FSA Introduces Short Selling Disclosure on 20th June 2008

The FSA has introduced new rules that introduce reporting on SHORT POSITIONS to take effect NEXT FRIDAY. This may necessitate immediate planning to ensure compliance at firms that use shorting or other economically equivalent instruments.

In light of the volatility seen around rights issues in current market conditions, FSA has introduced provisions in its Code of Market Conduct, to come into effect from Friday 20 June 2008, which will require the disclosure of significant short positions in stocks admitted to trading on prescribed markets which are undertaking rights issues.  For this purpose, FSA has defined a significant short position as 0.25% of the issued shares achieved via short selling or by any instruments giving rise to an equivalent economic interest. The obligation will be to disclose positions exceeding this threshold to the market by means of a Regulatory Information Service by 3.30pm the following business day.  These provisions were made by the FSA Board yesterday.

The FSA release can be read here:

http://www.fsa.gov.uk/pages/Library/Communication/PR/2008/057.shtml

To make the disclosures then firms that are affected will need to use a Regulatory Information Service.  Details of these services are available on the FSA website at:

http://www.fsa.gov.uk/Pages/Doing/UKLA/ris/index.shtml

If you need assistance with these matters please contact Stephen Burke, Chris Rexworthy, Peter Moore or your usual IMS contact on +44 207 408 2448.