The First Exercise of Article 83(2) TFEU under Review: An Assessment of the Essential Need of Introducing Criminal Sanctions

Abstract

The proposed Directive on criminal sanctions for insider dealing and market manipulation aims at harmonising the sanctioning regimes of EU Member States on market abuse, imposing the introduction of criminal sanctions. This proposal represents the first exercise of the competence introduced by Article 83(2) of the Treaty on the Functioning of the European Union and provides an opportunity to critically reflect on its use. This paper analyses the conditions for the approximation of criminal law set by the Article 83(2) and provides an assessment of the respect of these conditions in the proposed Directive. It argues that the proposal raises some concerns in relation to compliance with its legal basis, in view especially of the lack of a clear reliance on empirical data regarding the essential need of introducing criminal sanctions.