European financial regulators handed out more than 970 administrative sanctions and penalties in 2023, collecting over €71 million in fines from firms that violated securities rules, according to the first consolidated enforcement report published by the European Securities and Markets Authority (ESMA).

EU Financial Regulators Imposed 970+ Sanctions Worth €71 Million in 2024

The data covers enforcement actions taken by national regulators across all 27 EU member states plus Iceland, Liechtenstein and Norway. ESMA compiled the figures to provide a clearer picture of how European authorities police their financial markets.

Market abuse cases and violations of investment services rules drew the steepest penalties. Regulators imposed the largest fines under the Market Abuse Regulation and the revised Markets in Financial Instruments Directive, known as MiFID II, which governs how investment firms operate and treat clients.

ESMA shows significant variation in how different countries approach enforcement. Some jurisdictions rely heavily on administrative fines, while others prefer alternative measures like public warnings or orders to change business practices.

"The report highlighted the need for greater convergence in sanctioning by NCAs," ESMA noted in its annual review, referring to national competent authorities that supervise financial firms in each country.

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For example, the Cypriot regulator, CySEC, conducted more than 850 audits, imposed fines totaling €2.76 million, and withdrew several operating licenses. With new European Union regulations coming into force, the authority is intensifying its focus on compliance to support investor protection and maintain financial system stability.

ESMA’s Own Actions

Beyond the statistical overview, ESMA took direct enforcement action of its own last year. In March, the authority sanctioned Scope Ratings GmbH for multiple breaches of conflict-of-interest rules that apply to credit rating agencies. The case involved what ESMA described as "structural failures and specific breaches" of requirements designed to keep rating agencies independent from the companies they evaluate.

ESMA also withdrew the registration of EuroRating in June after the credit rating agency voluntarily renounced its authorization. Additionally, the authority withdrew authorization from an unnamed data reporting service provider under MiFIR after the entity requested the withdrawal.

The highest financial penalties were issued under the Market Abuse Regulation (MAR) and the Markets in Financial Instruments Directive II (MiFID II). These regulations, central to maintaining transparency and investor confidence in EU financial markets, accounted for the bulk of enforcement actions recorded over the past year.

The enforcement data represents the first time European regulators have published a comprehensive view of sanctions across the continent's fragmented regulatory landscape. Previously, enforcement statistics were scattered across individual national reports, making it difficult to assess the overall level of regulatory activity.

Source: Finance Magnates