Tuesday, February 04, 2014

Market abuse rules for EU finally agreed

Sharon Bowles, Liberal Democrat MEP for South East England and Chair of the European Parliament's Economic and Monetary Affairs Committee, reports agreement between the Council and the European Parliament on the EU's Market Abuse Directive. This legislation, which will impose criminal sanctions on insider dealing and market manipulation, was approved by an overwhelming majority of MEPs in Strasbourg today.

Ms Bowles has consistently called for the revision of market abuse legislation to have a wider scope, encompassing transparency, clarity and harmonisation in order to act as a strong deterrent.

She commented from Strasbourg: "The 2008 financial crisis, the rigging of LIBOR and EURIBOR, and recent insider trading scandals have proven the necessity for tighter rules on market abuse.

"Evidence and experience suggest that a culture change may not come directly from within the financial sector any time soon and we hope that this legislation proves to be a significant step in achieving such change.

"The new market abuse legislation agreed today means that Member States must now ensure that not only insider dealing - unlawful disclosure of inside information and market manipulation - but also recommending or inducing another person to engage in such an act, are punishable as criminal offences.

"Although much has been achieved today there is always room for improvement. Council should strive, in a future review of this legislation, to further strengthen the minimum standards for criminal sanctions; enable Member States to apply higher administrative fines; and make the full publication of these sanctions an obligation, areas Parliament was more than ready to address during these negotiations.

"Furthermore, this legislation should be adapted on an on-going basis to account for new trading behaviours and to broaden the concept of abuse to include gross asymmetry of knowledge."

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