• UK FCA fined Asia Research and Capital Management Ltd (ARCM) transparency failures
• This is the first FCA enforcement action, for breaches of short selling disclosure rules.

Breaches

• The firm failed to notify the FCA and disclose to the public its net short position in Premier Oil Plc, which were built up between February 2017 and July 2019.
• The Short Selling Regulation 2012 (SSR) sets out thresholds for when a firm is required to notify the FCA and disclose to the public details of net short positions held.
• From 24 February 2017 to 5 July 2019, ARCM failed to make 155 notifications to the FCA and 153 disclosures to the public of its net short position in Premier Oil.
• ARCM had built a net short position equivalent to 16.85% of Premier Oil share capital.
• This was held by ARCM for a further 106 trading days before being notified to the FCA.

Penalty

• ARCM will pay £873,118 resolve matter and qualified for 30% discount under executive settlement procedures; (they otherwise would have received a penalty of £1,247,312).