Financial market abusers could face a minimum of four years in jail under new plans voted through the European Parliament on Tuesday amid a string of financial scandals.
The European Union (EU) -wide laws will force national governments to impose a minimum of four years jail time for "serious offenses" such as manipulating the Libor benchmark. Judges can up the jail sentence if they see fit.
Among the offenses included in the law are placing an order which gives false or misleading signals about the supply or demand of a financial instrument or providing false or misleading information to manipulate the calculation of benchmarks, such as the Libor or Euribor.
"Criminals who get rich by manipulating markets and insider dealing should not get away with just an administrative penalty," British member of European Parliament (MEP) Arlene McCarthy, said in a press release.
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(Read more: Three ex-Rabobank traders charged with manipulating Yen Libor)
"Ensuring that justice is seen to be done will help to rebuild our citizens' trust in financial markets."
The new rules were approved by 618 votes to 20, with 43 abstentions, and form part of the EU's crackdown on market abusers.
In September, European lawmakers passed regulations that enforced tough fines on individuals and companies that manipulate the financial markets.
The financial world has been hit by a litany of scandals over the past few years, from the rigging of Libor, to manipulation of the foreign exchange market. The latest set of EU rules aims to harmonize the law across all 28 member states.