This is indeed an important debate. Market abuse, insider dealing and market manipulation are issues that do not get the airtime that they deserve. It is important that white collar crime and abuses of what we might call white collar financial services activities are properly attended to. We know that in recent years the regulators, or the relevant authorities, have sometimes struggled properly to prosecute or pursue issues where allegations have been made and there are difficulties in pinning down the right level of evidence. This is an important opportunity to see how, when the European Union proposes new regulations to tighten up some of the rules, the UK Government approaches such questions. I was interested to see in the Financial Services Authority’s recent annual report the quite shocking statistics on potential market manipulation that still takes place and often goes uncaptured.
The statistic that leapt out at me concerned something called APPM monitoring—I know that hon. Members enjoy their acronyms—or abnormal pre-announcement price movement monitoring. Apparently, such movements are still at a level of more than 20% in respect of announcements of mergers or acquisitions. If we look back at share transactions and other dealings, we can see that there are palpably instances when information has leaked out and people have taken advantage of
information asymmetry. Such market abuses are notoriously difficult to pin down and prosecute, but they are unfortunately still a feature of many of our markets and financial services and we need to do a great deal to bear down on them.
The original market abuse directive was adopted back in 2003, but the new set of regulations proposes to try to tighten up the arrangements in a number of areas. There are gaps in the new markets that have emerged, for example, particularly in commodities trading and derivatives trading. I shall talk about those in a moment. There are problems with regulatory enforcement, where outdated arrangements are in place. There is a lack of legal certainty, particularly when issues cross nation state boundaries, and a risk of regulatory arbitrage. I was not surprised, therefore, that that was one area in which the Commission made proposals.