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In the late 1990s, EU leaders and the Commission identified financial services as a key area in urgent need of reform in order to move ahead with a deeper and more effective single market.  In 1998, the Commission published its ‘Framework for Action’.  This framework evolved into an Action Plan which was adopted by the European Commission on 11 May 1999.  What came to be known as the Market Abuse Directive (MAD) was one element of this wider programme.

The 2007 financial crisis prompted a rethink of the 2004 Directive which coincided with implementing the original. More complications arose when it became clear that MAD was also dependent upon other new directives which were themselves being re-examined post crisis.

With many of the topics interleaving in subject matter with each other, the problem of how to introduce new rules became acute.  A Treasury brief of the time described the problem as ‘too many moving targets’. 

The Market Abuse Regulation and Criminal Sanctions for Market Abuse Directive emerged from this review.  The two key issues dealt with are inside information or dealing and market manipulation, with appropriate criminal penalties attached to offences.  The legislation must be enforced nationally by July 2016.  The FCA is the lead agency for this work in the UK.

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