The concerns centre on short selling legislation that is being discussed by the European Council, European Parliament and European Commission. Article 24 of the proposed legislation would give ESMA the power to ban the shorting of securities, including equities. The ban would not extend to derivatives which are covered separately.
In the statement, the UK government said: "At the May ECOFIN, the Council and Commission committed to work during trilogue to find a solution taking into account the concerns expressed by Member States in ECOFIN Council regarding the powers of ESMA in Article 24. Despite this commitment the concerns were not addressed. The UK continues to have significant concerns that, as drafted, Article 24 would be unlawful and contravene the principle set out in the judgement of the Court of Justice of the European Union in the case of Meroni. The UK Government cannot therefore support the text in Article 24 and will be considering how best to ensure legal certainty is provided."
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