The market abuse directive

The market abuse directive is one of the first proposals that follow the procedure recommended by the Lamfalussy committee. However, in addition to an ongoing disagreement between the European Commission and the European Parliament, the directive is also being faced with criticism from market participants.These problems show that the goal of implementing the Financial Services Action Plan (FSAP) by 2005 will be difficult, as Mattias Levin explains.

Mattias Levin, research fellow, Centre For European Policy Studies. mattias.levin@ceps.be

On 30 May, the Commission released its proposal for a directive on market abuse. This directive had been in the pipeline for some time, being part of the FSAP, a package of legislative measures aimed at achieving the single market for financial services. The interest in it was boosted, however, by the fact that it, together with a proposal for common prospectuses rules was the first directive being passed under the new legislative procedure devised by the committee of wise men.