Oct. 2--The Financial Services Authority wants to introduce forced disclosure of significant "short" positions in stocks across all sectors, not just financial firms.

However, the watchdog said it won't implement blanket rules until a European agreement can be reached.

Traders and firms have told the FSA that unilateral action would make it too complicated.

Short-selling is when traders "sell" shares they don't actually own, with a plan to buy them back at a later date more cheaply.

Hedge funds often do this if they believe that a stock will fall in value. But some argue such speculative dealing can distort markets.

Some blamed short-selling for a destabilising slump in shares at HBOS, before its rescue by Lloyds.

Others point out that investors were right to sell the stock because the company was in trouble.

The City watchdog wants any shortselling stakes above 0.5pc to be disclosed across all stock market sectors.

Currently, traders must disclose a short of more than 0.25pc in a financial firm or a company in the midst of a rights issue.

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