Reprimand to Bloom Tree Partners LLC for not reporting a net short position

Published 12-08-2019

The Danish Financial Supervisory Authority (“Danish FSA”) has on 12 August 2019 issued a reprimand to Bloom Tree Partners LLC for violation of article 9 of the European Parliament and Council Regulation (EU) No 236/2012 on short selling and certain types of credit default swaps (“the short selling regulation”).

Background

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.

Bloom Tree Partners 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 April 2019, and Bloom Tree Partners should thus, at that time, have brought down its position in the Danish FSA’s reporting system accordingly.

Following instructions from the Danish FSA, Bloom Tree Partners corrected this mistake in July 2019. Bloom Tree Partners was not aware of the error until it was contacted by the Danish FSA. The error has resulted in Bloom Tree Partners having neglected its reporting obligations to the Danish FSA for more than 80 days.

Bloom Tree Partners has explained that the offence was caused by human error. Bloom Tree Partners has stated that it now has implemented internal alerts in its systems and taken sufficient measures, which will ensure that the company will not miss any reporting obligations going forward.

Based on the above-mentioned measures taken by Bloom Tree Partners, the Danish FSA expects that Bloom Tree Partners will not miss any short selling notifications in future.

For more information on short selling, the Danish FSA refers to its website www.dfsa.dk.

Last updated 12-08-2019