The principal problematic point in the legislation concerns the granting of various powers to the European Securities and Markets Authority.
Delays at a Council of the EU meeting in Brussels involving national finance ministers continued to hamper progress of proposed regulation on short selling. The European Parliament, along with the Commission, have both taken a pro-ESMA stance when it comes to supporting its powers over national supervisors.
As for the national ministers, their official position would limit ESMA's powers in the field of short selling and sovereign debt issues. But Pascal Canfin – the European Parliamentary rapporteur for the regulation on short selling and certain aspects of credit default swaps – disagrees. "The Council would give veto rights to member state governments over ESMA", he said.
He also objected to a legislative watering down, in that the Council has now agreed to permit 'naked', un-supported selling of credit default swaps derivatives in "exceptional circumstances". It seems that the main national objector in the Council over the ESMA matter was the UK, with the support of the Czech Republic, Poland, Spain and Sweden. The group of opponents has thinned since March when it also included the Netherlands, Finland, Demark, Luxembourg and Bulgaria.
Now, the differences mean that overall the clearance of the regulation though the Brussels system, formerly scheduled for May, could be held up until June and possibly even September. Final accord would be signalled by a vote in plenary in the Parliament.
© IPE International Publishers Ltd.
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