FCA Plans to Simplify Short Selling With Anonymized Data and Faster Filings ⋅ Crypto World Echo
Short selling, long a contentious yet vital feature offinancial markets, is once again in the spotlight as the UK’s Financial ConductAuthority (FCA) launches a consultation to revamp its regulation.
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The watchdog’s latest proposal seeks to balance market transparency and operational efficiency, designedto encourage trading activity without compromising oversight.
A Smarter, Simpler Framework
The FCA’s consultation, released today (Tuesday),outlines several key reforms aimed at making short selling more efficient andless burdensome for market participants.
The plan follows the government’s legislativeframework introduced in January 2025 and forms part of the UK’s broaderpost-Brexit effort to make its capital markets more competitive.
Under the proposed model, the FCA would introduceaggregated net short position disclosures, combining and anonymizing allindividual positions reported above the 0.2% threshold. This approach wouldpreserve transparency while protecting the identities of individual investors.
The regulator also plans to extend the reportingdeadline for firms to submit their positions and to offer clearer guidance onhow they calculate a company’s issued share capital. Together, these steps aremeant to simplify compliance and reduce administrative strain.
Streamlined Processes for Market Makers
The proposals also aim to speed up and automate the reporting process. Market makers, who play a central role in providingliquidity, would benefit from upgraded systems for exemption notifications andposition reporting. According to the FCA, the changes are designed to makesubmissions “easier, quicker, and less burdensome.”
The consultation reflects the regulator’s continuingshift toward data-driven oversight and proportional regulation, which prioritizesefficiency while maintaining safeguards for market integrity.
With feedback now open, the FCA’s short-selling reviewmarks a pivotal moment in the UK’s efforts to modernize its financial rulebookfor a global marketplace increasingly focused on agility and trust.
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The latest update follows FCA’s easing of retail investor access to crypto exchange-traded notes (cETNs). The regulator recently lifted aban on cETNs, marking a notable shift in the UK’s regulatory stance towarddigital asset investments.
Under the new framework, cETNs can be offered to retailinvestors provided they are listed on the FCA’s Official List and traded on aUK-recognized investment exchange. The policy aims to expand distributionopportunities for firms while maintaining safeguards to protect consumersthrough stricter disclosure and oversight requirements.
The regulator has classified cETNs as Restricted Mass MarketInvestments, bringing them under the financial promotion regime and ensuringthat marketing materials meet standards designed to reduce the risk of investorharm.
This article was written by Jared Kirui at www.financemagnates.com.
