The chairman of the UK’s Financial Services Authority, Callum McCarthy, announced strict measures to try to curb short selling of financial companies’ stocks last night (Thursday September 18) – measures which will include limiting equity futures and options.
The move follows accusations that short selling was the reason for the plummetting of HBOS’s shares earlier this week, which led to the bank being bundled into the arms of Lloyds TSB in a £12bn merger.
McCarthy said in his speech that the FSA would require, from Friday September 19, “both the disclosure of short positions on a daily basis in respect of financial institutions and a prohibition in any active increase in a net short position in a financial stock by whatever instrument.”
He added that: “There will be an exception for market makers to enable them to meet client demand.”...