The regulator says that extending the regime will continue to help reduce the potential for abusive behaviour and disorderly markets.

The FSA expects that in the longer term the requirements will be replaced by a broader short selling regime for all UK stocks.

As is the case at present, disclosures will only need to be made if a net short position exceeds 0.25 per cent of a company's issued shared capital or increases by 0.1 per cent bands above that (e.g. net short position reaches 0.35 per cent, 0.45 per cent and so on).

Sally Dewar, managing director of wholesale and markets at the FSA, says: "Keeping the disclosure requirements will continue to enhance transparency and limit the potential for market abuse, while details of a long term regime for short selling are being drawn up. We remain committed to achieving an international consensus that is as wide as possible on our broader short selling regime."

The consultation period on the FSA proposals will close on 12 June to enable any new measures to be put in place before the current regime expires.