
UK FSA proposes permanent short-selling disclosure
Daily news headlines
LONDON - The UK Financial Services Authority (FSA) has released a discussion paper proposing general disclosure rules for short selling. The regulator says the requirements would apply to all UK-listed stocks, replacing the supervisor's temporary disclosure requirements, which expire in June 2009.
The regulator says enhanced transparency is necessary but is keen to stress that short selling's benefits outweigh its disadvantages. The paper says there will be no direct restrictions on short selling, citing benefits of increased liquidity and price efficiency, and asks the industry to assist in the regulator's response.
The FSA proposals follow a comprehensive review of short selling taken since it instituted its temporary ban on September 18, 2008 and which expired on January 16 this year. That expiry left reporting requirements still in place for full disclosure on shorting positions of 0.25% and above.
The discussion paper examines arguments for and against short selling - an accepted market practice until September's Lehman Brothers and Merrill Lynch failures caused a shockwave of financial instability and sent international bank share prices tumbling.
"This discussion paper offers the opportunity for market participants and others to contribute to the development of future policy," says Sally Dewar, head of FSA enforcement. "We believe enhanced disclosure across the whole market is the right way forward. We also consider it to be important that we align our proposals with those being developed on an international basis and we are working towards this."
Harmonisation of international regulatory responses is highlighted as crucial by the FSA. European Union member states have adopted a raft of temporary short-selling restrictions since the FSA's September ban. Since then, the EU's Committee of European Securities Regulators has launched a task group looking at a pan-European supervisory solution, while the self-regulating International Organisation of Securities Commissions has launched its own task force looking at the case for reform.
Consultation will end on May 8, after which the FSA will issue feedback on its future long-term policy.
The discussion paper can be downloaded here.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
SEC expected to protect CRT in conflicts of interest rule
Decision could come as early as today; high hopes for credit risk transfer exemption
FRTB managers face hard facts about risk factors
There are ways to reduce the capital charges caused by NMRFs, but they come at a price
SEC official defends delayed dealer registration rule
Regulator says market should be treated like equities, but PTFs warn it will harm market liquidity
New UK clearing rules: same as the old rules?
Clearing experts doubt UK regulation can diverge significantly from Emir and global standards
SEC to delay US Treasury clearing mandate, dealer rule
A final vote on proposed US Treasury market reforms is now expected in early 2024
BoE warns against use of stablecoins in banking
Tokenised payment systems pose compliance and systemic risks, regulator says
Industry unsure of SEC’s new short-selling transparency rule
Requirement aims to provide sufficient transparency while protecting traders from a GameStop-style backlash
EC to adopt NII outlier test within ‘weeks’
New IRRBB rules could come into force in early 2024; industry hoping EBA draft is softened