The European Union’s 27 member states have taken an inconsistent approach to new laws aimed at cracking down on insider dealing, meaning that compliance requirements across the trading bloc vary widely, according to European securities regulators.
The EU agreed to a common legal approach to insider dealing and stock mark manipulation seven years ago in an effort to create a level playing field across its member countries. But a report from CESR, a grouping of securities regulators, says that has not happened.
The report analyzes the ways in which member states have implemented the Market Abuse Directive and related rules. It found that national politicians and regulators have used opt-outs and discretionary parts of the directive to give a local spin to the rules when transposing them into domestic securities law.
CESR said there were differences in important areas across the scope of the directive. For example, 16 member states require companies to notify a national regulator if they decide to delay publication of insider information, but 11 do not. And eight members have gold plated the directive’s rules on when a company should disclose share deals made by executives, making the rules tougher than the directive requires.
Carlos Tavares, vice chair of CESR and chair of the Portugal’s securities regulator, said member states were allowed to use discretion when implementing the directive and the rules that go with it, but said this flexibility had been “a real source of divergence.”
The CESR report, he added, should “allow legislators to identify the necessary regulatory actions to achieve convergence and a real level playing field.”
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