The FSA may be acting outside of its designated legal powers
by allowing its short selling ban to end but continuing to
impose disclosure requirements on short positions.
On January 5 the UK regulator announced that it would not
renew its ban on short selling, which was introduced in
September expired in mid-January. But the disclosure regime
that was implemented alongside the ban will remain in place
until June 2009.
Under the Financial Services and Markets Act of 2000 (FSMA),
the FSA has the power to enforce the terms of its Code of
Market Conduct in cases where market abuse is suspected. This
can lead to official investigations and criminal
But according to Section 118 of FSMA, market abuse is
defined as "improper conduct that undermines the UK