On 9 May 2023, UK FB issued response to UK Treasury short selling plans.
- UK FB issued response to UK Treasury's paper seeking evidence on short selling regime.
- Follows UK Treasury December 2022 call for evidence on short selling rules.
UK FB Response
- UK FB considers call for evidence represented opportunity for short selling to continue playing a vital role under a regime that ensures adequate regulatory oversight.
- Response highlights that current short selling regulation already functions well, and requires no fundamental change, but merely a set of targeted technical adjustments.
- Recommends that UK FCA should simplify the market maker exemption, e.g. by making it activity-based, rather than instrument-based, allowing its use immediately.
- FCA should provide a positive securities list clarifying the securities eligible for the market market exemption, this would streamline firms' operations, increase efficiency.
- FCA should have greater intervention powers to prohibit/restrict short selling if prices of instruments are too volatile, to be used judiciously to preserve healthy markets.
- Investors' public disclosure requirements to notify FCA when their short positions in shares exceeds an agreed threshold should be established, then threshold maintained.