No C 153/8 Official Journal of the European Communities 11.6.87 
Article 4 
1. Where the procedure set out in this Article is to be 
followed, the Standing Veterinary Committee, instituted 
by Council Decision 68/361 /EEC (') and the CADDIA 
Steering Committee, instituted by Council Decision 
85/214/EEC (2), shall give an opinion on matters 
referred to them by the Commission. 
(») OJ.No L 255, 18. 10. 1968, p. 23. 
O OJ No L 96, 3. 4. 1985, p. 35. 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 54 
thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European Par­
liament, 
Having regard to the opinion of the Economic and 
Social Committee, 
Whereas Article 54 (3) (g) provides that the Council shall 
coordinate to the necessary extent the safeguards which, 
for the protection of the interests of members and others, 
are required by Member States of companies or firms 
within the meaning of the second paragraph of Article 58 
with a view to making such safeguards equivalent 
throughout the Community; 
Whereas the secondary market in transferable securities 
plays an important role in the financing of undertakings; 
Whereas, for it to be able to play that role effectively, 
every possible measure should be taken to ensure that 
that market operates smoothly; 
Whereas the smooth operation of the secondary market 
depends to a large extent on the confidence it inspires in 
investors; 
Whereas one of the factors on which such confidence 
depends is the assurances afforded to investors that they 
are placed on an equal footing; 2. In requesting the opinion of the Committees 
mentioned in paragraph 1, the Commission may fix a 
time limit within which this opinion shall be delivered. 
The deliberations of these Committees shall not be 
followed by a vote. However, each member of the 
Committees may demand that his opinion be recorded in 
the minutes. 
Whereas insider trading, by benefiting certain investors 
at the expense of others, is likely to undermine that 
confidence and may therefore prejudice the smooth 
operation of the secondary market in transferable 
securities; 
Whereas it is therefore necessary to take all appropriate 
measures to combat insider trading; 
Whereas in most Member States there are no rules or 
regulations prohibiting insider trading; whereas the rules 
or regulations that do exist differ appreciably between 
Member States; 
Whereas it is therefore necessary to adopt coordinated 
Community rules in this field; 
Whereas such coordinated rules also have the advantage 
of helping, through cooperation between the competent 
authorities, to combat transfrontier insider trading more 
effectively, 
HAS ADOPTED THIS DIRECIWE: 
Article 1 
1. Member States shall prohibit any person who, in 
the exercise of his profession or duties, acquires inside 
information as defined in Article 6 from taking 
advantage of that information to buy or sell on their 
territory, either directly or through another person, 
transferable securities admitted to trading on their stock 
exchange markets. 
Where the purchase or sale of transferable securities is 
carried out on a stock exchange market, it shall be 
deemed to be carried out on the territory of the Member 
State in which the stock exchange in question is situated 
or operates. Proposal for a Council Directive coordinating regulations on insider trading 
COM(87) 111 final 
(Submitted by the Commission to the Council on 25 May 1987) 
(87/C 153/09) 
M.D.^ official ]ournal of the European Communities ^ooer^B^ 
^here the purchase or sale of transferable securities is 
carriedoutoutsideastocke^chan^emarket,itshallbe 
deemed to be carried out on the territory of the member 
^tateinwhichthe counterpart of the person referredto 
in the first subparagraph is resident. 
^. The prohibition laid down in paragraph Ishallnot 
apply totransferablesecuritiesbou^ht or soldoutsidea 
stock e^chan^e market without the involvement of a 
professional intermediary. 
member states shall prohibit any personwhois resident 
on their territory and who acquires inside information in 
the exercise of his profession or duties from^ 
— disclosing that inside information to a third party 
unless such disclosure is made in the normalcourse 
of e^ercisin^ his profession or duties, 
— usin^ that inside information to recommend a third 
party to buy or sell transferable securities admitted to 
trading on their stock e^chan^e markets. 
t. member states shall impose the prohibition 
provided for in Article 1 in accordance with the terms 
referred to therein also on any person who has 
knowingly obtained inside information from a person 
whohas acquired that information inthe exercise of his 
profession or duties. 
^ member states shall prohibit any person referred to 
in paragraphia 
— from disclosing the inside information to a third 
party, 
— from usin^ that inside information to recommend a 
third party to buy or sell transferable securities 
admitted to trading on their stock e^chan^e markets. 
member states may lay down more stringent rules than 
thosecontainedinthis Mi^ectiveprovidedthatthey are 
nondiscriminatory. 
Por theput^posesof thisMirectivetransferablesecurities 
shall include not only securities usually traded on the 
stock e^chan^e market such as shares and debt securities 
but also traded options Telatin^ to such securities. Por the purposes of thisPOirective, inside information is 
information unknown to thepublicofaspecificnature 
and relating to one or more issuers of transferable 
securities, or to one or more transferable securities, 
which, if it were published, would be likely to have a 
material effect on the price of the transferable security of 
transferable securities in question. 
P Issuers whose transferable securities are admitted to 
official listing in one or more member states or are 
traded there on another stock e^chan^e market shall 
immediately informthepublicinthat^iember^tateor 
those member states of any circumstance or decision 
which wouldbe likely tohave amaterialeffecton the 
price of such transferable securities. 
^. ^here an issuer is unable to inform the public 
immediately ofacircumstance or decision as referred to 
in paragraph ^ because disclosure would prejudice its 
legitimate interests, it shall immediately inform the 
competent authorities thereof, whomayrelieveit of the 
obligation provided for in para^raphP 
P member states shall designate the authority or 
authorities competent to ensure that the provisions 
adopted pursuant to this Poirective are applied. They 
shall inform the commission accordingly, indicating, if 
appropriate, how duties have been allocated. 
^. The competent authorities shall be ^iven all such 
supervisory powersas may benecessary for the exercise 
of their duties. 
^. The competent authorities in the member states 
shall cooperate wherever necessary for the purpose of 
carryin^out their duties and shall e^chan^e any inform 
mation required for that purpose. 
t. member states shall provide that all persons 
employed or formerly employed by the competent authD 
orities referred to in Article ^ shall be bound by pro 
fessional secrecy. Information covered by professional 
secrecymaynotbedivul^edto any personor authority 
except by virtue of provisions laid down by law. 
^. Para^raphlshall not, however, preclude e^chan^es 
of information between the various member states by 
the authorities referred to in Article^as provided for in 
this P^irective. Information thus e^chan^ed shall be 
covered by the obligation of professional secrecy to 
which the persons employed or formerly employed by 
the competent authorities receiving the information are 
subject. 
No C 153/10 Official Journal of the European Communities 11.6.87 
3. Without prejudice to cases falling under criminal 
law, the authorities referred to in Article 8 which receive 
information may use it only for the exercise of their 
duties and in connection with administrative or judicial 
proceedings specifically relating to the exercise of those 
duties. 
Article 10 
The Contact Committee set up by Article 20 of Council 
Directive 79/279/EEC of 5 March 1979 coordinating 
the conditions for the admission of securities to official 
stock exchange listing (') shall also have as its function: 
(a) to facilitate the harmonized implementation of this 
Directive through regular consultations on any 
practical problems which arise from its application 
and on which exchanges of view are deemed useful; (b) to advise the Commission on any amendments to be 
made to this Directive. 
Article 11 
Member States shall determine the penalties to be 
applied for infringement of the measures taken pursuant 
to this Directive. 
Article 12 
1. Member States shall take the measures necessary to 
comply with this Directive not later than 31 December 
1990. They shall forthwith inform the Commission 
thereof. 
2. Member States shall communicate to the 
Commission the provisions of national law which they 
adopt in the field governed by this Directive. 
Article 13 
O OJ No L 66, 16. 3. 1979, p. 21. This Directive is addressed to the Member States.