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The Breach of Union Law Procedure and the European Supervisory Agencies (ESAs): An Effective Tool Suffering from an Expectation Gap

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The Future of Legal Europe: Will We Trust in It?

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Abstract

The establishment of the European Supervisory Agencies (ESAs) in 2010 by the European Union (EU) had two main objectives: to help develop a Single Rulebook and to achieve supervisory convergence in the securities, banking and insurance law fields. These goals were enshrined in the founding Regulations of 24 November 2010 of the European Securities and Markets Authority (ESMA), the European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA).

Professor at the University of Luxembourg; Max Planck Fellow at the MPI Luxembourg for International, European and Regulatory Procedural Law; Member of the ERA Board of Trustees since 2016.

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Notes

  1. 1.

    Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC, OJ EU L 331/84, 15.12.2010 (Moloney 2018).

  2. 2.

    Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC, OJ EU L 331/12, 15.12.2010.

  3. 3.

    Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC, OJ EU L 331/48, 15.12.2010.

  4. 4.

    Report by the High-Level Group on Financial Supervision in the EU, chaired by Jacques de Larosière, Brussels, 25 February 2009.

  5. 5.

    See “We pledge to strengthen our regulatory regimes, prudential oversight, and risk management, and ensure that all financial markets, products and participants are regulated or subject to oversight, as appropriate to their circumstances.” in G-20 Leaders. Declaration. Washington Summit on Financial Markets and the World Economy, November 15, 2008.

  6. 6.

    Communication from the Commission. European Financial Supervision, Brussels, 27.5.2009 COM(2009) 252 final.

  7. 7.

    Communication from The Commission European Financial Supervision, Brussels, 27.5.2009 COM(2009) 252 final.

  8. 8.

    Regulation (EU) 2019/2175 of the European Parliament and of the Council of 18 December 2019 amending Regulation (EU) No 1093/2010 establishing a European Supervisory Authority (European Banking Authority), Regulation (EU) No1094/2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), Regulation (EU) No 1095/2010 establishing a European Supervisory Authority (European Securities and Markets Authority), Regulation (EU) No600/2014 on markets in financial instruments, Regulation (EU) 2016/1011 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds, and Regulation (EU) 2015/847 on information accompanying transfers of funds, OJ EU L 334/1, 27.12.2019.

  9. 9.

    See decision by the Board of Appeals of the ESAs, in the appeal brought by Jeffrey Michael Howerton against the European Securities and Markets Authority, 2020-D-01, 9 October 2020.

  10. 10.

    ESMA, Decision of the Board of Supervisors, Breach of Union law investigations, -ESMA/2012/BS/87.

  11. 11.

    European Commission Directorate-General Justice and Consumers, Tiina Astola, Request to investigate a possible breach of Union law under Article 17 of Regulation (EU) No 1093/2010, 23/10/2017.

  12. 12.

    European Commission Directorate-General Justice and Consumers, Tiina Astola, Request to investigate a possible breach of Union law under Article 17 of Regulation (EU) No 1093/2010, 01/03/2018.

  13. 13.

    European Commission Directorate-General Justice and Consumers, Tiina Astola, Request to investigate a possible breach of Union law under Article 17 of Regulation (EU) No 1093/2010, 31/09/2018.

  14. 14.

    European Commission Directorate-General Justice and Consumers, Tiina Astola, Request to investigate a possible breach of Union law under Article 17 of Regulation (EU) No 1093/2010, 03/04/2019.

  15. 15.

    European Commission Directorate-General Justice and Consumers, Tiina Astola, Request to investigate a possible breach of Union law under Article 17 of Regulation (EU) No 1093/2010, 21/09/2018.

  16. 16.

    ESMA, Public Statement. ESMA to assess German financial reporting system following Wirecard collapse, 15 July 2020 ESMA71-99-1364.

  17. 17.

    Article 41 and 43 of the ESMA Regulation.

  18. 18.

    Art. 2(2), ESMA, Note, Breach of Union law cases: ESMA’s Approach on opening investigations, 23 October 2012, ESMA/2012/SMSG/66.

  19. 19.

    Decision of The Board of Supervisors, Rules Of Procedure On Breach of Union law Investigations, ESMA43-318-5630, 14 September 2020.

  20. 20.

    Decision of the European Banking Authority adopting Rules of Procedure for Investigation of Breach of Union law, EBA/DC/2016/174, 23 December 2016.

  21. 21.

    EIOPA, Decision adopting the Rules of Procedure on Investigations regarding Breach of Union law, EIOPA-Bos-11-017-Rev3, 31 January 2020.

  22. 22.

    General Court, 9 September 2015, T-660/14 SV Capital OÜ v EBA, T-660/14 and, on appeal, ECJ, 14 December 2016, SV Capital OÜ v EBA, C-577/15.

  23. 23.

    ESMA, Board of Supervisors, 21 September 2018 ESMA22-106-1066.

  24. 24.

    European Ombudsman, Decision in case 618/2017/CEC on the failure of the European Securities and Markets Authority (ESMA) to open an investigation into the Cypriot supervisory authority’s handling of an alleged fraud by an online trading firm, 12/06/2018.

  25. 25.

    Regulation (EU) No 1022/2013 of the European Parliament and of the Council of 22 October 2013 Amending Regulation (EU) No 1093/2010 Establishing A European Supervisory Authority (European Banking Authority) as regards the Conferral of specific Tasks on The European Central Bank pursuant To Council Regulation (EU) No 1024/2013, OJ EU L287/5, 29.10.2013.

  26. 26.

    Art. 41 (2) of Regulations 1095/2010 (ESMA) and 1094/2010 (EIOPA).

  27. 27.

    Art. 7 (3) Rules of Procedure on Breach of Union law Investigations, ESMA43-318-5630, 14 September 2020.

  28. 28.

    Art. 44 of the Regulation.

  29. 29.

    EBA, Recommendation to the Bulgarian National Bank and the Bulgarian Deposit Insurance Fund on action necessary to comply with Directive 94/19/EC (Deposit Guarantee Schemes Directive), EBA/REC/2014/02, 17.10.2014.

  30. 30.

    EBA, Recommendation to the Maltese Financial Intelligence Analysis Unit (FIAU) on action necessary to comply with the Anti-Money Laundering and Countering Terrorism Financing Directive, EBA/REC/2018/02 11 July 2018.

  31. 31.

    ESMA, Board of Supervisors, 7 May 2015 ESMA/BS/59.

  32. 32.

    EBA, Board of Supervisors meeting—Final Minutes, EBA BS 2019 176, 16 and 17 April 2016.

  33. 33.

    See EBA, Introductory statement of the EBA Director of Banking Markets, Innovation and Consumers before the Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance (TAX3), 26 April 2018.

  34. 34.

    Art. 4 (2), ESMA, Rules of Procedure on Breach of Union law Investigations, Esma43-318-5630, 14 September 2020.

  35. 35.

    Art. 8 (2) Rules of Procedure on Breach of Union law Investigations, ESMA43-318-5630, 14 September 2020.

  36. 36.

    Art. 9 (4) Rules of Procedure on Breach of Union law Investigations, ESMA43-318-5630, 14 September 2020.

  37. 37.

    Art. 10—Agreement on compliance actions. EIOPA, Decision Adopting the Rules of Procedure on Investigations Regarding Breach of Union law, EIOPA-Bos-11-017-Rev3, 31 January 2020.

  38. 38.

    EBA 2018 Annual Report, p. 76.

  39. 39.

    See EIOPA Annual Report 2018, p. 22.

  40. 40.

    Brunsden and Khan (2019).

  41. 41.

    Brunsden (2019).

  42. 42.

    Art 9b Request for investigation related to the prevention and countering of money laundering and of terrorist financing, as introduced by the 2019 ESAs’ Review.

  43. 43.

    Smaghi (2020).

  44. 44.

    Final Report of the High Level Forum on the Capital Markets Union—A new vision for Europe’s capital markets (The Report), available at: https://ec.europa.eu/info/sites/info/files/business_economy_euro/growth_and_investment/documents/200610-cmu-high-level-forum-final-report_en.pdf (last accessed on 02.11.2020).

  45. 45.

    Final Report of the High Level Forum on the Capital Markets Union: https://ec.europa.eu/info/sites/info/files/business_economy_euro/growth_and_investment/documents/200610-cmu-high-level-forum-final-report_en.pdf (last accessed on 03.11.2020).

References

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  1. Luxembourg, Luxembourg

    Pierre-Henri Conac

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  1. UCD Sutherland School of Law, University College Dublin, Dublin, Ireland

    Gavin Barrett

  2. Academy of European Law, Trier, Germany

    Jean-Philippe Rageade

  3. Law School, University of Hull, Hull, UK

    Diana Wallis

  4. Weil & Associés, Paris, France

    Heinz Weil

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Conac, PH. (2021). The Breach of Union Law Procedure and the European Supervisory Agencies (ESAs): An Effective Tool Suffering from an Expectation Gap. In: Barrett, G., Rageade, JP., Wallis, D., Weil, H. (eds) The Future of Legal Europe: Will We Trust in It? . Springer, Cham. https://doi.org/10.1007/978-3-030-68253-8_5

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