The UK government, through its HM Treasury, has recently published its response to the Short Selling Regulation Review. The review centered on the proposed UK short selling regime, an area of great interest to legal professionals working in international corporations and law firms.
As part of the broader Brexit restructuring, the future UK short selling regime spells major changes for the financial sector. Once the new UK regime for short selling is finalized, the retained EU Short Selling Regulation will be formally discarded under the revocation framework established by the UK Financial Services and Markets Act 2023. This shift forms part of the monumental rewriting of financial rules that has followed the UK’s departure from the EU.
The process of establishing the new regime is nearing completion. A draft statutory instrument for the new UK regime is expected to be published before the end of 2023. Meanwhile, the final statutory instrument is expected to be delivered during 2024.
Financial and legal professionals globally should monitor these developments closely for their potential significant impact on short selling operations in the UK. At this stage, opinions and comments from stakeholders including corporations and law firms play a pivotal role in shaping the final design and implementation of the regime.