On 3 March 2023, SBAI responded to call for evidence on short selling rules.
- SBAI issued a response to UK Treasury's call for evidence on short selling regulation.
- Document dated 3 March 2023, received 7 March 2023, and summarized on 9 March 2023.
- Follows UK Treasury December 2022 published short selling call for evidence.
- Short selling has important role in global financial markets and brings many benefits.
- E.g. investor protection against market volatility, increased liquidity, more efficient price discovery, dampening of price bubbles, and more efficient capital allocation.
- The SBAI supports regulation of short selling, including a ban on uncovered shorting.
- There is no rationale for public disclosure of individual short sales at low thresholds from a from a financial stability, market integrity or investor protection perspective.
- Short selling data can be more efficiently sourced from broker dealers, rather than requiring reporting of all positions above a certain threshold from all managers.
- UK authorities should have tools to combat market abuse, maintain orderly markets.
- But it is important the measures authorities deploy do not become the source or amplifier of disorderly markets and thereby undermine confidence in markets.
- Advised caution regarding expectations of the effectiveness of market interventions.