On 13 August 2017 an amendment to the Criminal Code came into effect (the “Amendment”).
A significant change concerns the crime of ‘misuse of information in commerce’ that was previously regulated in a single section (s. 255) together with the crime of ‘misuse of status in commerce’. As a result, this section has been divided into two separate intentional crimes (s.255 regulates misuse of information in commerce; s 255a regulates misuse of status in commerce). The most fundamental changes concern the misuse of information.
It will now be deemed that there has been a misuse of information in commerce if a person meets all of the below criteria:
a) the person, without authorisation, publishes, makes available or discloses to a third person information not yet publically available;
b) the disclosure is capable of substantially affecting decision making in commerce; and
c) the disclosure causes damage of at least CZK 50,000 (EUR 1,920), causes a different serious consequence or benefits the perpetrator or someone else by at least CZK 50,000 (EUR 1,920).
Separately, misuse of information in commerce will also be committed where a person meets all of the below criteria:
a) the person uses, without authorisation, information not yet publicly available acquired during the course of their employment, profession, position, or function by concluding, or initiating the conclusion of, a transaction on a regulated market with investment instruments or in multilateral trading facilities or on an organised market for goods;
b) the disclosure of the information is capable of substantially affecting decision making in commerce; and
c) the disclosure causes damage of at least CZK 50,000 (EUR 1,920), causes a different serious consequence or benefits the perpetrator or someone else by at least CZK 50,000 (EUR 1,920).
Notably, the conclusion of a transaction is not only an active order to trade but also the change or cancellation of such an order. Information capable of substantially affecting decision making in commerce means any information a rational investor would likely use as the basis for their investment decisions.
The Amendment implements Regulation (EU) No 596/2014 on market abuse, Directive 2014/57/EU on criminal sanctions for market abuse and Directive 2014/65/EU on markets in financial instruments.
If you have any questions related to the Amendment, please do not hesitate to get in touch with one of our contacts.
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