• 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.