ESMA has published a second update of its Q&A on the application of the Regulation on short selling and certain aspects of credit default swaps (the “Short Selling Regulation”).  The purpose of the Q&A is to promote common supervisory approaches and practices among the EU’s national securities markets regulators on the requirements of the Short Selling Regulation (which came into force on 1 November 2012).  It provides responses to questions posed by the general public, market participants and competent authorities in relation to the practical application of the short selling framework, and provides clarity on the requirements of the new regime to market participants and investors.  Additional Q&As complement the sections relating to the scope of the Short Selling Regulation, its application outside the EU and detail those financial instruments covered by the net short position notification and disclosure requirements, and the restrictions on uncovered short sales.  In addition, the Q&A includes responses on the treatment of ETFs, American Depository Receipts (“ADRs”) and Global Depository Receipts (“GDRs”), the treatment of shares pledged as collateral for the uncovered short sale prohibition and position reporting, the calculation of net short positions, the calculation and reporting for the particular situation of group and fund management activities, and the treatment of derivatives on sovereign debt with respect to duration adjustment.