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Financial Services: Regulation

Volume 487: debated on Wednesday 28 January 2009

To ask the Chancellor of the Exchequer what role his Department played in discussions leading to the recent decision of the Financial Services Authority to remove its prohibition on short selling of shares in financial institutions. (251268)

[holding answer 26 January 2009]: The Financial Services Authority (FSA) reviewed its recent short selling restrictions and, after consulting publicly, decided to extend the short selling disclosure regime until 30 June 2009 and allow its prohibition on the short selling of shares in financial institutions to expire.

The FSA is independent of Government, though is accountable to Parliament, HM Treasury, regulated firms and consumers. The Government do not have a general power of direction over the FSA.

The UK tripartite authorities, HM Treasury, the Bank of England, and the FSA, have worked, and continue to work, together to take all necessary steps to ensure the stability of the UK financial system. As was the case with previous administrations, it is not the Government’s practice to provide details of all such discussions.