The European Securities and Markets Authority (ESMA) has released its first consolidated report on sanctions and measures implemented by National Competent Authorities (NCAs) across the European Union. This report represents a significant milestone, offering a clear, detailed, and data-driven overview of the enforcement of financial regulation in the EU.

Key Statistic: €71 Million in Fines

En 2023, 970 sanctions administratives et mesures ont été imposées par les ANC des États membres. Le montant total des amendes administratives atteint 71 millions d’euros, un chiffre en hausse de 12 % par rapport à 2022, ce qui illustre une vigilance accrue et un renforcement des dispositifs de contrôle.

Geographical Distribution and Types of Sanctions

The report reveals notable regional differences in the distribution of sanctions:

  • Western Europe:
    • 65% of fines originated from countries such as France (18%), Germany (15%), and the Netherlands (12%), which are recognized for rigorous monitoring policies and sophisticated detection systems.
  • Southern Europe:
    • Italy and Spain accounted for 20% of the sanctions, primarily for market manipulation violations.
  • Central and Eastern Europe:
    • Although accounting for only about 5% of the total fines, ESMA notes significant progress in cross-border cooperation to address complex abuses.

Breakdown of Main Violations

1. Market Manipulation (40% of sanctions):

  • Key activities:
    • Artificially inflating trading volumes to mislead investors.
    • Disseminating false information to influence prices.
  • Example: A Spanish bank was fined €3 million for using algorithms to create an illusion of high demand.

2. Insider Trading (30% of cases):

  • Main targets:
    • Corporate executives accessing confidential information prior to major announcements.
    • External partners exploiting internal data before mergers or acquisitions.
  • Notable case: In Germany, a financial advisor was fined €1.8 million for passing privileged information to a relative.

3. Non-Compliance with Transparency Obligations (MiFID II, 20% of sanctions):

  • Issues identified:
    • Failure to report suspicious transactions within required deadlines.
    • Poor quality of transaction reports, complicating oversight.
  • Example: An intermediary in Italy was fined €1.2 million for failing to report over 150 unusual transactions within a six-month period

Enhanced Surveillance Methods

The Market Abuse Regulation (MAR) requires financial institutions to implement effective detection systems. ESMA highlighted several advancements in surveillance:

  • Widespread adoption of AI and machine learning to detect atypical behavior in real time.
  • Strengthened internal audits within major banks and asset management companies.
  • Increased cross-border cooperation, with over 120 joint investigations initiated in 2023.

This report underscores the EU’s commitment to financial transparency, stricter enforcement, and the ongoing modernization of regulatory tools to address market abuse effectively.