The UK Financial Conduct Authority used Primary Market Bulletin 65, published on 28 August, to explain how it may use emergency powers under the short-selling framework that took effect on 13 July 2026. The bulletin does not impose a ban. It describes the tools available if market conditions require closer reporting, transaction conditions or targeted action after a significant price fall.
The FCA also recognises short selling as part of price formation, liquidity and risk management. It says intervention will face a high bar and must be exceptional and proportionate. The update should therefore be read as operational guidance for a live regulatory framework, not evidence that UK markets are presently in a systemic crisis.
Three levels of intervention
Regulation 13 is an information-gathering power. The FCA may lower the standard 0.2% net-short reporting threshold, require notification of other instruments that provide an economic benefit from falling prices, and request additional information. Better visibility may then inform whether stronger intervention is necessary.
Regulation 15 permits direct conditions or temporary prohibitions on short selling and related activity. Its reach can extend beyond a traditional short sale to transactions that create equivalent downside exposure. The FCA says such action would address events posing a serious threat to UK financial stability or market confidence, while taking account of liquidity and efficiency.
Regulation 17 allows targeted restrictions after a financial instrument suffers a significant price fall on a UK venue relative to the previous close and conditions risk becoming disorderly. No instrument was designated in the bulletin. If the FCA activates these powers, it says a formal notice will identify the legal power, instruments or transactions, duration and proportionality assessment.
The regime is more than a power to ban
PS26/5 also reduces routine friction. A person must report when a net short position reaches or crosses 0.2% of issued share capital and each 0.1% increment above it. The deadline has moved to 23:59 on the working day after the obligation is triggered. Market makers shift from instrument-by-instrument exemption notifications to one activity-based notification plus annual attestation.
The FCA will publish anonymised aggregate net short positions. The design is deliberate: streamline ordinary reporting while retaining the ability to demand more granular information in stressed conditions.
What brokers and traders should prepare
Brokers, CFD providers, securities lenders and market makers serving UK instruments should test whether position calculations capture derivatives and economically equivalent exposure. Systems need to recalculate quickly if a threshold is lowered and impose temporary controls by instrument, account and direction without losing an audit trail.
Cross-border firms must distinguish the UK regime from EU requirements. Client communications should also identify whether a change in short availability, margin or order permissions results from an FCA notice, the firm’s own risk controls or liquidity. A temporary restriction should not be presented as a directional market call.
For investors, a short-selling restriction does not guarantee a price rebound. It can alter liquidity, hedging costs and price discovery, and any FCA notice will have a defined scope and duration. Traders should consult the original notice and their platform terms rather than relying on claims of a blanket ban.
TraderVote view
The important feature is escalation. Routine monitoring starts with a 0.2% threshold and aggregate disclosure; the FCA can then gather more information before applying conditions or targeted restrictions. The operational challenge for brokers is not memorising one number, but keeping position, order, communication and audit systems aligned when requirements change quickly.
The FCA’s commitment to publish scope, duration and reasons should help markets distinguish preventive powers from an actual crisis response. TraderVote will monitor emergency notices, aggregate short-position data and the bulk-reporting facility scheduled for 30 November.
Sources
UK FCA, “Primary Market Bulletin 65,” published 28 August 2026, accessed 30 August 2026: https://www.fca.org.uk/publications/newsletters/primary-market-bulletin-65
UK FCA, “PS26/5: Changes to the UK Short Selling Regime,” published 16 April 2026, accessed 30 August 2026: https://www.fca.org.uk/publication/policy/ps26-5.pdf
Independently written by Hengyuan from verifiable FCA documents available on 30 August 2026. This article is not investment or legal advice.
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