UK and EU legislation includes criminal and civil regimes that prohibit insider dealing and unlawful disclosure of inside information. The legislation, enacted at the UK and EU levels, applies to a wide range of traded instruments and trading venues in Europe, including commodities and the wholesale energy markets.
Part V of the UK Criminal Justice Act 1993 (CJA) imposes criminal liability for insider dealing, encouraging another to engage in insider dealing, and improperly disclosing inside information. Individuals who violate Part V are subject to unlimited fines and custodial sentences of up to seven years imprisonment.1
Implemented on July 3, 2016, the Market Abuse Regulation (MAR) imposes civil liability for insider dealing, unlawful disclosure of inside information, attempted insider dealing, market manipulation, and attempted market manipulation.2 MAR applies throughout all EU member states and has been retained into UK law as the UK MAR with some amendments following the UK’s withdrawal from the EU.
The Financial Conduct Authority is responsible for enforcing the CJA and UK MAR in the UK. The Financial Conduct Authority has authority to take enforcement action against any person, whether regulated by them or not, and to impose unlimited fines, order injunctions, and prohibit regulated firms and approved persons. For more on the regulated sector, see here.
Regulation (EU) No 1227/2011, on wholesale energy market integrity and transparency, as retained in the UK by the European Union (Withdrawal) Act 2018, Electricity and Gas (Powers to Make Subordinate Legislation) (Amendment) (EU Exit) Regulations 2018 (SI 2018/1286), Electricity and Gas (Market Integrity and Transparency) (Amendment) (EU Exit) Regulations 2019 (SI 2019/534) and Electricity and Gas etc. (Amendment) (EU Exit) Regulations 2020 (SI 2020/1016) (REMIT) prohibits insider trading in wholesale energy markets and imposes both civil and criminal penalties. The Office of Gas and Electricity Markets (OFGEM) is responsible for enforcing REMIT in the UK.
1 Note that section 31 of the Financial Services Act 2021 amends the maximum custodial sentence from up to seven years to up to ten years. The commencement date for this change has not yet been announced.
2 Note that market manipulation and attempted market manipulation are not currently covered on the Willkie Compliance Concourse. Contact us for advice on these topics.