The UK Financial Conduct Authority (FCA) has initiated a consultation process inviting input on the proposals for a revised short selling regime. This effort is aimed at fostering market growth by eliminating unnecessary obstacles that may hinder or discourage short selling activities. At the same time, it emphasizes the importance of maintaining adequate oversight and controls to manage potential risks, ensuring that financial markets operate in an orderly and effective manner.
The proposals outlined by the FCA are designed to complement existing legislation established by the government in January 2025. Key features of the proposed changes include:
1. **Aggregated Net Short Position Disclosures**: A new approach will be implemented to combine, anonymize, and disclose individual positions that exceed a reporting threshold of 0.2%. This aggregation is intended to enhance transparency while protecting individual identity.
2. **Position Reporting**: The FCA proposes to extend the timeline for firms to submit their position reports. This change aims to streamline the reporting process by reducing the duration required for the FCA to process submissions and issue guidance on how firms should determine the issued share capital of companies when calculating their positions.
3. **Market Maker Notifications**: The FCA seeks to enhance the efficiency of its systems relating to position reporting and market maker exemption notifications. By automating and simplifying these processes, the goal is to make it easier and less burdensome for firms to submit the necessary information.
Feedback is being solicited until December 16, 2025, allowing stakeholders ample time to contribute their insights and perspectives on the proposed changes. This consultation is part of a broader initiative to ensure that the regulatory landscape effectively supports market activities while safeguarding against potential abuses or systemic risks associated with short selling.