On 18 December 2023, the FCA updated its webpage on notification and disclosure of net short positions to reflect various recent developments.
The first of the updates relates to the FCA’s implementation of the Short Selling (Notification Threshold) Regulations 2023, which have been introduced by the Government and which increase the notification threshold for reporting net short positions in shares to the FCA from 0.1% to 0.2% of total issued share capital of an issuer. The FCA confirms in its update that it will be ready to receive notifications at the 0.2% threshold from 5 February 2024, and it asks firms to make the necessary changes to their systems and internal processes to allow them to submit notifications at the higher threshold via its Electronic Submission System. It also notes that:
- Until the threshold change is implemented on 5 February 2024, firms are required to continue to report positions which are at or above 0.1% and below 0.2%, and for those positions, no closing reports will be required from 5 February 2024.
- For open positions at 0.2% and above reached before, on or after 5 February 2024, closing reports will be required as usual when the position falls below 0.2%.
The second update relates to the draft Short Selling Regulations 2024, which the FCA notes has been published by the Government to set out how it will replace the onshored UK Short Selling Regulation, including aspects on sovereign debt, with a new framework tailored for the UK. HM Treasury plans to lay this instrument before Parliament in 2024, subject to Parliament time allowing.
Finally, the FCA flags that the Government has published its response to its July 2023 consultation on sovereign debt and credit default swaps under the UK Short Selling Regulation, along with its final policy position for the regulation setting out the Government’s approach under the UK’s new regime.