Market maker exemption

Positions taken by market makers in the course of providing liquidity are exempt from EU and UK short position disclosure, so they never appear on registers.

The EU Short Selling Regulation and the UK's regime exempt market-making activity from the notification and disclosure obligations, because a market maker's short inventory reflects its quoting rather than a view on the company. Firms must notify the regulator that they intend to use the exemption. The result is that the disclosed aggregates exclude a part of the short activity that exists in the market at any time.

Related terms

Named register: The EU-style publication model: each individual net short position of 0.5% or more of share capital is published with the position holder's name.

Disclosure floor: Why published figures understate true short interest where thresholds apply: positions below the threshold exist but are invisible.