Article 7 of the MAR Regulation defines inside information according to four cumulative criteria: it must be precise, non-public, relate to an issuer or a financial instrument, and be likely to have a significant effect on the price if made public. This definition is crucial for identifying cases of insider trading.

The AMF Sanctions Committee can impose pecuniary sanctions of up to 15% of annual turnover or €100 million for legal entities. This sanction is particularly severe in order to deter large companies from participating in insider trading. It also demonstrates the importance of financial regulation in protecting markets.

Insider trading is composed of three elements: the legal element (statutory provisions such as Article L.465-1 of the Code monétaire et financier), the material element (possession and use of inside information for stock market transactions), and the mental element (criminal intent, i.e. awareness of the privileged nature of the information and the intention to use it). These elements are essential for understanding the legal structure of this offence.

Since the Constitutional Council's decision of 18 March 2015 in the EADS case, the combination of administrative and criminal proceedings for the same facts and the same person is prohibited. A referral mechanism between the AMF and the Parquet national financier organises the allocation of cases to avoid such overlap. This measure aims to protect the rights of the defence and avoid disproportionate penalties.

Article L.465-1 of the Code monétaire et financier provides for a five-year prison sentence for insider trading. This penalty is severe in order to deter fraudulent practices on financial markets. When the inside information relates to the commission of a crime or offence, this sentence may be increased to seven years.

The main criterion is that the information must be likely to have a significant effect on the price if made public. This criterion is assessed with reference to the behaviour that a 'reasonable investor' would adopt in response to such information. It is essential because it determines whether information is sufficiently important to justify sanctions in the event of insider trading.

Case law does indeed accept that bad faith can be inferred from the profession or functions held by the perpetrator. For example, a company director has an irrebuttable presumption of being an insider, which facilitates the demonstration of criminal intent. This nuance is important for understanding how courts assess the mental element of the offence.

Penalties for insider trading can be criminal (such as imprisonment) or administrative (such as fines imposed by the AMF). This distinction is important because it determines the type of proceedings and the competent court. For example, criminal penalties are adjudicated by judicial courts, while administrative sanctions are imposed by the AMF.