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The European Securities and Markets Authority (ESMA) is proposing changes to short-selling rules following a review of the temporary bans on short selling adopted in response to market turmoil that arose with the onset of the pandemic, as well as the “meme stock” episode in the U.S. last year.

ESMA published a final report on its review of the region’s short-selling regulations, which proposes “targeted amendments” to the rules.

Among other things, the proposals aim to improve the operation of short-selling rules by clarifying the procedure for regulators to adopt both short-term and long-term bans on the practice in response to emergency situations.

They also aim to enhance the prohibition on naked short selling by introducing new record-keeping requirements and harmonizing sanctions.

The recommendations follow a review of the markets in the immediate aftermath of the onset of the pandemic which saw several European regulators take emergency measures against short selling.

Regulators also expanded reporting requirements for short positions to improve their ability to monitor short-selling activity throughout the region.

“Evidence from the crisis proved how widespread emergency situations might unfold very quickly requiring immediate responses,” the report said, noting that the pandemic’s situation prompted regulatory action that was more extensive and different from past responses.

After reviewing the pandemic episode, the ESMA is proposing changes to improve the operation of short-selling rules in future emergencies.

Additionally, the regulator said its reform proposals also considered the possibility of market phenomenons — such as the “meme stock” mania that led to a period of high volatility in the U.S. last year — developing in European markets too.

In response to that possibility, the regulator is also proposing changes “which aim at promoting supervision of locate arrangements and strengthen supervisory convergence,” the report noted.