Thursday 18 September 2008

"FSA Bans Short Selling" - Curiouser and Curiouser

The changes to the Code of Market Conduct promised tomorrow morning by the FSA will make interesting reading. As several of our regulars have rightly suggested elsewhere, it may not be as easy as all that.

In particular, it remains to be seen whether they will try to stop share-price swaps (spread-betting can be viewed as a form of this), which are contracts between consenting adults that have nothing whatsoever to do with actual share certificates etc etc, merely the availability of transparent and authoritative prices against which to make the difference-payments. Oh - and the availability of credit, of course - but that's another point.

I know how a lawyer would draft the wording to effect such a ban, but its consequences could in principle be extremely far-reaching. I believe the expression is - WTF ?

ND

++ UPDATE ++

So now we know. In a neat little document (half the length of the accompanying FAQs), the FSA states that short-selling bank shares is

"in the opinion of the FSA ... market abuse"

BUT - only if the short is a big one - greater than a quarter of a percent of the bank's issued share capital.

So - retail punters - carry on ! (if you can find anyone to take your order). Oh, and Market Makers too - they are exempt (which answers one of the anguished practical questions posed yesterday on Newsnight by an interviewee who knew what he was talking about). But for the big boys, note, it does indeed include OTC swaps, CFDs, spread-bets etc.

We shall see, we shall see ...

6 comments:

Steven_L said...

I had a brief read of the FSA document too Nick.

What are you saying then? Will little punters like me still be able to short financials with cfd's?

Steven_L said...

I just phoned my cfd provider Nick and they have a recorded message stating that they are unable to open new short positions on affected shares.

So it does seem to affect the small punter too.

I reckon any overvalued financial stock will be hot hard in January when they lift the restriction.

Nick Drew said...

I think I may have misread it Steven, it was a bit early in the morning for me ! On second reading it seems the materiality test is for disclosing, not opening positions

in any event I'm not in the least surprised no-one will take an order, whether or not they are allowed to

Steven_L said...

I know that early in the morning feeling Nick. I blame the markets opening at an ungodly hour for all my bad cfd bets.

Never mind. I'm going to start saving up for when they lift the restriction.

Let's hope they don't ban cheap supermarket lager, that would really screw me.

tory boys never grow up said...

A short term expedient I'm afraid - and probably all that could be cobbled together internationally on a short term basis. As always the best way to get at hedge funds and others who are over leveraging will be through those providing the finance and by making them price the risk properly. This needs to be done through a sensible capital adequacy regime and proper regulation of financial institutions - the days of allowing those institutions to base capital requirements on their own risk based models are hopefully coming to an end - but this may take a little while.

Anonymous said...

情色電影, aio交友愛情館, 言情小說, 愛情小說, 色情A片, 情色論壇, 色情影片, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊美女, 視訊交友, ut聊天室, 視訊聊天, 免費視訊聊天室, a片下載, av片, A漫, av dvd, av成人網, 聊天室, 成人論壇, 本土自拍, 自拍, A片, 愛情公寓, 情色, 舊情人, 情色貼圖, 情色文學, 情色交友, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 色情遊戲, 情色視訊, 情色電影, aio交友愛情館, 色情a片, 一夜情, 辣妹視訊, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊, 視訊美女, 美女視訊, 視訊交友, 視訊聊天, 免費視訊聊天室, 情人視訊網, 影音視訊聊天室, 視訊交友90739, 成人影片, 成人交友,

免費A片, 本土自拍, AV女優, 美女視訊, 情色交友, 免費AV, 色情網站, 辣妹視訊, 美女交友, 色情影片, 成人影片, 成人網站, A片,H漫, 18成人, 成人圖片, 成人漫畫, 情色網, 日本A片, 免費A片下載, 性愛, 成人交友, 嘟嘟成人網, 成人電影, 成人, 成人貼圖, 成人小說, 成人文章, 成人圖片區, 免費成人影片, 成人遊戲, 微風成人, 愛情公寓, 情色, 情色貼圖, 情色文學, 做愛, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 寄情築園小遊戲, 色情遊戲, 情色視訊,