European Court of Justice Rules on Interpretation of Market Abuse Directive

British and Irish Legal Information Institute

July 7, 2011

In the case of IMC Securities BV v Stichting Autoriteit Fianciële Markten, the European Court of Justice ruled on the interpretation of Article 1(2)(a), second indent of the Market Abuse Directive. In particular, the court was asked to determine whether this provision requires the price of a financial instrument to remain at an abnormal or artificial level for more than a certain amount of time in order for this constitute an abusive practice.

It was decided that no minimum time period should be set, in order to protect the integrity of the markets and enhance investor confidence by placing all market participants on an equal footing. As a consequence, it did not matter that the transaction at the heart of the dispute was a single transaction or that the price had remained at an artificial level for only a brief time.