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The European Parliament yesterday approved a new directive to establish strict criminal sanctions for those found guilty of financial fraud offenses, that were until now, prosecuted only at the civil level. The new directive applies to insider trading, market manipulation but also to aiding and incitement to commit such offenses.
A common set of criminal sanctions will be established, including fines and imprisonment up to four years for insider dealing/market manipulation, and two years for unlawful disclosure of inside information.
The new regulations, designed to restore confidence in European financial markets and improve investor protection, now have to be ratified by the Member States. Following publication of the Directive in the EU Official Journal, expected in June, countries will have two years to implement the changes in national law.
For financial institutions, the new directive makes it increasingly important to strictly control and report anomalies and suspicious transactions.
TAS provides banks and institutional investors with all the tools to comply with requirements for market abuse controls; supporting prevention and the identification of anomalous behaviour encompassed by the new regulations.