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  May 2002
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  Francisco Balsemão
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May 2002

The issue:

This issue relates to wording in the current draft of the EU directive on Insider Trading and Market Manipulation which could criminalize journalists where they (a) inadvertently report misleading information (e.g. by quoting a company CEO) or (b) make an innocent mistake (e.g. by misattributing a quotation or even making a simple error in transcribing a figure where such errors move markets and even where a correction is immediately published). The draft was published by the Commission at the end of May 2001.

The Commission has said that its primary target in the drafting of this legislation is financial analysts and market traders but has so far failed to change the wording sufficiently to protect financial journalists.

Whilst the Council has improved the text, changing the definition of abuse to when a journalist knew or ought reasonably to have known the information was false, it has not accepted the need for proof of intent.

The wording of the Common Position, adopted 07 May 2002, now reads:

Dissemination of information through the media, including the Internet, or by any other means, which gives, or is likely to give, false or misleading signals as to financial instruments, including the dissemination of rumours and false or misleading news, where the person who made the dissemination knew or ought to have known that the information was false or misleading. In respect of journalists when they act in their professional capacity such dissemination of information is to be assessed, without prejudice to Article 11, taking into account the rules governing their profession, unless those persons derive, directly or indirectly, an advantage or profits from the dissemination of the information in question.

The European Parliament voted on their first reading report at Plenary on 14 March 2023 and adopted a set of amendments which led the way to the Council agreed the above wording.

The EP first reading text can be found at:;=PV2&FILE;=p0020314EN.pdf&LANGUE;=EN

EPC Position:

The EPC has lobbied to improve the situation for journalists and although it favoured a complete exemption, has been prepared to accept a compromise whereby wording was added to the text to ensure that journalists would only be subject to this law if it could be proven that they knowingly misled or misinformed and could show they had gained personally. The EPC strongly favours an intent-based rather than effect-based law but has worked closely with MEPs and the Member States to build in statutory defences as an alternative.

The EPC shares the view of journalists' associations that journalists should indeed continue to be subject to legislation where they knowingly disseminate information with the purpose of misleading markets. One solution proposed by the EPC is that an additional "purposes" test be added to ensure that only journalists setting out intentionally to mislead are caught by this legislation.

An example of such a test exists in the UK Financial Services Authority's new Code of Market Conduct whereby a person would only be subject to market abuse sanctions for disseminating misleading information when (a) s/he knows, or could reasonably be expected to know, that the information disseminated is false or misleading; and (b) s/he disseminates the information in order to create a false or misleading impression. This is a key defence to protect the legitimate activities of journalists carrying out their professional duties that should be replicated in the EU legislation.

The EPC's main concern is that the transparency of markets will suffer as a result of this legislation as it currently stands. Criminalizing innocent mistakes would slow the speed and quality of information flow from news providers to markets, as journalists might be compelled to exclude information rather than risk criminal sanctions.

An additional concern is the wording of one particular Article (6.4) which could force journalists to make open declarations of share-holdings. MEPs seem to have accepted the principle that journalists should be exempted from this article and the EPC is attempting to persuade an MEP to push for new wording at Second Reading in the autumn which would limit the scope of this Article to financial analysts.

For details of amendments proposed by the EPC and other interested groups, see:

EPC Position papers are available on request from


  • Draft directive published May 2001
  • First Reading, European Parliament, 11-14 March 2002
  • Common Position adopted 07 May 2023
  • Second Reading, European Parliament, tbc (probably Sept/Oct 2002)

Key players:

  • Commissioner Bolkestein
  • David Wright
  • EP Rapporteur Robert Goebbels
  • MEP Theresa Villiers
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