We reported recently on the passing of the Financial Services Act 2010 (you can see our post by clicking here) which granted the Financial Services Authority (FSA) new powers in a number of areas including reporting and control of short selling. On 26 April 2010, the FSA published a consultation paper (CP10/11) on the use of those powers, focusing on:
- short selling rules: the FSA will modify slightly the scope of the existing disclosure regime in relation to rights issues, but retain the same scope for financial sector companies; the disclosure obligations will be transferred to a new Financial Stability and Market Confidence sourcebook in the FSA Handbook (FINMAR).
- enforcement powers: the FSA has set out a statement of its policy on use of its new powers of suspension or restriction of authorised and approved persons, the imposition of penalties for carrying our a controlled function without approval and the imposition of penalties for a breach of the short selling rules.
- financial stability information gathering: the FSA has set the scope and expected use of the power, which will also be contained in FINMAR.
- compensation amendments: dealing with circumstances where the Financial Services Compensation Scheme (FSCS) acts on behalf of other compensation schemes.
The consultation is open until 25 June 2010 and the consultation paper can be found by clicking here.