FCA introduces clearer and simpler short selling rules

The Financial Conduct Authority (FCA) has finalised a simpler UK short selling regime that reduces reporting burdens for firms, while maintaining regulatory oversight.

Short selling plays an important role in financial markets by supporting price formation, providing liquidity and facilitating risk management.  

The new rules follow legislative changes under the government's repeal and replace programme, which imply that the FCA will publish aggregated data showing the overall size of net short positions in each company rather than identifying individual short sellers. 

As well as implementing these changes, the new rules set out how the FCA will oversee short selling in a more proportionate and practical way. 

Firms will benefit from a more workable reporting timetable, with extra time to calculate and submit short position reports. In addition, rules for market makers have been simplified allowing eligible firms to make far fewer notifications to us about exemptions, replaced by an annual confirmation. This cuts administrative effort while retaining regulatory oversight. 

Jon Relleen, director of infrastructure and exchanges at the FCA, said: 

“These changes give firms clearer rules and cut administrative burdens, while ensuring we have the information we need to keep the market fair. It is smarter regulation in action.”

Notes to editors 

1. Read the Policy Statement, rules and operational guidance.
2. The FCA's powers to intervene in exceptional market conditions, including through emergency measures, remain unchanged. The regulator set a high bar for the use of the emergency powers and only consider using them in exceptional circumstances.