Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps (Text with EEA relevance)

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Regulation (EU) No 236/2012 of the European Parliament and of the Council, Article 17 is up to date with all changes known to be in force on or before 20 October 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.

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Regulation revoked by 2023 c. 29 Sch. 1 Pt. 1

Article 17U.K.Exemption for market making activities and primary market operations

1.Articles 5, 6, 7, 12, 13 and 14 shall not apply to transactions performed due to market making activities.

2.The [F1Treasury may by regulations determine] that the legal and supervisory framework of a third country ensures that a market authorised in that third country complies with legally binding requirements which are, for the purpose of the application of the exemption set out in paragraph 1, equivalent to the requirements under [F2Title III of Directive 2014/65/EU and Articles 3, 4, 6 and 7 of Regulation (EU) No 600/2014], under [F3Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April on market abuse] and under Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market(1), and which are subject to effective supervision and enforcement in that third country.

The legal and supervisory framework of a third country may be considered equivalent where that third country’s:

(a)markets are subject to authorisation and to effective supervision and enforcement on an ongoing basis;

(b)markets have clear and transparent rules regarding admission of securities to trading so that such securities are capable of being traded in a fair, orderly and efficient manner, and are freely negotiable;

(c)security issuers are subject to periodic and ongoing information requirements ensuring a high level of investor protection; and

(d)market transparency and integrity are ensured by preventing market abuse in the form of insider dealing and market manipulation.

3.Articles 7, 13 and 14 shall not apply to the activities of a natural or legal person where, acting as an authorised primary dealer pursuant to an agreement with a sovereign issuer, it is dealing as principal in a financial instrument in relation to primary or secondary market operations relating to the sovereign debt.

4.Articles 5, 6, 12, 13 and 14 of this Regulation shall not apply to a natural or legal person where it enters into a short sale of a security or has a net short position in relation to the carrying out of a stabilisation under Chapter III of [F4Commission Delegated Regulation (EU) No 2016/1052 of 8 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the conditions applicable to buy-back programmes and stabilisation measures].

5.The exemption referred to in paragraph 1 shall apply only where the natural or legal person concerned has notified the [F5FCA] in writing that it intends to make use of the exemption. The notification shall be made not less than 30 calendar days before the natural or legal person first intends to use the exemption.

6.The exemption referred to in paragraph 3 shall apply only where the authorised primary dealer has notified the [F6FCA] in relation to the sovereign debt concerned in writing that it intends to make use of the exemption. The notification shall be made not less than 30 calendar days before the natural or legal person acting as authorised primary dealer first intends to use the exemption.

[F76A.A notification made under paragraph 5 or 6 before IP completion day to a competent authority other than the FCA is only valid after IP completion day if a copy of that notification has been provided to the FCA not less than 30 calendar days before the day of IP completion day.]

7.The [F8FCA] may prohibit the use of the exemption if it considers that the natural or legal person does not satisfy the conditions of the exemption. Any prohibition shall be imposed within the 30 calendar day period referred to in paragraph 5 or 6 or subsequently if the [F9FCA] becomes aware that there have been changes in the circumstances of the natural or legal person so that it no longer satisfies the conditions of the exemption.

F108.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.A natural or legal person who has given a notification under paragraph 5 shall as soon as possible notify in writing the [F11FCA] where there are any changes affecting that person’s eligibility to use the exemption, or if it no longer wishes to use the exemption.

10.A natural or legal person who has given a notification under paragraph 6 shall as soon as possible notify in writing the [F12FCA] in relation to sovereign debt concerned where there are any changes affecting that person’s eligibility to use the exemption, or if it no longer wishes to use the exemption.

11.The [F13FCA] may request information, in writing, from a natural or legal person operating under the exemptions set out in paragraph 1, 3 or 4 about short positions held or activities conducted under the exemption. The natural or legal person shall provide the information not later than 4 calendar days after the request is made.

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13.[F15The FCA] shall publish and keep up to date on its website a list of market makers and authorised primary dealers who are using the exemption.

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Textual Amendments

F1Words in Art. 17(2) substituted (31.12.2020) by The Short Selling (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1321), regs. 1(2), 10(2)(a)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F2Words in Art. 17(2) substituted (31.12.2020) by The Short Selling (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1321), regs. 1(2), 10(2)(a)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F3Words in Art. 17(2) substituted (31.12.2020) by The Short Selling (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1321), regs. 1(2), 10(2)(a)(iii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F4Words in Art. 17(4) substituted (31.12.2020) by The Short Selling (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1321), regs. 1(2), 10(2)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F5Word in Art. 17(5) substituted (31.12.2020) by The Short Selling (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1321), regs. 1(2), 10(2)(c) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F6Word in Art. 17(6) substituted (31.12.2020) by The Short Selling (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1321), regs. 1(2), 10(2)(d) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F7Art. 17(6A) inserted (31.12.2020) by The Short Selling (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1321), regs. 1(2), 10(2)(e) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 9(c)(ii)) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)