U.K. Clashes With EU Over Bid to Boost Market Regulator’s Powers
The U.K. said that giving a European Union agency emergency powers to ban some securities trades may be illegal -- in the country’s latest clash over EU decision-making after failing to derail curbs on banker bonuses.
Britain said it’s concerned that draft EU rules, scheduled to be endorsed by governments as soon as today, may cede too many powers to the European Securities and Markets Authority, according to a document setting out the U.K.’s stance, obtained by Bloomberg News.
“The U.K. expresses concern that it is legally uncertain whether the powers granted to ESMA” are “acceptable,” according to the U.K. note, which the country has circulated to other EU nations. They plans may clash with EU rules limiting the decision-making powers of the bloc’s agencies, the U.K. said.
Britain has often found itself on the defensive in EU discussions on financial regulation. The nation, which lacks a veto on financial laws, was the sole dissenting voice in March opposing a deal to ban bonuses more than twice fixed pay.
The latest clash concerns plans to revamp the EU’s Markets in Financial Instruments Directive, or Mifid. While the overhaul foresees giving broader powers to ESMA, the Paris-based agency could only use them as a last resort if there was a threat to the EU’s financial stability, and if national regulators were unwilling or unable to act.
The U.K. is already locked in a legal challenge against an EU law from 2012 that gives ESMA the ability to temporarily ban short selling across the 27-nation EU. Lawyers for Britain urged the bloc’s top court last week to quash the “wide” and “unpredictable” powers of an EU agency to ban short selling.
A spokesman for the U.K. government office in Brussels didn’t have an immediate comment. A spokeswoman for the Irish government, which holds the rotating presidency of the EU, declined to comment.
Lawmakers at the European Parliament must also agree on the draft Mifid law before it can take effect.
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