The EU Regulatory Enforcement Outlook

A review of financial regulatory enforcement by NCAs across the EU27

Although the financial services sector is a global business, responsibility for the regulation, supervision and enforcement of regulatory requirements rests largely with national competent authorities (NCAs).
Here we explore points of interest in relation to enforcement against financial services firms by NCAs in ten key EU jurisdictions. Our thanks to Arthur Cox for their contribution in respect of the Republic of Ireland.

  • Almost all of the NCAs surveyed conduct their own investigations and have information-gathering powers.
  • Fines are often capped and the top level is generally well below typical UK and US fines, though MAR and MiFID II are exerting some upward pressure here.  Most NCAs can impose various other types of sanctions.
  • A range of non-enforcement powers (e.g. product intervention) are also being used increasingly in several jurisdictions.
  • Some NCAs have no formal early settlement process; others provide for early resolution with a reduced fine, accepting liability or providing valuable information.
  • Action against individuals tends to focus on individual misconduct (direct involvement in the breach by the firm, or a direct failure by board / senior managers to prevent such a breach) rather than responsibility for broader managerial or supervisory failings, although several jurisdictions are considering reform in light of the Financial Stability Board’s misconduct toolkit.
  • Several jurisdictions cited AML and counter-terror financing breaches as a key area of focus.
  • A number of jurisdictions reported a general increase in enforcement activity around transparency generally, in the wake of the implementation of MiFID II.
Select a country on the map to explore the regulatory enforcement highlights you need to know.
x The world in 2022