The European Securities and Markets Authority, or ESMA, stands as the securities markets’ regulator for the EU. Today, the regulator published a report in regards to the sanctions and imposed measures that were done under the Markets in Financial Instruments Directive, or MiFID, by the National Competent Authorities (NCAs).

Going By The Numbers

This report detailed that NCAs in 15 out of the thirty total EU/EEA member states had imposed sanctions into it come last year. Most of these sanctions, however, did not include a fine. An example of this would be Luxembourg, where 83 sanctions had occurred, but only a single violation had resulted in an administrative fine of €50,000. The remainder of these violations in Luxembourg had only been sanctioned by injunctions. It should be noted, however, that administrative penalties may be brought before firms that do not rectify their deficiencies that the NCA had identified during on-site inspections.

By contrast, Portugal had managed to impose fines of €750,000 in 2019, bringing forth the largest volume of fines in the entirety of the EU/EEA member states under MiFID II.

No Clear Trends Can Be Made Quite Yet

Of these 15 member states, NCAs had imposed an array of measures and sanctions that attributed to a total of 371 sanctions and measures being enacted. What this meant, is a total of €1,828,802 was given in fines under these measures. The 2020 reports, by contrast, has shown a marked increase in the number of Member States that have started to apply sanctions and measures. This applies to the total aggregate of reported sanctions and measures that were reported, as well, and includes that of the total amount of administrative sanctions, as well.

It’s the opinion of ESMA that no clear trends or tendencies can be determined in regards to the imposition of sanctions or measures. This applies to the ability to create detailed statistics or comparisons across Member states, as well.

The Wheels Of Administration Turn Slow

This is due to the fact that MiFID II and MiFIR has only been applicable for two years, now, and it includes a considerable amount of time for enforcement processes to reach a conclusion after it started. Furthermore, there’s a wide array of differences in regards to the MiFID II framework and the national legislation of Member states when it comes to measures highlighted, as well as sanctions.

Should an NCA report that there were no sanctions or measures imposed in 2019, ESMA warned that this doesn’t necessarily mean that the NCA in question failed to enforce the MiFID II rules. ESMA is convinced that practical factors could be at play as well, citing how long such an enforcement process can take, from start to finish. This, according to ESMA, may have led to certain sanctions, criminal proceedings and measures ongoing in 2019 not reach the deadline of the reporting period, which was on the 31st of December, 2019.