Short selling

Short selling means selling an asset that one does not already own.

(Short selling is contrasted with normal selling, which means selling an asset that one does already own.)

Short selling benefits hedge funds

"The Ministerial Foreword to the consultation [on short selling] states that:

'Short selling plays a healthy role in the proper functioning of financial markets. It provides essential liquidity to markets which drives investment in British firms, emboldens economic growth, and helps ensure investors pay the right price when investing in shares'.

To facilitate short-selling, HMT is considering inter alia whether to relax the reporting and disclosure rules applicable to short-sellers.

On balance, these considerations may appear to be more beneficial to hedge funds and other short-sellers than to corporate issuers of equities..."

James Winterton, Associate Director, Policy & Technical, ACT - February 2023.

See also

• Corporate
• Disclosure
• Equity
• Financial markets
• Hedge fund
• HM Treasury (HMT)
• Issuer
• Liquidity
• Reporting
• Share
• Short
• Short position

Other resource

• - UK as an international financial centre post Brexit