EU court rebuffs UK legal challenge to short-selling law
The UK government’s attempt to limit the extent of European Union power to ban certain financial practices has failed in the courts.
In 2012, the EU passed a law giving it the power to ban short-selling – betting on whether shares or other securities will fall in price – in emergency situations.
The UK challenged the law as a restraint of trade on the City, but the EU’s highest court rejected the case.
Britain will not be able to opt out.
EU authorities believe short-selling contributed to financial instability during the region’s debt crisis by increasing the volatility of stocks.
Under the new law, the European Securities and Markets Authority (ESMA) can ban short-selling if it thinks the practice threatens the stability of the EU financial system.
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