FCA Consults on New Short Selling Regime

The UK’s Financial Conduct Authority (FCA) has launched a consultation on proposals for a new short selling regime, aiming to modernise the framework while maintaining market transparency and stability.

The regulator said short selling plays a key role in supporting price formation, market liquidity, and risk management. The consultation seeks to remove unnecessary barriers that may discourage short selling, while ensuring sufficient oversight to maintain orderly markets.

The proposals, aligned with the government’s legislative framework announced in January 2025, include:

• Aggregated disclosures of net short positions, combining and anonymising individual reports above the 0.2% threshold.

• Extended reporting deadlines to give firms more time for submissions and clearer guidance on calculating issued share capital.

• Simplified systems for submitting market maker notifications and reporting, aimed at reducing administrative burden.

Simon Walls, Executive Director of Markets at the FCA, said the reforms mark “another important milestone” in the FCA’s effort to become a smarter regulator. He added that aggregated disclosures and streamlined reporting will “enhance and simplify the UK’s short selling regime while maintaining necessary market transparency.”