Brussels, 10/09/2013 (Agence Europe) - On Tuesday 10 September, the European Parliament endorsed by a wide majority an agreement reached in three-way talks to improve prevention, detection and penalties for individuals found guilty of manipulating the market or insider trading (see EUROPE 10876).
During a debate in plenary, the European Commission and a number of MEPs warned that further action needed to be taken and they called for the rapid conclusion of the three-way talks on the draft to introduce penalties for market abuse.
British MEP Arlene McCarthy (S&D), EP rapporteur on this issue, welcomed the outcome of the vote, saying: “There is still much to do in restoring the trust and confidence in banks and the financial services industry. We must get the real economy moving again and make sure consumers are protected in the financial services sector. We are sending a clear signal that the EU is not a soft option or safe haven for perpetrators of market abuse”. Internal Market Commissioner Michel Barnier said that the draft legislation took account of changes in financial platforms and the impact of new technology. He said that people guilty of manipulating benchmarks like Libor (like the scandal in the summer of 2012) now risked heavy fines. He said the new fines aimed to be dissuasive and be as high as 15% of annual turnover or €15 million. Barnier agreed with an MEP that 15% was too low, but said that it was a minimum level that would be put on the statute books. If the member states wanted to introduce higher penalties, he said they were free to do so. This was echoed by McCarthy, who promised to use the revision clause to go as far as possible.
In July 2013, France, backed by Italy, Spain and Portugal, said it wanted to make use of this clause to harmonise administrative penalties (see EUROPE 10884).
The new rules will now be extended to cover a variety of financial instruments including commodity derivatives affecting food and energy prices, traded inside and outside the exchanges as a first step towards a cross-border surveillance system. They will ensure a uniform definition of insider trading and information in order to ensure better quality indicators and prevent arbitrary legislation.
The regulation will be formally adopted once agreement in principle has been reached on MiFID II, the draft legislation updating the rules governing the financial markets (see EUROPE 10872). The entry dates for the two areas of legislation will be aligned with each other. (EL/transl.fl)