Shares: Sales

(asked on 2nd November 2022) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential (a) risks and (b) benefits of short selling; and if he will make it his policy to ban short selling.


Answered by
Andrew Griffith Portrait
Andrew Griffith
Minister of State (Department for Science, Innovation and Technology)
This question was answered on 8th November 2022

The government works closely with the regulators and market participants to monitor the effectiveness of the regulatory regime, in line with the government’s objectives of supporting economic growth and financial stability.

The UK’s Short Selling Regime, introduced in 2012, regulates short selling practices while safeguarding companies and the financial system. Among other things, it requires persons to report their short positions in companies whose shares are admitted to trading on UK trading venues, and provides the Financial Conduct Authority (FCA) with powers to request information from persons on their short selling activities, to apply penalties to persons who do not meet their regulatory obligations under the short selling regime, and to restrict the short selling of certain instruments in certain circumstances.

In particular, the FCA can temporarily restrict short selling when the price of an instrument has fallen significantly during a single trading day in relation to the closing price of that instrument on the previous trading day, and can restrict short selling for a period of up to three months when there are adverse events or developments which are a serious threat to financial stability or to market confidence in the UK.

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