The most significant change will be the amount of published sanctions
With the entry into force of the Market Abuse Directive and Market Abuse Regulation (MAD II/MAR) the publication regime for regulatory sanctions changed. The new Dutch law entered into force on August 11, 2016 and amends the articles 1:96 to 1:101 of the Dutch Financial Supervision Act. The legislator has chosen to broaden the scope of the new publication regime, also in anticipation of the publication regime in other European regulations including MiFID II.
Summary of the new regime
- Under the old publication regime regulators only published fines and orders for incremental penalty payments. The new regime applies to all kinds of regulatory sanctions (think of license revocations, dismissal of directors, prescribed actions and other).
- Under the old regime regulators published the final decision and the legal procedural steps, unless there were reasons for early publication. Under the new regime early publication remains limited to severe fines and forfeited penalties.
- The ability of anonymous publication is applicable to all kinds or regulatory sanctions. Under the new regime it is also be possible to defer publication. Both methods of publication aim to avoid disproportionate damage or interference with an ongoing investigation.
- And last but not least, the new publication regime allows regulators to waive disclosure. This option is limited to situations where anonymous or deferred publication would be disproportionate given the minor nature of the offense (this does not apply to fines) or would jeopardize the stability of the financial system.
Danger of overkill
The new regime applies to all kinds of regulatory sanctions and this could result in a substantial increase of publication. In that sense there is the risk of overkill. The public may lose interest by the overwhelming number of publications. Also not all regulatory sanctions will be that relevant. Without a doubt many kinds of sanctions must be published in full (with media coverage). However, there will also be sanctions that are better off being published in abbreviated form. Sanctions like these could be published as part of a summary bulletin or be integrated in a published overview of sanctions during a certain timeframe.
Let’s hope the regulators find clever ways to publish effectively, while doing justice to the call for greater transparency and market discipline.