Success for UK in fight to curb Brussels rules

 
Michael Bow
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BRITAIN took a vital step towards curtailing the power of European financial regulators yesterday after a court ruled EU efforts to curb short selling gave away too much power to Brussels.

A high ranking legal opinion from the European Court of Justice (ECJ) said the bid by EU-wide financial watchdog the European Securities and Markets Authority (Esma) to temporarily shut down short selling in times of financial stress broke the law.

The opinion from the advocate general, which still needs to be backed by the full court, could have wider implications by undermining a European drive to harmonise financial regulation.

“It was only a narrow point around short selling regulation. This was more about the right of Esma to override the wishes of the Financial Conduct Authority,” Slaughter and May partner Jan Putnis told City A.M.

Raoul Ruparel, Open Europe head of economic research, added: “This could prove to be an important decision for the UK as, if upheld by the ECJ, it would limit the power of the EU to pass a wide range of laws,”

But hedge funds could be left scratching their heads today after the ruling said Esma fell down on the procedural aspects of obtaining the power to ban short selling – rather than the issue of banning the practice itself.