European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

According to Article 67 of Directive No 2014/65, the Member States must designate the competent authorities which are to carry out each of the duties provided for under the different provisions of the directive. They must be public authorities and can only delegate tasks to other entities with the necessary capacity and resources to effectively execute all tasks. They are given all the supervisory …

Prudential supervision

According to Article 67 of Directive No 2014/65, the Member States must designate the competent authorities which are to carry out each of the duties provided for under the different provisions of the directive. They must be public authorities and can only delegate tasks to other entities with the necessary capacity and resources to effectively execute all tasks. They are given all the supervisory, including investigatory powers and powers to impose remedies necessary to fulfill their duties (Art. 69). They can, inter alia, have access to any document in any form whatsoever and receive a copy of it; demand information from any person and if necessary summon and question a person with a view to obtaining information; carry out on-site inspections or investigations; require the cessation of any practice that is contrary to the provisions of the directive; request temporary prohibition of professional activity; require the suspension of trading in a financial instrument; and refer matters for criminal prosecution. The competent authorities not only have the power to withdraw the authorization of an investment firm, they can also impose administrative sanctions against the persons responsible for infringing the provisions of the directive (Art. 70). Although, in principle, the decisions of the competent authorities should be properly reasoned and subject to the right to apply to the courts , the directive encourages the setting-up of redress procedures for the out-of-court settlement of disputes (Art. 75). According to Article 76, the competent authorities and their staff are bound by an obligation of professional secrecy with regard to confidential information they may receive in the course of their duties.

Article 79 requires that the competent authorities of different Member States cooperate with each other whenever necessary for the purpose of carrying out their duties under the directive particularly in the exchange of information. The principle according to which the home Member State is responsible for the supervision of the activities of an investment firm established in another Member State does not prevent the authorities of the host Member State from requiring, for statistical purposes, all investment firms with branches within their territories to report to them periodically on the activities of those branches or from providing the information necessary for the monitoring of their compliance with the standards set by the host Member State that apply to them (Art. 85). Those requirements may not be more stringent than those which the same Member State imposes on established firms for the monitoring of their compliance with the same standards. Moreover, where the competent authority of the host Member State finds a breach by an investment firm of obligations which do not confer powers on the competent authority of the host Member State, it refers those findings to the competent authority of the home Member State (Art. 86). If, despite the measures taken by the competent authority of the home Member State or because such measures prove inadequate, the investment firm persists in acting in a manner that is clearly prejudicial to the interests of host Member State investors or the orderly functioning of markets, the competent authority of the host Member State, after informing the competent authority of the home Member State takes all the appropriate measures needed in order to protect investors and the proper functioning of the markets. Where the breach in question concerns those provisions which confer powers on the host Member State's competent authorities, those authorities may directly require the investment firm concerned to put an end to its irregular situation. 

European Business Law

126. Prudential supervision

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Les notions juridiques connexes

126. Prudential supervision

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise