As of Jan. 16, investors are able to engage in short-selling in the United Kingdom. The FSA allowed the ban to expire, stating that market conditions have become "less extreme" and admitting that it had some effect on reducing liquidity and widening bid/offer spreads on stocks, but that it would reintroduce it if needed. It stated that it is seeking public comments on long-term options for the short-selling regime, and will publish proposals in early Febrary. The FSA also extended its rules requiring the disclosure of significant net short positions until June 30, but proposed requiring additional disclosures only upon specific significant increases in the share of net short positions in the relevant firm's issued shared capital.  

Full Story: UK Regulator Ends Ban on Short Selling, Extends Disclosure Regime Until Mid-2009, 41 Sec. Reg. & L. Rep 62 (Jan. 16, 2009)