Brussels, 14/04/2014 (Agence Europe) - On Monday 14 April, the European Union received the green light from the EU Council of Ministers on updated tools for tackling market abuse and increasing the penalties for it. EU28 foreign ministers adopted a regulation on which agreement in trialogue was given by the EP in September (see EUROPE 10918) and a directive on criminal sanctions, which the MEPs adopted in February (see EUROPE 11011).
“Today's adoption sends a strong zero tolerance warning to those engaging in insider dealing and market manipulation. (…) Member states should swiftly implement these new rules so criminals have no place to hide in Europe”, stated EU Justice Commissioner Viviane Reding and Internal Market Commissioner Michel Barnier. Once it has been published in the EU Officail Journal in June, the European Commission will introduce the implementing legislation required for the regulation and the member states will transpose the directive into their legal system over the following 24 months. The regulation's scope was extended to include abuse on the electronic trading platforms that have proliferated in recent years. It will now cover market abuse occurring across both commodity and related derivative markets that impact on energy prices. Member states will be able to issue fines of three times the profit made from the abuse of the market, or at least 15% of turnover for companies. Some countries say this does not go far enough and the Commission points out that member states will have the option of going beyond this minimum. The directive includes common definitions of market abuse offences such as insider dealing, unlawful disclosure of information and market manipulation.
There will be a common set of criminal sanctions including fines and imprisonment of at least four years for insider dealing/market manipulation and two years for unlawful disclosure of inside information. Member states may set longer prison sentences if they wish. The directive notes that companies can also be held liable for abuse of the market. (EL)