The FSA says it will not extend its ban on the short-selling of UK financial services stocks but warns it will "not hesitate" to re-instate it if necessary.
It says the emergency ban, introduced in September, will come to an end on 16 January as originally proposed.
But the regulator is bidding to extend the disclosure regime on significant net short positions until the end of June.
FSA managing director of wholesale and institutional markets, Sally Dewer, says the moves will help maintain orderly markets.
"Continuing the disclosure obligations as we propose will reduce the potential for abusive behaviour and disorderly markets," she adds.
The FSA is proposing to make one change to the regime. Currently a disclosure must be made if a net short position exceeds 0.25% of a relevant firm's issued shared capital, with further disclosures required if there are any changes in the position. Under the new proposals, further disclosures would only be required at 0.1% bands (e.g. as a net short position reached 0.35%, 0.45% and so on).
The FSA says its consultation will close on 9 January, adding it intends to publish a separate paper within a month, setting out its proposals for the longer-term short-selling regime.
Contact: Scott Sinclair, News Editor, 020 7484 9791 - [email protected]IFAonline
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