Cyprus Cracks Down on Insider Trading with European Council of Europe Convention

Strasbourg, France – The European Council of Europe took a significant step towards combating insider trading in financial markets by formally defining and criminalizing the practice through a new convention. This convention, which focuses on insider trading in Cyprus and within the European Council of Europe, was signed in 1989 and came into force in 1991. Cyprus, among other European countries, has ratified the agreement, which strengthens the legal framework for investigating and prosecuting insider trading cases.

Key Provisions of the Insider Trading Convention

• Definition: The convention defines insider trading as buying or selling securities based on material, non-public information, providing an unfair advantage and potentially distorting the stock market. This includes transactions conducted by individuals in positions of trust, such as board members, authorized agents, or employees of issuers of securities.
• Cooperation: The convention encourages the exchange of information between member states and provides mechanisms for mutual assistance and cooperation in investigations to prevent insider trading.
• Request Procedures: It sets guidelines for how authorities should handle requests for assistance, with appropriate procedures and safeguards to protect the confidentiality of sensitive information.

Benefits of the Insider Trading Convention for Cyprus

Cyprus, as a member of the European Council of Europe, has pledged to cooperate with other signatory countries to create a level playing field for investors and maintain the integrity of the financial markets. This Convention is expected to be beneficial for Cyprus, as it will help position the country as a reliable and transparent financial hub, attracting more investors and fostering economic growth.

Quote from Cyprus Minister of Finance, Nikos Nicosia

“We are committed to implementing this convention to eradicate insider trading and strengthen our legal framework. This convention signals our dedication to promoting fair and efficient financial markets, ultimately benefiting investors, the economy, and the people of Cyprus.”

Conclusion

1. The insider trading definition in Cyprus, as outlined in the European Council of Europe Convention, sets clear boundaries for acceptable conduct in the financial markets and emphasizes the importance of transparency and equality of opportunity for all investors.
2. The cooperation between European countries strengthens international efforts to combat insider trading and protect investors from unfair practices.