FSA says short-selling ban to be lifted
A BAN on the short-selling of UK financial sector shares will be lifted despite calls from MPs for an extension.
The Financial Services Authority said it would let the ban expire as scheduled on January 16, ignoring pleas last week for an extension from MPs including John McFall, chairman of the Treasury Select Committee.
But the regulator said it was set to keep rules requiring the disclosure of significant “short” positions for an extra six months, until June 30, in an effort to help troubled stock markets. It pledged to reinstate the ban if it saw fit.
Short-selling is when investors, typically hedge funds, borrow shares in a company which they then sell in the hope of buying them back later at a lower price.
The FSA introduced a temporary ban on the practice for 34 financial stocks in September last year due to the financial turmoil in the markets.
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