European authorities Monday adopted tougher rules against insider trading and market manipulation.

The European Union council announced that it has strengthened its rules against market abuse with new measures aimed at improving investor protection and creating a new framework for criminal sanctions. The new rules extend the scope of its existing rules prohibiting insider dealing and market manipulation to include financial instruments traded on recently created trading venues such as multilateral trading facilities and over-the-counter (OTC) markets.

The new market abuse rules also require national authorities to ensure that their legislation provides for criminal sanctions for insider dealing, market manipulation, and unlawful disclosure of inside information. It will also require them to ensure that inciting, as well as aiding and abetting, criminal offences is punishable.

Under the rules, offences related to insider dealing, inducing another person to engage in insider dealing, and market manipulation, will be punishable by a maximum term of at least four years. Offences related to unlawful disclosure of inside information will be punishable by a maximum term of at least two years.