Sélecteur de langues
European Commission - Press release
European Commission seeks criminal sanctions for insider dealing and market manipulation to improve deterrence and market integrity
Brussels, 20 October 2011 – Investors who trade on insider information and manipulate markets by spreading false or misleading information can currently avoid sanctions by taking advantage of differences in law between the 27 EU Member States. Some countries’ authorities lack effective sanctioning powers while in others criminal sanctions are not available for certain insider dealing and market manipulation offences. Effective sanctions can have a strong deterrent effect and reinforce the integrity of the EU’s financial markets. That is why the European Commisison proposes today EU-wide rules to ensure minimum criminal sanctions for insider dealing and market manipulation. For the first time, the Commission is using new powers under the Lisbon Treaty to enforce an EU policy through criminal sanctions. The proposed Directive requires Member States to take the necessary measures to ensure that the criminal offences of insider dealing and market manipulation are subject to criminal sanctions. Member States will also be required to impose criminal sanctions for inciting, aiding and abetting market abuse, as well as for attempts to commit such offences. The Directive complements today’s proposal for a Regulation on Market Abuse, which improves the existing EU legislative framework and reinforces administrative sanctions.
EU Justice Commissioner Viviane Reding said: “In these times of crisis, it is essential that citizens regain confidence in our markets. This is why, as a complement to effective supervision of the markets, the Commission proposes today to strengthen the enforcement of EU rules against insider trading and market manipulation by means of criminal law. Criminal behaviour should have no place in Europe's financial markets!"
Internal Market and Services Commissioner Michel Barnier said: "Sanctions for market abuse today are too divergent and lack the necessary deterrent effect. By imposing criminal sanctions for serious market abuse throughout the EU we send a clear message to deter potential offenders – if you commit insider dealing or market manipulation you face jail and a criminal record. These proposals will heighten market integrity, promote investor confidence and level the playing field in the internal market."
Defining criminal offences at EU level
Insider dealing occurs when a person who has price-sensitive inside information trades in related financial instruments. Market manipulation takes place when a person artificially manipulates the prices of financial instruments through practices such as the spreading of false or misleading information and conducting trades in related instruments to profit from this. Together these practices are known as market abuse.
The proposal for a Directive defines the two offences – insider dealing and market manipulation – which should be regarded by Member States as criminal offences if committed intentionally. In line with the scope of the proposed Market Abuse Regulation, transactions for certain purposes are excluded from the scope: buy-backs and stabilisation programmes, monetary policy and debt management activities and activities concerning emission allowances in pursuit of climate policy.
The proposal also requires Member States to criminalise inciting, aiding and abetting insider dealing and market manipulation, as well as attempts at these forms of market abuse. Criminal or non-criminal liability should also be extended to legal persons.
Member States should ensure that criminal sanctions imposed for these offences are effective, proportionate and dissuasive. The proposal includes a review clause requiring the Commission to report to the European Parliament and Council, within four years of the Directive's entry into force, on its application and, if necessary, on the need to review it, in particular with regard to the appropriateness of introducing common minimum rules on types and levels of criminal sanctions. If appropriate, the report shall be accompanied by legislative proposals.
This is the first legislative proposal based on the new Article 83 paragraph 2 of the Treaty on the Functioning of the European Union, which provides for the adoption of common minimum rules on criminal law when this proves essential to ensure the effective implementation of a harmonised EU policy. Current sanction regimes applied in the Member States for market abuse offences have proven not to be sufficiently effective. They do not always use the same definitions of these crimes and are too divergent, allowing perpetrators to benefit from loopholes.
Today's proposal follows the approach set out in the Commission's Communication "Towards an EU criminal policy – Ensuring the effective implementation of EU policies through criminal law" of 20 September 2011 (see IP/11/1049). This included an assessment, based on clear factual evidence, of the national enforcement regimes in place and the added value of common EU minimum criminal law standards, taking into account the principles of necessity, proportionality and subsidiarity.
Today's proposal is also part of the follow-up to the Commission's Communication on "Reinforcing sanctioning regimes in the financial services sector" of 8 December 2010 (see IP/10/1678). This envisaged the introduction of criminal sanctions for the most serious violations of financial services legislation if and where this would prove essential to ensure the effective implementation of such legislation.
The proposal now passes to the European Parliament and the Council for negotiation and adoption. Once adopted, Member States will have two years to transpose the Directive into national law.
For more information:
Homepage of Vice-President Viviane Reding, EU Justice Commissioner:
Homepage of Michel Barnier, Internal Market and Services Commissioner:
Chantal Hughes (+32 2 296 44 50)
Carmel Dunne (+32 2 299 88 94)
Matthew Newman (+32 2 296 24 06)
Mina Andreeva (+32 2 299 13 82)