Questions and Answers

Here you find common answers to questions about Danish conditions about short selling.

As the Short Selling Regulation is directly applicable in each Member State, the European Securities and Markets Authority (ESMA) coordinates the interpretation of the regulation. ESMA has published Questions & Answers (Q&A) on more general issues on its website on short selling:

ESMA website on short selling

Reporting of net short positions under the Short Selling Regulation must be done via the Danish FSA’s OAM system (‘Officially Appointed Mechanism’). If you are able to receive a Danish digital signature (NemID) you are required to use this type of login method. However, a Danish digital signature normally requires a Danish national business ID (CVR no.) if you represent a company, or a Danish national personal ID (CPR no.) if you are a natural person. Therefore, foreign users and companies have the option to apply for a username and password to the OAM system. This can be done via the ‘Register’ button in the top right corner of the OAM website. You can also find a guide for registration with username and password.

Please note that your application for access to the OAM system with username and password will have to be processed and accepted before you are able to submit your first net short positions.

A short net position has to be calculated based on the total issued share capital. This includes the total of both A- and B-shares, regardless of whether only one or both share classes are admitted to trading.

Information regarding an issuer's share capital may be found in several different places. Firstly, the share capital can always be found in the company’s articles of association. These can often be found on the issuer's webpage.

You should also be able to find the total share capital in the issuer's annual report; normally it will be an item under equity. If you read the annual report, you also have to check if, after the publication of the annual report, the issuer has issued any company announcements regarding the share capital.

No – a net short position in shares has to be notified in accordance with the Short Selling Regulation. If a net short position is in shares it has to be notified in number of shares and percentages. If you have a net short position in sovereign debt it has to be notified in Euro.

An ISIN is a unique identifier for a financial instrument. An issuer may have several ISIN codes since an ISIN is related to the instrument and not the issuer. As regards the notification of net short positions the notification has to be made in respect of the primary ISIN for an issuer. The primary ISIN for each issuer can be found when submitting the notification via the Danish FSA web portal.

No – notification of net short positions in sovereign debt has to be submitted to the relevant competent authority of the issuer of the debt.
 
ESMA’s webpage on short selling provides links to relevant competent authorities' webpages. On these pages you may find information regarding reporting of net short positions in each member state.

Please see the guide for registration with username and password to the OAM system

In general, the person notifying is responsible for the positions being reported correctly. Therefore, the Danish FSA cannot comment on whether a specific reporting is correct. However, the Danish FSA must at the same time emphasize that a net short position should be measured not only by sale of shares, but could arise as part of trading CFD, as part of index trading or another type of derivative. You can read more about how to measure a short position in Commission Delegated Regulation (EU) No 918/2012 of 5 July 2012.

The reporting obligation arises when crossing the threshold of 0.2 pct. and when crossing a threshold of 0.1 pct. of this. This means that the next obligation to notify arises when crossing the threshold of 0.3 pct. and subsequently when crossing thresholds of 0.4 pct., 0.5 pct. etc. up- or downwards. As stated above you can find a Q&A on general questions of understanding the regulation at ESMA's website. The same response can be found in questions 2f and 2g, which also address rounding off positions.

An overview of net short positions in Danish shares can be found directly on the OAM website through the menu ‘Statistics and extraction’. The overviews are updated automatically and in real-time when new positions are submitted through the system. You can also download the overviews in excel.

Spreadsheets with complete historical data on net short positions can be found on the Danish FSA’s website. These spreadsheets will be updated on a monthly basis

Yes, by creating a subscription on a search. You will find instructions here.

Yes, generally the use of the market maker exemption under article 17 of the regulation must be notified to the competent authority 30 days prior to the use of the exemption. However in some particular instances (e.g. in connection with initial public offering) the Danish FSA may give a positive response to the market maker upon request. The exemption may then be used from the date on which the market maker receives confirmation from the Danish FSA that we do not intend to refuse the use of the exemption on the specific instrument.

This procedure is found in paragraph 17 of ESMA's Guidelines on Exemption for market making activities and primary market operations under Regulation (EU) 236/2012 of the European Parliament and the Council on short selling and certain aspects of Credit Default Swaps (ESMA/2013/74). The Danish FSA has announced that it will follow the ESMA Guidelines, and therefore this process will be followed.

The forms may be submitted electronically. In such cases, the signature line must be marked with a unique identification of the person who signed the notification. Further, the submission must include a clear identification of who have submitted the forms. The Danish FSA also points out that the document with the financial instruments covered (Annex III) must be submitted electronically in CSV format.

It is only necessary to send notice or copy of a renewed agreement if key tasks or activities within the market maker agreement are to be changed. If there is a formal market maker agreement ("contract"), the message announcing the intention of using the exemption should contain either a description of the main tasks and activities in accordance with the contract or a copy of the new contract. The description of the main tasks and activities should be written in block 3 (e) of the notification form (Annex II). This description should specify whether the agreement regulates for how much of the daily trading period the market maker is committed to quote prices.

According to section 65.xii. the anticipated extent of the market maker activity should be stated. The Danish FSA recommends using block 3 (c) of the notification form (Annex II) when notifying this. Alternatively, you may insert an additional column in the spreadsheet (Annex III), so that the extent is noted for each of the ISIN codes in question. The extent could be entered as a range rather than as an exact value. It is not sufficient merely to indicate that you are ready to trade. The Danish FSA expects that the market maker has considered the expected activity in each instrument and whether it may have internal limits for quoting prices of each instrument. These considerations should be made prior to submitting the notification form to the Danish FSA.

Yes. The guidelines state that a list of instrument, such as an index at a given date, could be included in the notification if the list allows the competent authority to identify the instruments in question. A submitted notification only includes the instruments which were part of the index at the exact time when the notification was sent. A subsequent change in the shares included in the index therefore requires a new notification. The same principle applies to notifications regarding an index such as NASDAQ Copenhagen Large Cap companies. Any subsequent change in the Large Cap index requires that the Danish FSA receive a new notification of intent to use the exemption for this particular instrument.

It is sufficient to submit one notification; however, the notification must describe the activities carried out pursuant to Article 2 (i) (k). If several activities are carried out this must be notified.

Notification of a net short position is marked “(Historical)” when a position holder has made a new notification in the same share. Furthermore, notification of a net short position being reduced below 0.5 pct. will be marked “(Historical)” after 24 hours.
Last updated 09-07-2024