A revamped EU legal framework came into force on July 3, aiming to ensure more efficient, transparent and trustworthy European financial markets.

This new rulebook will increase investor protection and confidence by allowing deeper and more integrated financial markets, and contribute to the creation of the Capital Markets Union.

The new framework will strengthen the fight against market abuse across commodity and related derivative markets, explicitly ban the manipulation of benchmarks, such as LIBOR, and reinforce the investigative and sanctioning powers of regulators.

The updated rulebook strengthens and replaces the existing EU rules on market integrity and investor protection, first adopted in 2003. It consists of the Market Abuse Regulation and the Directive on Criminal Sanctions for Market Abuse.

More efficient, transparent and trustworthy European financial markets

The Market Abuse Regulation ensures that rules keep pace with market developments, such as new trading platforms, as well as new technologies, such as high frequency trading (HFT).

The new Directive on Criminal Sanctions for Market Abuse (or Market Abuse Directive) complements the Market Abuse Regulation by requiring member states to introduce common definitions of criminal offences of insider dealing and market manipulation, and to impose maximum criminal penalties for the most serious market abuse offences.

Member states have to make sure that such behaviour, including the manipulation of benchmarks, is a criminal offence, punishable with effective sanctions everywhere in Europe.

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