The Central Bank will take on a greater role in the regulation of market abuse from Sunday in EU-wide changes that include new legal controls over companies trading on Dublin's Enterprise Securities Market and Global Emerging Markets.
The EU regulation means that the Central Bank becomes the single supervisory authority for all companies traded on markets in Ireland and not just for companies on the main market. It also extends the range of financial instruments covered.
The changes concern insider dealing, market manipulation, rules for the disclosure of price-sensitive information, analysts and conflicts of interest, dealings by directors and company buyback plans.
Consequences
Up to now, according to
Paul Egan
, chair of the corporate department at Mason Hayes & Curran, a “lumpy soup of law, regulation, market rules and codes, with enforcement spread across disconnected sets of competent authorities”, has governed these areas.
Different consequences, and in some cases no consequences at all, would flow from identical activities according to the type of company or market concerned, he said. “The new law is long overdue.”
The new regime applies to all companies, Irish or foreign, admitted to trading on any market or trading platform, regulated or otherwise, within the EU. So it applies to Irish companies listed outside the jurisdiction and non-Irish companies listed here.
False information
Whereas up to now it was only main market-listed companies to which the law on disclosure of price-sensitive information applied, the change means all quoted companies are covered by the relevant criminal code.
The issuing of false information designed to manipulate the market will carry potential penalties of up to ten years in jail and a fine of €10 million.
All companies will also have to keep “insider lists” bearing the names of the individuals with access to insider information, both generally and by reference to transactions.
The new regime is also being introduced to deal with the role of technology in recent changes to the market, such as high-frequency trading.
