The Financial Services Authority (FSA) has today confirmed that it will extend its disclosure obligation for short selling of stocks in UK financial sector companies until 30 June 2009. The decision follows strong support for the proposals on which the FSA consulted last week.
Disclosure of a net short position in the stock of a UK financial sector company will continue to be required once a position reaches 0.25% of a relevant firm’s issued share capital. However, from 16 January 2009, further disclosure will only be required if a short position changes by a further 0.1% of issued share capital (i.e. at 0.35%, 0.45% etc).
The FSA will allow the ban on short selling stocks in UK financial sector companies to lapse on Friday. These changes will take effect at 00:00:01 on 16 January 2009, permitting short selling of these stocks on Friday.
The FSA plans to issue a further consultation paper with proposals on longer-term options for a short selling regime within a few weeks.
Background
- Policy statement PS09/1: Temporary short selling measures - Feedback on CP09/1 can be found here.
- The FSA consultation on the proposed changes can be found here.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime. The FSA as the UK Listing Authority is the UK competent authority for listing.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.
