Market manipulation and insider trading are now criminal offences after the Senate ratified changes to the Criminal Code on Wednesday.

Ruling party Senator Raymond Tannock introduced the measures saying they were necessary in response to concerns by the International Monetary Fund and a United Kingdom review of financial regulations in the Caribbean Overseas Territories and Bermuda.

He added that the Bermuda Stock Exchange had been directly affected by the absence of such regulations with the reluctance of the Financial Services Authority to give the BSX designated investment exchange status.

"The bill defines an insider as a person who is a director of a listed company or an employee or who is a professional, for example, working with the company and who may obtain non public information about any other listed company in Bermuda and use that information to his or her benefit," said Sen. Tannock.

Market manipulation refers to distorting the market by giving a misleading impression about the supply, demand or price of an investment.

The law, which now has to be signed by the Governor, provides for a $10,000 fine or six months in prison for people summarily convicted of market manipulation, and a $100,000 fine or a prison sentence of up to five years upon indictment.

And those found guilty of insider trading will face even harsher punishment ? a $25,000 fine on summary conviction or two years in prison, and a fine of $175,000 or seven years in prison upon indictment