Net short positions reporting and preparing for Brexit

If you’re a firm that reports net short positions, find out what you need to do during and after the transition period.

The UK left the EU on 31 January 2020 and entered a transition period which ends at 11pm on 31 December 2020. During the transition period, the EU short selling regulation (Regulation (EU) 236/2012) (the SSR) continues to apply in the UK, including the market making exemption.

Current reporting obligations during the transition period

During the transition period, the EU SSR continues to apply in the UK and we expect holders of net short positions to continue to report to us at the existing reporting thresholds.

To determine whether a position in shares should be notified to the FCA, position holders should check on ESMA FIRDS whether the FCA is the relevant competent authority for a particular share and also on ESMA's List of exempted shares to see if that share is exempt. If a share is not exempt, position holders should send their notification to us. If position holders have reasons to believe that the information on ESMA’s pages is not updated or correct, then they should raise this issue to us.

Reporting obligations after the transition period

ESMA is due to review their temporary decision on the 0.1% threshold for reporting net short positions in December 2020. We will communicate our reporting threshold requirements under UK SSR in due course.

The reporting thresholds for UK sovereign debt and uncovered positions in UK sovereign credit default swaps will remain the same. The amount of the outstanding UK sovereign debt will be updated quarterly by us on the FCA’s website.

To determine whether a position in shares should be notified to the FCA, position holders will have to consult the FCA FIRDS for a particular share and also the UK List of exempted shares to see if that share is exempt. If a share is not exempt, position holders should send their notification to us. If position holders have reasons to believe that the information on the FCA pages is not updated or correct, they should raise this issue to us.

The UK list of exempted shares

The UK List of exempted shares will be published on our website from 1 January 2021.

This will be an Excel file comprising 2 lists (tabs):

  1. The FCA’s list of exempted shares containing all shares admitted to trading on UK trading venues where their principal trading venue is outside the UK; and
  2. ESMA’s list of exempted shares as of the end of the transition period. The shares on this list will remain exempt from some of the requirements in the onshored SSR for 2 years, including reporting requirements under Articles 5 and 6 of the onshored SSR.

The FCA’s list of exempted shares will be updated periodically as we identify shares whose principal trading venue is outside the UK. If a share appears on any of the above lists, no notification will be required. 

Electronic submissions

Net short position notifications should be sent through our Electronic Submission System (ESS) prior registration of reporting persons and position holders. This process will not change.

Further information

Find out more about the onshored SSR:

Further information on the changes introduced by the onshored SSR is available in our Primary Market Bulletins (PMB) 21 and 24 published in February and October 2019.

Page updates

12/11/2020: Information added Update on reporting obligations after the transition period.