The Spanish National Stock Market Commission announced that they’ve implemented temporary regulation. This legislation applies towards short selling, which will see itself postponed for one month. Emergency measures were created after the commission spoke with health experts and financial analysts from the Spanish government. It was determined that to ensure markets aren’t affected by the changing volatility, banning short selling for a temporary period was best.
Representatives speaking for the Spanish National Stock Market Commission expressed that the European Union is experiencing extreme volatility that each respective market has to take the necessary measures to ensure safety. Statements continued with it being noted that performances since the Covid-19 Pandemic have increased tenfold over the last week. Creating these measures ensures that the market won’t be overrun with disorderly trading, prompting long-lasting adverse effects. Regulators that don’t concern themselves with future consequences from Covid-19 could see themselves on an economic downfall.
Concerns surrounding the coronavirus in Spain have prompted for a nation-wide closure. Notable destinations have become ghost towns, with warnings displayed to ensure that citizens or tourists remain enclosed in their respective locations. This includes Sol Square in Madrid, which began informing visitors to leave the area as of March 15th. It should be noted that the Short Selling Postponement began two-days later on March 17th. Extensions on this postponement period can increase by three months, with this being evaluated on April 17th by the Stock Market Commission in Spain.
Financial governors in Spain followed similar emergency measures implemented by the Italian regulators. Italy had initially created a one-day ban on short-selling for traders. This has increased until April 1st, with that postponement period expected to last until May 1st. This follows after both the Spanish and Italian IBEX Index’s fell to their lowest valuations since 2012. We’ll keep our readers informed on any updates regarding the Italian or Spanish financial markets.