Competent authorities
1. Each Member State shall designate a single competent administrative authority responsible for carrying out the duties resulting from this Regulation and for ensuring that the provisions of this Regulation are applied. Member States shall inform the Commission, ESMA and the competent authorities of other Member States accordingly.
The competent authority shall be independent from market participants.
2. Member States may allow their competent authority to delegate to third parties the tasks of electronic publication of approved prospectuses and related documents.
Any such delegation of tasks shall be made in a specific decision setting out the following:
(a)
the tasks to be undertaken and the conditions under which they are to be carried out;
(b)
a clause obliging the third party in question to act and be organised in such a manner as to avoid conflicts of interest and to ensure that information obtained while carrying out the delegated tasks is not used unfairly or to prevent competition; and
(c)
all arrangements entered into between the competent authority and the third party to which tasks are delegated.
The final responsibility for supervising compliance with this Regulation and for approving the prospectus shall lie with the competent authority designated in accordance with paragraph 1.
The Member States shall inform the Commission, ESMA and the competent authorities of other Member States of any decision to delegate tasks as referred to in the second subparagraph, including the precise conditions regulating such delegation.
3. Paragraphs 1 and 2 are without prejudice to the possibility for a Member State to make separate legal and administrative arrangements for overseas European territories for whose external relations that Member State is responsible.
Powers of competent authorities
1. In order to fulfil their duties under this Regulation, competent authorities shall have, in accordance with national law, at least the following supervisory and investigatory powers:
(a)
to require issuers, offerors or persons asking for admission to trading on a regulated market to include in the prospectus supplementary information, where necessary for investor protection;
(b)
to require issuers, offerors or persons asking for admission to trading on a regulated market, and the persons that control them or are controlled by them, to provide information and documents;
(c)
to require auditors and managers of the issuer, offeror or person asking for admission to trading on a regulated market, as well as financial intermediaries commissioned to carry out the offer of securities to the public or ask for admission to trading on a regulated market, to provide information;
(d)
to suspend an offer of securities to the public or admission to trading on a regulated market for a maximum of 10 consecutive working days on any single occasion where there are reasonable grounds for suspecting that this Regulation has been infringed;
(e)
to prohibit or suspend advertisements or require issuers, offerors or persons asking for admission to trading on a regulated market, or relevant financial intermediaries to cease or suspend advertisements for a maximum of 10 consecutive working days on any single occasion where there are reasonable grounds for believing that this Regulation has been infringed;
(f)
to prohibit an offer of securities to the public or admission to trading on a regulated market where they find that this Regulation has been infringed or where there are reasonable grounds for suspecting that it would be infringed;
(g)
to suspend or require the relevant regulated markets, MTFs or OTFs to suspend trading on a regulated market, an MTF or an OTF for a maximum of 10 consecutive working days on any single occasion where there are reasonable grounds for believing that this Regulation has been infringed;
(h)
to prohibit trading on a regulated market, an MTF or an OTF where they find that this Regulation has been infringed;
(i)
to make public the fact that an issuer, an offeror or a person asking for admission to trading on a regulated market is failing to comply with its obligations;
(j)
to suspend the scrutiny of a prospectus submitted for approval or suspend or restrict an offer of securities to the public or admission to trading on a regulated market where the competent authority is making use of the power to impose a prohibition or restriction pursuant to Article 42 of Regulation (EU) No 600/2014 of the European Parliament and of the Council ( 26 ) , until such prohibition or restriction has ceased;
(k)
to refuse approval of any prospectus drawn up by a certain issuer, offeror or person asking for admission to trading on a regulated market for a maximum of five years, where that issuer, offeror or person asking for admission to trading on a regulated market has repeatedly and severely infringed this Regulation;
(l)
to disclose, or to require the issuer to disclose, all material information which may have an effect on the assessment of the securities offered to the public or admitted to trading on a regulated market in order to ensure investor protection or the smooth operation of the market;
(m)
to suspend or require the relevant regulated market, MTF or OTF to suspend the securities from trading where it considers that the issuer’s situation is such that trading would be detrimental to investors’ interests;
(n)
to carry out on-site inspections or investigations at sites other than the private residences of natural persons, and for that purpose to enter premises in order to access documents and other data in any form, where a reasonable suspicion exists that documents and other data related to the subject-matter of the inspection or investigation may be relevant to prove an infringement of this Regulation.
Where necessary under national law, the competent authority may ask the relevant judicial authority to decide on the use of the powers referred to in the first subparagraph.
In the event that approval of a prospectus has been refused pursuant to point (k) of the first subparagraph, the competent authority shall inform ESMA thereof, which shall then inform the competent authorities of other Member States.
In accordance with Article 21 of Regulation (EU) No 1095/2010, ESMA shall be entitled to participate in on-site inspections referred to in point (n) of the first subparagraph where those inspections are carried out jointly by two or more competent authorities.
2. Competent authorities shall exercise their functions and powers referred to in paragraph 1 in any of the following ways:
(a)
directly;
(b)
in collaboration with other authorities;
(c)
under their responsibility by delegation to such authorities;
(d)
by application to the competent judicial authorities.
3. Member States shall ensure that appropriate measures are in place so that competent authorities have all the supervisory and investigatory powers that are necessary to fulfil their duties.
4. This Regulation is without prejudice to laws and regulations on takeover bids, merger transactions and other transactions affecting the ownership or control of companies that transpose Directive 2004/25/EC and that impose requirements in addition to the requirements of this Regulation.
5. A person making information available to the competent authority in accordance with this Regulation shall not be considered to be infringing any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision, and shall not be subject to liability of any kind related to such notification.
6. Paragraphs 1 to 3 are without prejudice to the possibility for a Member State to make separate legal and administrative arrangements for overseas European territories for whose external relations that Member State is responsible.
Cooperation between competent authorities
1. Competent authorities shall cooperate with each other and with ESMA for the purposes of this Regulation. They shall exchange information without undue delay and cooperate in investigation, supervision and enforcement activities.
Where Member States have chosen, in accordance with Article 38, to lay down criminal sanctions for infringements of this Regulation, they shall ensure that appropriate measures are in place so that competent authorities have all the necessary powers to liaise with judicial authorities within their jurisdiction to receive specific information related to criminal investigations or proceedings commenced for possible infringements of this Regulation and provide the same to other competent authorities and ESMA to fulfil their obligation to cooperate with each other and ESMA for the purposes of this Regulation.
2. A competent authority may refuse to act on a request for information or a request to cooperate with an investigation only in any of the following exceptional circumstances:
(a)
where complying with the request is likely to adversely affect its own investigation, enforcement activities or a criminal investigation;
(b)
where judicial proceedings have already been initiated in respect of the same actions and against the same persons before the authorities of the Member State addressed;
(c)
where a final judgment has already been delivered in relation to such persons for the same actions in the Member State addressed.
3. Competent authorities shall, on request, immediately supply any information required for the purposes of this Regulation.
4. The competent authority may request assistance from the competent authority of another Member State with regard to on-site inspections or investigations.
A requesting competent authority shall inform ESMA of any request referred to in the first subparagraph. In the case of an on-site inspection or investigation with cross-border effect, ESMA shall, where requested to do so by one of the competent authorities, coordinate the inspection or investigation.
Where a competent authority receives a request from a competent authority of another Member State to carry out an on-site inspection or an investigation, it may do any of the following:
(a)
carry out the on-site inspection or investigation itself;
(b)
allow the competent authority which submitted the request to participate in an on-site inspection or investigation;
(c)
allow the competent authority which submitted the request to carry out the on-site inspection or investigation itself;
(d)
appoint auditors or experts to carry out the on-site inspection or investigation;
(e)
share specific tasks related to supervisory activities with the other competent authorities.
5. The competent authorities may refer to ESMA situations where a request for cooperation, in particular to exchange information, has been rejected or has not been acted upon within a reasonable time. Without prejudice to Article 258 TFEU, ESMA may, in the situations referred to in the first sentence of this paragraph, act in accordance with the power conferred on it under Article 19 of Regulation (EU) No 1095/2010.
6. ESMA may, or where the Commission so requests shall, develop draft regulatory technical standards to specify the information to be exchanged between competent authorities in accordance with paragraph 1.
Power is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.
7. ESMA may develop draft implementing technical standards to establish standard forms, templates and procedures for the cooperation and exchange of information between competent authorities.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Cooperation with ESMA
1. The competent authorities shall cooperate with ESMA for the purposes of this Regulation, in accordance with Regulation (EU) No 1095/2010.
2. The competent authorities shall without delay provide ESMA with all information necessary to carry out its duties, in accordance with Article 35 of Regulation (EU) No 1095/2010.
3. In order to ensure uniform conditions of application of this Article, ESMA may develop draft implementing technical standards to determine the procedures and forms for exchange of information as referred to in paragraph 2.
Power is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1095/2010.
Professional secrecy
1. All information exchanged between the competent authorities under this Regulation that concerns business or operational conditions and other economic or personal affairs shall be considered to be confidential and shall be subject to the requirements of professional secrecy, except where the competent authority states at the time of communication that such information may be disclosed or such disclosure is necessary for legal proceedings.
2. The obligation of professional secrecy shall apply to all persons who work or who have worked for the competent authority or for any third party to whom the competent authority has delegated its powers. Information covered by professional secrecy may not be disclosed to any other person or authority except by virtue of provisions laid down by Union or national law.
Data protection
With regard to the processing of personal data within the framework of this Regulation, competent authorities shall carry out their tasks for the purposes of this Regulation in accordance with Regulation (EU) 2016/679.
With regard to the processing of personal data by ESMA within the framework of this Regulation, it shall comply with Regulation (EC) No 45/2001.
Precautionary measures
1. Where the competent authority of the host Member State has clear and demonstrable grounds for believing that irregularities have been committed by the issuer, the offeror or the person asking for admission to trading on a regulated market or by the financial intermediaries in charge of the offer of securities to the public or that those persons have infringed their obligations under this Regulation, it shall refer those findings to the competent authority of the home Member State and to ESMA.
2. Where, despite the measures taken by the competent authority of the home Member State, the issuer, the offeror or the person asking for admission to trading on a regulated market or the financial intermediaries in charge of the offer of securities to the public persists in infringing this Regulation, the competent authority of the host Member State, after informing the competent authority of the home Member State and ESMA, shall take all appropriate measures in order to protect investors and shall inform the Commission and ESMA thereof without undue delay.
3. Where a competent authority disagrees with any of the measures taken by another competent authority pursuant to paragraph 2, it may bring the matter to the attention of ESMA. ESMA may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
