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.
Exane Asset Management reported in the Danish FSA’s reporting system in November 2018 a net short position in the issued share capital of a Danish publicly traded company. The position was below the public disclosure threshold of 0.5 %, but above the reporting threshold of 0.2 %. However, this was a wrongful reporting since the net short position actually was below the reporting threshold of 0.2 %.
Following instructions from the Danish FSA, Exane Asset Management corrected the error in the Danish FSA’s reporting system in July 2019. Exane Asset Management was unaware of the error until it was contacted by the Danish FSA.
The error has resulted in Exane Asset Management having left an incorrect net short position open in the Danish FSA’s reporting system and having neglected its reporting obligations to the Danish FSA for more than 200 days.
Exane Asset Management explained that the wrongful reporting happened due to a human mistake, and that Exane Asset Management now has implemented further safeguards internally in order to ensure that the company will not make similar errors going forward.
On this basis, the Danish FSA expects that Exane Asset Management will report net short positions correctly and meet its reporting obligations to the Danish FSA in future.
For more information on short selling, the Danish FSA refers to its website www.dfsa.dk.