Updated UK Short Selling Regulations Published
A new version of the Short Selling Regulations 2024 has been presented to Parliament, including an explanatory memorandum and impact assessment. These updated regulations introduce a fresh framework for overseeing short selling activities, granting the Financial Conduct Authority the authority to create rules around these activities and intervene in extraordinary situations. Notably, the draft Regulations exclude requirements for short positions in sovereign debt or sovereign CDS, aligning with the decision to eliminate the short-selling regime for these instruments under normal reporting circumstances. However, the FCA will retain the power to address sovereign debt and sovereign CDS positions in exceptional circumstances.
The revised draft Regulations also introduce changes and additions to the original provisions, such as:
– Allowing the FCA to establish rules exempting market making activities on overseas trading venues.
– Setting buy-in procedures for UK CCPs offering clearing services for shares.
– Updating supervision and enforcement powers to align with the new regime.
Specific provisions will take effect immediately upon the Regulations being made, enabling the FCA to issue guidance. The remaining provisions will come into force when the existing Short Selling Regulations are revoked, with the FCA’s rules taking effect from that point onward.
