European Union regulators may win powers to ban new financial instruments before they are sold, as part of an overhaul of the region’s market rules.
Such “precautionary” bans would be justified if a security “gives rise to significant investor protection concerns or poses a serious threat to the orderly functioning and integrity of financial markets,” according to a report by Markus Ferber, the lawmaker leading work on the measures in the European Parliament.
Ferber is seeking to bolster last year’s EU plans to revamp the region’s market legislation, known as Mifid. The rules were proposed by Michel Barnier, the EU’s financial services commissioner, to plug regulatory gaps exposed by the financial crisis that followed Lehman Brothers Holdings Inc.’s 2008 collapse.
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