Basic Legal Principles: Prevent Market Manipulation
EU Directives
The European Parliament and the Council of the European - issued on 01/28/2003 Directive 2003/6/EC, which deals with insider trading and market manipulation (market abuses).
Three technical implementation directives (2003/124/EC, 2003/125/EC, 2004/72/EC) as well as Regulation no. 2273/2003 (exceptions to the rules for repurchase programs and price stabilization measures) were issued with regard to its implementation.
The CESR securities regulation authorities (Committee of European Securities Regulators) issued a directive containing instructions and information regarding the implementation of the market abuse directive.
Germany
In August 2008, the BaFIN (Bundesamt für Finanzdienstleistungsaufsicht) published a cicular concerning the supervision of employee transactions.
The MaKonV (regulation on the practical implementation of the prohibition of market manipulation) clarifies undefined legal terms contained in § 20a WpHG (Wertpapierhandelsgesetz - Securities Trading Act). It came into force on March 1,2005.
In addition, minimum requirements were specified in the employee and proper conduct guidelines in regards to monitoring and restricting employee transactions.
On June 7, 2010, the BaFin published a pamphlet entitled “Mindestanforderungen an Compliance und die weiteren Verhaltens-, Organisations- und Transparenzpflichten” (“Minimum Requirements for Compliance and Transparency, and Associated Behavioral and Organizational Duties”). The so-called “MaComps” (“Minimum Requirements for Compliance”) detail the duties of the WpHG which banks and financial institutions need to follow. With this step, the BaFin offers banks and financial institutions the first standardized and comprehensive body of rules and regulations for the securities sector. The main intent of the circular is to empower the Compliance department at these institutions.
Switzerland
In May 2008, the Swiss Federal Banking Commission (SFBC) issued a new circular
(in German) regarding market abuse and insider dealing.
Liechtenstein
On November 24, 2006, the FMA "Financial Market Authority", Liechtenstein, published the law concerning market abuse with financial instruments (Marktmissbrauchsgesetz; MG). It has been in force since February 2007.
In addition, there is a directive that addresses the transparency and independence of financial analyses. It has been in force since the 1st of September, 2004.
