EU: New EU rules on market abuse cross the finishing line

The Council of the EU has formally adopted a new market abuse regulation and a directive on criminal sanctions for market abuse. This completes the legislative process for the new rules, which replace the existing Market Abuse Directive and introduce a new framework for disclosure of inside information by listed companies; insider lists; dealings by directors and senior managers; and market abuse, including new rules on the conduct of pre-soundings.

The next step is for the regulation and directive to be published in the Official Journal, which is expected by the end of June 2014. The regulation will come into force twenty days after that and most of the provisions in the regulation apply with direct effect two years after its entry into force. The directive, which supplements the regulation with rules on criminal sanctions for market abuse, must be implemented by member states two years after its entry into force. Denmark and the UK have both opted out of the directive, although they remain subject to the parallel regulation.

The Council’s press release can be found here.

The background to the criminal sanctions directive was reported in the May 2013 edition of Financial Crime Update.

EU: European Council adopts directive on freezing and confiscation of proceeds of crime

On 14 March 2014 the European Council published a press release announcing that it had formally adopted the proposed directive on the freezing and confiscation of proceeds of crime. The European Parliament had already adopted the proposed directive on 25 February 2014 and so it will come into force 20 days after its publication in the Official Journal. Member states will then have 2½ years to implement it into domestic law, meaning that the directive is likely to come into force in late 2016.

The UK and Denmark have opted out of the directive. However, the UK Government stated in January 2014 that it intended to reconsider its position once the directive had been adopted. 

The directive forms part of the European Union’s efforts to tackle organised crime, corruption and money laundering within the EU and its member states. The European Commission highlighted the continuing need of EU states to improve their efforts to tackle corruption in its first ever EU Anti-Corruption Report, published on 3 February 2014. Linklaters commented on that report in the February 2014 edition of Financial Crime Update, here.

US Issues Additional Ukraine-related Sanctions

On 28 April 2014, President Obama announced additional sanctions against Russian government officials and 17 companies considered to have close ties to the administration of Russian president Vladimir Putin. The additional sanctions were issued in the context of the ongoing crisis in Ukraine and consist of travel bans and asset freezes for seven individuals, most of whom are officials in the Russian government, and restrictions placed on dealings by U.S. persons with 17 companies. The companies sanctioned all have ties to Russian businessmen who were included in previous rounds of sanctions. Additional Ukraine-related sanctions from the European Union are expected to be announced in the days ahead. Clients should monitor ongoing developments closely, and seek the advice of counsel in connection with any business activities that may implicate sanctions issues.

U.S. Treasury Department press release can be found here.

List of newly sanctioned individuals and companies can be found here