FCA
Financial Conduct Authority (UK)
FCA finalises changes to the UK Short Selling Regime
Published
Oct 27, 2025
Effective
Jul 13, 2026
Topics
Short selling, Net short position reporting, Market maker exemptions, Reportable shares, UK sovereign debt, Emergency powers, FCA Handbook
Executive Summary
The FCA has finalised PS26/5, establishing a new FCA Handbook sourcebook for UK short selling rules and confirming operational changes to implement the Short Selling Regulations 2025 framework. The core rules came into force on 13 July 2026, with a second operational phase scheduled for 30 November 2026 to enable multiple net short positions to be uploaded and submitted in a single bulk submission. The changes largely preserve the existing regime but adjust reporting, exemption and reference-data processes to reduce disproportionate burden while maintaining orderly UK markets. Key confirmed changes include a 23:59 T+1 deadline for reporting net short positions, a new reportable shares list replacing the exempt shares list, activity-based market maker exemption notifications with annual attestation, formal five-year recordkeeping for covering arrangements, and publication of aggregate net short positions by company from 13 July 2026. Firms should treat this as a medium-impact implementation because reporting operations, exemption governance, reference data, record retention and public disclosure monitoring all require updates.
What Changed
Previous
An earlier reporting deadline applied under the current UK SSR regime; the FCA webpage does not state the prior cut-off. Multiple-position bulk submission was not identified as available in Phase 1.
New
Net short positions must be reported by 23:59 on T+1. Phase 2, effective 30 November 2026, will update the system to allow multiple positions to be uploaded and submitted in a single bulk submission.
Previous
The UK SSR regime covered shares, UK sovereign debt and UK sovereign CDS; existing market making exemptions applied to UK sovereign debt.
New
UK sovereign CDS are outside the scope of position reporting and covering requirements. Existing exemptions for market making in UK sovereign debt no longer apply from 13 July 2026, while FCA emergency powers continue to cover these instruments.
Previous
Firms used the list of exempt shares to identify shares not subject to the rules.
New
A new reportable shares list replaces the exempt shares list and sets out shares admitted to trading on UK trading venues that are subject to the short selling rules. For issuers with multiple admitted share classes, it identifies the main class of ordinary shares for reporting.
Previous
Market makers had to send further notifications to add financial instruments to their exemption.
New
The notification process becomes activity-based. Market makers must provide an annual attestation, and transitional provisions require market makers to renotify the FCA for existing exemptions.
Previous
The FCA webpage does not identify an equivalent aggregate net short position publication format or a separately formalised five-year recordkeeping rule for covering arrangements.
New
From 13 July 2026, the FCA publishes aggregate net short positions by company, based on individual net short positions reported at or above the 0.2% threshold, without naming individual position holders. Firms must keep records of covering arrangements for five years.
Business Impact
Who is affected
Directly affected
persons conducting short selling activity in in-scope shares admitted to trading on UK trading venues, market makers using exemptions, and firms responsible for net short position reporting and covering controls.
Indirectly affected
securities lenders, market data providers, issuers with shares admitted to UK trading venues, shareholders, advisers, consultants and trade associations.
Jurisdictions
United Kingdom
Business processes
Net short position calculation, threshold monitoring and FCA notification, Regulatory reporting cut-off and submission workflow, Short-sale locate, cover and record-retention controls, Market maker exemption notification, transitional renotification and annual attestation, Reference-data maintenance for reportable shares and ordinary share class identification, Monitoring of FCA aggregate net short position publications, Emergency powers monitoring and trading restriction escalation
Estimated effort
Medium
Compliance risk
Medium
Affected Reports
| Field | Validation rule |
|---|---|
| Net short position reporting deadline | Reports must be submitted by 23:59 on T+1 under the FCA final rules. |
| Issued share capital | Firms must apply the FCA's new guidance on provision of issued share capital in position reporting. |
| Group-level reporting arrangement | Firms must apply the FCA's new guidance on group-level reporting arrangements for net short position notifications. |
| Reportable share / main class of ordinary shares | Firms must use the new reportable shares list, including the FCA-identified main class of ordinary shares where an issuer has multiple admitted classes. |
| Market maker exemption activity and attestation status | Market maker exemption notifications become activity-based, with annual attestation and transitional renotification for existing exemptions. |
| Covering arrangement record retention | Records of covering arrangements must be kept for five years. |
Recommended Actions
- 1AI generatedStep 1 of 7
update short selling policies and operating procedures to reflect the 13 July 2026 commencement, the 23:59 T+1 deadline, the five-year covering-record requirement and the new reportable shares list.
- 2AI generatedStep 2 of 7
validate reporting systems against the updated FCA notification templates and plan technology changes for the 30 November 2026 bulk submission functionality.
- 3AI generatedStep 3 of 7
replace exempt-shares-list controls with reportable-shares-list controls, including governance for issuers with multiple share classes and exception handling when reference data changes.
- 4AI generatedStep 4 of 7
review market maker exemption inventories, complete required transitional renotification, and design an annual attestation control with clear ownership and evidence retention.
- 5AI generatedStep 5 of 7
confirm that UK sovereign CDS and UK sovereign debt handling is correctly reflected in product scope, exemption logic, covering controls and emergency-powers monitoring.
- 6AI generatedStep 6 of 7
add surveillance or management-information review of FCA aggregate net short position publications where relevant to issuer, investor-relations, market-risk or compliance teams.
- 7AI generatedStep 7 of 7
document an implementation sign-off covering reporting deadline tests, template mapping, reference-data feeds, exemption governance and retention evidence.
Timeline
publication
Oct 28, 2025
FCA Consultation Paper CP25/29 on changes to the UK Short Selling Regime was published.
consultation deadline
Dec 16, 2025
Consultation on CP25/29 closed.
publication
Apr 16, 2026
FCA published PS26/5 finalising short selling rules, the Statement of Policy on emergency powers and operational details.
effective date
Jul 13, 2026
Phase 1 implementation: new short selling rules and final Statement of Policy came into force; FCA systems supported ANSP disclosure; reportable shares list took effect; existing market making exemptions for UK sovereign debt no longer applied; FCA began publishing ANSPs by company.
implementation
Nov 30, 2026
Phase 2 implementation: FCA position reporting system update to support upload and submission of multiple positions in a single bulk submission.
Sources
AI-generated analysis is based on the following primary sources. Always verify against the official publication.
- Policy statement webpageFinancial Conduct AuthorityApr 16, 2026PS26/5: Changes to the UK Short Selling Regime ↗
https://www.fca.org.uk/publications/policy-statements/ps26-5-changes-uk-short-selling-regime
- Regulatory information webpageFinancial Conduct AuthorityDate not specifiedShort selling ↗
https://www.fca.org.uk/markets/short-selling
- Primary legislationUK LegislationJun 29, 2023Financial Services and Markets Act 2023 ↗
https://www.legislation.gov.uk/ukpga/2023/29/contents
Related Evidence
Verified source support for this analysis
The evidence agent checks whether the drafted finding is supported by official publications and relevant public source material.
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