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  • EU Report on Penalties Under the European Market Infrastructure Regulation
    06/13/2018
    The European Securities and Markets Authority has published its first annual report on penalties imposed by national regulators for infringement of obligations under the European Market Infrastructure Regulation. The report focuses on supervisory measures and penalties imposed by EU national regulators in relation to the EMIR clearing obligation, the reporting obligation, obligations on non-financial counterparties and the risk mitigation techniques for uncleared derivatives. The obligations on CCPs and Trade Repositories are out of scope of the report.

    The report has been provided to the European Commission, the Council of the European Union and the European Parliament. ESMA notes that the report can be used to identify best practices as well as areas which might benefit from increased harmonization.

    Overall, ESMA found that national regulators have adopted similar approaches to supervising and monitoring compliance with EMIR. Two areas where there is less harmonization are the amounts of fines, which range from EUR 125 to EUR 100 million, and whether a member state has provided for criminal sanctions. ESMA notes that it has launched a Sanctions Register for national regulators to report future sanctions imposed under EMIR.

    ESMA notes that national regulators do not appear to have prioritized specific supervisory action over third-country entities' trading contracts with substantial effect in the EU and which are subject to the clearing obligation and states that this could be a point for future consideration.

    Finally, ESMA encourages national regulators to publish regular reports on the effectiveness of the penalty rules under EMIR.

    View the report.

    View the Sanctions Registry.

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    TOPIC: Derivatives