FSA's list of banned shorted companies

[Legal Beagles]

FSA prohibits 'active creation or increase' of short positions in financial companies for three months

More...

[Legal Beagles]

FSA's list of banned shorted companies

The Financial Services Authority's list of companies in which it is prohibited to take short positions

More...

[Amethyst]

Re: FSA's list of banned shorted companies

Can someone explain what this means

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The City regulator said it was prohibiting the 'active creation or increase' of short positions in these financial companies for three months'


ahh okay investiagtating

FSA bans short-selling in financial stocks

1 hour ago
LONDON (AFP) — The City regulator has declared a halt to short-selling in financial shares -- when investors borrow company stock to sell it -- and warned it could extend the ban to other financial sectors to steady the markets.

AFP: FSA bans short-selling in financial stocks


Extract from the speech by Callum McCarthy, Chairman of the Financial Services Authority to the Lord Mayor's City Banquet at the Mansion House.





"We have been much concerned – as have many – at the volatility and what I would describe as incoherence in the trading of equities, particularly for financial institutions. There is a danger in a trading system which allows financial institutions to be targeted and subject to extreme short selling pressures, because movements in equity prices can be translated into uncertainty in the minds of those who place deposits with those institutions with consequent financial stability issues. We have seen acute examples of this phenomenon in both London and New York this week.



"The FSA has therefore decided to introduce a rule wtich will take effect from tomorrow, to require both the disclosure of short positions on a daily basis in respect of financial institutions; and a prohibition in any active increase in a net short position in a financial stock by whatever instrument. There will be an exception for market makers to enable them to meet client demand.
"We intend this prohibition to run in the first instance for some 120 days, during which time we will review both its effectiveness and the general policy we wish to adopt in respect of short selling more generally. This is a measure which reflects the present turbulence in markets. It is designed to have a calming effect – something which the equity markets for financial firms badly need. I hope that practitioners will support both the ambition and the chosen means of achieving it."

FSA/PN/102/2008
18 September 2008
The Board of the Financial Services Authority (FSA) today (Thursday 18 September) agreed to introduce new provisions to the Code of Market Conduct to prohibit the active creation or increase of net short positions in publicly quoted financial companies from midnight tonight.
In addition, the FSA will require from Tuesday 23 September daily disclosure of all net short positions in excess of 0.25 per cent of the ordinary share capital of the relevant companies held at market close on the previous working day. Disclosure of such positions held at close on Friday 19 September will also be required on Tuesday 23 September.
The FSA stands ready to extend this approach to other sectors if it judges it to be necessary.
These provisions will remain in force until 16 January 2009, although they will be reviewed after 30 days. A comprehensive review of the rules on short selling will be published in January.
Hector Sants, chief executive of the FSA, said:
"While we still regard short-selling as a legitimate investment technique in normal market conditions, the current extreme circumstances have given rise to disorderly markets. As a result, we have taken this decisive action, after careful consideration, to protect the fundamental integrity and quality of markets and to guard against further instability in the financial sector."
The detailed changes to the Code of Market Conduct, and a schedule of the companies whose securities are covered by them, will be published before the market opens tomorrow (Friday 19 September).

Further info...
Short Selling (No 2) Instrument 2008 – FAQs [PDF]
TR4 - Form for short position disclosure [PDF]
Mansion House speech by Callum McCarthy
SHORT SELLING (NO 2) INSTRUMENT 2008 - Plain version of new short selling rules without highlighted changes [PDF]
SHORT SELLING (NO 2) INSTRUMENT 2008 - Full version of new short selling rules with highlighted changes [PDF]
List of UK incorporated banks and insurers in connection with SHORT SELLING (NO 2) INSTRUMENT 2008 [PDF




That seems like quite a major move to make ?


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