When the FSA published its new rules on short selling in September 2008 it stated that it would review the rules after 30 days and that a comprehensive review of the rules would be published in January 2009.
On 22 October 2008, the FSA announced that it has now conducted the 30 day review and, with one exception, has concluded that it should not make any changes to the new rules at the present time.
The only change which is to be made relates to the rule in the Code of Market Conduct requiring (with effect from 23 September 2008) daily disclosure of all net short positions in excess of 0.25 per cent of the ordinary share capital of UK financial sector companies held at market close on the previous working day. The FSA has now indicated that it accepts that it is not a proportionate requirement to require daily disclosures of short positions where there has been no change in that short position. It will therefore amend the Code of Market Conduct so that once disclosure of a short position has been made, additional disclosures will only be required when that short position changes. The FSA has stated that a further announcement will be made when this change to the Code of Market Conduct has been made.
The FSA is due to publish its consultation paper on short selling in January 2009. The temporary rules are stated in the Code of Market Conduct to cease to have effect on 16 January 2009.
View the latest FSA list, as at 30 September 2008, of UK banks and insurers covered by the short selling prohibition (1 page pdf).