General Decree of BaFin on 21 September 2008 (expired by the end of 31 January 2010)
- As published in the announcement of:
- 21. September 2008
Please note that the General Decree is solely convenience translation for information purposes only. The original German text is binding in all respects.
1.Transactions agreed by trading participants with a customer for settlement of a transaction in shares concluded at a fixed or definable price (fixed price transaction) are exempted from the ban on short selling as defined in the General Decree of BaFin issued on 19 September 2008.
2.This General Decree is issued subject to reservation of revocation pursuant to section 36 (2) Administrative Procedures Act (Verwaltungsverfahrensgesetz – VwVfG) as well as in conjunction with the reservation of requirements being subsequently incorporated, amended or supplemented.
3.The General Decree shall be deemed announced on the day following the customary announcement.
Grounds:
The General Decree is based on section 4 (1) Securities Trading Act (Wertpapierhandelsgesetz – WpHG) and supplements the Decree of 19 September 2008.
The general aim of the General Decree of 19 September 2008 is to prevent certain types of short selling since these could give rise to excessive price movements. These in turn could jeopardise the stability of the financial system, resulting in serious disadvantages for the financial market.
The current market circumstances have shown that it is necessary to allow an exemption for the above-mentioned legitimate business practices pursuant to no. 2 of the General Decree of BaFin of 19 September 2008. Similar provisions are also in place in other jurisdictions (e.g. in the US and the UK).
This clarifying exemption gives due regard to the justified interests of the market participants and is thus appropriate, necessary and, also in the narrower sense, reasonable.
Instruction on available remedies
It is possible to object to this Decree within one month of its issuance.
The objection must be submitted in writing or for recording with the
Federal Supervisory Authority in
Lurgiallee 12, D-60439 Frankfurt am Main,
or
Graurheindorfer Str. 108, D-53117 Bonn,
Thomas Eufinger
Note:
BaFin will not object to any transactions falling under the above-mentioned provision and effected already after issuance of the General Decree of 19 September 2008.