Regulatory offence provisions

(1) A person acts in a regulatory-offence manner who 1. without approval under section 12(1), first sentence, including in conjunction with the second sentence, in each case also in conjunction with section 212(3), point 4, or section 237(1), first sentence, puts into effect a change, an extension, or an intercompany agreement named there, or its amendment, rescission, termination, or ending, or extends the business operations of a reinsurance undertaking, 2. contravenes an enforceable order under a) section 43a(1), section 44, first sentence, section 293(2), or section 306(1), first sentence, point 4 or point 5, or b) section 303(2), point 2 or point 3, 2a. grants or promises special remuneration contrary to section 48b(1), first or second sentence, 2b. fails to arrange for the payment of a benefit, or fails to do so completely or in time, contrary to section 48c(1), first sentence, 3. fails to allocate an asset to the tied assets, or fails to do so correctly or in time, contrary to section 125(1), second sentence, 4. fails to ensure that the holdings of the tied assets are individually entered in a schedule of assets, contrary to section 126(1), first sentence, 5. withdraws an amount from the tied assets contrary to section 130(1), 6. fails to give a notification, or fails to give it correctly, completely, or in time, contrary to section 134(1), 7. is simultaneously active for an insurance undertaking contrary to section 164(3), third sentence, 8. exercises a comparable activity for an insurance undertaking contrary to section 164(3), third sentence, 9. invests tied assets contrary to a) section 215(2), first sentence, including in conjunction with a statutory instrument under section 217, first sentence, point 6, or b) section 234j(1), first sentence, including in conjunction with a statutory instrument under section 235(1), point 10, 10. fails to ensure that the holdings of the tied assets are invested in the manner named there, contrary to section 239(1), second sentence, or 11. contravenes a statutory instrument under section 240, first sentence, point 8, first half-sentence, or an enforceable order based on such a statutory instrument, insofar as the statutory instrument refers to this regulatory-offence provision for a specific set of facts.
(2) A person acts in a regulatory-offence manner who, intentionally or recklessly, 1. fails to submit a document named in section 37(1) or section 227(2), first sentence, or fails to submit it in time, 2. contravenes a statutory instrument under section 39(1), first sentence, including in conjunction with section 68(1), fourth sentence, or an enforceable order based on such a statutory instrument, insofar as the statutory instrument refers to this regulatory-offence provision for a specific set of facts, 3. fails to make a publication, or fails to make it correctly, completely, or in time, contrary to section 40(1), first sentence, or 4. contravenes a statutory instrument under section 43a(2), first or second sentence, or an enforceable order based on such a statutory instrument, insofar as the statutory instrument refers to this regulatory-offence provision for a specific set of facts.
(3) A person acts in a regulatory-offence manner who, intentionally or negligently, 1. fails to make a notification, or fails to make it correctly, completely, in the prescribed manner, or in time, contrary to section 17(1) or (2), section 36(1), first sentence, or section 59(1), including in conjunction with (4), 1a. acquires or increases a significant participation within the assessment period, contrary to section 18(3), third sentence, 2. contravenes an enforceable order under a) section 18(1), (2), first half-sentence, (2a), or (3), fourth sentence, section 19(1), section 133(1), section 134(7), first half-sentence, section 135(3), first half-sentence, or section 306a(1), including in conjunction with section 306a(6), or b) section 305(1), including in conjunction with (2), section 308(4), point 1, including in conjunction with section 62(1), point 6, or section 314(1), first or second sentence, 3. cooperates with an insurance intermediary contrary to section 48(1) or (2), second sentence, 3a. directs information to policyholders or potential policyholders contrary to section 1a(3) of the Insurance Contract Act, 3b. in brokering an insurance-based investment product within the meaning of Article 2(1), point 17, of Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (recast) (OJ L 26, 2.2.2016, p. 19; L 222, 17.8.2016, p. 114), a) fails to make appropriate information available in good time before conclusion of the contract, contrary to section 7b(1), first sentence, of the Insurance Contract Act, b) fails to request information, or fails to do so correctly, completely, or in time, contrary to section 7c(1), first sentence, of the Insurance Contract Act, c) recommends an insurance-based investment product contrary to section 7c(1), second sentence, of the Insurance Contract Act, or d) fails to provide a statement before conclusion of the contract, contrary to section 7c(5), third sentence, of the Insurance Contract Act, 3c. fails to create a record contrary to section 7c(4), first sentence, of the Insurance Contract Act, 4. fails to give a notification, or fails to give it correctly, completely, or in time, contrary to section 135(1), 5. contravenes a statutory instrument under section 160, first sentence, or an enforceable order based on such a statutory instrument, insofar as the statutory instrument refers to this regulatory-offence provision for a specific set of facts, 6. fails to tolerate a measure contrary to section 306(7), first sentence, or section 306a(5), or 7. contravenes an enforceable order under section 308b, first sentence.
(4) A person acts in a regulatory-offence manner who, as a person acting for an undertaking subject to supervision under this Act, breaches Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (OJ L 302, 17.11.2009, p. 1), as last amended by Directive 2014/51/EU (OJ L 153, 22.5.2014, p. 1), by, intentionally or recklessly, 1. using a rating contrary to Article 4(1), first subparagraph, 2. failing to ensure that an undertaking subject to supervision under this Act carries out its own credit risk assessments, contrary to Article 5a(1), 3. failing to issue a mandate correctly, contrary to Article 8c(1), 4. failing to ensure that a mandated rating agency satisfies a condition named there, contrary to Article 8c(2), or 5. failing to carry out the documentation named there correctly, contrary to Article 8d(1), second sentence.
(4a) A person acts in a regulatory-offence manner who, as a member of an audit committee of a mutual insurance association established under section 189(3), first sentence, in conjunction with section 107(4), first sentence, of the Stock Corporation Act, which is an undertaking of public interest under section 316a, second sentence, point 3, of the Commercial Code, 1. fails to monitor the independence of the statutory auditor or the audit firm in accordance with Article 4(3), second subparagraph, Article 5(4), first subparagraph, first sentence, or Article 6(2) of Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC (OJ L 158, 27.5.2014, p. 77, L 170, 11.6.2014, p. 66), or 2. submits to the supervisory board a recommendation for the appointment of a statutory auditor or an audit firm that does not satisfy the requirements of Article 16(2), second or third subparagraph, of Regulation (EU) No 537/2014, or that was not preceded by a selection procedure under Article 16(3), first subparagraph, of Regulation (EU) No 537/2014.
(4b) A person acts in a regulatory-offence manner who, as a member of the supervisory board within the meaning of section 189 of a mutual insurance association that is an undertaking of public interest under section 316a, second sentence, point 3, of the Commercial Code, submits to the highest representative body a proposal for the appointment of a statutory auditor or an audit firm that does not satisfy the requirements of Article 16(5), first subparagraph, or second subparagraph, first or second sentence, of Regulation (EU) No 537/2014.
(4c) (repealed)
(4d) A person acts in a regulatory-offence manner who breaches Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) (OJ L 352, 9.12.2014, p. 1, L 358, 13.12.2014, p. 50), by, intentionally or recklessly, 1. failing to draw up or publish a key information document, or failing to do so correctly, completely, in time, or in the prescribed manner, contrary to a) Article 5(1), b) Article 5(1) in conjunction with Article 6, c) Article 5(1) in conjunction with Article 7(2), d) Article 5(1) in conjunction with Article 8(1) to (3), 2. failing to draw up or translate a key information document in the prescribed manner, contrary to Article 5(1) in conjunction with Article 7(1), 3. failing to review a key information document, or failing to do so in time, contrary to Article 10(1), first sentence, 4. failing to revise a key information document, or failing to do so completely, contrary to Article 10(1), first sentence, 5. failing to make a key information document available, or failing to do so in time, contrary to Article 10(1), second sentence, 6. making statements in marketing materials that contradict the information in the key information document, or that diminish its significance, contrary to Article 9, first sentence, 7. failing to include the necessary notices in marketing materials, or failing to do so correctly or completely, contrary to Article 9, second sentence, 8. failing to make a key information document available, or failing to do so in time or in the prescribed manner, contrary to Article 13(1), (3), and (4), or Article 14, 9. failing to provide suitable procedures and arrangements, or failing to do so correctly or in the prescribed manner, for the submission and handling of complaints, contrary to Article 19(a) and (b), or 10. failing to provide suitable procedures and arrangements, or failing to do so correctly or in the prescribed manner, ensuring that retail investors have effective complaints procedures available to them in the event of cross-border disputes, contrary to Article 19(c).
(4e) A person acts in a regulatory-offence manner who breaches Regulation (EU) 2015/2365 of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions and of reuse and amending Regulation (EU) No 648/2012 (OJ L 337, 23.12.2015, p. 1), by, intentionally or recklessly, 1. failing to make a notification, or failing to make it correctly, completely, in the prescribed manner, or in time, contrary to Article 4(1), 2. failing to retain records, or failing to do so completely or for at least the prescribed period, contrary to Article 4(4), 3. reusing financial instruments without the conditions named there being satisfied, contrary to Article 15(1), or 4. exercising a right of reuse without the conditions named there being satisfied, contrary to Article 15(2).
(4f) A person acts in a regulatory-offence manner who, intentionally or recklessly, 1. fails to establish the identity of a beneficiary who differs from the policyholder, or fails to do so correctly, contrary to section 54(1), first sentence, 2. fails to obtain sufficient information on beneficiaries who differ from policyholders, contrary to section 54(1), second sentence, 3. fails to identify the beneficial owner, contrary to section 54(1), third sentence, 4. fails to ascertain whether a beneficiary who differs from the policyholder, and, where applicable, that beneficiary's beneficial owner, is a politically exposed person, a family member of such a person, or a person known to be closely associated with such a person, contrary to section 54(2), first sentence, in conjunction with section 10(1), point 4, of the Money Laundering Act, 5. fails to establish the identity of the third party and that of his or her beneficial owner, contrary to section 54(2), second sentence, 6. fails to verify the identity, or fails to do so in time, contrary to section 54(2), third sentence, 7. fails to inform a member of senior management before a payout, contrary to section 55, point 1.
(4g) A person acts in a regulatory-offence manner who breaches Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171, 29.6.2016, p. 1; L 306, 15.11.2016, p. 43), by, intentionally or recklessly, 1. failing, as a supervised contributor, to satisfy the requirements on governance and control named there, contrary to Article 16(1), 2. failing, as a supervised contributor, to have effective systems, controls, and strategies to safeguard the integrity and reliability of all contributions of input data or expert judgements under paragraph 3 for the administrator, contrary to Article 16(2) or (3), 3. failing, as a supervised contributor, to retain records, or failing to do so correctly, completely, or for the prescribed period, contrary to Article 16(3), first sentence, 4. failing, as a supervised contributor, to make information or records available, or failing to do so correctly or completely, or failing to cooperate fully with the administrator and the supervisory authority, in the review and supervision of the provision of a benchmark, contrary to Article 16(4), 5. failing, as a supervised contributor, to notify the administrator, or failing to do so correctly, in the prescribed manner, or in time, contrary to Article 23(3), first sentence, 6. contravening an issued and enforceable order of the supervisory authority, as contributor under Article 23(5), as supervised entity under Article 23(6), or as supervised contributor under Article 23(10), 7. failing, as a supervised entity, to draw up a plan satisfying the requirements named there, or failing to do so correctly, completely, or in the prescribed manner, failing to update it, failing to submit it to the supervisory authority, or failing to do so completely or in time, or failing to be guided by it, contrary to Article 28(2), 8. using, as a supervised entity, a benchmark that does not satisfy the requirements named there, contrary to Article 29(1), or 9. failing to ensure that a prospectus contains the information named there, contrary to Article 29(2).
(4h) A person acts in a regulatory-offence manner who, within the scope of this Act, selects assets contrary to Article 6(2), first sentence, of Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012 (OJ L 347, 28.12.2017, p. 35).
(4i) A person acts in a regulatory-offence manner who, within the scope of this Act, breaches Regulation (EU) 2017/2402 by, intentionally or negligently, 1. failing to retain a share named there, contrary to Article 6(1), first sentence, 2. failing to make information available, or failing to do so correctly, completely, in the prescribed manner, or in time, contrary to Article 7(1), first to fourth or fifth subparagraph, 3. applying another criterion or procedure, contrary to Article 9(1), first or second sentence, 4. using a designation named there, contrary to Article 18, first sentence, or 5. failing to inform the European Securities and Markets Authority, or failing to do so correctly, completely, or in time, or failing to notify the supervisory authority, or failing to do so correctly, completely, or in time, contrary to Article 27(4).
(4j) A person acts in a regulatory-offence manner who, within the scope of this Act, intentionally or negligently, 1. fails to ensure that it has an effective system under Article 9(1), third sentence, of Regulation (EU) 2017/2402, 2. securitises an exposure named in Article 9(3) of Regulation (EU) 2017/2402 without having carried out a review named there, or 3. makes a notification under Article 27(1), first, second, or third subparagraph, second sentence, of Regulation (EU) 2017/2402 with misleading content.
(4k) A person acts in a regulatory-offence manner who breaches Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (OJ L 317, 9.12.2019, p. 1), as amended by Regulation (EU) 2020/852 (OJ L 198, 22.6.2020, p. 13), by, intentionally or recklessly, 1. failing to ensure that the information named in Article 4(1) in conjunction with (2) or (3), Article 5(1), or Article 10(1), first subparagraph, each also in conjunction with Article 15(1), is published or kept up to date, or 2. failing to disclose information, or failing to do so correctly, completely, in the prescribed manner, or before conclusion of the contract, contrary to Article 6(3) in conjunction with Article 6(1) in conjunction with a) Article 7(1), first subparagraph, or (2), each also in conjunction with Article 15(1), b) Article 8(1), including in conjunction with Article 6, first subparagraph, in conjunction with Article 5 of Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13), c) Article 8(2) or (2a) or Article 9(4) or (4a), d) Article 9(1), (2), or (3), each in conjunction with Article 5 of Regulation (EU) 2020/852, or e) Article 6, second subparagraph, or Article 7 of Regulation (EU) 2020/852.
(4l) Breaches of Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on a pan-European Personal Pension Product (PEPP) (OJ L 198, 25.7.2019, p. 1) by persons within the scope of this Act may be sanctioned under section 120a of the Securities Trading Act.
(4m) Breaches of Regulation (EU) 2022/2554 of the European Parliament and of the Council of 14 December 2022 on digital operational resilience for the financial sector and amending Regulations (EC) No 1060/2009, (EU) No 648/2012, (EU) No 600/2014, (EU) No 909/2014 and (EU) 2016/1011 (OJ L 333, 27.12.2022, p. 1) by persons within the scope of this Act may be sanctioned under section 56(5e) and (6), points 1 and 2, of the Banking Act.
(5) The regulatory offence may be punished, in the cases of subsections (4e) and (4h) to (4k), with a fine of up to five million euros, in the cases of subsection (4d), with a fine of up to seven hundred thousand euros, in the cases of subsection (1), point 2, letter b, subsection (2), point 3, subsection (3), points 3, 3a, 3b, and 3c, subsections (4a) and (4b), and (4g), with a fine of up to five hundred thousand euros, in the cases of subsection (2), point 2, subsection (3), point 2, letter a, subsections (4) and (4f), with a fine of up to two hundred thousand euros, in the cases of subsection (3), point 7, with a fine of up to one hundred thousand euros, and in the remaining cases, with a fine of up to fifty thousand euros. In the cases of subsection (3), point 3, a higher fine of up to five million euros may be imposed on a legal person or association of persons, in addition to the first sentence.
(6) A higher fine may be imposed on a legal person or an association of persons in the cases of subsection (4d), in addition to subsection (5); this may not exceed the higher of the amounts of five million euros or 3 percent of the total turnover that the legal person or the association of persons achieved in the business year preceding the authority's decision.
(6a) A higher fine may be imposed on a legal person or association of persons in the cases of subsections (4e), (4h), (4i), and (4j), in addition to subsection (5); this may not exceed 1. in the cases of subsection (4e), points 1 and 2, and subsections (4h), (4i), and (4j), the higher of the amounts of five million euros and 10 percent of the total turnover that the legal person or association of persons achieved in the business year preceding the authority's decision, 2. in the cases of subsection (4e), point 3, the higher of the amounts of fifteen million euros and 10 percent of the total turnover that the legal person or association of persons achieved in the business year preceding the authority's decision.
(6b) A higher fine may be imposed on a legal person or an association of persons in the cases of subsection (4f), provided these are serious, repeated, or systematic breaches, in addition to subsection (5); this may not exceed the higher of the amounts of five million euros or 10 percent of the total turnover that the legal person or association of persons achieved in the business year preceding the authority's decision.
(6c) A higher fine may be imposed on a legal person or association of persons in the cases of subsection (4g), in addition to subsection (5); this may not exceed the higher of the amounts of one million euros and 10 percent of the total turnover that the legal person or association of persons achieved in the business year preceding the authority's decision.
(6d) A higher fine may be imposed on a legal person or association of persons in the cases of subsection (3), points 3, 3a, 3b, and 3c, in addition to subsection (5); this may not exceed the higher of the amounts of five million euros or 5 percent of the total turnover that the legal person or association of persons achieved in the business year preceding the authority's decision.
(7) In addition to the amounts named in subsections (5), (6), (6a), (6b), (6c), and (6d), the regulatory offence may be punished, in the cases of subsection (3), points 3, 3a, 3b, 3c, (4d), (4f), (4h), (4i), and (4j), with a fine of up to twice, and in the cases of subsections (4e) and (4g), with a fine of up to three times, the economic benefit derived from the breach. The economic benefit comprises profits gained and losses avoided, and may be estimated.
(8) Total turnover within the meaning of subsections (6), (6a), (6b), (6c), and (6d) is 1. in the case of insurance undertakings, the total amount resulting from the national law applicable to the insurance undertaking in accordance with Article 63 of Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings (OJ L 374, 31.12.1991, p. 7), as last amended by Directive 2006/46/EC (OJ L 224, 16.8.2006, p. 1), less value added tax and other taxes levied directly on this income, 2. otherwise, the amount of net turnover in accordance with the national law applicable to the undertaking, in line with Article 2, point 5, of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19, L 369, 24.12.2014, p. 79), as last amended by Directive 2014/102/EU (OJ L 334, 21.11.2014, p. 86). Where the legal person or association of persons is the parent undertaking or a subsidiary, the relevant total amount in the parent undertaking's consolidated financial statements drawn up for the largest group of undertakings is decisive instead of the total turnover of the legal person or association of persons. Where the consolidated financial statements for the largest group of undertakings are not drawn up in accordance with the provisions named in the first sentence, the total turnover must be determined in accordance with items comparable to those in the first sentence, points 1 and 2, of the consolidated financial statements. Where annual financial statements or consolidated financial statements are not available for the relevant business year, the annual or consolidated financial statements for the immediately preceding business year are decisive; where these are also unavailable, the total turnover may be estimated.
(9) Section 17(2) of the Regulatory Offences Act does not apply to breaches of the requirements and prohibitions referred to in subsection (3), points 3, 3a, 3b, 3c, and subsections (4d), (4e), (4f), (4g), (4h), (4i), and (4j). Section 30 of the Regulatory Offences Act also applies to legal persons or associations of persons that are active domestically through a branch or by way of cross-border provision of services. The prosecution of the regulatory offences under subsection (3), points 3, 3a, 3b, 3c, and subsections (4d), (4e), (4f), (4g), (4h), (4i), and (4j), becomes time-barred after three years.