Introduction

Member States of the European Union have followed very different models for investor protection. The extent to which company legislation provides protection for investors in shares and bonds, and for minority shareholders, has varied considerably. The regulatory regimes dealing with the control of the prospectus, with financial reporting and with different aspects of the primary markets (new issues) and secondary markets (trading in shares and bonds and related derivatives) has varied even more. The distinction between what is considered to belong to company law and to market regulation is also drawn differently. All Member States have seen a strengthening of the regulatory protection of investors, whatever their starting point. There has been a considerable convergence in the level and form of investor protection. European Union Law has played an important part in this, and the regulatory regime is now based on a set of directives. As discussed in previous chapters, minority shareholders' rights and the liability of directors is not yet harmonised in the way financial reporting and the further regulatory regime are. The present chapter will be concerned most principally with Directive 2003/6/EC of the European Parliament and the Council on insider dealing and market abuse. The Directive has amended and extended the previous rules of Community law relating to insider dealing, and also covers market manipulation, as defined in Article 1(2). The new rules on insider dealing are similar to those contained in the 1989 Directive in many ways.