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Whistleblower-System

Insider dealing

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Information

We point to the fact, that starting with July 3rd, 2016 the Market Abuse Regulation (EU) No. 596/2014 (MAR) shall apply. The corresponding national provisions will follow.

 

The amended BörseG, which entered into force on 1 January 2005, includes a definition of inside information.

  • It must be information of a precise nature that has not been made public.
  • It must be directly or indirectly related to one or more issuers or to one or more financial instruments.
  • It must be capable of having a significant effect on the price of a security were it to be published.
  • It must be information that an informed investor would be likely to use as the basis of their investment decisions.

 

Inside information is clearly defined in Article 48a para. 1 no. 1 BörseG. It also includes confidential information about client orders that have not yet been executed, which also constitutes inside information for persons in charge of executing these orders (e.g. agent traders).

 

Misuse of inside information

Misuse of inside information is a criminal offence. Austrian law, specifically Article 48b BörseG, prohibits the misuse of inside information. The Code of Criminal Procedure (StPO; Strafprozessordnung) applies to any further proceedings in this regard.

Anyone who makes use of inside information to secure a financial advantage for themselves or a third party commits the offence described above. This may be by buying, selling or recommending securities, or by disclosing the information to third parties. Financial advantage in this case refers not just to making a profit but also to avoiding a loss.

Pursuant to Article 48i para. 3 BörseG, the FMA must report the case to the public prosecutor’s office if it has reasonable grounds to suspect a violation against the prohibition of insider dealing, and may subsequently be asked by the public prosecutor to carry out further investigations.

 

Penal provisions

Misuse of inside information is sanctioned with a prison sentence of up to three years, provided that the financial advantage does not exceed EUR 50 000. Otherwise, the prison sentence could be up to five years.

This applies to so-called primary insiders pursuant to Article 48b para. 4 BörseG, i.e. any individual who has access to inside information as a member of an administrative, management or supervisory body of the issuer (e.g. members of management or supervisory boards) or due to their profession (e.g. auditors, interpreters) or their stake in the issuer’s capital.

By contrast, secondary insiders are individuals who misuse inside information without being insiders as referred to in Article 48b para. 4 BörseG. These might be life partners of a board member or cleaners. If the financial advantage is below EUR 50 000, the prison sentence may be for up to one year; for advantages above that amount, secondary insiders face up to three years.

 

Further information