This article was written by Natalie Lim.
Initial Statement
The updated statement follows ESMA’s decision, issued on 16 March 2020, to temporarily amend the threshold for notifying net short positions to national competent authorities (NCAs) under the Short Selling Regulations (SSR) from 0.2 per cent of issued share capital to 0.1 per cent. This precautionary measure was taken to allow NCAs to monitor developments in markets under the exceptional circumstances linked to the impact of the COVID-19 outbreak. The FCA had previously confirmed, in its initial statement of 17 March 2020, that this decision would apply in the UK. At the time, it advised that systems changes would be required and firms should continue to report at the previous thresholds until further notice.
FCA update
The FCA has now confirmed that the required changes to its systems have been made. It will be ready to receive notifications at the lower threshold from 6 April 2020 and firms are advised to make best efforts to report at the lower threshold from this date. Nonetheless, the FCA appreciates that it may not be possible for some firms to amend their systems by this date. In such circumstances, firms should contact the FCA at PMU@fca.org.uk.
For the avoidance of doubt, firms are not required to amend and resubmit notifications submitted to the FCA between 16 March 2020 and 3 April 2020.
In line with the SSR, the new reporting obligation will apply to shares for which the FCA is the relevant NCA, and not to exempted shares where the principal venue for the trading of the shares is located outside the EU.