AIMA

FSA short selling pre-consultation

To help inform its views before formally consulting on its short selling ban in January 2009, the FSA has provided a series of questions to which it invites firms to reply or comment by 25th November. Some AIMA members may already have received these questions direct from the FSA.

The FSA’s questions can be found here.

AIMA will take a full and constructive part in responding to the FSA’s consultation paper on behalf of the hedge fund industry when it is published. While members must, of course, decide for themselves whether or not they wish to respond to the FSA’s current questions, our initial view is:

• we oppose the short selling ban imposed by the FSA in September and are concerned that the FSA’s questions constitute a form of cost benefit analysis in respect of a measure which we do not feel should be in place;
• when the substantive debate on the ban commences in January, it is imperative that both sides base their arguments on data which are, so far as is possible, complete, accurate and transparent to all sides. We query whether a deadline of one week gives firms sufficient time to ensure that data which the FSA is seeking meets these criteria. We would prefer firms to take what they consider to be adequate time to gather and analyse the relevant statistics, rather than for them to rush to meet a tight, yet essentially artificial, deadline;
• if members wish to respond to the FSA’s questions indirectly via AIMA, we would ask them to send their replies to Matthew Jones who will organise these to be compiled and forwarded. We would also be grateful if members who respond directly to the FSA could copy their replies to us – we will keep the contents confidential.