Short selling, long a contentious yet vital feature of
financial markets, is once again in the spotlight as the UK’s Financial Conduct
Authority (FCA) launches a consultation to revamp its regulation.
Join IG, CMC, and Robinhood in London’s leading trading industry event!
The watchdog’s latest proposal seeks to balance market transparency and operational efficiency, designed
to encourage trading activity without compromising oversight.
A Smarter, Simpler Framework
The FCA’s consultation, released today (Tuesday),
outlines several key reforms aimed at making short selling more efficient and
less burdensome for market participants.
The plan follows the government’s legislative
framework introduced in January 2025 and forms part of the UK’s broader
post-Brexit effort to make its capital markets more competitive.
Under the proposed model, the FCA would introduce
aggregated net short position disclosures, combining and anonymizing all
individual positions reported above the 0.2% threshold. This approach would
preserve transparency while protecting the identities of individual investors.
The regulator also plans to extend the reporting
deadline for firms to submit their positions and to offer clearer guidance on
how they calculate a company’s issued share capital. Together, these steps are
meant to simplify compliance and reduce administrative strain.
Streamlined Processes for Market Makers
The proposals also aim to speed up and automate the reporting process. Market makers, who play a central role in providing
liquidity, would benefit from upgraded systems for exemption notifications and
position reporting. According to the FCA, the changes are designed to make
submissions “easier, quicker, and less burdensome.”
The consultation reflects the regulator’s continuing
shift toward data-driven oversight and proportional regulation, which prioritizes
efficiency while maintaining safeguards for market integrity.
With feedback now open, the FCA’s short-selling review
marks a pivotal moment in the UK’s efforts to modernize its financial rulebook
for a global marketplace increasingly focused on agility and trust.
Expect ongoing updates as this story evolves.
Short selling, long a contentious yet vital feature of
financial markets, is once again in the spotlight as the UK’s Financial Conduct
Authority (FCA) launches a consultation to revamp its regulation.
Join IG, CMC, and Robinhood in London’s leading trading industry event!
The watchdog’s latest proposal seeks to balance market transparency and operational efficiency, designed
to encourage trading activity without compromising oversight.
A Smarter, Simpler Framework
The FCA’s consultation, released today (Tuesday),
outlines several key reforms aimed at making short selling more efficient and
less burdensome for market participants.
The plan follows the government’s legislative
framework introduced in January 2025 and forms part of the UK’s broader
post-Brexit effort to make its capital markets more competitive.
Under the proposed model, the FCA would introduce
aggregated net short position disclosures, combining and anonymizing all
individual positions reported above the 0.2% threshold. This approach would
preserve transparency while protecting the identities of individual investors.
The regulator also plans to extend the reporting
deadline for firms to submit their positions and to offer clearer guidance on
how they calculate a company’s issued share capital. Together, these steps are
meant to simplify compliance and reduce administrative strain.
Streamlined Processes for Market Makers
The proposals also aim to speed up and automate the reporting process. Market makers, who play a central role in providing
liquidity, would benefit from upgraded systems for exemption notifications and
position reporting. According to the FCA, the changes are designed to make
submissions “easier, quicker, and less burdensome.”
The consultation reflects the regulator’s continuing
shift toward data-driven oversight and proportional regulation, which prioritizes
efficiency while maintaining safeguards for market integrity.
With feedback now open, the FCA’s short-selling review
marks a pivotal moment in the UK’s efforts to modernize its financial rulebook
for a global marketplace increasingly focused on agility and trust.
Expect ongoing updates as this story evolves.
This post is originally published on FINANCEMAGNATES.
