Finally, after a 30-day review, the City regulator has amended one of the more unfathomable rules in its ban on shorting bank and insurance shares.
As discussed here previously, anyone who held a short position in one of the relevant stocks had to make an announcement every day even if the position had not changed. Cue confusion, and a mass of unnecessary regulatory announcements.
Today the FSA announced that its rules on short-selling would remain the same, with one exception. It said:
"The one change relates to the requirements for disclosing significant net short positions in UK financial sector stocks. The FSA accepts that it is not a proportionate requirement to require daily disclosures of short positions where there has been no change in a short position. Consequently the FSA will be making amendments to the Code of Market Conduct so that once disclosure of a short position has been made, additional disclosures will only be required when that short position changes. A further announcement will be made when this change has been made."
Hooray for common sense. Now we await the outcome of the FSA's "comprehensive review of short-selling" due in January.
