The UK's Financial Services Authority (FSA) announced on Wednesday that it will not be imposing additional regulatory controls on short selling, but will be seeking to improve the transparency of the process and the information available to investors.
The regulatory body revealed that, following analysis of the results of a questionnaire on the issue, it has been decided that CRESTCo, which operates the real-time settlement system for UK securities, will produce aggregate stock-lending data for FTSE 350 securities on a monthly basis, in order to improve transparency.
Speaking last week, Gay Huey Evans, Director of Markets and Exchanges at the FSA explained that:
'The consultation confirmed our view that there was no need to impose additional controls on short selling but that greater transparency would be valuable. We therefore welcome CRESTCo's initiative to publish securities lending data. This proposal meets all the criteria we set out in our consultation.'
According to the FSA, it has also been agreed that the London Stock Exchange and virt-x will notify their members of securities which are subject to a significant proportion of settlement delays, and will consider reducing the 'buy-in' timeframe for illiquid securities which are experiencing a build up in settlement delays.
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