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UK takes battle against short selling ban to European court
by David Campbell on Jun 12, 2013 at 07:42
The UK has accused one of Europe’s biggest financial regulators of an illegal power grab as a court case seeking to prevent a potential EU ban on short selling reaches the European Court of Justice.
Britain was outvoted by European finance ministers when it tried to prevent the European Securities and Markets Authority from being awarded the power last year.
‘There is a short point at the heart of this case. It is that the extensive discretion given to Esma is contrary to the institutional balance laid down in the treaties,’ Jemima Stratford QC, representing the British government, told the ECJ, in comments reported by the Telegraph.
‘This would be a fundamental change. It cannot be right that it crept in under the radar.’
Unlike other powers granted to regulators, the power to institute a short-selling ban without prior approval by European finance ministers. The EU previously instituted limited limits on short selling during the financial crisis.
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