European policymakers have approved a new effort to combat market manipulation by introducing criminal sanctions for these sorts of violations.
The European Commission welcomed a vote Tuesday by the European Parliament approving the commission’s proposal for a directive on criminal sanctions for market abuse. The directive will require countries to make market manipulation, including the manipulation of benchmarks, a criminal offence, punishable with effective sanctions everywhere in Europe. They will have two years to implement the directive in national law.
Under the directive, there will be common EU definitions of market abuse offences such as insider dealing, unlawful disclosure of information and market manipulation; and, there will be a common set of criminal sanctions including fines and imprisonment of four years for insider dealing/market manipulation and two years for unlawful disclosure of inside information.
The commission says that the verdict demonstrates Europe’s commitment to combat insider dealing and market manipulation in its financial markets.
“Today the European Union is sending a clear signal: there must be zero tolerance for manipulators in our financial markets. The EU’s new market abuse framework will ensure that those who commit market abuse will face huge fines or jail across Europe,” said vice president, Viviane Reding, the EU’s justice commissioner and Michel Barnier, internal market and services commissioner.