|
|
The UK has made a welcome move to remove any unnecessary burdens that result from often ill-considered EU regulation and design a short-selling regime that helps deliver strong and sustainable growth.
Jeremy Hunt, the chancellor, has called for views on how short-selling regulation should be improved in the country as part of the so-called “Edinburgh reforms” package to boost the City of London. The UK should start by abrogating the nonsensical EU requirement to publicly disclose short positions by the parties that have taken them out.
This artefact of EU regulatory over-reach is exactly the type of reform that a post-Brexit UK should pursue. The requirement discourages short selling — the practice of selling borrowed shares in the hopes of profiting from a price decline — and distorts trading.
Short selling sometimes attracts ill-judged criticism, often from companies seeking to fend off damning revelations uncovered through research by short sellers such as my firm. But it benefits markets by improving liquidity and stability while increasing the appetite of investors to take “long” exposures by allowing them to hedge risks....
more at FT