Regulation 6 FCA rules requiring notification of a significant net short position in the issued share capital of a company

(1)

The FCA may make designated activity rules requiring a person who has a net short position which is—

(a)

in the issued share capital of a company which has admitted shares, and

(b)

equal to or greater than the notification threshold,

to notify the FCA.

(2)

The notification threshold referred to in paragraph (1) is 0.2% of the issued share capital of the company.

(3)

For the purposes of this regulation—

(a)

a person has a net short position in the issued share capital of a company if the person’s total short position in the issued share capital of that company exceeds the person’s total long position in the issued share capital of that company;

(b)

a short position in the issued share capital of a company is the position resulting from—

(i)

a short sale of a share issued by the company, or

(ii)

entering into a transaction, other than a short sale of a share issued by the company, where an effect of the transaction is to confer a financial advantage on the person entering into that transaction in the event of a decrease in the price or value of a share issued by the company;

(c)

a long position in the issued share capital of a company is the position resulting from—

(i)

holding a share issued by the company, or

(ii)

entering into any transaction where an effect of the transaction is to confer a financial advantage on the person entering into that transaction in the event of an increase in the price or value of a share issued by the company.

(4)

Designated activity rules made by virtue of paragraph (1) may, in particular, make provision as to—

(a)

the circumstances in which a person has a net short position in the issued share capital of a company for the purpose of rules made by virtue of this regulation, including provision as to the circumstances in which a person is considered to hold a share;

(b)

the calculation of a person’s net short position, including—

(i)

the transactions that are to be taken into account when calculating a person’s net short position;

(ii)

the treatment of short or long positions held by different entities in a group;

(iii)

the treatment of short or long positions held by or under different fund structures;

(c)

the circumstances in which a notification is required to be re-made or updated, including for example where a person’s net short position falls below the notification threshold.