Introduction
The Financial Conduct Authority (FCA) opened Consultation Paper CP25/29 on 28 October 2025, in response to HM Treasury’s Short Selling Regulation: Call for Evidence, proposing major updates to the UK short selling regime. These reforms are not intended to fundamentally change the current framework; rather, they aim to make it simpler, more efficient, and more competitive, while maintaining market integrity and transparency.
UK Short Selling Regulation 2025: What’s Changing
While the FCA’s consultation focuses on rules and implementation, the SSR 2025 itself introduced three fundamental structural changes to the UK regime:
- Removal of UK Sovereign Debt: UK sovereign debt and associated credit default swaps (CDS) have been removed entirely from the scope of mandatory reporting and covering requirements. This reflects the view that the size and liquidity of the UK market render such requirements unnecessary and disproportionate.
- Shift to Aggregate Net Short Positions (ANSP): The former obligation requiring the public disclosure of individual short positions (at or above 0.5% of issued share capital) is repealed. It is replaced by an obligation for the FCA to calculate and disclose a single, anonymised Aggregate Net Short Position (ANSP) for each company.
- Reportable Shares List (RSL): The previous list detailing shares exempt from the regime is replaced by the Reportable Shares List, which explicitly identifies the shares subject to the UK’s reporting and covering requirements.
These changes were made by Parliament in January 2025, although they have not yet come into effect.
You can read our detailed blog on UK SSR 2025 here.
Key Proposed Changes / Consultation: Open Discussion
The existing regime requires persons to report Net Short Positions (NSPs) to the FCA when they reach, exceed, or fall below 0.2% of a company’s issued share capital, and at subsequent 0.1% increments. The proposed changes aim to simplify the reporting process without altering the core framework or thresholds.
| Area of Change | Current Regime (UK SSR) | Proposed Requirement (SSR 2025) |
|---|---|---|
| Reporting Deadline | No later than 15:30 on the trading day following the trading day (T+1). | Extended to 23:59 on the working day following the working day (T+1). |
| List Content | FCA publishes the UK List of Exempted Shares, identifying shares admitted to trading on UK venues that are exempt from reporting and covering requirements. | FCA replaces this with the Reportable Shares List (RSL), which identifies admitted shares to which position reporting and covering requirements apply. |
| Market Maker Exemptions | New market makers must notify the FCA at least 30 calendar days before using the exemption; notifications are submitted via manual email. | Notification period reduced to 15 calendar days and the FCA proposes an electronic submission system to replace manual email. |
| Public Short Positions Disclosure | Individual NSPs at/above 0.5% were identified and publicly disclosed. | Individual NSPs reported to the FCA will remain anonymous. The FCA will calculate and publish ANSPs as a single aggregate for each company (sum of NSPs ≥ 0.2%). |
| Calculation Time | NSPs must be calculated as of midnight at the end of the trading day (T). | Still uses data as of midnight (T), but clarifies the mechanical calculation can be performed any time before submission. |
| Financial Instruments Scope | Unclear whether the list of instruments (options, futures, etc.) used for calculation was exhaustive. | Clarified: the list of specified financial instruments used to calculate long and short positions is exhaustive. |
| Issued Share Capital | No centralised source for determining issued share capital. | Persons must act reasonably using publicly available (free) information, e.g., Companies House filings or DTR 5.6.1R disclosures. |
| Group & Legal Entity Reporting (Cease) | When a group NSP falls below 0.2%, the group reports first; constituent legal entities report their individual NSPs on the trading day following the group’s notification (if still above threshold). | When a group falls below 0.2%, constituent legal entities must report on the same working day the group reports (if their positions require it). |
| Group & Legal Entity Reporting (Initial) | Constituent legal entities report only when the group NSP is below the base threshold. No guidance if the group later reaches the threshold while entities remain above it. | Both the group and constituent entities should renotify on the same working day, allowing the FCA to exclude duplicates from ANSP calculations and prevent overstatement. |
Frequently Asked Questions (FAQ)
1) How are Aggregate Net Short Positions (ANSP) calculated and disclosed?
The shift from individual public disclosure to ANSP is a core feature of SSR 2025, intended to provide transparency on overall short-selling activity without identifying specific position holders, thereby mitigating negative market effects like short squeezing.
- Calculation Components: The ANSP represents the sum of all anonymised NSPs reported to the FCA at or above the 0.2% reporting threshold. Positions below the threshold are excluded.
- Publication Timeline: ANSPs will be published two working days after the day to which the position relates (T+2), starting from 12:00. This accommodates the later reporting deadline and the time required for calculation and verification.
- Late/Inaccurate Positions: NSPs notified after the deadline or those undergoing verification may be excluded until confirmed. The FCA may exceptionally include late notifications to maximise ANSP accuracy (without negating potential supervisory action against the late notifier).
- Format: ANSPs will be disclosed in a downloadable, machine-readable format to enable analysis and integration by market participants.
2) How are Reportable Shares (RSL) determined and published?
SSR 2025 requires the FCA to maintain and regularly update a list of shares admitted to trading on UK venues that are subject to reporting and covering rules. This replaces the current exempt shares list and will include the ISIN, issuer name, and date of inclusion.
The FCA will determine inclusion based on three key factors:
- Principal Country Determination: Rather than measuring turnover on individual venues, the FCA will aggregate trading volumes across all venues within a country/territory over a two-year period.
- Significant Importance: The FCA will explicitly evaluate whether a share holds significant importance to the UK market, considering factors such as: UK headquarters/incorporation, primary UK listing, FTSE 100 inclusion, or provision of services critical to the UK market/economy.
- Duplication Consideration: If the UK is the principal country but the share is not deemed significantly important, the FCA may still exempt it if already subject to similar rules in a third country, preventing unnecessary duplication.
Review Cycle: The comprehensive review remains biennial (every two years) based on the preceding two calendar years of trading data, but the update date shifts from 1 January to 1 April, allowing January–March for review and finalisation. The RSL will also be updated monthly (first working day) for new admissions/removals.
Reporting Format: The FCA plans to publish the RSL in a machine-readable format for easy integration into internal systems.
3) How are covering requirements being updated?
Covering requirements mandate that a person must have borrowed, agreed to borrow, or located shares prior to a short sale to mitigate settlement failure risk. While largely retained, the proposals formalise best practices:
- Mandatory Record Retention: Evidence of compliance (e.g., borrowing agreements) must be retained for at least 5 years (formalising previous guidance).
- Subscription Rights Clarity: When using agreements related to subscription rights to cover a short sale, the seller must clarify they can ensure settlement when due.
- Easy-to-Borrow Lists: For these lists to qualify as confirmation, they must specify “the amount of shares that is available” for the relevant quantity (replacing the prior requirement to specify the “maximum amount of shares affected by the possible sale”).
4) How will the FCA implement the new regime?
The FCA plans a two-phase rollout. The goal is not to change the core framework but to make it more efficient and coherent by removing unnecessary regulatory friction.
- Phase 1 (Main Commencement Day): The new Short Selling Sourcebook (SSR), including rules on position reporting, covering, the RSL criteria, and ANSP disclosure will take effect. Crucially, the calculation/publication of ANSPs and the first RSL will commence.
- Phase 2 (6 Months Later): New systems for submitting position reports (including bulk submissions) and managing market maker exemption notifications will go live.
5) When does the consultation close, and how can firms respond?
The consultation closes on 16 December 2025. Respondents can submit feedback to the FCA by completing the FCA form or emailing cp25-29@fca.org.uk.
Source: FCA – CP25/29: Changes to the UK Short Selling Regime
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