May 18, 2020 / 7:10 AM / 13 days ago

Italy's Consob suspends ban on short selling

MILAN, May 18 (Reuters) - Italian market regulator Consob said on Monday it would suspend the ban on the creation and increase of short positions it had imposed in March given the impact on markets from the coronavirus emergency but added it would continue to monitor the situation.

The watchdog said the ban would expire at 23:59 CET (2159 GMT) on Monday. A requirement put in place by the European Securities and Markets Authority (ESMA) to disclose new short positions of 0.1% or above remained in place, it added.

In short-selling, traders borrow a company stock with a view to selling it, hoping to buy it back later at a lower price and pocket the difference, a practice that often exacerbates market moves amid panic selling. (Reporting by Agnieszka Flak)

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