Following the adoption by the European Parliament on 10 September of proposals to revise the existing framework of the Market Abuse Directive aimed at ensuring market integrity and investor protection, MEP Sven Giegold stressed the importance of this step to shore up relevant legislation. He believes that greater transparency will limit the potential for market manipulation.
On September 18, the European Commission also proposed draft legislation to help restore confidence in the integrity of benchmarks. These pieces of legislation are intended to complement the proposals voted the week before and thus seek to enhance the robustness and reliability of benchmarks by the authorities.
As empahised by Internal Market Commissioner Michel Barnier, market confidence has been undermined by scandals as the manipulation of the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR) revealed major loopholes in EU rules on market abuses and insider trading. Barnier believes that these “proposals will ensure for the first time that all benchmark providers have to be authorised and supervised [and that] they will enhance transparency and tackle conflicts of interest".
Read the European Commission Press Release here.