According to the regulations that are expected to come into effect by July, the buyer borrows a security and simultaneously sells it at the current market price. At a time when Germany is considering a complete ban on ‘short selling’, Croatia is beginning the implementation of a securities lending project, which is a prerequisite for this financial instrument.
In the return of the shares, the difference between the selling and buying price can be retained. This week marks the end of the period during which members of the investment community can submit their comments to the Central Clearing Depository regarding the securities lending project. Thus, initial conditions have been created, which must then be realized in specific regulations, for the introduction of a new instrument on the stock exchange – ‘short selling’. Although many ‘short sellers’ are being accused these days of market manipulation and exploiting economic problems for their own gain, this instrument allows pessimists (bears) to profit in a declining market. More on securities lending in the new issue of Lider.
