U.K. – FCA Short Selling Regulations

U.K. – FCA Short Selling Regulations

On 23 November 2023, UK FCA issued an update on the short selling regulations.

  • UK FCA issued an update on the Short selling (notification threshold) regulations 2023 and on the government's draft statutory instrument – Short selling regulations 2024.
  • Also issued an update on UK Treasury's response with the government’s final policy position for short selling regulation on sovereign debt and credit default swaps.

Notification Threshold Regulations

  • Following UK Treasury’s Short selling regulation review: call for evidence and its response to that, it has laid a SI before parliament which increases the notification threshold for the reporting of net short positions in shares to the FCA.
  • From 0.1% to 0.2% of total issued share capital of an issuer with explanatory note.
  • These regulations enter into force on 5 February 2024 and UK FCA will update on how the new reporting threshold will be implemented shortly.

Short Selling Regulations 2024

  • Following UK Treasury’s Short Selling Regulation Review: Call for Evidence and its response to that, government published a draft SI with explanatory policy note.
  • This sets out how government will replace the retained EU law Short Selling Regulation, including aspects on sovereign debt, with a new framework tailored for UK.
  • Call for evidence was part of wider program to repeal/replace law in financial services.
  • Government welcomes any technical comments on the draft SI by 10 January 2024.
  • UK Treasury plans to lay this SI before parliament in 2024, subject to parliament time.

Sovereign Debt and Credit Default Swaps

  • Following Short Selling Regulation: Consultation – sovereign debt and credit default swaps, UK Treasury published its response re final policy position.
  • Summarizes responses and sets out government’s approach under the new regime.