FSA proposes extending short selling disclosure regime to all UK shares
6 February 2009
The Financial Services Authority (FSA) has issued a consultation paper in which it proposes to extend the disclosure obligation on short sellers so that it applies to all listed shares, not just those of issuers in the financial sector. In January the FSA extended until 30 June 2009 the disclosure regime for net short positions in these stocks in excess of 0.25% of a firm’s issued share capital.
The FSA believes that the benefits of short selling such as price efficiency and liquidity normally outweigh the disadvantages, and short selling should continue to be permitted. However, it sees advantages in having enhanced transparency of short selling.
Sally Dewar, managing director of wholesale and institutional markets, said:
"This discussion paper offers the opportunity for market participants and others to contribute to the development of future policy. We believe that enhanced disclosure across the whole market is the right way forward. We also consider it to be important that we align our proposals with those being developed on an international basis and we are working towards this."
The consultation ends on 8 May 2009.
For further details see http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/023.shtml