1This chapter applies to all persons who:

1. (1)

   engage, or are intending to engage, in short selling in relation to relevant financial instruments; or

2. (2)

   have engaged in short selling in relation to relevant financial instruments where the resulting short position is still open.

A person who has a disclosable short position must provide disclosure of his position where:

1. (1)

   the position relates, directly or indirectly, to securities which are:

   1. (a)

      the subject of a rights issue;

   2. (b)

      admitted to trading on a prescribed market in the United Kingdom; and

   3. (c)

      issued by:

      1. (i)

         a UKcompany; or

      2. (ii)

         a non-UKcompany for whom the UKprescribed market is the sole or main venue for trading the securities; and

2. (2)

   the disclosable short position:

   1. (a)

      is reached or exceeded during a rights issue period; or

      1
   2. (b)

      has been reached or exceeded immediately before the beginning of the rights issue period and has not fallen below a disclosable short position at the time the rights issue period commences.

A person who has a disclosable short position in a UK financial sector company must provide ongoing disclosure of his position.

A net short position is the position remaining after deducting a long position (if any) that a person holds in relation to the issued capital of a company from a short position in relation to the issued capital of that company, where the value of the long and short positions is calculated in accordance with the provisions below.

The calculation of a net short position must take account of any form of economic interest, whether by virtue of a long or short position, in the issued capital of the company.

A net short position must be calculated on the basis of the position held at midnight at the end of each day that a person has the net short position.

A 'long position' is the total of:

1. (1)

   the number of shares a person holds in a company; and

2. (2)

   any exposure, calculated on a delta-adjusted basis, to the issued capital of the company the person has through his holding of financial instruments which will result in the person making a profit, whether directly or indirectly, if there is an increase in the price or value of the shares of the company.

A 'short position' is the total of:

1. (1)

   the number of shares in a company that a person has sold where the person has borrowed or needs to borrow or purchase shares to settle the transaction and the shares have not yet been returned to the lender, or borrowed and returned to the lender, or purchased, as the case may be; and

2. (2)

   any exposure, calculated on a delta-adjusted basis, to the issued capital of the company the person has through his holding of financial instruments which will result in the person making a profit, whether directly or indirectly, if there is a decrease in the price or value of the shares.

For the purposes of calculating a net short position when a company is in a rights issue period:

1. (1)

   a long position in the nil paid rights cannot be deducted from a short position in relation to the company; and

2. (2)

   any short position in the nil paid rights must be taken into account.

Where a person has appointed one or more discretionary investment managers to manage some or all of his investments, the person must make any disclosures required under FINMAR 2.2.1 R or FINMAR 2.2.3 R in respect of any disclosable short position, unless FINMAR 2.4.2 G applies.

Where a discretionary investment manager or another person has been authorised by a person ("P") to make any disclosures required by FINMAR 2.2.1 R or FINMAR 2.2.3 R on P's behalf, he must:

1. (1)

   provide disclosure or ongoing disclosure as required under FINMAR 2.2.1 R or FINMAR 2.2.3 R of P's position; and

2. (2)

   clearly identify the person on whose behalf he is making the disclosure.

Where a discretionary investment manager manages investments for more than one person, he must provide disclosure or ongoing disclosure under FINMAR 2.2.1 R or FINMAR 2.2.3 R in respect of the aggregate net short position of all the portfolios managed by him.

Where a person whose investments are managed by a non-discretionary investment manager has a disclosable short position, the person must make any disclosures required under FINMAR 2.2.1 R or FINMAR 2.2.3 R in respect of his position.

Where a non-discretionary investment manager has been authorised by a person to make any disclosures required by FINMAR 2.2.1 R or FINMAR 2.2.3 R on that person's behalf, he must:

1. (1)

   provide disclosure or ongoing disclosure as required under FINMAR 2.2.1 R or FINMAR 2.2.3 R of the person's position; and

2. (2)

   clearly identify the person on whose behalf he is making the disclosure.

Where one or more companies in a group is required to disclose a disclosable short position, each company must make a separate disclosure of its own position unless FINMAR 2.4.9 G applies.