FSA confirms extension of short selling disclosure regime

The Financial Services Authority (FSA) has confirmed that it will extend its disclosure obligation for short selling of stocks in UK financial sector companies until 30 June 2009.

The decision follows strong support for the proposals on which the FSA consulted last week.

Disclosure of a net short position in the stock of a UK financial sector company will continue to be required once a position reaches 0.25% of a relevant firm's issued share capital. However, from 16 January 2009, further disclosure will only be required if a short position changes by a further 0.1% of issued share capital (i.e. at 0.35%, 0.45% etc).

The FSA will allow the ban on short selling stocks in UK financial sector companies to lapse on Friday. These changes will take effect at 00:00:01 on 16 January 2009, permitting short selling of these stocks on Friday.

The FSA plans to issue a further consultation paper with proposals on longer-term options for a short selling regime within a few weeks.