The U.K.’s Financial Conduct Authority (FCA) has proposed changes to streamline its short reporting regime, aiming to remove barriers that may inhibit short-selling activity.
The regulator published a consultation paper that sets out proposed changes to its rules that are intended to remove certain administrative obstacles to short-selling, such as simplifying short position reporting requirements and processes.
“Our proposals intend to create a more efficient, effective, and coherent short-selling regime,” it said. “This seeks to maintain the orderly and effective functioning of U.K. markets, while removing disproportionate costs.”
Among other things, it’s seeking to adopt a new model for required short position disclosures; extend the deadline for firms to meet reporting requirements; and, streamline its systems for receiving short reports to make submissions faster and easier.
The FCA said that the changes — which implement changes that reflect similar legislative reforms — are designed to reduce barriers to trading activity that can be important to supporting price formation, providing liquidity, and facilitating risk management.
“Aggregated net short positions and simplified processes for reporting will enhance and streamline the short-selling regime in the U.K., reducing burdens for capital market participants while ensuring the market still gets the transparency it needs,” said Simon Walls, executive director of markets at the FCA, in a release.
The proposals are out for comment until Dec. 16.
The FCA said that it expects to implement the reforms in 2026, after the rules are finalized, and firms have been given time to make any required operational changes.