The U.K. lost a fight at the European Union’s top court against the EU’s powers to ban short- selling in the first ruling in a series of British challenges to measures ranging from transaction taxes to bonus curbs.
“As all the pleas in law relied on by the United Kingdom have been rejected, the Court dismisses the action in its entirety,” the EU Court of Justice, the 28-nation bloc’s highest court, ruled in Luxembourg today.
The U.K. challenged the European Securities and Markets Authority’s emergency powers as illegal and encroaching on national regulators. The court’s decision is final and can’t be appealed.
The U.K. has repeatedly found itself on the defensive in EU financial-regulation negotiations. The nation last year opposed a deal to cap banker bonuses at twice annual salary and filed a similar challenge at the EU court on the issue.
Prime Minister David Cameron has promised to seek a new settlement with the EU, amid rising opposition that has seen the U.K. Independence Party, which advocates a divorce from the bloc, gain in opinion polls. Cameron’s promise to hold a referendum on EU membership by the end of 2017 has failed to quell calls from members of his Conservative Party for Britain’s European destiny to be put to the people sooner.
Britain contested EU rules allowing Paris-based ESMA to introduce short-selling bans to protect the “integrity of financial markets.” Under the law, ESMA can only act if a crisis has “cross-border implications” and national regulators have failed to deal with it.
The court said today that the powers granted to ESMA “are precisely delineated and amenable to judicial review” and are compatible with the EU’s treaties.
The case is: C-270/12, United Kingdom of Great Britain and Northern Ireland v. Council of the European Union, European Parliament.