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FSA To Receive More Powers With Regard To Recognised Exchanges

by Robin Pilgrim, LawAndTax-News.com, London

14 September 2006


The Economic Secretary to the UK Treasury, Ed Balls, announced on Wednesday that the Government is to legislate to enhance the Financial Services Authority's powers in relation to recognised exchanges.

The FSA will be given the power to veto rule changes proposed by recognised exchanges that would be disproportionate.

Talking about the planned legislation in a speech to the Hong Kong General Chamber of Commerce and the British Chamber of Commerce, in Hong Kong, Mr Balls explained that:

"The Government's interest in this area is specific and clear: to safeguard the light touch and proportionate regulatory regime that has made London a magnet for international business. That has made London an economic asset for the UK, for Europe, and for countries throughout the world. I can therefore announce today that the UK Government will now legislate to protect our regulatory approach."

He continued:

"This legislation will confer a new and specific power on the FSA to veto rule changes proposed by exchanges that would be disproportionate in their impact on the pivotal economic role that exchanges play in the UK and EU economies."

"It will outlaw the imposition of any rules that might endanger the light touch, risk based regulatory regime that underpins London's success."

"Nothing in this legislation has any consequence for the nationality of the ownership of UK exchanges. It will neither make overseas ownership easier or more difficult. We remain open to overseas investment that will continue to be able to benefit from our regulatory regime."

The new legislation has come about as a result of concerns expressed to the Government about the effects of a possible takeover of the London Stock Exchange by a company based outside the UK on the LSE's rules, in particular the rules applying to those companies whose securities are traded on the LSE's markets.


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