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(2004/C 84 E/0612)

WRITTEN QUESTION E-0105/04

by Stavros Xarchakos (PPE-DE) to the Commission

(22 January 2004)

Subject:   Curious approach adopted by the Greek government to the stock exchange

Professor Prokopis Paulopoulos, the parliamentary spokesman of New Democracy publicly complained on 12 January 2004 that the Greek government was decriminalising two crimes relating to the operation of the stock exchange, notably share manipulation and the abuse of confidential information. These rules are being introduced as part of the new code for capital markets which has been presented to the Greek Parliament and provides for the two crimes in question to be decriminalised. Hitherto both share manipulation (Article 72 of Greek Law 1969/91) and the abuse of confidential information (Article 30 of Law 1806/88 and Presidential Decree 53/92, Articles 2 and 3) were criminal offences. It should be borne in mind that Greece has suffered the greatest loss of capital in Europe over the last few years with the collapse of the Athens Stock Exchange index. As a result 1,5 million Greeks have lost money amounting to an estimated EUR 100 billion.

Is the decriminalisation of share manipulation of shares and the abuse of confidential information compatible with Community law? Which other EU country has suffered a comparable loss of capital on the stock exchange? Which sanctions have been imposed and on whom in comparable circumstances in the other 14 Member States of the Union?

Answer given by Mr Bolkestein on behalf of the Commission

(17 March 2004)

According to the Honourable Member's information, the Greek Government intends to decriminalise both market manipulation and insider dealing. These two infringements would no longer be considered as criminal offences if the new Greek code for capital markets were to be adopted by the Greek Parliament.

Regarding decriminalisation of market manipulation and insider dealing, Member States have currently to transpose Directive 2003/6/EC (1) (hereafter Market Abuse Directive) in order to have it implemented by 12 October 2004. As the transposition deadline is not reached, and as the Commission is not aware of any final transposition of this Directive by Greece yet, and the Commission therefore can not assess at this stage the legislative action of the Greek authorities.

However, Article 14, paragraph 1 of the Market Abuse Directive, makes mandatory for the Member States the principle of administrative measures or sanctions for such infringements. In addition, the last sentence of Article 14, paragraph 1 requires Member States to ensure that these measures are effective, proportionate and dissuasive.

This paragraph foresees that the previous administrative measures and sanctions are without prejudice to the right of Member States to impose criminal sanctions. This means that the Member States may impose criminal offences in addition to administrative measures or sanctions. However, if the Member States decide not to have a criminal penalties regime, they should nonetheless maintain a mandatory regime of administrative measures or sanctions.

Regarding the criminal regime of prosecution for market abuse, the data show poor results. A study done by the predecessor of the Committee of European Securities Regulators — the Forum of European Securities Commissions — for the period of 1995-2000 regarding the market manipulation revealed that only thirteen criminal sanctions had been pronounced in the six year period in the whole European Economic Area (EEA). Regarding insider dealing, in Germany, France, Italy, the United Kingdom (and Switzerland) there were only nineteen criminal convictions in the same period.

Concerning the question on comparisons of loss of capital on stock exchanges, in terms of stock exchange price index declines and analysis of the difference between the maximum value and the minimum value of the index on the period, the Athens Stock Exchange General index registered a decline of 76 % between 1999 and 2003. In the same period, with the same method, the decline was 52 % in London FTSE 100, 72 % in Frankfurt Dax, 65 % in Paris CAC 40 and 56 % in Milano Mibtel for instance.

Finally, regarding the types and amounts of sanctions imposed for market abuse in Member States, figures for Greece are as follows: between 1997 and 2004, the Hellenic Capital Market Commission (HCMC) substantiated 136 cases of insider dealing and market manipulation, and has imposed administrative fines of a total amount of EUR 52 million. Concerning penal sanctions, 31 from the HCMC's investigated market abuse cases were considered to be of penal character and have been referred to the Public Prosecutor through the filing of criminal complaints. In these cases more than 100 natural persons are involved.

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(1)  Directive 2003/6/EC of the Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation, OJ L 96, 12.4.2003.

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