For a European approach to law enforcement – Robert Ophèle

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Article originally published on the AMF website on 8 October 2019. You will find the link to the original page at the end of the article.

12th Colloquium of the AMF Enforcement Committee
Closing speech by Robert Ophèle, Chairman of the AMF – Friday 4 October 2019

At the close of this symposium I would like to share with you one satisfaction and two areas of concern.

The satisfaction is the growing audience for the Enforcement Committee’s decisions. Since the beginning of the year, a press release in French and English has been published for each decision, which is intended to give greater visibility to these decisions, which thus better fulfil their educational purpose and contribute to better recognition abroad of our repressive action. I think I can say that this is a success. For example, the Natixis decision has already been downloaded more than 2,000 times; cases with less media coverage average around 1,000 downloads in the week following their publication. There is no doubt that the ongoing redesign of our website will further enhance the impact of these decisions.

We therefore give good visibility to our decisions and case law, a visibility to which this annual colloquium and our regularly updated book on the guiding principles emerging from the case law also greatly contribute. But while the basis of our sanctions is increasingly European texts, if we wish to analyse how non-compliance with these European regulations is prosecuted in Europe, we are particularly powerless, as Gérard Rameix mentioned in his speech. ESMA certainly keeps a register of sanctions imposed on the basis of European regulations by the various national authorities. But this register is, I must say, unusable as it stands:

– The fact that it only records sanctions pronounced on the basis of European texts is logical and, given the time lapse between the date of the acts being prosecuted and the date of the sanction, many current decisions are still taken on the basis of national texts …. From this point of view, the relevance of the ESMA register will therefore gradually improve.

– However, it only records decisions taken by authorities that are members of the ESMA Board, and in several major countries – Germany, for example – the sanctioning authority is not the supervisory authority; no decisions are therefore transmitted; similarly, when the French referral is to criminal proceedings, nothing is transmitted to ESMA.

At the end of September, the register lists 90 decisions for 2019 taken in 10 countries (out of the 28 countries that make up the European Union); 85 decisions under MIFID, 4 under UCITS and 1 under MAD. 57 of the 90 declarations come from 2 countries, Belgium and Italy. France, for its part, declared 4 of the 14 decisions taken by the Enforcement Committee and no administrative composition on this register.

Moreover, the register records the existence of a sanction but not the sanction itself.

However, a capital markets union, or a savings and investment union to use the terminology recommended by our Minister, must, in regulatory terms, be based on a three-storey structure:

– The first floor is naturally a single corpus of financial regulation; we are not yet fully there, given the divergences in the transposition of directives and the national options provided for in the regulations.

– The second stage consists of the convergent implementation of this corpus in the various countries of the Union; this is what ESMA is now focusing on, with supervisory convergence now one of its major objectives, in line with the emphasis placed on this subject by the co-legislators in the context of the revision of the founding texts of the European supervisory authorities. There was a choice to be made between transferring direct supervisory powers to ESMA and strengthening convergence between national authorities, and it was this second path that was chosen.

– But there is also a third stage, which is that of homogeneous repression. We can clearly see how unacceptable it would be, in an area of freedom to provide services, to have a repressive approach that is too heterogeneous. There is no such coherence in the European approach to repression; this third level has yet to be built. The first step would be to draw up a documented overview of the situation; the increase in the power of European texts should make it possible to do this; this is an objective that we must set ourselves collectively, with our counterparts in the Union.

This was therefore my first concern, the lack of a European approach to the repressive sector.

My second concern is the length of our procedures in France. They are obviously too long and the recent mission of the National Assembly on shareholder activism quite rightly highlighted this.

For inspections that result in a referral to the Enforcement Committee, there are approximately 30 months (two and a half years) between the launch of the inspection and, where there are objections, the Committee’s decision; for investigations, the average time taken is 45 months, almost four years. There are many reasons to justify such lengths of time: the complexity of certain cases, the delays caused by requests for cooperation with our foreign counterparts, the length of the procedure itself and the fact that it is difficult to compress it (observations in response to the detailed letter or inspection report, the referral procedure, any translations). But beyond these objective reasons, I think that we have room for progress and my ambition would be to gain 6 months on average on the deadlines I have just mentioned. Is it possible to aim for an average duration of investigations not exceeding 18 months, an average duration of checks not exceeding 6 months? Once the parties concerned have submitted their observations, the Board should be able to rule within three months, any objections notified within one month and the Enforcement Committee should be able to rule within 12 months, excluding the referral procedure. In total, this would save six months on both investigations and inspections.

As regards the cases that are subject to an administrative composition and which are generally simpler with a procedure that is also faster; in total, control or investigation we are talking about a total duration that is currently slightly more than two years. We should aim for 18 months.

This is by no means a commitment to results that I am making this morning, but an axis on which we are going to work.

The mission of the National Assembly on shareholder activism also invites us to think about an interim procedure which, in urgent cases, would make it possible to quickly clarify the status of certain strategies. Let’s think about it, and let’s think about it collectively because, in any case, accelerating the current process must be one of our major objectives to bring the supervisor’s time closer to market time.

Thank you for your attention.

Link to the original article


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