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No more naked in Germany


19 May 2010 Frankfurt
Reporter:

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General Decree of the Federal Financial Supervisory Authority (BaFin) on the prohibition of uncovered short-selling transactions in debt securities of Member States of the EU whose legal currency is the euro of 18 May 2010, as amended and promulgated on:

18 May 2010

1. Naked Short Selling in debt securities as defined by section 2 (1) sentence 1 no. 3 of the German Â鶹´«Ã½ Trading Act (Wertpapierhandelsgesetz - WpHG) which are admitted to trading on a regulated market of a Stock Exchange in Germany and were issued by a Member State of the European Union whose legal currency is the euro are prohibited.

An naked short sale exists if at the time of the conclusion of the respective transaction the seller of the debt securities

a) is not the owner of the same,

b) does not have any absolutely enforceable claim under the law of obligations or under property law to be transferred title in a corresponding number of securities of the same class.

2. Exempted from this prohibition are transactions of persons who have undertaken by contract to purchase or sell financial instruments on a continuous basis by way of trading for own ac-count at prices defined by them to the extent that the respective transaction is necessary for the performance of such contractual obligations, as well as transactions which trading participants conclude with the customer for settlement of a transaction in shares at a fixed or definable price (fixed price transaction). Also exempted are short sales used to secure already existing posi-tions. Further exemptions may be permitted upon written application.

3. This General Decree shall apply until 31 March 2011, 24.00 hrs.

4. This General Decree is issued subject to reservation of revocation pursuant to section 36 (2) Administrative Procedures Act (Bundesverwaltungsverfahrensgesetz - BVwVfG).

5. The General Decree shall be deemed announced on the day following the customary announcement.
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