UK needs more transparency around shorting, FSA says

The UK Financial Services Authority today ruled out any permanent restrictions on short-selling stocks today, but said that it planned to force public disclosure of all short positions.

In a discussion paper published today, the FSA said that permanent bans on all short selling, on naked short selling or on shorting stocks with rights issues would not have enough effect to justify the cost. The authority also dismissed other equity market rules such as circuit breakers, which halt trading in volatile markets, or uptick/downtick rules, which limit the amount a stock price can change over a single day. It would seek the legal power to support longer-term interventions in emergencies, such as the temporary restriction on shorting financial stocks imposed last year.

However, it said that increased transparency would be a valuable change and proposed compelling investors to disclose all individual net short positions above 0.5% of total issued stock to both the FSA and the public.

See also: FSA to extend short selling oversight
Shorts changed
Iosco to tackle trading abuses