Article 10 Unlawful disclosure of inside information

Abstract

The improper use of inside information, governed by EU Regulation No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (MAR) consists of three types of conduct: two of them, known as ‘insider dealing’ (or insider trading), are described under Article 8(1)(2), while the third concerns the ‘unlawful disclosure of inside information’, according to Article 10. As a whole they pursue the main objective of the MAR, which is the protection of ‘inside information’ as defined in Article 7. Following a short introduction on unlawful behaviours connected to the improper uses of inside information, the comment addresses the main issues raised by Article 10. Both insider trading and the unlawful disclosure of inside information are prohibited by Article 14 of the MAR, even if the discipline of the two types of misconduct unveils significant differences. While the prohibition of insider trading is absolute, the transmission to third parties of inside information is sometimes necessary and, thus, legitimate without impairing the effectiveness of the equal access of information principle. In order to understand Article 10, cases of legitimate and illegitimate transmission of inside information from primary or secondary insiders must be carefully distinguished. Within the overall picture of a strongly market-oriented discipline, unlawful disclosure of inside information not only reduces insider trading opportunities, but aims to impose a duty of confidentiality for all persons possessing inside information.