The UK Government has said it will remove requirements currently placed on investors when taking out short positions in sovereign debt or sovereign credit default swaps (CDS), and the related reporting requirements under the UK’s new short selling regime, following significant support during consultation.
The government says it will keep sovereign debt and CDS in scope of the Financial Conduct Authority (FCA) emergency intervention powers for short selling, which will be treated the same as other financial instruments.
As part of these retained powers, the government will require the FCA to set out its approach to using these powers. The government considers that this should provide the market with greater upfront clarity on the FCA’s use of its emergency powers.
The FCA will consult on this approach in due course, while the government has published a draft Statutory Instrument (SI) illustrating the features of the UK’s new short selling regime.
The UK government says it will welcome any technical comments on the draft SI by 10 January 2024.
