As of midnight on Tuesday, the German breed of short-seller (Leerverkäufer) is set to become a rare species, according to Dow Jones:
Germany will ban so-called naked short-selling from midnight, a lawmaker with the ruling Christian Democratic Union told Dow Jones Newswires Tuesday.
“The ban of naked short-selling will be valid from midnight,” Norbert Barthle, the CDU budget spokesman, said Tuesday.
He added that Chancellor Angela Merkel will announce the plan in her speech to the lower house of parliament Wednesday morning.
Earlier flashes (not of the naked variety), via Reuters:
RTRS-GERMAN CHANCELLOR ANGELA MERKEL TO ANNOUNCE BAN ON NAKED SHORT-SELLING ON WEDNESDAY – COALITION SOURCE
RTRS-GERMAN NETWORK N-TV SAYS SHORT-SELLING BAN APPLIES TO STOCKS AND EURO GOVT BONDS
Shorting bonds, eh? If they don’t mean CDS, this could apply to shorting bonds via futures or repos (yes, it’s possible to short in this way, as this FT report explains).
Either way, not good for the Leerverkäufer. And, er… points for cool Teutonic efficiency, at least.
This all comes as the German parliament’s lower house prepares to vote on bank penalties attached to its ratification of the eurozone bailout, including a transaction tax.
In that climate, short-bashing isn’t surprising at all.
Update: Confirmation, plus details. Flashes, via Reuters:
RTRS-GERMANY FINANCE MINISTRY ANNOUNCES BAN ON NAKED SHORT-SELLING AT 10 MOST IMPORTANT GERMAN FINANCIAL INSTITUTIONS
RTRS-GERMANY FINANCE MINISTRY SAYS BAN TO TAKE EFFECT FROM MIDNIGHT
RTRS-GERMANY FINANCE MINISTRY SAYS BAN ALSO APPLIES TO CDS ON EURO GOVT BONDS
RTRS-GERMANY FINANCE MINISTRY SAYS BAN ALSO APPLIES TO EURO GOVT BONDS
Note the subtle difference in the last two flashes, which does suggest restrictions on futures and repos.
Related links:
Short-selling rules, the world tour - FT Alphaville
The scale of sovereign short-selling - FT Alphaville
Oh, those naughty, short-selling… US Senators? – FT Alphaville