CHAPTER IV

NET SHORT POSITIONS IN FUNDS OR GROUPS PURSUANT TO ARTICLE 3(7)(c)

Method of calculating positions for management activities related to several funds or managed portfolios
Article 12
1
The calculation of the net short position in a particular issuer shall be made in accordance with Article 3(7)(a) and (b) of Regulation (EU) No 236/2012 for each individual fund, irrespective of its legal form and for each managed portfolio.
2
For the purposes of Article 12 and Article 13, the following definitions shall apply:
a
‘investment strategy’ means a strategy that is pursued by a management entity, regarding a particular issuer, that aims to have either a net short or a net long position taken through transactions in various financial instruments issued by or that relate to that issuer;
b
‘management activities’ means management of funds irrespective of their legal form and portfolio management in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more financial instruments;
c
‘management entity’ means a legal person or entity, including a division, unit or department that manages, on a discretionary basis, funds or portfolios pursuant to a mandate.
3
The management entity shall aggregate the net short positions of the funds and portfolios under its management for which the same investment strategy is pursued in relation to a particular issuer.
4
When applying the method described above, the management entity shall:
a
take into account the positions of the funds and portfolios the management of which has been delegated by a third party;
b
exclude the positions of the funds and portfolios the management of which it has delegated to a third party.
The management entity shall report, and disclose where required, the net short position that results from paragraphs 3 and 4 when it reaches or exceeds a relevant notification or disclosure threshold in accordance with Articles 5 to 11 of Regulation (EU) No 236/2012.
5
Where a single legal entity is performing management activities together with other non-management activities, it shall apply the method described set out in paragraphs 1 to 3 to its management activities only and report, and disclose the resulting net short positions.
6
For its non-management activities that give rise to the holding of short positions by the entity for its own account, that single legal entity shall perform the calculation of the net short position in a particular issuer in accordance with Article 3(7)(a) and (b) of Regulation (EU) No 236/2012 and report, and disclose the resulting net short positions.

Method of calculating positions for legal entities within a group that have long or short positions in relation to a particular issuer
Article 13
1
The calculation of the net short position shall be made in accordance with Article 3(7)(a) and (b) of Regulation (EU) No 236/2012 for each legal entity constituting the group. The relevant legal entity, or on its behalf, the group it belongs to, shall report, and disclose, the net short position in a particular issuer when it reaches or exceeds a notification or disclosure threshold. Where one or more of the legal entities constituting the group are management entities, they shall apply the method described in Article 12(1) to 12(4) for fund and portfolio management activities.
2
The net short and long positions of all the legal entities constituting the group shall be aggregated and netted, with the exception of the positions of the management entities that perform management activities. The group shall report, and disclose where relevant, the net short position in a particular issuer when it reaches or exceeds a relevant notification or disclosure threshold.
3.
When a net short position reaches or crosses the notification threshold in accordance with Articles 5 and 7 or the disclosure threshold in accordance with Article 6 of Regulation (EU) No 236/2012, a legal entity within the group shall report and disclose in accordance with Articles 5 to 11 of Regulation (EU) No 236/2012 the net short position in a particular issuer calculated according to paragraph 1 provided that no net short position at group level calculated according to paragraph 2 reaches or crosses a notification or disclosure threshold.
A legal entity designated for this purpose shall report, and disclose where relevant, the net short position at group level in a particular issuer calculated according to paragraph 2 when:
1. no notification or disclosure threshold is reached or crossed by any legal entity within the group;
2. a notification or disclosure threshold is reached or crossed simultaneously both by the group itself and any legal entity within that group.
Substituted by Commission Delegated Regulation (EU) 2015/97 of 17 October 2014 correcting Delegated Regulation (EU) No 918/2012 as regards the notification of significant net short positions in sovereign debt (Text with EEA relevance).