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Short Selling FAQs



What is the new policy governing UK shares?


On 18 September 2008 the Financial Services Authority (FSA) decided to prohibit the creating or increasing of a short position in more than 30 UK quoted banks, general insurance and life assurance companies.

What are the specific UK shares that I cannot sell short?


A full list of affected stocks can be found here. You cannot open a new down bet or increase the size of an existing down bet on any of these stocks.

How long will the FSA restrictions last?


The regulation ceases to have effect on 16 January 2009.

What if I already have an existing short position in one of the affected UK stocks?


You can keep your position open but you cannot increase your short position any further. Under certain circumstances when borrowing restrictions arise, as detailed in our Customer Agreement, this may not be the case and your position may have to close prematurely.

Could I mistakenly open a new short position in one of the affected UK stocks?


We have adjusted our systems to impose restrictions on the affected stocks; but, it remains your own responsibility to make sure you do not breach the FSA's requirements.

Will I have any difficulties closing long positions on any of the affected UK stocks?


No, selling to close an open position is not short selling and is completely unaffected by these changes.

Can I go short on any other UK stocks?


Yes, there are no new restrictions on any other stocks. The only stocks affected are those named in the above attachment.

What if I already hold an existing short position in a UK stock not included in the list?


These are unaffected. You can keep your position open until it expires or you choose to close it.

Will I have any difficulties closing other long positions on non-affected UK stocks?


No, there are no issues closing existing long positions.

Are other markets outside of the UK going to be affected?


Yes, the US regulator announced similar measures on Friday 19 September 2008. We will update our current rules in line with regulatory changes as any new restrictions are applied. This will affect the availability of certain stocks to be sold short, as in the UK. Similar announcements have been made regarding the Irish and Swiss exhanges and there may be more announcements to follow


Source: IG Index

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