FSA mulls wider short selling disclosure rules

LONDON (Reuters) - The financial regulator is considering forcing investors to disclose short positions in all stocks, not just banks and insurers, it said on Wednesday.

The Financial Services Authority on Monday said its ban on short-selling financial stocks would end on January 16, but investors still need to disclose significant short positions on 34 banks and insurers until at least the end of June.

As part of that announcement, the financial watchdog said it would publish a separate consultation paper on its long-term plans for short selling.

One of those proposals is to extend the disclosure requirement to all UK stocks, a spokeswoman for the FSA said.

An email was sent to regulated firms on Tuesday, seeking feedback on the costs of introducing that and other proposals.

The FSA banned the short selling of financial stocks in September after the practice was blamed for adding to steep share price falls and undermining confidence in banks such as HBOS HBOS.L.

Its new plan requires the disclosure of any net short position of over 0.25 percent and each subsequent 0.1 percent.

The plan "will reduce the potential for abusive behaviour and disorderly markets" on financial stocks, the FSA said.

(Reporting by Steve Slater; editing by Elaine Hardcastle)