On February 6, the UK Financial Services Authority (FSA) issued a discussion paper (DP09/1 Short Selling) in which it proposed broadening the current disclosure requirement with respect to significant net short positions in financial stocks to apply to all UK listed equities. The proposed threshold is 0.50% for initial disclosure and for subsequent changes of 0.1% or more, compared with the current requirement for disclosure of 0.25% in relation to UK financial sector equities.
In June 2008 the FSA introduced a disclosure requirement with respect to issuers undertaking rights issues, as reported in the June 20, 2008, edition of Corporate and Financial Weekly Digest. The FSA then introduced a four-month temporary ban on establishing or increasing net short positions in UK financial stocks on September 18, 2008, as reported in the September 19, 2008, edition of Corporate and Financial Weekly Digest. The ban was combined with a requirement for the disclosure of existing net short positions in financial stocks exceeding 0.25% of an issuer’s share capital. On the expiration of the ban on January 16, 2009, it was not renewed, but the requirement for the disclosure of net short positions was extended until June 30, 2009, as reported in the January 16, 2009, edition of Corporate and Financial Weekly Digest. At that time the FSA announced that it would consult on proposals for a long-term regime, and DP09/1 is the result.
The consultation period lasts until May 8, following which permanent rules will be announced.