ESMA sees spike in EU market abuse sanctions
22 December 2020 France
Image: RomanR/Adobe Stock
The European Securities and Markets Authority (ESMA) has revealed that there has been a “significant increase” in EU market abuse sanctions.
In the authority’s annual report on administrative and criminal sanctions, it was found that national competent authorities (NCAs) and other authorities imposed a total of €88 million in fines related to 339 administrative and criminal actions under Market Abuse Regulation (MAR).
The report covers the period from 1 January 2019 to 31 December 2019. Over that time frame, NCAs reported 279 administrative sanctions and measures as well as 60 criminal sanctions for MAR infringements in 2019.
ESMA said this represents a noteworthy decrease compared to the 472 administrative sanctions imposed in 2018.
However, the authority outlined there is a significant increase of the aggregated value of the sanctions.
In total, approximately €82 million in financial penalties were levied for administrative sanctions, while €6 million was imposed in relation to criminal infringements of MAR.
Despite a decrease in the number of administrative sanctions under MAR, falling from 472 in 2018, the overall financial penalties imposed are significantly higher, rising to €88 million from €10 million in 2018.
ESMA said while criminal sanctions have increased four-fold to 60, from 15 in 2018, with financial penalties rising to €6 million from €65,650 in 2018.
Going forward, ESMA noted that the report will help its ongoing work in fostering supervisory convergence in the application of the MAR and contribute to ESMA’s goal to develop an EU outcome-focused supervisory and enforcement culture.
MAR, which came into effect on 3 July 2016, aims to increase market integrity and investor protection, enhancing the attractiveness of securities markets for capital raising.
Although the UK has left the EU, during the transition period until 31 December 2020, EU law, including the EU Market Abuse Regulation (EU MAR), continues to apply in the UK.
At the end of the transition period, EU MAR will be onshored into UK law by the European Union (Withdrawal) Act 2018 (EUWA).
The Financial Conduct Authority said the Market Abuse Exit Regulations 2019 will make changes to onshored MAR (UK MAR) to make sure it operates effectively in the UK.
In the authority’s annual report on administrative and criminal sanctions, it was found that national competent authorities (NCAs) and other authorities imposed a total of €88 million in fines related to 339 administrative and criminal actions under Market Abuse Regulation (MAR).
The report covers the period from 1 January 2019 to 31 December 2019. Over that time frame, NCAs reported 279 administrative sanctions and measures as well as 60 criminal sanctions for MAR infringements in 2019.
ESMA said this represents a noteworthy decrease compared to the 472 administrative sanctions imposed in 2018.
However, the authority outlined there is a significant increase of the aggregated value of the sanctions.
In total, approximately €82 million in financial penalties were levied for administrative sanctions, while €6 million was imposed in relation to criminal infringements of MAR.
Despite a decrease in the number of administrative sanctions under MAR, falling from 472 in 2018, the overall financial penalties imposed are significantly higher, rising to €88 million from €10 million in 2018.
ESMA said while criminal sanctions have increased four-fold to 60, from 15 in 2018, with financial penalties rising to €6 million from €65,650 in 2018.
Going forward, ESMA noted that the report will help its ongoing work in fostering supervisory convergence in the application of the MAR and contribute to ESMA’s goal to develop an EU outcome-focused supervisory and enforcement culture.
MAR, which came into effect on 3 July 2016, aims to increase market integrity and investor protection, enhancing the attractiveness of securities markets for capital raising.
Although the UK has left the EU, during the transition period until 31 December 2020, EU law, including the EU Market Abuse Regulation (EU MAR), continues to apply in the UK.
At the end of the transition period, EU MAR will be onshored into UK law by the European Union (Withdrawal) Act 2018 (EUWA).
The Financial Conduct Authority said the Market Abuse Exit Regulations 2019 will make changes to onshored MAR (UK MAR) to make sure it operates effectively in the UK.
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