Far from closing the investigation, as the Stock Exchange did with its own inquiry after only a short period, it is widely believed that the SFA, which regulates the investment banking sector, is looking hard at events in the run-up to the hostile takeover.
SBC's innovative use of derivative contracts as part of Trafalgar's bid led it to take stakes in several other regional electricity companies, whose share prices rose after the takeover was announced.
There is concern that SBC's interpretation of the rules may provoke the regulaters into a general tightening. The Stock Exchange last month quickly cleared SBC of any breach of its rules. But as a result of the concern prompted by SBC's methods, it is drawing up questions to put to members, and interested institutions.
These will include whether there is a need to change the rules covering derivatives and those relating to the undisclosed large positions that can be taken in companies by market-makers.
SBC, was a corporate adviser to Trafalgar. Its market-making operations bought shares in regional electricity companies between the bank's role as corporate adviser to Trafalgar House, and its market-makers. The fact that SBC's market makers took a sizeable, 8.2 per cent stake, in Yorkshire Electricity, which only emerged after the bid for Northern Electric became public, has become a matter of controversy.
The regulator appears to be trying to establish whether the implications of its findings so far fall into the disciplinary sphere, or whether the inquiry needs to be directed more at how the rules should be modified.
Sources within the Exchange as well as the regulators concede that SBC's innovations have exposed a weakness, if not a gap, in the rules covering the rapidly developing area of derivatives.