Criminal offences of insider dealing to be aligned with the UK Market Abuse Regulation

HM Treasury plans to align aspects of the Criminal Justice Act 1993 (CJA) more closely with the UK Market Abuse Regime (UK MAR) including the scope for potential insider dealing prosecutions. The statutory instrument draft was published on 20 April 2023 and is expected to come into force on 15 June 2023.

Definition updates

The UK currently has both civil and criminal market abuse regimes, under the UK MAR and CJA respectively, both of which establish the offence of insider dealing.

Penalties and other sanctions can be imposed by the Financial Conduct Authority (FCA) for a breach of the CJA. However, the definition of securities and markets contained in the CJA, on which criminal insider dealing may take place, has not been updated in recent years.

Currently, the list of securities covered by the criminal CJA offence is narrower than the list of securities caught by the civil offences under the UK MAR regime. Additionally, the list of regulated markets relevant for the CJA offence is narrower than the relevant markets under UK MAR.

The effect of the draft SI

The draft statutory instrument updates the list of securities and markets, contained in schedule 2 of the CJA, in relation to which an offence can be committed, to be broadly in line with the UK MAR. It aligns the relevant CJA markets and securities with those covered by the UK MAR, while also adding three additional markets for the CJA offence that are not relevant markets for the UK MAR prohibitions.

The new securities will be expanded to include those defined in the UK Markets in Financial Instruments Regulation, such as currency options, certain swaps and exchange traded funds. The regulated markets list relevant for the CJA offence will now include 130 regulated markets, 230 multilateral trading facilities and 75 organised trading facilities, as well as the NASDAQ, NYSE and SIX Swiss Exchange.

Osborne Clarke comment

HM Treasury is making changes to a legislation that were long overdue. Of the markets currently included in schedule 2 of the CJA, many are either no longer in operation or now operate under a different name. The changes made by the draft statutory instrument will bring the CJA up to date, greatly expand the scope of potential insider dealing prosecutions, and align the civil and criminal insider dealing regimes.

Aligning the two regimes clearly make sense and may reflect the FCA's continued commitment to make fighting financial crime one of its top priorities.