Short-Selling: Progress On International Harmonisation And Forthcoming Changes In The UK

This article was originally published 23 July,


This update highlights a number of important developments

regarding the regulatory framework for the short-selling of


At the international level – and in the European Union

(EU), in particular - significant progress is being made towards

the harmonisation of individual jurisdictions' short-selling


In the UK, the existing temporary rules on disclosure of short

positions have now been extended again, and work is underway to

implement a permanent regime (which is expected to be significantly

broader, in some respects, than at present).

IOSCO's Principles – A Framework For

Regulators Globally

In a report published in June 2009, IOSCO (International

Organization of Securities Commissions) proposed four high-level

principles for effective regulation of short-selling, intended to

guide individual regulators in the formulation of their own rules.

The principles state that there should be:

appropriate controls to avoid the risks that could interfere

with the functioning and stability of the markets (e.g.

permitting short-selling only of specified eligible securities,

prohibiting "naked" shorting, controlling pricing, or

providing for settlement of failed trades);

a requirement to report relevant trades to the market or, at

least, to a regulator;

effective monitoring and enforcement; and

appropriate exceptions (e.g. for market-makers).

IOSCO's principles have no binding effect, but aim to

establish a sensible framework for development of specific national


To view this document in its entirety please click


Sidley Austin LLP, a Delaware limited liability partnership

which operates at the firm's offices other than Chicago,

London, Hong Kong, and Sydney, is affiliated with other

partnerships, including Sidley Austin LLP, an Illinois limited

liability partnership (Chicago); Sidley Austin LLP, a separate

Delaware limited liability partnership (London); Sidley Austin, a

New York general partnership (Hong Kong); Sidley Austin, a Delaware

general partnership of registered foreign lawyers restricted...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT