The Financial Services Authority (FSA) is going to extend short selling disclosure regime within UK financial sector companies until 30 June 2009.
FSA interprets this step as a change to the regime. Currently a disclosure must be made if a net short position exceeds 0.25% of a relevant firm’s issued shared capital, with further disclosures required if there are any changes in the position. Under the amendments further disclosures would only be required at 0.1% bands (e.g. as a net short position reached 0.35%, 0.45% and so on). The scope of the disclosure obligations continues to apply only to stocks in UK financial sector companies.
FSA also proposes that the ban on the short selling of stocks in UK financial sector companies will expire on 16 January. The consultation will close on 9 January to enable the new measures to be in place at the expiry of the existing ones on 16 January.
“We believe that these proposals are the right measures for maintaining orderly markets,” says Sally Dewar, managing director of wholesale and institutional markets, FSA. “Continuing the disclosure obligations as we propose will reduce the potential for abusive behaviour and disorderly markets. In addition, we will not hesitate to reinstate the ban if necessary.”
L.D.