New Europe-wide rules imposing tougher sanctions for insider trading and other financial market abuses were approved earlier this week by an overwhelming majority of members of the European parliament (MEPs). The market abuse regulation strengthens the framework provided by the 2003 Market Abuse Directive in an attempt to synchronise the different rules relating to market manipulation across the EU.

Under the new regulation, companies convicted of market abuse could be fined up to 15% of their annual turnover or €15m (£12.6m). Individual traders would face fines of up to €5m (£4.2m) and a temporary or in some cases permanent ban on doing certain jobs within investment firms. 

In response to the London Interbank Offered Rate (Libor) scandal, which is believed to have cost governments, charities and other bodies many millions of pounds in artificially inflated interest rates, the MEPs included the transmitting of false or misleading information to manipulate the calculation of a benchmark in the new rules.

Arlene McCarthy, Labour MEP for northwest England, said: ‘There is still much to do in restoring trust and confidence in banks and the financial services industry. We must get the real economy moving again and make sure consumers are protected.’

Negotiations with member states about implementing the regulation will begin next month.