Short-selling investors who bet on a fall in a UK firm’s share price will not be made public as part of proposals by the City watchdog to change disclosure rules.
The Financial Conduct Authority (FCA) is consulting on plans to overhaul the rules which currently require the identities of so-called short-sellers to be disclosed.
In a shift to make British rules more aligned to the US, the regulator is planning to make disclosure on short positions anonymous, with the amount reported only on a total combined basis.
The FCA is also proposing to increase the reporting threshold to 0.2% of a company’s share capital, up from 0.1% currently.
It said the move would “support growth by removing unnecessary barriers which might inhibit or discourage short selling”, which it said “can play an important role by supporting price formation, providing liquidity, and facilitating risk management”.
The FCA added that the new rules would still ensure “sufficient visibility and controls over short selling to manage any risks to support orderly and effective financial markets”.
It follows orders by the Government earlier this year for regulators to cut red tape and help support economic growth, while the UK also no longer has to follow European Union rules on short-selling position disclosures.
But there are expected to be concerns over the watering down of rules in this area and lower levels of transparency amid fears it could make it easier for hedge funds to manipulate markets to boost returns.
Simon Walls, executive director of markets at the FCA, said: “These proposed changes are another important milestone in our drive to become a smarter regulator and to support growth.
“Aggregated net short positions and simplified processes for reporting will enhance and streamline the short-selling regime in the UK, reducing burdens for capital market participants while ensuring the market still gets the transparency it needs.”
The consultation is open for seven weeks, closing on December 16, with aims for the final rules to come into effect in the second half of 2026.
