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From Friday June 20th, publicly listed companies will be obliged to reveal details of their short selling activities if they are considered to be "significant" based on a scale threshold set out by the authority.
The financial regulator has made clear that it considers the short selling of stocks and shares to be a legitimate part of trading but its concern is that a lack of transparency in this regard could distort the market, particularly in the current economic environment.
A statement from the FSA said: "These provisions and, in particular, the threshold triggering a disclosure of a short position, will be kept under review and may be subject to change in the light of experience."
Short selling involves companies selling their securities in the belief that their value will decrease, while investors in this instance are generally taking the risk that their value will increase.
