Clarifying European Reporting Thresholds

Unlike Australia and Hong Kong, the European Short Disclosure regime has various thresholds at which disclosure requirements kick in.


First of all, lets define Net short percentage figure. Once the position holder has arrived at a Net figure, taking into account all long and short positions in the cash instrument and then netted them against the deltas of derivative or secondary instruments, they can divide the same by the total outstanding shares of the company.


Now if the Net short percentage figure exceeds 0.2%, the position must be notified. If the position falls below 0.2 subsequently it must be notified. If the position breaches any 0.1% increments upwards or downwards from that threshold, it must be notified. So 0.3%, 0.4%, 0.5% are all reportable thresholds for upwards or downwards breaches.


If the position exceeds 0.5%, the position must be publicly disclosed. And then it must be disclosed again if it falls below 0.5%. And as with private notifications listed above, it must also be disclosed at 0.6%, 0.7%, 0.8% ad infinitum, on upwards or downwards breaches.