The European Commission has published an amended proposal for a regulation on insider dealing and market manipulation. In order to capture the direct manipulation of benchmarks such as LIBOR and EURIBOR and in order to ensure that such manipulation of benchmarks is a criminal offence, the Commission wishes to amend its earlier proposals for a regulation on insider dealing and market manipulation and the related proposal for a directive on criminal sanctions.

The Commission acknowledged that although it may be difficult or impossible for a competent authority to prove that manipulation of a benchmark had an effect on the price of related financial instruments, any actual or attempted manipulation of benchmarks can have a serious impact on market confidence and could result in significant losses to investors or distort the real economy.  The purpose of the amendment therefore is to prohibit manipulation of benchmarks unequivocally and to clarify that competent authorities can impose administrative sanctions for the offence of market manipulation in these cases, without the need to prove or demonstrate incidental issues such as price effects. 

The amended proposal for a directive on criminal sanctions for market abuse would extend the scope of the criminal offence of market manipulation to cover the direct manipulation of benchmarks if committed intentionally. The amended proposal would also require Member States to criminalise inciting, aiding and abetting the manipulation of benchmarks, as well as attempts at such manipulation.

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