We reported last week that the FSA was consulting on whether to lift its ban on short selling of stocks in financial companies and certain amendments to the disclosure rules in connection with short positions (see the post by clicking here).

The amendments to the FSA's rules have now come into force, so that:

  • with effect from today, 16 January 2009, the ban on short selling of stocks in financial companies has expired;
  • the short selling disclosure obligation has been extended to 30 June 2009, with a full consultation to follow; and
  • a net short position which represents an economic interest of 0.25% of the issued capital of any financial company must be disclosed. Once disclosed, additional disclosures are required if the short position crosses any 0.1% threshold over 0.25%, whether as a result of an increase or a decrease in the short position.

The policy statement, including the amended rules, can be found by clicking here.