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Importance of MiFID II for the energy sector: sanctions for non-compliance

  • Poland
  • Energy and infrastructure

12-10-2017

It should be noted that there will be sanctions for non-fulfillment of the vast majority of new responsibilities required by MiFID II (the updated Markets in Financial Instruments Directive (2014/65/EU)). In this respect, the directive does not spare the addressees of MiFID II, including investment firms, banks and investment funds, but also a large number of other businesses.
According to MiFID II, EU member states will be required to provide for administrative sanctions and other effective measures, proportionate and dissuasive, against those responsible for infringements. Administrative sanctions and other measures specified by member states should satisfy certain essential requirements in relation to addressees, criteria to be taken into account when applying a sanction or measure, manner of publication, key powers to impose sanctions, and levels of administrative sanctions. In particular, competent authorities should be empowered to impose fines sufficiently high to offset the benefits that can be expected and dissuasive even for larger institutions and their managers.
Under MiFID II, the catalogue of infringements which should be subject to sanctions is open, as indicated by the words “at least” used in Art. 70(3). Accordingly, the member states may provide for a more extensive catalogue of infringements and sanctions in order to implement MiFID II.
Maximum fines
The maximum administrative fine imposed on a legal person is at least EUR 5 million or the equivalent in national currency, or 10% of the total annual turnover of the legal person according to the last available accounts.
In the case of a natural person, the maximum administrative fine will be at least EUR 5 million or the equivalent in national currency.
Interestingly, the maximum administrative fines for infringements that result in a benefit to the responsible person may be even higher—up to at least twice the amount of the benefit derived from the infringement, where that benefit can be determined, even if that exceeds the maximum amount of EUR 5 million. 

This poses numerous and difficult challenges for energy companies.
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If you are interested in any aspect of application of MiFID II, please do not hesitate to contact us.

It should be noted that there will be sanctions for non-fulfillment of the vast majority of new responsibilities required by MiFID II (the updated Markets in Financial Instruments Directive (2014/65/EU)). In this respect, the directive does not spare the addressees of MiFID II, including investment firms, banks and investment funds, but also a large number of other businesses.

According to MiFID II, EU member states will be required to provide for administrative sanctions and other effective measures, proportionate and dissuasive, against those responsible for infringements. Administrative sanctions and other measures specified by member states should satisfy certain essential requirements in relation to addressees, criteria to be taken into account when applying a sanction or measure, manner of publication, key powers to impose sanctions, and levels of administrative sanctions. In particular, competent authorities should be empowered to impose fines sufficiently high to offset the benefits that can be expected and dissuasive even for larger institutions and their managers.
Under MiFID II, the catalogue of infringements which should be subject to sanctions is open, as indicated by the words “at least” used in Art. 70(3). Accordingly, the member states may provide for a more extensive catalogue of infringements and sanctions in order to implement MiFID II.

Maximum fines


In the case of a natural person, the maximum administrative fine will be at least EUR 5 million or the equivalent in national currency.

Interestingly, the maximum administrative fines for infringements that result in a benefit to the responsible person may be even higher—up to at least twice the amount of the benefit derived from the infringement, where that benefit can be determined, even if that exceeds the maximum amount of EUR 5 million. 

This poses numerous and difficult challenges for energy companies.


 

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Renata Misiewicz
PR team
+48 22 50 50 719
renata.misiewicz@eversheds-sutherland.pl