• On 6 March 2023, ISLA confirmed that, on 5 March 2023 it had submitted its response to UK Treasury's Call for Evidence on the Short Selling Regulation (SSR), setting position.
• Follows UK Treasury December 2022 published short selling call for evidence.

Response Overview

• The SSR was introduced by EU and brought into UK statute book after UK’s EU exit.
• In implementing the outcomes of the Future Regulatory Framework (FRF), UK GVT will repeal this regulation, and replace it with a regulatory regime tailored to UK markets.
• ISLA was encouraged to see the associated statement as made by the UK regulator saying Short selling plays a healthy role in the proper functioning of financial markets.
• It provides essential liquidity to markets driving investment in British firms, emboldens economic growth, and helps ensure investors pay right price when investing in shares.
• ISLA's response was positive about the aims of the SSR review, and acknowledged a need to continue to regulate all short selling within the UK, for the foreseeable future.
• It did however have concerns about regulatory burden on firms, especially those that look to utilize the stock-by-stock exemptions, where the administrative burden is high.
• On the whole though, ISLA was happy to maintain the core framework and only modify the existing SSR to make minor technical amendments to streamline the current rules.
• ISLA also agreed monitoring short selling helps UK FCA identify possible misconduct and market abuse, and proactively engage with firms to address market integrity risk.