The EU Short Selling Regulation (SSR) introduced a private and public notification regime for investors who hold net short positions in certain financial instruments.
End of the transition period
The EU SSR and the Level 2 regulation (regulation EU 918/2012) were converted into domestic law as amended by the Short Selling (Amendment) (EU Exit) Regulations 2018 following the end of the transition period.
The Binding Technical Standards, adopted under the EU SSR as at the end of the transition period, have also been converted into UK law and apply as amended by the Technical Standards (Short Selling) (EU Exit) Instrument 2019.
ESMA Guidelines adopted under the SSR have not been incorporated into UK law.
ESMA Guidelines and Q&A documents adopted under the SSR, should be treated in accordance with our general approach to EU non-legislative materials. Generally, firms should continue to follow and have regard to such materials to the extent that they are relevant under UK SSR.
We published our Primary Market Bulletin 21, 24 and 32 in which we advise market makers of changes to the regulatory obligations under UK SSR. PMB 21 and 32 are particularly important for firms using the market maker exemption under the SSR, as they explain the key conditions for the exemption and equivalence of EEA regimes.
Under the UK SSR, you may have to notify us of positions that are private or are to be disclosed publicly.
Amending the SSR notification threshold from 0.2% to 0.1% – 6 January 2021 update
On 6 January 2021, the Treasury published the Short Selling (Notification Thresholds) Regulations 2021 No. 5 (the Regulations) to amend the notification threshold under Article 5(2) of the Short Selling Regulation from 0.2% to 0.1% of the issued share capital of an issuer. This change will come into force on 1 February 2021.
This means that from 1 February 2021 the notification threshold for issued share capital of a company that has shares admitted to trading on a UK trading venue (UK Regulated Market and UK MTF) will be 0.1%.
Under the ESMA decision in March 2020, which was subsequently renewed in June 2020, September 2020 and December 2020, the scope of the threshold notification, which was temporarily amended from 0.2% of issued share capital to 0.1%, only applied to shares admitted to trading on a regulated market.
The Regulations will apply a new 0.1% notification threshold to shares admitted to trading on a UK MTF as well as a UK regulated market.
From the end of the transition period until the Regulations come into effect on 1 February 2021, the notification threshold for issued share capital of a company that has shares admitted to trading on a UK trading venue is 0.2%. However, during this period position holders will continue to be able to make notifications to us at the lower 0.1% threshold if they wish to do so.
Register to submit a notification
To be able to submit a short selling notification to us on behalf of a position holder (whether a firm or an individual), the person making the notification (the reporting person) must be registered with us through our Electronic Submission System (ESS).
If you are making notifications for yourself as an individual reporting person, you will still need to be registered as a reporting person beforehand.
You will not be able to send any notifications until we have accepted your registration.
Firstly, you will need to create a personal ESS account before you are able to submit a SSR registration form.
Once your account has been approved, you will need to submit one of the following Position Holder registration types:
- Registration for New Position Holder Firm – This registration type is to register yourself as a reporting person for a firm that has not been registered before.
- Registration for Existing Position Holder – This registration type is to register yourself as a reporting person for a firm/individual that is already registered
- Registration for New Position Holder Individual – This registration type is to register yourself as a position holder individual or for an individual that has not been registered before.
For all the above registration types, you will need to upload an authorisation letter on the ESS portal. The authorisation letter should be on company letter head and should state which individuals have permission to submit notifications on behalf of the firm/individual. This should be signed by an individual that has the authority to give this level of permission.
For registering of New Position Holder Firm, a certificate of incorporation of the firm will be required.
For registering a New Individual Position Holder, you must provide a copy of the position holder’s driving license or passport.
Once we have accepted your registration we will send you an acceptance email in addition to being given permission to the SSR notification submissions on ESS.
If there is more than one reporting person for a position holder, each reporting person must complete the registration process.
This is detailed in section 5 of our ESS user guide.
Determination of a notifiable position in shares
Certain shares are exempt from the notification and disclosure requirements in the UK SSR if their principal venue for trading is located outside the UK. For a list of these shares, please see the UK list of exempted shares. More information is available in the ‘UK list of exempted shares’ section.
To determine whether a position in shares should be notified to us, position holders will have to consult the FCA FIRDS to see whether a particular share is admitted to trading in the UK. Subsequently, position holders will have to consult 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 reason to believe that the information on our pages is not up to date or correct, they should raise this issue with us.
See the short selling restrictions and prohibitions page for the latest information on prohibitions for specific financial instruments.
To calculate the net short position, group aggregation, etc, please refer to the UK SSR and the supplementary texts and the information available on our pages.
Private share notifications
A private share notification must be made when the net short position in shares reaches 0.2% of the issued share capital of the company concerned, and again at each 0.1% change above 0.2% .
This relates to both a 0.1% increase and decrease of the position (including each time the position drops below 0.2%)
Public share notifications
A public share notification must be made when the net short positions of shares reach 0.5% of the issued share capital of the company concerned, and again at each 0.1% change above 0.5%.
This change relates to both a 0.1% increase and decrease of the position (including each time the position drops below 0.5%).
To make a public notification, fill in a Net Short Position share notification type on ESS and submit this to us. We will make this information available on our website if the position reaches or crosses the 0.5% threshold.
If you have previously disclosed a position publicly and that position then falls below 0.5%, you must make a new disclosure.
Determination of private UK Sovereign debt and credit default swaps notifications
Net short positions in UK sovereign debt and positions in uncovered UK sovereign credit default swaps (CDS) must be privately reported to us when these positions reach 0.5% of the UK outstanding sovereign debt and at each 0.25% increase or decrease after that.
The amount of the UK outstanding sovereign debt and the corresponding threshold is published by us and updated on a quarterly basis.
To notify us about UK sovereign debt or CDS positions, complete the Net Short Position Sovereign Debt Notification on ESS and submit that to us.
UK sovereign debt thresholds
For thresholds regarding UK sovereign debt and uncovered positions in UK sovereign CDS, please see the below table which is updated on a quarterly basis.
NOTIFICATION THRESHOLDS FOR NET SHORT POSITIONS ON UK SOVEREIGN DEBT
Valid as of 1 January 2021
|Amount of outstanding UK debt (in million €) - Duration adjusted||Initial threshold
in % In million €
in % In million €
How to make a notification
You must send your notification to us through our Electronic Submission System, following registration of reporting persons and position holders.
You should send your positions by 3.30pm on the trading day after the day the position was reached. All calculations should be made as at midnight on the trading day the position was reached.
Correct or delete an incorrect notification
When you submit a net short position notification, you will see a position ID in your ESS portal. There is a unique ID for every position submitted to us.
If you need to correct or delete a notification, you must submit a Net Short Position Share Notification – Correct and reference the position ID of the notification that you wish to correct.
If the position is completely incorrect and you wish to delete it you will need to submit a Net Short Position Share Notification – Delete and reference the position ID of the notification you wish to delete.
Do not use the notifications provided for correcting or deleting a notification to report a movement of a position, or the closing out of a position. These notification types should only be used when you have given us incorrect information in a notification.
Please, follow the above steps if you wish to correct or delete a previous notification sent to us in UK sovereign debt or in uncovered UK sovereign CDS.
Notes for using the forms on ESS
You must provide all the mandatory information (highlighted by a red asterix) to complete the forms on ESS.
The ISIN code of the stock must be provided in the correct format (12 alphanumeric characters) and a percentage position must always be completed to 2 decimal places.
No ISIN code is require for reporting net short positions in UK sovereign debt and in uncovered UK sovereign CDS.
UK list of exempted shares
Certain shares are exempt from the notification and disclosure requirements in the UK SSR, if the principal venue for the trading of the shares is located outside the UK.
For a list of these shares please see the UK list of exempted shares. This list includes:
- The FCA’s List of exempted shares containing all shares admitted to trading on UK trading venues, where their principal venue for trading is outside the UK; and
- 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 UK SSR for 2 years, including reporting requirements under Articles 5 and 6 of the UK SSR.
If a share appears on any of these lists, no notification will be required.
The FCA’s List of exempted shares will be updated periodically as we identify shares whose principal trading venue is outside the UK.
If position holders have reasons to believe that the information on the UK list of exempted shares is not up to date or correct, please email [email protected].
Exemptions from the UK SSR
Market makers and authorised primary dealers may not have to comply with these obligations when undertaking market-making activities in the instruments and using an exemption from the SSR.
See our list of market makers and authorised primary dealers.
Request for guidance
You can request guidance in writing and on a named basis only.
We expect you to have considered the query before writing to us, and we may reject any queries that we don’t consider are seeking guidance.
Email queries to [email protected], with the subject line ‘Request for guidance: SSR’.