Overview

The Short Selling and Bank Accounts Bill aims to prohibit short selling of UK-listed company shares (with exceptions for market makers), mandate transparency regarding pension fund share lending for short selling, and require banks and building societies to offer free current and savings accounts to retail customers.

Description

This bill comprises five sections. Section 1 makes it an offense to create or increase a net short position in a UK-listed company, punishable by an unlimited fine or 12 months imprisonment. However, market makers are exempt. Section 2 requires pension funds to disclose details of share lending for short selling, including quantities, fees, and share prices. Non-compliance faces penalties up to £100,000 for a first offense and an unlimited fine thereafter. Section 3 mandates banks and building societies to offer at least one free current account and one interest-bearing free savings account to retail customers. Penalties for non-compliance are similar to those in Section 2. Section 4 defines key terms like "market maker" and "retail customer". Section 5 covers the bill's title, commencement date (with Section 3's date determined by the Treasury), and extent (across the UK).

Government Spending

The bill is expected to increase government spending due to the potential costs of enforcement and monitoring compliance by the Financial Services Authority, but no specific figures are provided in the bill text.

Groups Affected

• Financial Institutions: Banks and building societies will be required to provide free accounts, potentially impacting profitability.
• Pension Funds and Trustees: Increased administrative burden and potential penalties for non-disclosure of short-selling activities.
• Retail Customers: Benefit from free banking services.
• Short Sellers: Subject to legal restrictions and potential penalties.
• Market Makers: Exempted from short-selling restrictions.

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