On March 17, the UK Financial Conduct Authority (FCA) published a statement on short selling bans and reporting (the Statement).
The Statement explains that, under the Short Selling Regulation (SSR), EU regulators and the FCA have the power to apply short- or long-term bans on short sales in shares and certain other financial instruments.
The Statement considers the impact of an EU regulator or the FCA imposing a ban on short selling. It notes that the FCA has rarely before imposed a ban on short selling of UK shares and has never initiated a ban under the SSR. In order to impose a ban, the FCA states that the situation would need to meet a “high bar,” but which will depend on the particular circumstance.
The FCA also highlights the European Securities & Markets Authority’s (ESMA) decision to alter the thresholds for the notification of short selling positions to EU financial regulators under the SSR and the FCA confirms that it will apply this change in the UK. (For more information, please see the March 20 edition of Corporate & Financial Weekly Digest.)
The Statement is available here.