Download Chapter 9

MONTENEGRO
Negotiating Team for the Accession of Montenegro to the European Union
Working Group for Chapter 9 – Financial Services
Bilateral screening: Chapter 9
PRESENTATION OF MONTENEGRO
1
Brussels, 10 June 2013
Chapter 9:
Financial Services
MARKET ABUSE
Milivoje Popovic
Securities and Exchange Commission of Montenegro
[email protected]
MONTENEGRO
Negotiating Team for the Accession of Montenegro to the European Union
Chapter 9:
Financial Services
2
Chapter 9:
Financial Services
CONTENT






Relevant Acquits
Legal framework
Institutional Framework
Sanctions
Assessment of compliance
Convergence dynamics
3
MONTENEGRO
Negotiating Team for the Accession of Montenegro to the European Union
Chapter 9:
Financial Services
Chapter 9:
Financial Services
RELEVANTE ACQUITS
o Directive 2003/6/EC of 28th of January 2003 on insider dealing
and market manipulation (market abuse)
4
MONTENEGRO
Negotiating Team for the Accession of Montenegro to the European Union
Chapter 9:
Financial Services
Chapter 9:
Financial Services
LEGAL FRAMEWORK
• Law on Securities (Official Gazette of Republic of Montenegro no.
59/00 and 28/06 and Official Gazette of MNE no. 53/09, 73/10,
40/11 and 06/13 )
• Rules on control of securities business (Official Gazette of MNE no.
28/07, 19/12, 09/13)
• Montenegro Stock Exchange Rules (adopted on August 20th , 2012)
5
MONTENEGRO
Negotiating Team for the Accession of Montenegro to the European Union
Chapter 9:
Financial Services
Chapter 9:
Financial Services
LEGAL FRAMEWORK
Main provisions:
•
Inside information- Art. 102 of the LS bans the trading in securities in cases where the
person involved in the trading is in possession of any unpublished information that if
published would materially affect the price of the securities. (the definiton largerly
satisfies the requirements stated in the definition of inside information provided
in Art. 1 of the Directive)
•
Market manipulation- Art. 103 of the LS prohibits all persons to do anything with the
intention of creating, a false or misleading appearance of the volume of trading in any
securities on any securities market or the price of any such securities. In addition
according to Art. 105 no person should induce or attempt to induce another person to
invest in securities by making or publishing any statement, promise or forecast that he
knows to be misleading, false or deceptive. (the requirements from the Art. 5 of the
Directive are completely satisfied)
6
MONTENEGRO
Negotiating Team for the Accession of Montenegro to the European Union
Chapter 9:
Financial Services
Chapter 9:
Financial Services
LEGAL FRAMEWORK
•
Publication of inside information- according to art. 27 of the LS every issuer of
securities that are publicly offered keeps the general public informed as soon as
reasonably practicable of any information which:
– is necessary to enable them to appraise the financial position of the issuer and of its
subsidiaries;
– may lead to establishing of false market in its securities; or
– might reasonably be expected materially to affect market activity in the price of its
securities.
(the requirements from the Art. 6 of the Directive are satisfied)
•
Obligation of the market operator to adopt structural provisions aimed at
preventing and detecting market manipulation practices- According to art. 52 of the
LS the Rules of the stock exchange need to ensure that the business conducted by the
exchange will be maintained in an orderly manner and so as to afford proper protection
to investors.
(the requirements from the Art. 6 of the Directive are satisfied)
7
MONTENEGRO
Negotiating Team for the Accession of Montenegro to the European Union
Chapter 9:
Financial Services
Chapter 9:
Financial Services
INSTITUTIONAL FRAMEWORK
Competent authority in Montenegro
•
The Montenegro Securities Commission (SEC) is the authority, empowered by the Law
on Securities to regulate and supervise the securities market.
•
SEC is an independent organisation with the legal personality.
•
Sufficient supervisory and investigatory powers of the competent authority- The
SEC is vested with all powers needed to effectively supervise the Montenegrin market as
regards the MAD provision. All the powers listed in art. 12 para 2 of MAD are at the SEC
disposal according to art 16 and art. 22 of the Rules on the Control over Securities
Business.
•
International cooperation- SEC is a full signatory of the IOSCO MMoU and as such
meets the highest standards in supervisory cooperation.
8
MONTENEGRO
Negotiating Team for the Accession of Montenegro to the European Union
Chapter 9:
Financial Services
Chapter 9:
Financial Services
SANCTIONS
•
Breaches –A fine of 2,500 euros to 20,000 euros shall be imposed on a legal person in
case of market manipulation and abuse of inside information (Art. 113 LS).
•
Administrative measures – SEC has the power to impose coercive administrative
measures such as ceasing the trading in a particular issue, requiring information
disclosure, suspending a license or making public a sanction imposed ( LS and Rules on
control of securities business.
•
Right of appeal – all decision (measures) of the SEC are appealable in front of the
Administrative Court of Montenegro (Art. 10 (5) of the LS).
9
MONTENEGRO
Negotiating Team for the Accession of Montenegro to the European Union
Chapter 9:
Financial Services
Chapter 9:
Financial Services
ASSESSMENT OF COMPLIANCE
o
Current status: Montenegrin legislation is largely compliant with the principles of
Directive.
o
Gaps identified:
 Obligation of any person professionally arranging transactions in financial
instruments who reasonably suspects that a transaction might constitute insider
dealing or market manipulation to notify the competent authority. This obligation is
not recognized in the LS.
 Exceptions from the requirements of the directive - The participants in the
Montenegrin market are not granted opportunity to diverge from the LS requirements in
the cases of trading in own shares in ‘buy-back’ programmes or to the stabilization of a
financial instrument
10
MONTENEGRO
Negotiating Team for the Accession of Montenegro to the European Union
Chapter 9:
Financial Services
Chapter 9:
Financial Services
CONVERGENCE DYNAMICS
o According to the Government of Montenegro agenda for 2013, the New
Law on Capital Market will be adopted by the end of the fourth quarter of
2013, in which the full compliance with the Directive 2003/6/EC will be
reached.
o The adoption of amendments to the Criminal Law is in parliamentary
procedure, where prohibition of market manipulation and use,
disclosure and recommendation of inside information will be defined as
criminal offenses.
11
MONTENEGRO
Negotiating Team for the Accession of Montenegro to the European Union
Chapter 9:
Financial Services
Thank you for your attention!
QUESTIONS
12