Written answers

Thursday, 7 April 2011

Department of Finance

Financial Services Regulation

4:00 pm

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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Question 24: To ask the Minister for Finance the position regarding insider trading (details supplied). [7081/11]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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As Minister for Finance I have no function in the matter raised by the Deputy. The Central Bank of Ireland has informed me that insider trading in shares admitted to trading on the main market of the Irish Stock Exchange is governed by the Market Abuse (Directive 2003/EC) Regulations, 2005. Insider trading in shares admitted to other markets run by the Irish Stock Exchange is governed by Part Five of the Companies Act, 1990.

Under the Market Abuse Regulations, the Central Bank of Ireland is the competent authority for supervising market activity. It currently has a delegation arrangement in place with the Irish Stock Exchange under which the Irish Stock Exchange conducts certain market monitoring functions for it. There are close operational ties between the two bodies. Notwithstanding the delegation arrangement, the Central Bank has been building up systems and procedures to monitor trading itself. I am assured that recent trading in the relevant Irish financial sector shares is subjected to monitoring and analysis in accordance with those procedures.

Shares listed on ESM are monitored by the Irish Stock Exchange and the Office of the Director of Corporate Enforcement has an enforcement role.

The Deputy should bear in mind that while patterns of market trading may be suggestive of insider trading, similar trading patterns will also be found where people trade without inside information on the basis of seeking to pre-empt forthcoming events. The latter is entirely legal. The former is illegal.

If any person has any information which would be useful to the authorities who supervise markets in this regard, I would encourage them to forward it to the Central Bank. Insider trading undermines the integrity of markets. Both the Central Bank and the ISE understand that and examine carefully any instance of suspicious trading and any information provided to them about such matters.

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