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The Exemptions

Regulation (EU) No 236/2012 on shot selling and certain aspect of credit default swaps is applicable form 1 November 2012 (the Regulation).

Article 17 of the Regulation on short selling and certain aspects of credit default swaps provides for an exemption of market making activities and primary market operations from the net short position transparency requirements and the restrictions on uncovered short sales.

The Regulation prescribes that the notification of intent to make use of the exemption, including all relevant documents, must be made in writing to the Securities Market Agency at least 30 calendar days before the intended first use of the exemption. Use of exemptions may only be made after these 30 calendar days. The 30 calendar day period commences after all relevant data and documents have been submitted.

The  the notification of intent to make use of the exemption including all relevant documents, must be made in writing and submitted to Securities Market Agency, Poljanski nasip 6, 1000 Ljubljana, Slovenia and by fax no. + 386 1 280 04 30 or by e-mail .


Depending on the type of exemption (Authorised Primary Dealers or Market Making activities), the notifying entity should provide the following information:

A. For Authorised Primary Dealers:
1. Details of the notifying party;
2. Details of the contact person within the notifying party;
3. Copy of the agreement/recognition signed with a sovereign issuer or a person act-ing on its behalf.
B. For market making activities:
1. Details of the notifying party;
2. Details of the contact person within the notifying party;
3. Status of the notifying party:
• Credit institution;
• Investment firm;
• Third country entity; or
• Firm as referred to in point (l) of Article 2(1) of Directive 2004/39/EC.
4. Market of which the notifying person is a member;
5. A description of the activities specifying particular capacity according to Article 2(1)(k) of the Regulation:
• Capacity under Article 2(1)(k)(i);
• Capacity under Article 2(1)(k)(ii) and the nature of client facilitation services:
 Fulfilling orders initiated by clients;
 Responding to clients’ requests to trade.
6. For each capacity, the financial instrument(s) for which the intent to use the ex-emption is notified. It can take the form of a list of individual financial instruments or a clear specification of the instruments concerned, provided that it results in a closed list of specific instruments and allows the notified competent authority to unambiguously identify all individual instruments for which the exemption is declared;
7. In case of existing contractual agreement for provision of market making services – description of the main duties and activities under the contract or a copy of the contract;
8. Where the market making activities are carried out on related instruments, e.g. ETFs – the corresponding category of financial instruments according to Section C Annex I of Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments (MiFID), e.g. category 3 – units in collective investment undertakings;
9. Where no previous market making activity in a particular financial instrument can be demonstrated (e.g. IPO, intention to start a new market making business in a new financial instrument, etc.):
• For market making activities under Article 2(1)(k)(i) capacity – indication of expected daily volumes of market making activities in a financial instrument;
• For market making activities under Article 2(1)(k)(ii) capacity – indication of expected weekly volumes of market making activities in a financial instrument.

The notification has to be submited to Securities Market Agency according to specification published in ESMA’s consultation paper “ Exemption for market making activities and primary dealer operations under Regulation (EU) 236/2012 of the European Parliament ant the Council on short selling and certain aspects of Credit Default Swaps.

Securities Market Agency can prohibit the use of the exemption if it considers that the notifying entity does not satisfy the conditions of the exemption. The justified prohibition is communicated in writing within the 30 calendar days upon having received complete notification.

At any time, Securities Market Agency can decide to withdraw the benefits of the exemption in case there have been changes in the circumstances of the notifying entity or that the notifying entity no longer satisfies the conditions of the exemption. This may result from changes in the circumstances of the market maker/primary dealer.

Forms
- Notification for Authorised Primary Dealers
- Notification for market making activities

  • Poljanski nasip 6, 1000 Ljubljana, SI-Slovenija
  • Telephone: +386 (0)1 280 04 00
    Fax: +386 (0)1 280 04 30
  1. E-mail: info@atvp.si
  2. Media contacts: pr@atvp.si