EUROPE: Council of the European Union adopts Market Abuse Regulation

Tuesday April 15 2014

The Council of the European Union have adopted strengthened EU rules aimed at clamping down on insider dealing and market manipulation on securities markets.

The new rules comprise a regulation aimed at enhancing the protection of investors, amending and replacing directive 2003/6/EC, and a directive establishing a framework for criminal sanctions.

Directive 2003/6/EC prohibits insider dealing and the manipulation of financial instruments that are admitted to trading on regulated markets. However, the emergence of new trading venues as well as over-the-counter (OTC) trading have brought more competition to regulated markets, making it more difficult to monitor for possible market abuse.

The new market abuse regulation (MAR) extends the scope of those rules to include financial instruments traded on more recently-created venues such as multilateral trading facilities, as well as OTC-traded financial instruments.

The new market abuse directive (MAD) obliges member states to provide in their national legislation for criminal sanctions in respect of insider dealing, market manipulation and unlawful disclosure of inside information.

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