We have previously reported on the UK Financial Services Authority's (FSA) temporary ban on the short selling of stocks in the UK financial sector (which has now expired) and the ongoing disclosure requirements in relation to new and existing short positions. In February 2009 the FSA published a discussion paper setting out its proposals for longer-term regulation of short selling across the entire UK listed stock market (click here to see the most recent post).
The FSA has now published its policy statement (PS09/10) confirming its extension to the temporary disclosure requirements, which were due to expire on 30 June 2009, with no new fixed time limit. The FSA has emphasised that it does not consider the current regime to be a permanent regime, but is concerned to ensure that no further extensions of time are required while it concludes the consultation process in relation to the proposed permanent regime. The FSA expects that, on conclusion of that consultation process, the temporary regime will be either superseded by a new permanent regime or revoked.
The rules apply to any net short position in a financial sector company, taking into account any form of economic interest the holder has in the shares, other than any interest held as a market maker in that capacity. The thresholds for disclosure remain the same: an initial threshold of 0.25% of the issued capital and subsequent disclosure bands of 0.1% (click here to see our previous post describing these thresholds).
The policy statement can be found by clicking here.