FSA Swamped by Short Sell Queries

FSA Swamped by Short Sell Queries


The FSA are currently being over-run by applications from businesses outside of the banking sector wishing to be added to the restricted short selling list.

 On Friday they imposed a temporary ban on the short selling of shares in all UK banks and insurance companies; however, the ban does not extend to the wider insurance and finance market, thus excluding big money businesses that deal with real estate, building and retail. Many companies in these sectors are panicking that they could fall victim to short selling, leaving their businesses unstable as a result.


The sheer velocity with which the market has collapsed in the last fortnight has forced the FSA to make a quick decision about the rules regarding short selling. Whereas normally there would be months of planning and consultations, in this instance they have not had time to prepare the market for the possible repercussions, and so they are experiencing an influx of queries from nervous chief executives.


Most of these industry heads should find that their shares are unaffected by the credit crunch, with many high street retailers including Nike, Laura Ashley and the Co-Op Group reporting that sales are soaring amid the current financial downturn. But much still rides on the 700bn bailout from the US government. Whether or not the panic is unfounded remains to be seen, and I’m sure the FSA, and indeed the world, wait with baited breath for the decision.


By Danielle Williams

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