• UK entered transition period on 31 January 2020, which ends at 11pm on 31 December 2020.
• During the transition period, the EU short selling regulation (regulation (236/2012) (SSR) continues to apply in UK, including the market making exemption.

Current Reporting Obligations

• During transition period, EU SSR continues to apply in the UK and FCA expect holders of net short positions to continue to report to them at existing reporting thresholds.
• To determine whether a position in shares should be notified to FCA, position holders should check on ESMA FIRDS whether FCA is the relevant competent authority for a particular share and on ESMA's list of exempted shares to see if that share is exempt.
• If a share is not exempt, position holders should send their notification to the FCA.
• If position holders have reasons to believe that the information on ESMA’s pages is not updated or correct, then they should raise this issue with the FCA.

After Transition Period

• Under the onshored Short Selling Regulation, position holders will be required to report their net short positions in shares at the 0.20% threshold; reporting thresholds for UK sovereign debt and uncovered positions in UK sovereign credit default swaps will remain the same.
• Amount of the outstanding UK sovereign debt will be updated quarterly by the FCA.
• To determine whether a position in shares should be notified to the FCA, position holders will have to consult FCA FIRDS for a particular share and also the UK list.
• If a share is not exempt, position holders should send their notification to the FCA.
• If position holders have reasons to believe that the information on the FCA pages is not updated or correct, they should raise this issue with the FCA.

UK List of Exempted Shares

• The UK list of exempted shares will be published on FCA website from 1 January 2021.
• This will be an Excel file comprising 2 lists (tabs): FCA’s list of exempted shares containing all shares admitted to trading on UK trading venues where principal trading venue is outside UK; and ESMA’s list of exempted shares as of end of transition period.
• Shares on this list will remain exempt from some of the requirements in onshored SSR for 2 years, including reporting requirements under articles 5 and 6 of onshored SSR.
• FCA’s list of exempted shares will be updated as it identifies shares whose principal venue is outside UK; if a share appears on any of above lists, no notification required.

Electronic Submissions

• Net short position notifications should be sent via Electronic Submission System (ESS) prior registration of reporting persons and position holders; process will not change.

Further Information

• See Short Selling (Amendment) (EU Exit) Regulations 2018; and FCA 2019/54.
• Further information on the changes introduced by the onshored SSR is available in FCA Primary Market Bulletins (PMB) 21 and 24 published in February and October 2019.