FCA Publishes Final Rules on the UK’s New Short Selling Regime

On 16 April 2026, the Financial Conduct Authority (FCA) published Policy Statement PS26/5, setting out its final rules and guidance for the UK’s reformed short selling regime. The new framework, which will take effect on 13 July 2026, replaces the existing regime based on assimilated EU law with bespoke rules in the FCA Handbook, the Short Selling Rules sourcebook (SSR).

Background

The reforms follow HM Treasury’s publication of the Short Selling Regulations 2025 (SSR 2025) in January 2025, which created a new legislative framework for regulating short selling in the UK as part of the government’s programme to repeal and replace retained EU law. The overarching aim is to maintain orderly and effective markets while removing disproportionate costs and burdens that may inhibit or discourage short selling activity. 

Key Provisions

• Position reporting. The notification thresholds remain unchanged at 0.2% of a company’s issued share capital, with subsequent notifications at each 0.1% increment. However, the reporting deadline has been extended from 3:30pm to 11:59pm on the working day following the working day on which the obligation is triggered, giving firms more time to calculate and notify positions. Guidance has also been introduced on sourcing issued share capital data, requiring firms to “act reasonably” using publicly available information.

• Aggregate net short position disclosures. The previous requirement for individual public disclosures of net short positions at the 0.5% threshold has been replaced. The FCA will instead publish anonymous aggregate net short positions (ANSPs) for each company, based on notifications received at the 0.2% threshold.

• Market maker exemption. The notification process for market makers has been streamlined to a single “activity-based” notification. Market makers will also be required to submit an annual attestation confirming their continued eligibility.

• Covering obligations and record-keeping. The covering rules for short sales remain largely the same, but the FCA has formalised a requirement to retain records of covering arrangements for at least five years.

• Reportable Shares List (RSL). The FCA will publish a new RSL, replacing the previous Exempted Shares List, to identify every class of share admitted to trading on UK trading venues that is subject to the short selling rules. Firms will be able to use the RSL to determine which companies are subject to the position reporting requirements.

• Sovereign debt. UK sovereign debt and associated sovereign credit default swaps are excluded from the scope of the position reporting and covering requirements, although they remain within scope of the FCA's emergency powers.

Key Dates

The new regime will be implemented in two phases. Phase 1 takes effect on 13 July 2026 and includes the new FCA rules, the Statement of Policy on emergency powers, the RSL, and the first ANSP disclosures. Phase 2, taking effect on 30 November 2026, introduces a bulk submission facility for position reporting. Existing market makers have a transitional period ending on 29 January 2027, by which date they must re-notify the FCA to continue using the exemption.

Our team is available to advise on all aspects of the new regime and to assist clients in preparing for the transition. Please do not hesitate to get in touch if you would like to discuss how these changes may affect your operations.