According to article 9 of the short selling regulation, a natural or legal person who has a short position shall at midnight on the trading day on which the position is achieved calculate the net short position. If the net short position requires notification, cf. article 5 and 6 of the short selling regulation, the natural and legal person shall according to article 9 report the position to the relevant competent authority with correct details regarding the identity of the natural or legal person that holds the short position.
If the net short position is 0.2 % or more of the listed company’s issued share capital, the natural or legal person shall report the position to the relevant competent authority no later than 3:30 pm on the following trading day. For shares admitted to trading on Danish trading venues, the Danish FSA is the relevant competent authority. If the net short position is 0.5 % or more of the listed company’s issued share capital, the Danish FSA will publish the net short position on its website. If the net short position falls below the threshold of 0.2 % of the listed company’s issued share capital, it must be reported to the Danish FSA.
Arrowstreet Capital had a net short position of less than the public disclosure threshold of 0.5 %, but above the reporting threshold of 0.2 % in the issued share capital of a publicly traded Danish company. The position went below the reporting threshold in June 2019, and Arrowstreet Capital should thus, at that time, have brought down its position in the Danish FSA’s reporting system accordingly.
Following instructions from the Danish FSA, Arrowstreet Capital promptly corrected this mistake in January 2020. Arrowstreet Capital was not aware of the error until it was contacted by the Danish FSA. The error has resulted in Arrowstreet Capital having neglected its reporting obligations to the Danish FSA for more than 200 days.
Arrowstreet Capital has explained that the offence was caused by a human error in connection with reviewing compliance reports. Arrowstreet Capital also explained that it has used this incident as an opportunity to implement additional measures in its compliance department in order to make sure that Arrowstreet Capital will not neglect its reporting obligations to the Danish FSA going forward.
Based on the above-mentioned measures taken by Arrowstreet Capital, the Danish FSA expects that Arrowstreet Capital will not miss any short selling notifications in future.
For more information on short selling, the Danish FSA refers to its website (short selling).