Editor’s note: this is general educational information about how UK short selling disclosure works, not investment advice. It is drawn from the official sources listed at the end.
Analysis: a reporting regime built around its own cost
The headline number did not move in 2026, which makes the rest of the package the story. The FCA’s policy statement PS26/5 sets out what the review actually targeted: the time and cost of calculating and reporting positions, and the speed with which firms can rely on the market making exemption. On the second point the numbers are blunt. Under the old instrument by instrument process, market makers submitted roughly fifteen hundred notifications covering 43,556 financial instruments in 2024. The new rules replace that with a single activity based notification plus an annual attestation, with the regulator retaining the right to request information for supervision.
The consultation drew 24 responses, from trade associations, law firms, issuers, hedge funds, trading venues and market makers. Two of the changes that followed are worth reading as signals about where the regime still strains. Firms told the FCA that sourcing reliable issued share capital data is expensive and difficult, which matters because that denominator determines whether a position is reportable at all. The regulator’s answer for now is guidance on acting reasonably using publicly available information, with a possible longer term fix borrowed from Chapter 5 of the Disclosure Guidance and Transparency Rules, to be considered at the next review of those rules. A threshold expressed as a percentage of a figure that firms struggle to pin down is a soft edge, not a hard one.
The second signal is what the FCA declined to reopen. Some respondents raised the retention of the emergency powers and the requirement to publish anonymised aggregate positions. The FCA’s response was that those powers were retained and the change was made in legislation, and so are beyond its control. Anonymised aggregation is therefore a parliamentary choice rather than a supervisory preference, which is the answer to the recurring question of why the UK does not name individual short sellers the way it once did.
What the published data can and cannot support follows from all of this. An aggregate figure tells a reader how much reported short interest exists in a company at or above the threshold as of two working days ago. It does not identify holders, does not capture positions below 0.2%, and does not distinguish a directional short position in a company from a hedge against a convertible or an index exposure. A careful reader would treat a rising aggregate as a question to investigate rather than an answer.
What the documents say
A fund can sell a UK-listed share short and tell nobody. Cross one number and it cannot. The number is 0.2% of the issued share capital of the company being shorted, and since 13 July 2026 it has sat in a statutory instrument rather than in assimilated European law. Regulation 6 of the Short Selling Regulations 2025 empowers the Financial Conduct Authority to make rules requiring a person with a net short position equal to or greater than the notification threshold to notify the regulator, and then fixes that threshold in the legislation itself at 0.2% of the company’s issued share capital.
The new regime replaced the assimilated EU Short Selling Regulation, Regulation (EU) No 236/2012, and the detailed obligations now live in the Short Selling Rules Sourcebook in the FCA Handbook. The threshold survived the transition unchanged. What changed around it is the plumbing.
What counts as a short position
The regulations define the position by economics rather than by instrument. A person has a net short position when total short exposure to a company’s issued share capital exceeds total long exposure. A short position arises either from a short sale of a share issued by the company or from entering into any other transaction where an effect is to confer a financial advantage on the holder if the price or value of a share falls. Long positions are defined as the mirror image, covering both holding the share and any transaction that pays off when the price rises.
The FCA’s rules put working detail on that frame. Net short positions include direct and indirect exposures through exchange traded funds, indices and baskets, are calculated on a delta adjusted basis for relevant instruments, and are expressed as a percentage of issued share capital rather than of free float or of daily volume. Issued share capital for this purpose means all ordinary and preference shares in issue, aggregated across every class, and excluding convertible debt instruments. Positions must be calculated for every working day on the basis of the position held at midnight, though the arithmetic itself can be done at a more civilised hour.
The first notification is due when the position reaches or exceeds 0.2%. After that, a fresh notification is required each time the position moves through a 0.1 percentage point increment in either direction, so at 0.3%, at 0.4%, and on the way back down. Under the 2026 rules the filing deadline is 23:59 on the working day after the obligation is triggered, and holders must keep records of notifiable positions for 5 years. The duty sits with the position holder. Neither the exchange nor the company being shorted has any part in it.
Who ends up seeing the number
A notification goes to the regulator, not to the market. Regulation 7 then requires the FCA to publish, for each working day, the aggregate net short position in the issued share capital of each company with admitted shares: the sum of the notified positions held on the relevant working day, expressed as a percentage of issued share capital. Publication must follow no later than two working days after the day the figure relates to. In practice the FCA releases the current aggregate report each working day from 12:00, on a T+2 basis, and individual positions are anonymised and never disclosed.
The statute builds in room for the data to be wrong. The FCA may exclude a notified position while it is verifying the reliability of that position, and may exclude information received after the working day before publication. It may also amend or re-publish an earlier aggregate figure to reflect notifications received, verified or amended since. Where a position has stayed open for a long period but no longer appears valid, the regulator can contact the holder and, absent a response, close the position by submitting a 0% notification on the holder’s behalf. Where the aggregate for a company comes out at zero, nothing is published at all.
Scope is set by a list rather than by judgement. The Reportable Shares List identifies the shares admitted to UK trading venues that fall within the regime, using the principal country of the share, its importance to the UK market and, where relevant, whether a third country’s rules already achieve a similar outcome. The principal country test looks at trading volume over the previous 2 years. The list gets a full review every 2 years on the first working day of April, routine monthly updates on the first working day, and ad hoc updates in exceptional circumstances.
What the regime does not do
Disclosure rules say when a position becomes visible. They say nothing about whether the trading behind it was honest. The FCA has separate powers over conduct, and separately again the Short Selling Regulations 2025 give it powers in exceptional circumstances: to require notifications, to require notification of lending fees, to prohibit or impose conditions on short sales, and to restrict short selling following a significant price fall. The regulator has said it sets a high bar for using them, on the view that short selling supports the orderly and effective functioning of the UK market.
Covering requirements are the other half of the discipline that disclosure alone does not provide. A short seller of a share admitted to trading on a UK trading venue must cover the sale by borrowing the share, agreeing to borrow it, or entering a locate arrangement with a third party giving a reasonable expectation that settlement can be effected when due. That obligation applies at the level of the individual trade, with no threshold and no grace for size, which is a useful reminder that the 0.2% line governs publicity rather than permission.
