This new rulebook, will increase investor protection and confidence by allowing deeper and more integrated financial markets, and contribute to the creation of the Capital Markets Union. The new framework will strengthen the fight against market abuse across commodity and related derivative markets, explicitly ban the manipulation of benchmarks, such as LIBOR, and reinforce the investigative and sanctioning powers of regulators.
The updated rulebook strengthens and replaces the existing EU rules on market integrity and investor protection, first adopted in 2003. It consists of the Market Abuse Regulation and the Directive on Criminal Sanctions for Market Abuse.
Jonathan Hill, EU Commissioner responsible for Financial Stability, Financial Services and Capital Markets Union said: "I am very pleased that our revamped rulebook against insider dealing and market manipulation is now taking effect. Having in place clear rules against misbehaviour on Europe's financial markets is key for their efficient functioning and investor protection."
Vera Jourová, Commissioner responsible for Justice, Consumers and Gender Equality said: "Administrative authorities will now have greater powers to investigate market abuse and to impose significant fines, while those found guilty of market abuse will be deterred by the prospect of facing jail."
The Market Abuse Regulation ensures that rules keep pace with market developments, such as new trading platforms, as well as new technologies, such as high frequency trading (HFT). The new Directive on Criminal Sanctions for Market Abuse (or Market Abuse Directive) complements the Market Abuse Regulation by requiring Member States to introduce common definitions of criminal offences of insider dealing and market manipulation, and to impose maximum criminal penalties for the most serious market abuse offences. Member States have to make sure that such behaviour, including the manipulation of benchmarks, is a criminal offence, punishable with effective sanctions everywhere in Europe.
The essential delegated and implementing acts based on the Market Abuse Regulation have been adopted in time to ensure that market participants and supervisory authorities can implement the new rule book and apply it as of 3 July 2016.