Possible sanctions on failed trades

BASEL: European Union markets regulators will consider punishing brokers who generate risks by failing to settle trades on time as part of wider efforts to restrain short selling, a top regulator said yesterday.

The Committee of European Securities Regulators (CESR) is finalising guidelines on disclosure of short positions to improve transparency in short selling, a practice long favoured by hedge funds. CESR chairman Eddy Wymeersch said the regulatory body was now moving to a second stage of looking whether settlement failures should be punished.