UK’s Short-Selling Regime – Update November 2025

 

Major shifts under CP25/29 and where this places the UK in global context

On 28 October 2025 the Financial Conduct Authority (FCA) launched consultation paper CP 25/29, setting out its proposed rulebook for short-selling in the UK. The consultation is open until 16 December 2025.

Changes since the 2018 (Brexit Withdrawal) regime

Under the previous regime (the UK’s version of the EU Short Selling Regulation, 2012), the public disclosure threshold for individual net-short positions was 0.5% of issued share capital, and the regime extended to shares admitted to UK trading venues, UK sovereign debt and sovereign CDS.

The new legislative framework, the Short Selling Regulations, Jan 2025 (SSR 2025), introduces important structural reforms:

• UK sovereign debt and UK sovereign CDS are removed from the routine scope of the regime (though emergency powers remain).
• Public disclosure of individual names is replaced by publication of aggregate, anonymised net-short positions (ANSPs) for each issuer. The private notification threshold remains at 0.2%.
• The “exempt shares” list is replaced with a “Reportable Shares List” (RSL), flipping the previous logic. The FCA will now define which admitted shares are in scope of reporting and covering in the UK.
• Operational enhancements: extended deadlines for position reporting (moving to a 23:59 T+1), clearer guidance on issued share capital, and minimum five-year record-keeping for short-covering arrangements.
• Market maker exemptions would become quicker to access: the pre-use notification window drops to 15 calendar days (from 30), as well as an easier path to extend existing exemptions.

Global context

This reform brings the UK closer to the US on disclosure requirements, whilst maintaining the existing prohibitions on uncovered short sales alongside an emergency toolkit in periods of market stress. The FCA considers it is a competitive, not a deregulatory stance, particularly regarding the removal of the public-naming feature that many argued distorted behaviour. The FCA’s choice to anonymise and aggregate reflects an industry push for more efficient hedging and price-discovery mechanisms whilst still retaining supervisory visibility.

The change also signals the UK’s intent to make its markets more competitive: the FCA describes the consultation as “removing unnecessary or disproportionate burdens which may inhibit or discourage short selling activity” while supporting market integrity. For global asset managers trading UK-listed shares, this means aligning UK compliance frameworks with the evolving international backdrop and ensuring systems can cope across multiple jurisdictions.

The UK’s move to aggregate disclosure is in our opinion a welcome recalibration. Some argue that disclosing individualshort positions promoted transparency, market integrity and the potential to better detect market abuse (e.g. short-squeezes).  However the public naming of individual short sellers has long been criticised for conflating legitimate hedging with rampant speculation, consequentially affecting behavioural and reputational misunderstandings. Only after full implementation of SSR25 will the consequences of the changes be fully appreciated by market participants and the FCA itself.

The roll-out of SSR25 will be phased; the FCA intends Phase 1 systems for ANSP publication and the RSL to go live with the new Sourcebook (estimated Q2 2026), followed by Phase 2 changes to the Electronic Submission System (ESS) and market-maker notifications six months later. That staging is important for implementation planning across financial institutions.

Compliance Implementation Roadmap

With the consultation window now open, firms should already be preparing these key areas:

• Mapping short-selling workflows: ensure processes cover the 0.2% notification threshold, 23:59 T+1 (or whichever deadline the FCA finalises), five-year record-keeping for covering and locate/borrow evidencing.
• Internal systems check: review that trading, middle-office and reporting systems can calculate net short positions (including group aggregation, ETF and structured product look-throughs) and flag when a position exceeds the threshold.
• RSL readiness: once the FCA publishes the Reportable Shares List, ensure timely identification of in-scope shares, position monitoring and appropriate application of the rules.
• Consultation feedback: consider submitting comments to the FCA by 16 December 2025, especially on areas such as issued share capital calculation, group reporting, and RSL criteria.
• Communications and governance: alert relevant governance bodies (compliance committee, risk oversight, trading desks) to the reforms and update internal manuals/controls accordingly.

Firms that act early will be able to treat this not just as a compliance exercise, but as an opportunity to refine their short-selling infrastructure and control environment.  For further information as to how your compliance department needs to adapt to these changes, contact srb@objectivus.com or kmt@objectivus.com.