• 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.

Response Summary

• 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.