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EU's top court rejects UK short-selling challenge

Gavin Hellier | Getty Images

The European Union's top court has dismissed Britain's challenge to the bloc's law on banning the short-selling of shares in market emergencies.

The ruling is a blow to Britain's attempts to limit the scope of financial rules from Brussels as Prime Minister David Cameron seeks to renegotiate the country's membership of the EU.

Britain was challenging part of the short-selling law which gives the European Securities and Markets Authority the power to ban bets on falling share prices when markets are in turmoil.

"The power of the European Securities and Markets Authority to adopt emergency measures on the financial markets of the member states in order to regulate or prohibit short-selling is compatible with EU law," the Luxembourg-based court said in a statement on Wednesday.

(Read more: EU cracks down on commodity speculation in new deal)

"As all the pleas in law relied on by the United Kingdom have been rejected, the Court dismisses the action in its entirety," it said.

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