Commission to get tough on insider dealing

Plans for minimum level of sanctions for manipulation of financial markets.

The European Commission is to announce plans on Wednesday (19 October) to introduce a minimum level of criminal sanctions for insider dealing and the manipulation of financial markets.

Click Here: NRL Telstra Premiership

Officials say that sanctions currently in place to fight financial-market abuse are insufficient in some countries. The Commission is worried that perpetrators are increasingly using member states where the level of punishment is low or non-existent, which can have a knock-on effect throughout the entire European Union.

Increased powers

It would be the first time that the Commission has used powers under the Lisbon treaty enabling it to establish minimum rules for criminal offences. It will aim to oblige member states to ensure that any attempt to commit insider dealing or market manipulation is punishable.

One country, Bulgaria, does not criminalise market abuse at all, while Austria, Slovakia and Slovenia criminalise insider dealing but not market manipulation (behaviour such as spreading false information or rumours to change prices).

The directive, to be proposed by Viviane Reding, the European commissioner for justice, will complement a more general regulation on market abuse to be proposed on the same day by Michel Barnier, the European commissioner for the internal market, that will update rules adopted in 2003.