Liechtenstein in breach of market abuse obligations

The Alpine principality of Liechtenstein has been formally threatened with legal action at the European Free Trade Area (EFTA) Court for failing to implement three European Union (EU) directives designed to prevent abusive practices in the securities markets. The banking centre has been accused by the EFTA Surveillance Authority of not abiding by directive 2003/125/EC on the fair presentation of investment recommendations and the disclosure of conflicts of interest; plus directives 2003/6/EC and 2003/124/EC on insider dealing and market manipulation. Liechtenstein can be ordered by the EFTA Court to comply with certain EU laws, because of the state’s membership of the European Economic Area (EEA).