Short-selling bans spark confusion over index trades and extraterritoriality

Dealers say volumes have been light as market participants try to work out scope of bans – with confusion arising on index trades and the geographic reach of the rules

Equity derivatives traders and their compliance teams are struggling to work out the precise scope of the short-selling bans introduced last night by regulators in Belgium, France, Italy and Spain. The biggest questions concern the use of index derivatives containing the 60 different stocks protected by the bans, and whether the rules apply outside the four countries in question. As a result, market sources say volumes were light this morning.

"It is confusing at best. Four countries, four