Keywords

Summary



Keywords

1. Approximation of laws – Insider dealing – Prohibition

(European Parliament and Council Directive 2003/6, Art. 2(1))

2. Approximation of laws – Insider dealing – Prohibition

(European Parliament and Council Directive 2003/6, Art. 1(1); Commission Directive 2003/124, Art. 1(2))

3. Approximation of laws – Insider dealing – Prohibition

(European Parliament and Council Directive 2003/6, Art. 14(1))

Summary

1. Article 2(1) of Directive 2003/6 on insider dealing and market manipulation (market abuse) must be interpreted as meaning that the fact that a person, as referred to in the second subparagraph of that provision, in possession of inside information, acquires or disposes of, or tries to acquire or dispose of, for his own account or for the account of a third party, either directly or indirectly, the financial instruments to which that information relates, implies that that person has ‘used that information’ within the meaning of that provision, but without prejudice to the rights of the defence and, in particular, to the right to be able to rebut that presumption. The question whether that person has infringed the prohibition on insider dealing must be analysed in the light of the purpose of that directive, which is to protect the integrity of the financial markets and to enhance investor confidence, which is based, in particular, on the assurance that investors will be placed on an equal footing and protected from the misuse of inside information.

That provision thus defines insider dealing objectively without the intention behind such dealing being referred to explicitly in its definition. This was done with a view to achieving uniform harmonisation of the law of the Member States. Consequently, if the constituent elements of insider dealing laid down in that provision are present, it is possible to assume an intention on the part of the author of the transaction. However, that presumption does not infringe fundamental rights and, in particular, the principle of the presumption of innocence laid down, inter alia, in Article 6(2) of the European Convention for the Protection of Human Rights and Fundamental Freedoms.

(see paras 35, 38-39, 62, operative part 1)

2. The capacity of information to have a significant effect on the price of the financial instruments to which it relates is one of the characteristic elements of the concept of inside information as defined in Article 1(1) of Directive 2003/6 on insider dealing and market manipulation (market abuse), that concept having itself been defined, in Article 1(2) of Directive 2003/124 implementing Directive 2003/6 as regards the definition and public disclosure of inside information and the definition of market manipulation, as being information which a reasonable investor would be likely to use as part of the basis of his investment decisions. In accordance with the purpose of Directive 2003/6, that capacity to have a significant effect on the price of the financial instruments concerned or the price of related derivative financial instruments must be assessed, a priori, in the light of the content of the information at issue and the context in which it occurs. It is thus not necessary, in order to determine whether information is inside information, to examine whether its disclosure actually had a significant effect on the price of the financial instruments to which it relates.

(see paras 67-69)

3. Article 14(1) of Directive 2003/6 on insider dealing and market manipulation (market abuse) must be interpreted as meaning that gains realised from insider dealing may constitute a relevant element for the purposes of determining an effective, proportionate and dissuasive sanction. The method of calculation of those economic gains and, in particular, the date or the period to be taken into account are to be determined by national law.

If, in addition to the administrative sanctions laid down in that provision, a Member State has introduced the possibility of imposing a criminal financial sanction, it is not necessary, for the purposes of assessing whether the administrative sanction is effective, proportionate and dissuasive, to take account of the possibility and/or the level of a criminal sanction which may subsequently be imposed. The assessment of how effective, proportionate and dissuasive the administrative sanctions laid down in Directive 2003/6 are cannot depend on a hypothetical criminal sanction which may subsequently be imposed.

(see paras 76-77, operative part 2-3)