Legislation providing a power to prevent an overseas takeover of the London
Stock Exchange resulting in ‘disproportionate’ changes in listings rules will be
well on its way to becoming law by Christmas, economic secretary Ed Balls
announced in the Commons.
Balls’ announcement came as the US exchange Nasdaq was on the brink of buying
out the London Stock Exchange. There have been widespread fears that a takeover
of the LSE by a US exchange could lead to the the implementation of
Sarbanes-Oxley, and damage London’s successfully light regulatory regime.
He said the government plans to introduce a stand-alone bill modifying the
Financial Services and Markets Act to give the FSA new powers that will be
introduced as early as possible after the Queen’s Speech.
Balls said: ‘Our aim is to enable the FSA to stop recognised investment
exchanges and clearing houses making changes in their regulatory provisions
whose effects are likely to be disproportionate.’
He said the provisions were not intended to challenge existing regulatory
provisions or make overseas ownership of UK exchanges any easier or more
difficult than it is at the moment. The veto would be limited to new rules
imposing an obligation or burden and to where the new requirement was
The FSA would have to call for representations before acting and any planned
veto could be challenged in the courts by judicial review.
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