The UK's financial market watchdog has mooted the possibility of hedge funds reporting some of their short positions privately rather than in the full public glare, although it has ruled out revoking the disclosure regime that surrounds the contentious practice.

The Financial Services Authority today said it could widen the current obligations for short sellers to report taking or changing short positions that exceed 0.25% of UK financial companies, or of firms conducting rights issues, to encompass all UK stocks.