Short Selling Regulations - Financial Conduct Authority

Short Selling Regulation

Last Modified: 17/12/2014
Regulation on short selling and certain aspects of credit default swaps is directly applicable in the UK since 1 November 2012.

Regulation (EU) No 236/2012 of the European Parliament and of the Council (the Short Selling Regulation – SSR)  requires holders of net short positions in shares or sovereign debt to make notifications once certain thresholds have been breached. It further outlines restrictions on investors entering into uncovered short positions in either type of instrument. It gives powers to competent authorities to suspend short selling or limit transactions when the price of various instruments (including shares, sovereign and corporate bonds, and ETFs) fall by set percentage amounts from the previous day’s closing price.

Who does the SSR apply to?

The SSR applies to people undertaking short selling of shares, sovereign debt, sovereign credit default swaps (CDS) and related instruments that are admitted to trading or traded on an EEA trading venue (unless they are primarily traded on a third country venue).

When will the SSR requirements apply?

The regulation has been directly applicable in the UK since 1 November 2012.

ESMA published its Consultation Paper on Guidelines for market-making exemptions:

  • on 17 September; and
  • the consultation period ended on 5 October.

It published its final guidelines at the end of November. 

When can I apply to the FCA for market-maker exemptions?

ESMA has now published its consultation paper on market-making exemptions, so you can now apply. We have also published our guidelines.

More information

For more information, see the Short Selling Regulation