While various European regulators have dropped their restrictions on short-selling due to the Covid-19 outbreak, the European Securities and Markets Authority (ESMA) will continue to require enhanced reporting of short positions.

The ESMA has extended short-reporting requirements that were introduced in March due to the spike in market volatility prompted by the pandemic.

At that time, the ESMA introduced a requirement for firms to report to regulators when short positions exceed 0.1% of an issuer’s share capital. That measure, which was due to expire June 17, has been extended for three months.

The ESMA said that the extension will “maintain the ability of [regulators] to deal with any threats to market integrity, orderly functioning of markets and financial stability at an early stage,” allowing them to deal with signs of heightened market stress.

“The Covid-19 pandemic continues to have serious adverse effects on the real economy in the EU with any outlook for a future recovery remaining uncertain,” the ESMA said.

While financial markets have recovered in recent weeks, the regulator said that “uncertainty is potentially threatening their future development and the stability of the financial system in the EU.”

In late May, various European regulators said they would end temporary short-selling curbs that were also adopted in response to extreme market volatility.

Canadian regulators saw no reason to impose restrictions, citing no increase in short-selling activity.