The FCA sets out final rules implementing the SSR 2026, updates to reporting and exemptions, and a two‑phase timetable for firms to prepare
The FCA has published PS26/5, its Policy Statement that summarises responses to CP25/29 and sets out the final form of the UK’s short selling framework. These final rules implement the changes introduced by the SSR 2026 and consolidate the regime into a new dedicated Sourcebook within the FCA Handbook.
The statement also includes a formal Statement of Policy on the conditional exercise of the regulator’s emergency powers, plus operational guidance for firms preparing to comply.
The reforms aim to keep UK markets orderly while reducing unnecessary burdens that previously fell on firms.
Key technical updates cover the scope of instruments, timing for disclosures, record‑keeping obligations, and how market makers will operate under an amended exemption model. The statement preserves a high threshold for invoking emergency powers and explains the circumstances in which prohibitions, restrictions, or additional requirements on short selling could be imposed.
What the final rules change
The final measures recreate the current regime’s protections in a clearer structure and introduce targeted operational changes. Notably, UK sovereign credit default swaps are excluded from the scope of both position reporting and covering requirements. From 13 July 2026, existing market making exemptions for UK sovereign debt are removed, although the regulator’s emergency powers will still apply to these instruments. The deadline for reporting net short positions has been extended to 23.59 T+1, and firms will see revised guidance and templates for reporting issued share capital and group‑level arrangements (see PS26/5 page 11).
Reporting, records and lists
The regime introduces a new reportable shares list to replace the existing list of exempt shares; this will identify which shares admitted to trading on UK venues are subject to the rules and will select a single main class for issuers with multiple admitted classes. The FCA has published a test copy of the list in CSV and XLSX formats to help firms prepare (see PS26/5 page 27). In addition, firms must retain records of their covering arrangements for five years, formalising prior practice (see PS26/5 page 23).
Market maker exemption and renotification
The market maker exemption (MME) is being simplified: notifications will become activity‑based rather than instrument‑by‑instrument, and market makers will provide an annual attestation instead of repeated instrument additions. Transitional rules require market makers to renotify the FCA of their existing exemptions under the new process (see PS26/5 page 34).
Aggregate disclosure and emergency policy
From 13 July 2026 the FCA will publish aggregate net short positions (ANSPs) by company, aggregating reported positions at or above the 0.2% threshold without naming individual holders (see PS26/5 page 43). The regulator keeps its emergency powers to act in exceptional market conditions, but sets a high bar for their use. The Statement of Policy explains the kinds of circumstances that might trigger intervention and how powers would be applied (see PS26/5 page 59).
Phased implementation and operational support
The new rules come into force on Monday 13 July 2026, with a two‑phase rollout to give firms time to adapt. Phase 1 starts on the main commencement day and includes the new short selling rules, the Statement of Policy, the reportable shares list, and system changes for publishing ANSPs. Phase 2 begins on Monday 30 November 2026 and adds an enhanced position reporting system supporting bulk submissions. The FCA has published an operational guide detailing the technical steps firms need to take and the expected timetable.
Who should read this and next steps
PS26/5 is aimed at any firm or individual engaged in short selling, including market makers, securities lenders, market data providers, issuers with shares admitted to UK trading venues and their shareholders, as well as advisers and trade bodies. Firms should review the new Sourcebook, the published operational guide, and the test version of the reportable shares list to plan system and process changes ahead of 13 July 2026. The FCA will accept questions and further technical engagement as firms implement the changes.
Background legal context
The updated framework flows from the incorporation of the UK Short Selling Regulation — an assimilated EU law — into domestic law and the subsequent creation of the SSR 2026 under the powers in the Financial Services and Markets Act 2026. The FCA’s proposals in CP25/29 built on the Treasury’s Call for Evidence and were designed to keep the regime broadly intact while removing disproportionate burdens that could deter beneficial short selling activity.
