Short selling regime for UK financial sector companies: FSA shortens the short list

On 14 January 2009 the Financial Services Authority (FSA) announced that the ban on short selling stocks in UK financial sector companies would be allowed to lapse with the effect that short selling in these stocks was permissible from Friday, 16^th January 2009. 

The FSA has now published revised FAQs following the lifting of the ban which change the way in which baskets or indices should be treated. Firms must now include any economic interest held in a basket, index or ETF in the calculation of their overall short position.

The FSA has also published a new list of firms deemed to be UK financial sector companies. Four companies have been removed from the list (Alliance & Leicester, Bradford & Bingley, HBOS and London Scottish) while Provident Financial has been added.

The FSA is due to publish another consultation paper within a few weeks, setting out its proposals for the longer-term short selling regime.

If you would like to discuss further how we can assist please contact Scott Wilson, Stephen Burke, Chris Rexworthy, Peter Moore or your usual IMS Consultant.

29th January 2009