short selling

FSA Approach to Implementation of Aspects of the EU Short Selling Regulation

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On August 15, the FSA published a short selling edition of its Market Watch newsletter. Newsletter No. 42, August 2012. 

Although the EU Short Selling Regulation (the ‘Regulation’) will have direct effect in the UK from November 1, certain aspects of it afford discretion to, or impose obligations on, member states to introduce operational procedures to ensure compliance by market participants.

The newsletter, which does not constitute formal FSA guidance, sets out the FSA’s proposed approach to how it will exercise that discretion in six areas of the Regulation including:

  • removing the existing UK rules on short selling by November 1, through amendments to the FSA Handbook;
  • whether it is appropriate to apply the FSA’s existing penalties policy to breaches of the short selling regime;
  • a framework for determining whether or not the FSA will exercise its powers to suspend, prohibit or limit trading in financial instruments following a significant fall in price; and
  • developing web-based solutions for the public disclosure of significant short positions.

The FSA will issue a formal consultation on proposed changes to the FSA Handbook shortly.  

France, Italy, and Spain Extend Short Selling Restrictions

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On August 25, the national financial regulators of France, Italy, and Spain extended restrictions on short selling stock introduced on August 11. France’s restrictions have been extended to November 11 while Italy and Spain have extended their restrictions to September 30. The ban enacted by Belgium’s financial regulator on August 11 continues to remain in effect indefinitely. France Release. Italy Release. Spain Release. Belgium Release.