Five years after the initial implementation of the EU regulation on Short Selling, Iceland has confirmed its decision to incorporate the regulation into national law through a financial circular. The planned date of enforcement of the new act is the 1st of July 2017.
One may ask why Iceland needs to implement an EU regulation if the legal definition of the regulation states that it becomes immediately enforceable and the transposition into national laws is strictly forbidden. The answer is quite simple - Iceland is not a member of the European Union, and EU regulations do not have a direct effect on Icelandic law. Iceland is a member of the European Economic Area (EEA), and all EU legal acts must be specifically included in the EEA Agreement and then implemented by Althing (the Icelandic Parliament) to become binding.
According to the circular, from July, transparency in the market will increase as investors who engage in short-selling on a large scale will have to report to the authorities (note: page is in Icelandic) if they exceed certain limits. Under the new rules, investors will have to disclose short positions greater than -0.2% to the Icelandic regulator, with an obligation to disclose short positions greater than -0.5% to the market.
Currently, the volume of short sales is not publicly known in the Icelandic market and a complete register of shares that are lent out is not easily accessible.
The upcoming implementation of the EU short-selling regulation in Iceland will surely be a concern for firms which might short sell in this jurisdiction. If you are are subscribed to FundApps’ Shareholding Disclosure service, you have no need to worry: our dedicated team of compliance experts ensures the updates to the short-selling rules are made accurately and on time, just as they do with 90 other jurisdictions around the world. And don’t forget, rule updates issued by FundApps are automatically pushed to the cloud, meaning there are no lengthy install times or complicated procedures.
If you would like to learn more about how FundApps helps institutional investors stay compliant with changing legislation worldwide, book a demo or contact us and we’ll be happy to answer any questions.