Esma rebuke on short selling regulation
Tuesday 29 November 2011 - by Will.Henley@gfsnews.com
Steven Maijoor suggested in Brussels on Tuesday that curtailing the ideal time for the European Securities and Markets Authority to draft detailed guidelines on the regulation by around eight months would harm its "quality".
The final rule merely requires that the trader has a "reasonable expectation" of being able to borrow the shares from the other party. However Esma is charged with determining what may be deemed "reasonable" in its technical guidance.
In his speech, Maijoor also sought to reassure firms that new powers given to Esma under the revised Markets in Financial Instruments regime - to ban certain risky products or activities - would be used only sparingly.
"Our intervention would be limited to certain specific circumstances and a condition for Esma to step in would be that national authorities have not taken any action to address the threat," he said.
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