Background
According to the short selling regulation Article 9, a natural or legal person who has a short position shall at midnight on the trading day on which the position is achieved calculate the net short position.
If the net short position is 0.2 percent or more of the listed company’s issued share capital, the natural or legal person shall report the position to the relevant competent authority no later than 3:30 pm on the following trading day. For shares admitted to trading on the Danish venues, the Danish FSA is the relevant competent authority. If the net short position is 0.5 percent or more of the listed company’s issued share capital, the Danish FSA will publish the net short position on its website. If the net short position falls below the threshold of 0.2 percent of the listed company’s issued share capital, it should be reported to the Danish FSA.
On 16 August 2018, the Danish FSA contacted Park West Asset Management LLC by e-mail to follow up on certain net short positions that had been active for a very long period according to the Danish FSA’s database.
On 28 August 2018, Park West Asset Management LLC responded to the Danish FSA. Park West Asset Management LLC stated that, in two cases, the net short positions had been reduced below the 0.2 percent reporting threshold more than a year ago, but that Park West Asset Management LLC had not reported the changes to the net short positions to the Danish FSA.
In none of the above-mentioned occasions did the net short position pass the publication threshold of 0.5 percent or more of the listed company’s issued share capital. I.e. none of the net short positions have been published on the Danish FSA’s website.
Park West Asset Management LLC has informed the Danish FSA that the missed filings were due to an error in Park West Asset Management LLC’s internal tracking system such that it did not flag the positions when they fell below the reporting threshold that required a subsequent filing requirement.
On 29 August 2018, Park West Asset Management LLC reported the missing net short positions to the Danish FSA. Furthermore, Park West Asset Management LLC has stated that it will remedy its notification process after becoming aware of the problem due to the Danish FSA’s investigation.
For more information on short selling, the Danish FSA refers to its website www.finanstilsynet.dk.