UK's Membership of EU and its Impact on Insider Trading
The European Union has recently introduced criminal sanctions in all its member countries in cases of market manipulation and insider trading. The new regulations are quite strict and are essential in reforming the financial markets. There are two directives Market Abuse and Criminal Sanctions [footnoteRef:1]and MFID [footnoteRef:2] have been introduced recently by EU in their pursuit to eliminate market manipulation and insider trading. [1: Criminal sanctions include fines up to £5million with a limit of the minimum amount of all the profits that are made through insider trading. ] [2: MFID stands for Markets in Financial Instruments Directive, this directive was introduced to protect insider trading dealings]
The criminal sanctions already exist in UK laws, however these sanctions are meant to have a greater impact on those member countries where leniency have been obtained in cases o insider trading and the punishment levels for market manipulation are low. The new sanctions can pose a systematic risk also because it can have a disruptive impact on the economy. The UK market is not much affected by the new directives because they already had similar approach in dealing with market manipulation and financial frauds.
EU directives have clearly stated that prison sentences would be given to those who are involved in insider trading. UK laws even before these directives had imposed strict penalties in cases of insider...
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