Following the Treasury's Short Selling Regulatory Review: Soliciting Evidence and Responses, the UK Government has published a draft Statutory Instrument (SI) and a policy note setting out how the Government currently intends to amend the UK's short selling regulatory regime, but does not set out all the elements of this new proposed regime。

In summary, the draft Additional Notes set out the scope of the proposed new UK short selling regime and gave the FCA a series of relevant rulemaking powers to clearly define company-oriented short selling requirements in the FCA Manual.。

It also includes emergency intervention powers given to the FCA, which may require additional short selling-related information and limit short selling in exceptional circumstances where financial stability or market confidence is seriously threatened, or to prevent disorderly declines in the price of financial instruments.。

Among the key elements set for the proposed new regime, the FCA notes the following:

• Short selling of stocks and related instruments is defined as a new designated activity。
• The Financial Regulatory Commission will have the power to exempt certain shares from compliance and will be required to publish a list of shares subject to certain new short selling rules。
• The FCA will be required to publish the net short positions received from short sellers on an issuer summary basis.。
• The FCA will have the power to establish rules exempting market making activities and stabilizing market activities from certain short selling regulations。

The FCA will be consulted on the use of these new powers by the Financial Regulatory Commission to develop rules on short selling。

The evidence call is part of the government's wider plan to repeal and replace EU reservation laws in the financial services sector.。Government requests comments on draft SI by 10 January 2024。The Ministry of Finance currently plans to present the final version of the statutory instrument to Parliament in 2024.。