Further Implementation of the Market Abuse Regulation, European Capital Markets Update
On 31 July 2017, a new law was adopted to further implement and ensure the effectiveness of Regulation 596/2014 on market abuse ("Market Abuse Regulation"). This new law amends the law of 2 August 2002 on the supervision of the financial sector and on financial services ("Financial Law") and aims, among others, at:
- Introducing and refining the investigation powers of the Belgian Financial Services and Market Authority ("FSMA"), which is the Belgian financial regulator. This mainly concerns professional bans, home searches and seizure of documents or electronic data.
- Implementing the Directive 2014/57 on criminal sanctions for market abuse ("Market Abuse Directive on Criminal Sanctions"). To this end, the law introduces several changes to the Financial Law to align the notions of "insider trading", "market manipulation" and "unlawful disclosure of inside information" to the Market Abuse Regulation and the Market Abuse Directive on Criminal Sanctions.
In addition, the law introduces a new provision under which, if a legal person infringes the prohibitions laid down by the Market Abuse Regulation (i.e. insider trading, market manipulation or unlawful disclosure of inside information), the FSMA may cumulatively impose administrative sanctions on both the legal person and any natural person who committed such infringement on behalf of the legal person or who participated in the decision-making process leading to such infringement. - Partially implementing the Directive 2015/2392 as regards reporting to competent authorities of actual or potential infringements of the Market Abuse Regulation. Pursuant to Article 32 of the Market Abuse Regulation, Member States must ensure that competent authorities establish effective mechanisms to enable reporting of actual or potential infringements of the Market Abuse Regulation to such authorities. In this perspective, the law introduces a new article 69bis in the Financial Law allowing any individual, acting in good faith, to report infringements to the Market Abuse Regulation while being protected from any civil, criminal or disciplinary action or professional sanctions. The FSMA will ensure that the identity of such individual remains confidential.
The law entered into force on 21 August 2017.
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