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HCMC issues alert on the timing for selling stocks obtained through share capital increases of Greek issuers


On 22 April, the HCMC published an announcement alerting investors participating in share capital increases of Greek listed issuers about the proper timing for the sale of their newly acquired stock.

In it, the HCMC reiterates a position taken also in the past, namely that a sale performed before the date of the actual approval of the listing of the new shares by the Athens Exchange is an ‘uncovered short sale’, in the meaning of Article 12 of the Short Selling Regulation. As a result, any investor who performs a sale before that date, runs the risk of being fined – in an amount ranging from EUR 1,000 to 1,000,000 – and this irrespectively of whether the trade actually settles without problems (with shares becoming available when due).
Investors who participate in share capital increases of Greek issuers, including the recent highly visible TPEIR transaction, are therefore advised not to rely on the issuers’ ‘indicative expected timetable’ as per their Prospectus, because such indicative reference does not provide legal certainty on the date on which the ATHEX will actually approve the listing of the new shares for them to become available for trading. Only publication of the actual ATHEX approval decision is deemed by the supervising authority to provide such certainty.

The recent announcement is a reminder of a similar case, a few years ago, when the HCMC considered that a larger number of about 150 (mainly institutional) investors who sold their newly obtained shares in Greek systemic banks before the date of the relevant ATHEX announcement, were in breach of Article 12 and imposed fines ranging between EUR 10,000 and 800,000, despite the fact that most of the trades were settled without problems. That decision had been criticized as ‘legalistic’ by market participants and legal commentators, however in the numerous court challenges that ensued administrative courts confirmed the reasoning of the HCMC. Cases are still pending before the Supreme Court (Council of State), though.

For more information on the above matter, you can contact Michael Tsibris or Giannis Koumettis of our firm.