Joint HM Treasury and FCA statement on the Criminal Market Abuse Regime
Published 24 March 2023
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In the Economic Crime Plan 2019-22, the government and Financial Conduct Authority (FCA) committed to jointly reviewing the criminal market abuse regime (‘the Criminal Regime Review’).
The criminal market abuse regime sets out the UK’s criminal sanctions for insider dealing and market manipulation. It is important in helping the FCA fulfil its statutory objectives of protecting consumers, enhancing market integrity, and promoting competition. The criminal regime has not been materially updated since it was introduced. The government committed to reviewing the criminal regime to ensure that the FCA can take action against market abuse in a way that is commensurate to the seriousness and market impact of the abusive behaviour.
The FCA and HM Treasury have now completed the Criminal Regime Review. The review has identified a number of areas where the government believes it would be appropriate to update the criminal regime. This sits alongside the government’s acceptance of the recommendations of the Fair and Effective Markets Review (FEMR) in relation to market abuse, where the government will lay secondary legislation in 2023.
The Criminal Regime Review has been undertaken within the wider context of regulatory reforms in financial services, known as the Future Regulatory Framework (FRF) Review. The FRF Review was established to determine how the financial services regulatory framework should adapt to the UK’s new position outside of the European Union (EU), and how to ensure the framework is fit for the future. The government has set out its approach to repealing and replacing retained EU law on financial services in Building a Smarter Financial Services Framework. As part of the FRF programme, the Government intends to repeal the Market Abuse Regulation, the civil market abuse regime, and replace it with UK-specific legislation. We will set out a timetable for this in due course.
The government will consider changes to the criminal regime alongside any reforms to the Market Abuse Regulation through the FRF Review and will therefore consider how to take forward the recommendations from the Criminal Regime Review at that point.