Short selling

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STOP PRESS: The Short Selling Regulations 2025 were made and published on 13 January 2025, along with an explanatory memorandum. The regulations replace the assimilated UK Short Selling Regulation and establish a new legislative framework for the regulation of short selling in the UK, creating designated activities for short selling and giving the Financial Conduct Authority (FCA) rulemaking powers related to those activities, and powers to intervene in exceptional circumstances. Certain provisions came into force on 14 January 2025, with the remaining provisions coming into force on the day on which the revocation of the UK Short Selling Regulation comes into force under the Financial Services and Markets Act 2023.

This Overview provides a guide to the Lexis+® UK Financial Services content within the short selling subtopic with links to the appropriate materials.

What is short selling?

There are essentially two types of short selling: covered and uncovered (naked).

Covered short selling—in a covered short sale, the trader borrows the securities from a holder (lender) in return for a fee, and sells them to a purchaser. If the price of the securities

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