Insider trading

The Market Abuse Directive was implemented in the Netherlands on 1 October 2005 in the Act on the Supervision of the Securities Trade [Wet toezicht effectenverkeer] 1995 and in the Market Abuse Decree [Besluit Marktmisbruik] (incorporated as of 1 January 2007 in the Act on Financial Supervision [Wet op het financieel toezicht] (Wft) 2006, section 5.4). The intention is to tighten the existing European system relating to market abuse, to expand it and partly to harmonise it in order to protect market integrity within Europe more effectively.

Market integrity is very important if the markets in financial instruments are to function properly and investors are to be properly protected. Market integrity is one of the conditions for maintaining investors’ confidence in the markets. A lack of confidence can result in investors and parties requesting capital no longer being prepared to participate in activities on these markets.

The consequences of the implementation of the Market Abuse Directive as of 1 October 2005 included an expansion of the ban on market manipulation and the allocation to the AFM of supervision of the publication of price-sensitive information by companies listed on the Euronext Amsterdam stock exchange (previously laid down in provision 28h of the Listing and Issuing Rules [Fondsenreglement]). In addition, a transparency regime was introduced for publicists who make investment recommendations, as well as an obligation for investment firms to disclose any reasonable suspicion of insider trading or market manipulation. Lastly, existing provisions relating to insider trading, the disclosure regulations for 'insiders' and the insider rules were partly adapted compared to the old regulations.