5.VII.1.2.4.4 Sanctions for infringements (proposal 4)

MiFID II does currently require neither NCAs nor ESMA to impose sanctions for the infringements of the obligations under the double volume cap mechanism (i.e. not carry through with the required suspension of the waiver). ESMA observes that currently a sanction framework for double volume cap mechanism infringements is in place in almost all jurisdictions. ESMA proposes to harmonise the sanction framework. The rationale here is to ensure convergance (a level playing field) across countries in the area of sanctions for infringements of the double volume cap.1 Almost half of respondents to the consultation agreed with the ESMA view. Only few respondents believed that the NCAs are better placed to take action in a pragmatic way according to the situation. Based on the support to the proposal, ESMA proposes to include the infringement of the double volume cap suspensions in the MiFID II text. The ESMA proposal also takes into account concerns expressed about different practices across the individual jurisdictions. ESMA proposes to insert a degree of flexibility in the harmonized approach for infringements of the double volume cap by deciding which sanction to apply and in which cases.2