The European Parliament has proposed a directive that would see criminal penalties for insider dealing harmonised across the European Union (EU).
The proposal – drafted by the Committee on Economic and Monetary Affairs – is deemed “essential to ensure effective implementation of EU financial services legislation”.
The new proposals would provide a detailed list of infringements and sanctions available to authorities for tackling market abuse.
Parliamentarians argue the sactions must be “effective, proportionate and dissuasive” to tackle the problem.
The committee says there are considerable divergences between member states’ approach to market abuse.
It reveals that five member states do not provide for criminal sanctions for disclosure of inside information by primary insiders and eight member states do not do so for secondary insiders.
The committee finds: “In addition, one member state does not currently impose criminal sanctions for insider dealing by a primary insider and four do not do so for market manipulation.”