Changes to proposed regulation on insider trading and market manipulation

In connection with the recent LIBOR scandal, the European Commission has amended its earlier proposals for regulation on insider dealing and market manipulation. The changes will explicitly prohibit manipulation of benchmarks, including LIBOR and EURIBOR, and make such manipulations a criminal offence.

The original proposals date from October 2011 and consist of a directive and a regulation. The regulation aims to reinforce the investigative and sanctioning powers of supervisors, promote the fight against market abuse in commodities and derivatives markets, and ensure that regulations keep pace with market developments. The directive requires member states to ensure that insider dealing and market manipulation are subject to criminal sanctions.

The European Parliament is expected to discuss the proposals at a plenary meeting in January 2013.

Consultation on regulation of benchmarks and market indices

The LIBOR manipulation issue has led the European Commission to propose new rules for the production and use of indices serving as benchmarks in financial and other contracts. The Commission is holding a consultation about the proposed rules until 15 November.