Short Selling Rules

The FSA has published Policy Statement 09/1: Temporary short selling measures (PS09/1) in which the FSA explains what it is will do in relation to the temporary short selling measures that it introduced in September 2008.

In PS09/1 the FSA confirms that it will allow the ban on the short selling of stocks in UK financial sector companies to expire on 16 January 2009. The FSA also confirms that it will extend its temporary disclosure regime for significant net short positions in the stocks of UK financial sector companies until 30 June 2009.

The FSA is making one change to the disclosure regime so that once a disclosure has been made, additional disclosures will be required only if a short position changes significantly. This is done by the FSA requiring disclosure every 0.1% above the 0.25% threshold (i.e. at 0.35%, 0.45%, 0.55% and so on). Any short position reaching these further thresholds (whether increasing or decreasing) has to be disclosed. If a short position decreases below 0.25% a final disclosure also needs to be made.

The changes become effective at 00:00:01 on 16 January 2009.

Please note that short selling measures have been enforced in other countries such as (but not limited to) Germany, Belgium, U.S., Australia, Japan.

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