The Executive Directors of the Austrian Financial Market Authority (FMA), Helmut Ettl and Kurt Pribil, welcome the move made by EU Commissioner Michel Barnier towards an EEA-wide minimum harmonisation of sanctions in the financial services sector. “The sanctions and fines that are set at national level for non-compliance with EU financial market regulations are so divergent that they encourage supervisory/sanction arbitrage,” explain the FMA Executive Directors. “The fact that some market operators escape to countries with weak sanctions or where it is unlikely that sanctions will be imposed not only distorts competition in the EEA, but is also an additional barrier to efficient and effective international cooperation among the supervisory authorities.” The move by Commissioner Barnier towards also subjecting sanction rules to a minimum level of harmonisation confirms and supports the demand that has long been made by the FMA for Austria’s national rules to be brought up to the international level. In particular, Ettl and Pribil welcome the proposals that sanctions imposed due to improper market conduct should be subject to compulsory publication, that it should be possible to punish legal persons as well as natural persons, and that a clear and uniform system should be introduced so that sanctions can be classed as penalties under civil law, penal administrative law or criminal law.
Surveys carried out by the three EU committees representing the supervisory authorities (CEBS – banking supervision, CEIOPS – supervision of insurance and occupational pension funds, CESR – securities supervision) have revealed that the current powers of the national supervisory authorities to impose sanctions in the event of breaches of EU financial market law deviate greatly in terms of the party responsible for prosecution, the amount and type of sanction that may be applied, and the actual use made of the criminal penalties available. “An effective, proportionate and deterrent sanctioning regime, where at least the basic features are harmonised, is a key prerequisite for a well-functioning single market for financial services,” explain FMA Executive Directors Helmut Ettl and Kurt Pribil.
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-5106
+43/(0676)/882 49 516