The Managed Funds Association (MFA) has applauded the UK Parliament’s approved reforms to the short-selling regulation, with Rob Hailey, MFA Managing Director, Head of EMEA Government Affairs, describing them as a win for the UK economy.
The new secondary legislation requires the FCA to publish anonymised aggregated (by issuer) net short positions based on all individual position notifications it receives, instead of identifying individual short sellers above 0.5% of issued share capital.
According to a recent release, the MFA says this is good for the UK financial services industry as it will encourage more market participants to engage in short selling, which will benefit UK capital markets and reinforce the UK’s standing as a leading global financial centre.
It will also reportedly foster a more competitive alternative asset management industry, benefiting investors, including pension funds.
“Short selling improves market efficiency, liquidity, and price discovery. It also helps to combat corporate waste, fraud, and abuse,” Hailey said in a recent press release, citing other benefits including reducing volatility and market bubbles, alongside enhancing the efficiency of capital allocation and increasing capital investment.
