Author: | Published: 1 Jun 2005
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Moussas & Tsibris




+30 201 339 2070 3


+30 201 339 0591

The Market Abuse Directive is being implemented in Greece by Law 3340/2005 on the protection of the capital market from abuse of privileged information and market manipulation. For the purposes of the Law, market abuse means abuse of privileged information and market manipulation. The Law applies to actions or omissions that take place:

  • on Greek territory or abroad, concerning financial instruments that are admitted to trading on a regulated market within the Greek territory;
  • on Greek territory, concerning financial instruments that are admitted to trading on a regulated market situated or operating in a member state.

Abuse of privileged information

According to the Law, privileged information means any piece of information that, cumulatively, is precise, has not been made public, relates directly or indirectly to one or more issuers of financial instruments or to one or more financial instruments, and, if it were made public, would be likely to have a significant effect on the prices of those financial instruments or on the price of related derivative financial instruments (that is, information a reasonable investor would be likely to use as part of the basis of their investment decisions).

Any natural person or legal entity that possesses privileged information in this sense, by virtue of their membership of the administrative, management or supervisory bodies of the issuer; or by virtue of their holding in the capital of the issuer; or by virtue of their access to the information through their employment, profession or duties; or by virtue of their criminal activities, is prohibited from using that information by acquiring or disposing, directly or indirectly, financial instruments to which that information relates. Any person subject to the above is prohibited from disclosing privileged information to any other person. Both prohibitions also apply to any person, other than the persons referred to above, who possesses privileged information while they know, or ought to have known, that it is privileged.

Market manipulation

The Law provides for a general prohibition of market manipulation, that is, transactions or orders that give false or misleading signals as to the supply, demand or price of financial instruments (unless entered into for reasons that are legitimate and conform to accepted market practices), transactions or orders employing fictitious devices or any other form of deception or contrivance and the dissemination of false or misleading information through the media, including the internet, or by any other means. In respect of journalists when they act in their professional capacity, their dissemination of information will be assessed taking into account the rules governing their profession, unless they derive, directly or indirectly, an advantage or profits from the dissemination of the information.

Preventive measures

The Law provides for extensive preventive measures relating to issuers, employees, analysts, market operators and broker-dealers.

Public disclosure of privileged information by the issuers

Issuers are placed under the general obligation to inform the public as soon as possible of privileged information that directly concerns them.

Issuers must also post on their internet sites, for at least six months, all privileged information that they are required to disclose publicly.

List of insiders

Issuers must draw up a list of the persons working for them, under a contract of employment or otherwise, who have access to privileged information. The list must be updated regularly and transmitted to the Capital Market Commission (the CMC) if requested.

Managers' transactions

Persons with managerial responsibilities in an issuer and persons closely associated with them must disclose the existence of transactions relating to shares of the issuer, or any linked derivatives.


Persons who produce or disseminate research concerning financial instruments or issuers or other information recommending or suggesting investment strategy, intended for the public, must take reasonable care to ensure that the information is fairly presented and must also disclose their interests or indicate any conflicts of interest concerning the financial instruments to which that information relates.

Suspicious transactions

Market operators must adopt structural provisions aimed at preventing and detecting market manipulation practices and must disclose to the CMC all instances reasonably suspected to constitute market abuse. Broker-dealers must also inform the CMC when they suspect that a client's transactions constitute abuse of privileged information or manipulation.

Recording orders

Persons that professionally arrange transactions must record and archive all orders given by their clients pertaining to the conclusion of stock exchange transactions and, in particular, tape orders given by telephone as well as store orders given by fax or by electronic means.

Competent authority and sanctions

The CMC is the authority competent to ensure that the provisions adopted pursuant to the Law are applied and is further authorized to issue decisions on preventive measures to implement all relevant level-2 Directives.

If the provisions regarding the prohibitions of market abuse are breached the CMC may impose administrative fines ranging from €10,000 to €2 million. Criminal sanctions are also provided if perpetrators acting with intent. In case of breach of the obligations arising from the provisions regarding the preventive measures, the CMC administers documentary reprimand or imposes a fine of €3,000 up to €500,000. If the breach in question also constitutes an infringement of the provisions regarding market abuse, the sanctions may be imposed cumulatively.

The Law has been approved by the Greek parliament and published in the Government Gazette. It will enter into force two months after its publication (that is, on July 10 2005), whereas the provisions regarding the recording, taping and archiving of orders in particular - which became the focus of intense disagreement by market participants - will be effective three months later.

Michael Tsibris and Georgia Plagou