Changes from report parliamentary committee draft to plenary report

Added5. By way of derogation from paragraph 1, where the legal system of the Member State does not provide for administrative penalties, this Article may be applied in such a manner that the penalty is initiated by the competent authority and imposed by judicial authorities, while ensuring that those legal remedies are effective and have an equivalent effect to the administrative penalties imposed by competent authorities. In any event, the penalties imposed shall be effective, proportionate and dissuasive. Those Member States shall notify to the Commission the provisions of their laws which they adopt pursuant to this paragraph by [OP please insert date = date of transposition of this amending Directive] and, without delay, any subsequent amendment law or amendment affecting them.

AddedArticle 66 Administrative penalties, periodic penalty payments and other administrative measures for breaches of authorisation and requirements for acquisitions or divesture of material holdings, material transfers of assets and liabilities, mergers or divisions

Added1. Member States shall ensure that their laws, regulations and administrative provisions provide for administrative penalties, periodic penalty payments and other administrative measures at least where:

Added(a) the business of taking deposits or other repayable funds from the public is conducted without being authorised as a credit institution in breach of Article 9;

Added(b) activities as a credit institution are commenced without obtaining prior authorisation in breach of Article 9;

Added(c) a qualifying holding in a credit institution is acquired, directly or indirectly, or further increased, directly or indirectly, such that the proportion of the voting rights or of the capital held would reach or exceed the thresholds referred to in Article 22(1) or the credit institution would become the subsidiary of the acquirer, without notifying in writing the competent authorities of the credit institution in relation to which the acquirer seeks to acquire or increase the qualifying holding, during the assessment period, or against the opposition of the competent authorities, in breach of that Article;

Added(d) a qualifying holding in a credit institution is disposed of, directly or indirectly or reduced as a result of which the proportion of the voting rights or of the capital held would fall below the thresholds referred to in Article 25 or the credit institution would cease to be a subsidiary of the acquirer, without notifying in writing the competent authorities in breach of that Article ;

Added(e) a financial holding company or mixed financial holding company as defined in article 21a(1) fail to apply for approval in breach of Article 21a or breaches any other requirement set out in that Article;

Added(f) an acquirer as defined in Article 27a(1) acquires directly or indirectly, a material holding ▌, or increases an already held material holding, such that the holding by the acquirer in the institution would exceed 15% of the acquirer’s eligible capital without the acquirer’s notifying the competent authorities in breach of that Article;

Added(g) any of the parties referred to in Article 27d of this Directive disposes directly or indirectly of a material holding that exceeds the threshold referred to in Article 27d of this Directive without notifying the competent authorities in breach of that Article▌;

Added(h) any of the parties referred to in Article 27f(1) executes a material transfer of assets and liabilities without notifying the competent authorities in breach of that Article;

Added(i) any of the parties referred to in Article 27k(l) engages in a process of merger or division in breach of that Article.

Added2. Member States shall ensure that in the cases referred to in paragraph 1, the measures that can be applied include the following:

Added(a) administrative penalties:

Added(i) in the case of a legal person, administrative pecuniary penalties of up to 10 % of the total annual net turnover of the undertaking;

Added(ii) in the case of a natural person, administrative pecuniary penalties of up to EUR 5 000 000, or in the Member States whose currency is not the euro, the corresponding value in the national currency on 17 July 2013;

Added(iii) administrative pecuniary penalties of up to twice the profits gained or losses avoided because of the breach where those can be determined;

Added(b) periodic penalty payments:

Added(i) in the case of a legal person, periodic penalty payments of up to 5 % of the average daily turnover which, in the case of an ongoing breach, the legal person shall be obliged to pay per day of infringement until compliance with an obligation is restored. The periodic penalty payment may be imposed for a period of up to six months from the date stipulated in the decision requiring the termination of a breach and imposing the periodic penalty payment;

Added(ii) in the case of a natural person, periodic penalty payments of up to EUR 500 000 which, in the case of an ongoing breach, the natural person shall be obliged to pay per week of infringement until compliance with an obligation is restored, and which may be imposed for a period up to six months from the date stipulated in the decision requiring the termination of a breach and imposing the periodic penalty payment;

Added(c) other administrative measures:

Added(i) a public statement which identifies the natural person, institution, financial holding company or mixed financial holding company, intermediate parent undertaking responsible and the nature of the breach;

Added(ii) an order requiring the natural or legal person responsible to cease the conduct and to desist from a repetition of that conduct;

Added(iii) suspension of the voting rights of the shareholder or shareholders held responsible for the breaches referred to in paragraph 1;

Added(iv) subject to Article 65(2), a temporary ▌ ban of a member of the institution's management body or any other natural person who is held responsible for the infringement from exercising functions in the institution.

Added3. The total annual net turnover referred to in paragraph 2, points (a)(i) and (b)(i), of this Article shall be equal to the business indicator set out in Article 314 of Regulation (EU) No 575/2013. For the purposes of this Article, the business indicator shall be calculated on the basis of the most recent available yearly supervisory financial information, unless the result is zero or negative. If the result is zero or negative, the basis for the calculation shall be the most recent earlier yearly supervisory financial information which produces an indicator above zero. Where the undertaking concerned is part of a group the relevant total annual net turnover shall be the total annual net turnover resulting from the consolidated account of the ultimate parent undertaking.

Added4. The average daily turnover referred to in paragraph (2), point (b)(i), shall be the total annual net turnover referred to in paragraph 3 divided by 365.’;

Added(10) Article 67 is amended as follows:

Added(a) paragraph 1 is amended as follows:

Added(i) points (d) and (e) are replaced by the following:

Added‘(d) an institution fails to have in place governance arrangements and gender neutral remuneration policies required by the competent authorities in accordance with Article 74;

Added(e) an institution fails to report information or provides incomplete or inaccurate information regarding compliance with the obligation to meet own funds requirements set out in Article 92 of Regulation (EU) No 575/2013 to the competent authorities in breach of Article 430(1) of that Regulation;’;

Added(ii) point (j) is replaced by the following:

Added‘(j) an institution fails to maintain a net stable funding ratio in breach of Article 413 or 428b of Regulation (EU) No 575/2013 or repeatedly and persistently fails to hold liquid assets in breach of Article 412 of that Regulation;’;

Added(iii) the following points (r) to (ab) are added:

Added‘(r) an institution fails to meet the own fund requirements set out in Article 92(1) of Regulation (EU) No 575/2013;

Added(s) an institution or a natural person fails to comply with an obligation arising from a decision issued by the competent authority or an obligation arising from national provisions transposing Directive 2013/36/EU or from Regulation (EU) No 575/2013;

Added(t) an institution that fails to comply with the remuneration requirements in accordance with Articles 92, 94 and 95 of this Directive;

Added(u) an institution acts without the prior permission of the competent authority where national provisions transposing Directive 2013/36/EU or Regulation (EU) No 575/2013 require the institution to obtain such prior permission or obtained such permission on the basis of its own false statement or does not comply with the conditions under which such permission was granted;

Added(v) an institution fails to meet the requirements in relation to composition, conditions, adjustments and deductions related to own funds as set out in Part Two of Regulation (EU) No 575/2013;

Added(w) an institution fails to meet the requirements in relation to its large exposures to a client or group of connected clients set out in Part Four of Regulation (EU) No 575/2013;

Added(x) an institution fails to meet the requirements in relation to the calculation of the leverage ratio, including the application of derogations set out in Part Seven of Regulation (EU) No 575/2013;

Added(y) an institution fails to report information or provides incomplete or inaccurate information to the competent authorities in relation to the data referred to in Articles 430(1), (2) and (3) and in Articles430a and 430b of Regulation (EU) No 575/2013;

Added(z) an institution fails to comply with the data collection and governance requirements set out in Part Three, Title III, Chapter 2 of Regulation (EU) No 575/2013.

Added(aa) an institution fails to meet the requirements in relation to the calculation of the risk-weighted exposure amounts or own funds requirements or fails to have in place the governance arrangements set out in Part Three, Title II to VI of Regulation (EU) No 575/2013;

Added(ab) an institution fails to meet the requirements in relation to the calculation of the liquidity coverage ratio or the net stable funding ratio as set out in Part Six, Title I and Title IV of Regulation (EU) No 575/2013 and the delegated act referred to in Article 460(1) of that Regulation.’;

Added(b) paragraph 2 is replaced by the following:

Added‘2. Member States shall ensure that in the cases referred to in paragraph 1, the measures than can be applied include at least the following:

Added(a) administrative penalties:

Added(i) in the case of a legal person, administrative pecuniary penalties of up to 10 % of the total annual net turnover of the undertaking;

Added(ii) in the case of a natural person, administrative pecuniary penalties of up to EUR 5 000 000, or in the Member States whose currency is not the euro, the corresponding value in the national currency on 17 July 2013;

Added(iii) administrative pecuniary penalties of up to twice the profits gained or losses avoided because of the breach where those can be determined;

Added(b) periodic penalty payments:

Added(i) in the case of a legal person, periodic penalty payments of up to 5 % of the average daily turnover which, in the case of an ongoing infringement, the legal person shall be obliged to pay per day of infringement until compliance with an obligation is restored. The periodic penalty payment may be imposed for a period of up to six months from the date stipulated in the decision requiring the termination of a breach and imposing the periodic penalty payment. The average daily turnover referred to in this paragraph shall be the total annual net turnover divided by 365.

Added(ii) in the case of a natural person, periodic penalty payments of up to EUR 500 000 which, in the case of an ongoing infringement, the natural person shall be obliged to pay per day of infringement until compliance with an obligation is restored, and which may be imposed for a period up to six months from the date stipulated in the decision requiring the termination of a breach and imposing the periodic penalty payment;

Added(c) other administrative measures:

Added(i) a public statement which identifies the natural person, institution, financial holding company or mixed financial holding company, intermediate parent undertaking responsible and the nature of the breach;

Added(ii) an order requiring the natural or legal person responsible to cease the conduct and to desist from a repetition of that conduct;

Added(iii) in the case of an institution, withdrawal of the authorisation of the institution in accordance with Article 18;

Added(iv) subject to Article 65(2), a temporary ▌ ban of a member of the institution's management body or any other natural person who is held responsible for the infringement from exercising functions in the institution;