UK government's revamped short selling regulation sparks debate about market transparency

Changes to anonymity

The UK government’s freshly introduced rules for short selling have sparked lively debate about the degree to which the changes will improve transparency in financial markets, with some experts declaring it a victory for asset managers “concerned about copycat behaviour [and] short squeezes”.

The changes follow alterations to the existing Short Selling Regulation (SSR) resulting from repeals of European Union legislation following the UK's withdrawal from the EU in 2020.  The state of play  Under the UK short selling regime, firms have to report to the Financial Conduct Authority any net short positions in shares of companies trading on a UK market when those positions reach 0.2% of a company's issued share capital. When these short positions then reach or exceed 0.5%, the UK's financial watchdog publicly discloses these positions on its website, identifying the firms or...