Do not pass go, do not collect £200

It’s full steam ahead for the review of the Market Abuse Directive. At the end of 2013 the European Parliament and the EU member states reached a final agreement on MAD II that will cover offences such as insider dealing, market manipulation and unlawful disclosure of information. For the first time criminal sanctions will apply to serious financial market offences at an EU level. Member states will be obliged to set a maximum penalty of no less than 4 years in jail for the most serious incidences of insider dealing or market manipulation and 2 years for improper disclosure of information. Whether increasing penalties will actually deter criminals and make markets more efficient, or it’s simply the prospect of press pictures of former traders in orange jumpsuits that appeals to the wider public, remains to be seen. It certainly raises the importance of the upcoming ESMA hearing on future market abuse regulation. If market abuse can send you directly to jail, you had better understand all the details of market soundings, accepted market practices and indicators of market manipulation.

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