The Treasury is today rushing legislation through the Commons in a day in
order to safeguard the London Stock Exchange.
The speed with which the Investment Exchanges and Clearing Houses bill is
speeding towards the statute book – the normal process takes months – reflects
concern that possible overseas bidders for the LSE should know the legal
limitations that will be placed on their ownership.
The bill gives the Financial Services Authority power to veto ‘excessive’
changes in regulation within recognised investment exchanges and clearing
houses. But its clear intent is to prevent any US-owned buyer suddenly
tightening up LSE rules.
The grounds for the FSA to refuse recognition of rule changes – about which
it must be given 30 days’ notice – is the likelihood that the proposal ‘imposes
or will impose an excessive requirement on the persons affected’.
Government ministers have made it clear that the power will be used sparingly
and will not be used by the FSA to monitor every minor rule change or impose a
rule-change clearance bureaucracy.
The use of the all-in-one-day Commons process is highly unusual although not
unprecedented. It has already been used this autumn to rush through Northern
Ireland constitutional reform designed to help break the ongoing deadlock
preventing the creation of a power-sharing executive including Unionist and Sinn
Fein elements in Belfast.
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