Tough rules against market fixing backed by MEPs


Tougher sanctions against people and organisations convicted of interest-rate fixing have been welcomed by MEPs.

The so-called market abuse regulation - debated by MEPs on 10 September 2013 - has been introduced in the wake of the Libor scandal.

The legislation will ensure that manipulating benchmark rates will be treated in the same way as insider dealing.

It will apply to all financial instruments, interest rates, currencies, benchmarks, indexes and derivatives traded on regulated markets and trading platforms in at least one EU member state.

There will also be increased protection for whistleblowers, and tougher laws in non-financial markets, such as energy or commodities markets.

The parliament's negotiator on the regulation, British Labour MEP Arlene McCarthy, said it was a "cornerstone in the programme of financial reform and rehabilitation necessary to restore trust in the markets".

She pointed out that the debate was taking place five years since the collapse of Lehman Brothers, which was the trigger for much of the global economic crisis.

However British Conservative MEP Kay Swinburne cautioned that "having rules alone is not good enough", arguing that "effective enforcement" was the key to clamping down on illegal practices.

She said that fines and sanctions needed to be at such a high level to be a "genuine deterrent".

The Economic and Monetary Affairs Committee has passed an amendment to ensure that market manipulation will be punished with a minimum of a five year jail term.

Current maximum jail terms for market manipulation range from 30 days in Estonia to 15 years in Slovakia.

Barclays Bank was fined £290m after admitting it attempted to manipulate the Libor and Euribor rates between 2005 and 2009, leading to the resignation of its chief executive, Bob Diamond.

The new regulation was approved by 659 votes to 20 during the daily voting session later in the day.

Useful links:

The European Parliament's disclaimer on the use of simultaneous interpretations can be found here.

Read Democracy Live's guide to how the plenary sessions work here.

A full speaker's list can be found here.

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