Ban on Short Selling

The FSA ban on short selling in UK financial services came into effect at 00.01 on Friday 19th September 2008 and are currently set to cease to have effect on 16th January 2009.

The usual question is whether the ban covers options, CFDs, OTC, other derivatives and Spreadbetting etc.

Of course this is not all 100% clear as it has been issued rather quickly, but there is a phrase that the FSA uses; " economic exposure in the issued share capital of a company".

This would therefore include a basket of shares where all the components in the index or basket are UK financial sector companies.

For obvious reasons Market Makers are exempt from this ban.

The FSA document can be read here http://www.fsa.gov.uk/pubs/other/short_selling_faqs.pdf and I will try and answer any other questions on the subject.