A senior adviser to the European Court of Justice has indicated that the European Securities and Markets Authority will be stripped of its power to ban short selling in the latest in a series of key UK victories over the EU.
The FT reports Esma will lose its power to ban short selling in economic emergencies and it will return to the FCA after the ECJ advocate general decision.
The legal opinion is non-binding but the ECJ normally agrees with the advocate general. The view could strike a blow for centralisation of power in the EU and harmonisation of markets, traditionally seen as the aim of the body.
The opinion states: “The outcome [of the provision to ban short selling] is not harmonisation but the replacement of national decision-making with EU level decision-making.”
It is the latest UK win after EU lawyers said the financial transaction tax could be illegal while the European Securities and Markets Authority also gave up plans to regulate Libor instead of the FCA.