The UK’s Financial Services Authority is proposing to extend its short selling disclosure obligations for the foreseeable future.

Last year the UK joined with other countries, including the U.S. and Canada, in adopting a short selling ban for certain financial sector stocks. The UK’s ban expired earlier this year (the U.S. and Canadian bans expired last fall) but it extended measures requiring disclosure for significant net short positions in the stocks of financial sector companies to June 30.

Today, the FSA said it is proposing to extend the current disclosure regime for significant net short positions in the stocks of UK financial sector companies for an indefinite period. Disclosures will only need to be made if a net short position exceeds 0.25% of a company’s issued shared capital or increases by 0.1% bands above that mark.

Sally Dewar, managing director of wholesale and markets at the FSA, said, “Keeping the disclosure requirements will continue to enhance transparency and limit the potential for market abuse, while details of a long term regime for short selling are being drawn up. We remain committed to achieving an international consensus that is as wide as possible on our broader short selling regime.”

The FSA noted that it considered setting another deadline on the obligation, but decided that “it is not possible to forecast how long the need for the obligation will continue and we believe that setting another specified period would be artificial.”

It’s now proposing extending the disclosure obligation without a fixed time limit. “However, we emphasise that we do not intend this to be a permanent regime,” it said in a consultation paper. “Our expectation is that it would either be superseded in due course by broader permanent disclosure measures — preferably agreed on the widest possible international basis — and/or be revoked.”

IE