Russian Insider Trading Law

Legislative Framework

Russian insider trading law is governed by the Federal Law on Combating the Misuse of Inside Information and Market Manipulation (No. 224-FZ of 27 July 2010), which entered into force on 29 July 2011. The law was adopted as part of Russia’s commitment to international securities regulation standards, including the International Organization of Securities Commissions (IOSCO) principles and the G20 commitment to combat market abuse. The law replaced the fragmented and inadequate provisions of the earlier securities legislation and established a comprehensive regime for the prevention and sanctioning of insider trading and market manipulation.

The law is supplemented by the Criminal Code of the Russian Federation, which criminalises insider trading and market manipulation (Articles 185.3–185.6), and by the Code of Administrative Offences (KoAP), which establishes administrative liability for violations not reaching the criminal threshold. The Central Bank of the Russian Federation (CBR) is the primary enforcement authority, exercising supervisory and investigative functions in the securities market.

Definition of Inside Information

Article 2 of Law No. 224-FZ defines inside information (insayderskaya informatsiya) as precise, specific information that has not been publicly disclosed, the disclosure of which could materially affect the price of financial instruments, foreign currency, or goods. The information must be of a type included in the closed list established by the law and CBR regulations. The list includes: information on the financial and economic activities of issuers; information on decisions of management bodies; information on major transactions; and information on the results of securities issuance.

The law distinguishes between inside information (which belongs to the issuer or other insider source) and inside information for the purposes of market manipulation. The distinction is material for enforcement: misuse of inside information requires proof that the information is inside information under Article 2, while market manipulation does not require the involvement of inside information.

Prohibited Acts

Article 4 of Law No. 224-FZ establishes the core prohibitions. The law prohibits: (1) the use of inside information to conclude transactions in financial instruments, foreign currency, or goods; (2) the transfer of inside information to third parties; (3) recommendations or inducements to acquire or dispose of financial instruments based on inside information; and (4) market manipulation.

Market manipulation is defined separately under Article 5 of Law No. 224-FZ and Article 185.3 of the Criminal Code. Manipulation includes: the dissemination of false or misleading information affecting prices; transactions that create artificial prices, demand, supply, or trading volumes; the use of deceptive trading strategies; and the manipulation of reference prices, indices, or benchmarks. The law provides specific safe harbours for transactions carried out in accordance with exchange rules, stabilisation measures, and buyback programmes.

Insider Lists

Article 9 of Law No. 224-FZ requires issuers and other persons who possess inside information to maintain an insider list (spisok insayderov). The list must include: all persons who have access to inside information by virtue of their employment, contract, or position; persons affiliated with the issuer; and other persons designated by CBR regulations. The insider list must specify the grounds for inclusion, the date of inclusion, and the date on which the person ceases to be an insider.

Insiders are subject to specific obligations: they must not use inside information for transactions; they must not disclose inside information to third parties; and they must maintain the confidentiality of inside information. Insiders must acknowledge in writing their awareness of the legal prohibitions and the consequences of violation. The issuer must update the list promptly and maintain it for at least five years.

Disclosure Requirements

Issuers and other persons are required to disclose inside information to the public in accordance with CBR regulations. Article 8 of Law No. 224-FZ establishes the principle of immediate disclosure: inside information must be disclosed as soon as practicable after the person becomes aware of it. The method of disclosure includes publication through the newsfeed of the authorised information agency and posting on the issuer’s website.

The disclosure obligation applies to events that could materially affect the price of financial instruments. Standard disclosure events include: changes in the issuer’s financial condition; decisions on the payment of dividends; changes in the composition of management bodies; decisions on reorganisation or liquidation; and the commencement of legal proceedings that could materially affect the issuer’s activities. The CBR has the authority to exempt specific categories of information from the disclosure obligation where disclosure would prejudice the legitimate interests of the issuer.

CBR Enforcement

The Central Bank of Russia exercises comprehensive enforcement authority over insider trading and market manipulation. The CBR’s Market Conduct Department monitors trading activity on the Moscow Exchange and other trading platforms, using automated surveillance systems to detect suspicious trading patterns. The CBR has the power to: request documents and information from market participants; conduct on-site inspections; issue binding orders to cease violations; and refer cases for administrative or criminal proceedings.

The CBR publishes decisions on insider trading and market manipulation cases on its official website. Enforcement statistics show an increasing volume of cases, with insider trading cases concentrated in the equities market and market manipulation cases involving both equities and derivatives. The CBR has enhanced its surveillance capabilities through the introduction of the Market Abuse Monitoring System, which analyses trading data in real time using algorithms designed to identify patterns consistent with insider trading and manipulation.

Administrative and Criminal Liability

Administrative liability for insider trading and market manipulation is established under Articles 15.29–15.31 of the Code of Administrative Offences. Penalties for individuals include fines of 3,000–5,000 RUB for minor violations and 300,000–500,000 RUB for serious violations. For legal entities, fines range from 300,000 RUB to 1,000,000 RUB, with enhanced penalties for repeat violations. The CBR may also impose disqualification on officials involved in violations.

Criminal liability is established under Article 185.3 of the Criminal Code (market manipulation) and Article 185.6 of the Criminal Code (misuse of inside information). Criminal liability arises where the violation causes substantial harm (exceeding 2,500,000 RUB) or generates income on a large scale. Penalties include: fines of up to 300,000 RUB or the convicted person’s income for up to two years; compulsory community service for up to 480 hours; and imprisonment for up to six years (for market manipulation) or up to four years (for insider trading). Aggravated offences — those committed by an organised group or causing particularly large damage — carry enhanced penalties of up to seven years’ imprisonment.