City could be hammered by new EU short selling rules, says MEP

THE EUROPEAN Commission’s plans to regulate short selling have the potential to wreck the City’s reputation as a global trading centre, a London MEP said yesterday.

Conservative MEP Syed Kamall said that, while the Commission consulted with industry figures widely before drafting the rules, European politicians hoped to strengthen the new regulation to stifle the market, disproportionately hitting the Square Mile.

France and Germany wrote a letter to the Commission over the summer urging it to ban short selling of shares and sovereign bonds.

“Short selling is socially useful,” said Kamall. “It is vital that we do not over-regulate the EU market, as those that operate here will not just take their short positions out of the EU but their long positions as well.”