UK FCA Launches New Short Selling Regime
Summary
The UK Financial Conduct Authority (FCA) published Policy Statement 26/5 on April 16, 2026, outlining changes to the UK short selling regime as part of the post-Brexit repeal and replacement of retained EU law. The FCA removed the requirement for market makers to notify each financial instrument individually, replacing it with a single activity-based notification system. The FCA also extended the implementation date, with phase 1 and the new short selling rules now commencing on July 13, 2026.
Market makers engaged in UK market making activities should prepare to transition from per-instrument notifications to a single activity-based notification by July 13, 2026. Firms that have not yet assessed their short selling compliance infrastructure under the new regime should prioritize this review given the extended implementation date provides a clear deadline for operational adjustments.
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What changed
The FCA's Policy Statement 26/5 introduces a streamlined notification process for market makers, eliminating the previous requirement to notify for each financial instrument individually. Market makers will now submit a single activity-based notification covering market making activities across any financial instrument. The FCA also clarified it will continue accepting notifications via email and will not automate the notification process from the outset.
Affected market participants should review their short selling compliance procedures ahead of the July 13, 2026 effective date. Firms previously burdened by per-instrument notifications should prepare to implement the new activity-based notification framework. The FCA's extension provides additional time for industry to adjust to the post-Brexit short selling framework.
Archived snapshot
Apr 24, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
April 23, 2026
The UK’s New Short Selling Regime Launches
Alix Prentice Cadwalader, Wickersham & Taft LLP + Follow Contact LinkedIn Facebook X ;) Embed
On 16 April, the UK’s Financial Conduct Authority (FCA) published Policy Statement 26/5 on “Changes to the UK Short Selling Regime” (PS 26/5) which forms part of the UK government’s programme to repeal and replace retained European Union (EU) law post-Brexit (for our earlier note on this see here). In addition to this repeal and replace exercise, PS 26/5 aims to reduce some of the inefficiencies and disproportionately burdensome aspects of the previous short selling regime by:
Removing the requirement for market makers to notify each financial instrument they want to benefit from the market maker exemption to report. Market makers will only be required to submit a single ‘activity based’ notification such that they can use the exemption for market making activities in any financial instrument;
The FCA, consequently, is continuing to accept notifications via email and not is updating arrangements to automate the notification process from the start of the new regime;
The FCA has extended the date when the new rules come into force, with phase 1 and the new short selling rules now starting on July 13.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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