Thursday, September 14, 2006

Balls Clause update

Despite the "bafflement" the SEC has expressed at the UK's proposed Balls Clause (sorry, I just love calling it that--it brings out the Beavis & Butthead in me) the UK Financial Services Authority issued a statement today supporting it. It says:

The FSA has been consulted by HMT, on its plans to make legislative changes, and is supportive of the proposed approach. The new provisions will provide confidence to UK markets and stakeholders that foreign ownership will not undermine the essence of the UK regulatory regime. The FSA remains indifferent to the nationality of the ownership of the entities it regulates.
First off, yeah, right you're indifferent.

Second, the markets and stakeholders need confidence that a foreign buyer of the London Stock Exchange will not "undermine the essence of the UK regulatory regime"? Good to see you have so much confidence in that national sovereignty thing. A foreign buyer will undermine your regulation? By demanding that you abandon that "light touch"? Because a foreign buyer wants more regulation?

Is this one of those British humor things? Like Ali G or Fawlty Towers? Otherwise, the FT sums it up best:

(Scene: The high-tech boardroom of a US exchange, Manhattan.)

Brad: OK, guys, now our takeover of the London Stock Exchange is complete we can activate phase two – the rule-change. Our drafters are in position. Order them to impose disproportionate measures ASAP. Remember: we’re aiming to wreck the pivotal economic role of our new subsidiary.

Chuck: Won’t that alienate our key clients in London and undermine one of the main reasons for our takeover?

Brad: Of course, Chuck, but this is about showing those Brits who’s boss.

(Meanwhile, in an ops room at Financial Services Authority HQ, women in pencil skirts are pushing cardboard pieces round a giant map of the Square Mile and Canary Wharf. There’s a barely concealed sense of light-touch regulation.)

Brenda: Incoming rule-change, sir.

Nigel: Prepare to launch the Balls Clause.

Brenda: Balls Clause primed and ready, sir.

Nigel: Fire!

(A colossal explosion. The room rocks)

Brenda: Rule-change hit and destroyed, sir.

(Cheers, faint murmurs of “jolly good show” etc, before calm descends).

No comments: