On Mar. 28, RSA FSCA issued draft standard on short sales disclosure.
RSA FSCA issued draft conduct standard on requirements pertaining to the reporting and public disclosure of short sales and accompanying documents.
Follows RSA FSCA Mar. 2025 issued draft standard on short sale disclosures, #168387.
Draft Standard
Publication of draft conduct standard preceded by two publications: discussion paper published in Nov. 2018, and first draft of conduct standard published in Mar. 2023.
Substantial commentaries were submitted on the first draft Conduct Standard and industry commentators raised various very fundamental concerns.
Following first draft conduct standard, RSA FSCA engaged targeted stakeholders, adopted fundamentally different approach and reformulated conduct standard.
RSA FSCA view that a legal framework governing reporting and public disclosure of short sales will support transparency, have distinct benefits for market and its users.
Greater disclosure will help deter market abuse and reduce risk of disorderly markets.
Such a framework will also provide early warning signs of a build-up of large short positions, alerting RSA FSCA to potential market abuse or emerging systemic risk.
Public access to information on short sales will also provide informational benefits to the market, improving insight into market dynamics, aiding transparency, and making available important information to assist price discovery.
Effectiveness
Comments on draft conduct standard must be submitted by May 19, 2025.
