UK regulator ends its ban on short selling but keeps disclosure rules on shorting positions
LONDON - The UK ban on short selling for 34 companies will expire on January 16, according to the UK Financial Services Authority (FSA). The regulator will extend its rules forcing short sellers to disclose their positions until June 30.
The ban against short selling - investors aiming to profit by selling shares lent for a fee in the hope of subsequently buying them back cheaper - was introduced in September after the collapse of Lehman Brothers and a dive in share prices on a number of UK banks, most notably HBOS.
"We will not hesitate to reinstate the ban if necessary," says Sally Dewar, managing director of wholesale and institutional markets at the FSA. "We believe these proposals are the right measures for maintaining orderly markets."
The FSA has resisted political pressure to extend the ban, including comments by chairman of the Treasury select committee John McFall and Liberal Democrat Treasury spokesman Vince Cable. However, the Association of British Insurers (ABI), whose members represent around 15% of the UK stock market, welcomed the FSA's decision to extend the short-selling disclosure regime.
The regulator plans to publish a consultation paper within the next month, outlining its proposals for a long-term short-selling regime.
More on Regulation
Heavy regulatory costs and fragile systems will be problems in 2015
Avoiding model failure will be a key issue in 2015
Tax evasion, corporate ownership and sanctions will all be concerns
Response to criticism of deference to big banks
Sign up for Risk.net email alerts
Sponsored webinar: IBM
Watch highlights of this year's London conference
Operational risk and the challenges of defining and dealing with conduct risk
Watch discussions and speakers from our North America conference
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.