FCA Fines Hedge Fund Over Short Selling

The FCA has fined a firm for the first time for a breach of the Short Selling Regulation (SSR) 

The firm failed to notify the FCA and disclose to the public a short position built between February 2017 and July 2019. Read more.

The Short Selling Regulation 2012 (SSR) sets out thresholds for when a firm is required to notify the FCA and disclose to the public details of net short positions held.

The SSR disclosure obligations and the definitions of a short sale are distinct from one another and MiFIR RTS 22 Article 11 explains the details required to populate the short selling flag on a transaction report.

Firms are mis-reporting the short selling flag particularly in terms of the financial instruments they include as being short sold with or without exemption.  As FCA is clearly monitoring for compliance with the disclosure obligations under SSR firms should take care to ensure they transaction report the short sell flag correctly and not use default or inaccurate values.

The ARM itself is updated to ensure that all data validations are in line with ESMA’s guidelines.  Further, UnaVista Analytics – Data Accuracy contains Alerts and Dashboards designed to highlight reporting errors made in the Short Selling flag on a T+2 basis, enabling firms to monitor for common errors when reporting this field. 

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