Brussels, 04/02/2014 (Agence Europe) - With the European Parliament having enshrined the revision of the directive introducing criminal sanctions for market abuse on Tuesday 4 February, Arlene McCarthy (S&D, UK) called upon the United Kingdom to comply with the future rules.
The British Conservatives within the ECR Group voted for the text. However, as McCarthy stressed, it would have been “hard to vote against it so soon before the elections”. According to Commissioner for the Single Market Michel Barnier, London has three months to exercise its right of opt-in.
By way of example, market abuse is not currently a criminal infringement in Austria, Bulgaria, Slovakia and Slovenia. The aim of the text is to harmonise national rules in order to avoid regulation shopping among fraudsters, who will no longer find “any way of exploiting legislative loopholes in Europe”, said Justice Commissioner Vivianne Reding.
Four years in prison for the most serious abuse. The EP shored up the initial proposal of the Commission, as Reding explained. Emine Bozkurt (S&D, Netherlands), who was also rapporteur, welcomed the fact that her proposal for four-year prison sentences had made it to the final text for the most serious crimes. Financial players found guilty of illegally divulging information will risk two years' imprisonment. This will be a minimum threshold which the states will be able to exceed. The directive also provides for criminal proceedings against legal persons, such as investment companies, for example. Current British legislation does not provide a rule of this kind. McCarthy explained that there had been no prosecutions of any bank or individual over the manipulation of the LIBOR index. It is also worth noting that the sanctions may be published. Lastly, the member states will also be free to choose to stipulate that market manipulation committed recklessly or by serious negligence may constitute a criminal offence.
Germany's Wolf Klinz (ALDE) lamented the fact that a lifetime professional ban was not retained in the final text. Barnier wanted a future assessment of the efficacy of the sanctions to lead to a revision of the directive. He reassured Slavi Binev (ELD, Bulgaria) over the latter's concerns that the directive would not be implemented in certain countries. Following publication of the directive in the Official Journal, theoretically in June, the states would have two years to apply the text. (EL/transl.fl)