Penalties for violations of SFDR regulations
- The competent authority for monitoring compliance by financial market participants and financial advisors with SFDR requirements is the Financial Supervision Commission.
- The Financial Supervisory Commission has been granted the supervisory powers necessary to perform the functions of the competent authority under the SFDR. These include, among others, the power to order a financial market participant to cease actions resulting in violations and not to undertake such actions in the future, to apply to the competent authority of a financial market participant for the dismissal of a member of the board of directors responsible for the violation, prohibiting the person responsible for the violation from performing the function of a member of the management board or managerial functions in entities that are financial market participants for a period of not less than one month and not more than one year, or imposing on a financial market participant or on a member of the management board of a financial market participant an administrative fine of up to PLN 21,569,000 or 3% of net revenues from the sale of goods and services and financial operations, and with respect to insurance companies – 3% of gross premiums written or three times the amount of benefits gained or losses avoided as a result of the violation (if it is possible to determine them). Analogous supervisory powers of the Financial Supervision Commission have been provided for financial advisors, in case they violate selected provisions of the SFDR.
- Violations of financial product disclosure obligations under the SFDR may involve, among other things, the Financial Supervisory Commission banning a financial product, issuing a public warning indicating the person responsible for the violation of the law and the nature of the violation, or imposing an administrative fine on a financial market participant.