§ Mr. BercowTo ask the Chancellor of the Exchequer (1) if he will make a statement on his position in regard to the proposed EU market abuse directive; [12392]
(2) what the forecast cost to the UK financial services industry is of the proposed EU market abuse directive. [12391]
§ Ruth KellyThe Government support the Commission's objectives of developing the single market in financial services and promoting the integrity of the single market. The proposal for the directive creates for the first time an EU-wide regime to counter market manipulation and updates the existing insider dealing provisions to enable them to benefit from the enhanced co-operation measures.
The Government will examine the proposal carefully to ensure that there is no diminution in the level of protection from market manipulation currently enjoyed by UK markets, that the level of regulation proposed is proportionate and consistent with the goal of advancing the single market in financial services, and that any consequent changes to the UK's new market abuse regime are kept to a minimum.
Since the United Kingdom has a rigorous market abuse regime under part VIII of the Financial Services and Markets Act 2000 due to come into force shortly, United Kingdom firms should already have in place measures to counter abusive behaviour.
However, the directive as currently drafted would require some modifications to the existing regulatory regime. The inflexible regulatory approach taken in the current draft of the directive could give rise to additional compliance costs as firms incur legal costs on advice to avoid behaviour that could give rise to enforcement actions.
The Government's goal in negotiations is to minimise the need for modification of the current regulatory regime to ensure the directive effectively tackles market abuse and does not impose additional, unnecessary costs.