CHAPTER III

NET SHORT POSITIONS PURSUANT TO ARTICLE 3(7)(b)

Net short positions in sovereign debt — short positions
Article 9
1
A short sale of sovereign debt through the sale of a basket of sovereign debt shall in relation to that sovereign debt also be taken into account to the extent that that sovereign debt is represented in the basket.
2
For the purposes of Article 3(1)(a) and 3(3) of Regulation (EU) No 236/2012 where a position in an instrument, including those listed in Article 8(2), confers a financial advantage in the event of a decrease in the price or value of the sovereign debt, this position shall be taken into account in calculating the short position.
3
Any sovereign credit default swap referenced to a sovereign issuer shall be included in the calculation of net short positions in that sovereign debt. Sales of sovereign credit default swaps shall be considered to be long positions and purchases of sovereign credit default swaps shall be considered to be short positions.
4
If a sovereign credit default swap position is hedging a risk other than the referenced sovereign debt, the value of the hedged risk cannot be treated as a long position for the purposes of calculating whether a natural or legal person has a net short position in the issued sovereign debt of a sovereign issuer.
5
In calculating net short positions, it is irrelevant whether cash settlement or physical delivery of underlying assets has been agreed.