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CMVM Priorities for 2020


 
23 January 2020
 
In 2020, the Securities Market Commission (CMVM) will conduct its activity by focusing on the contribution that supervision and regulation of the national capitals market can offer to recover investors' trust in the market and in its institutions, for the financial system's stability and for promoting a competitive and efficient capitals market in the international front for benefiting companies and families.

These objectives will reflect a wide range of planned activities aimed at:

  1.  Increasing the effectiveness of supervision, namely in its precautionary impacts, and intensify investor protection as to the suitability of investment products to that of the risk and knowledge profiles and in view of greenwashing risks;
  2. Reinforcing mechanisms to deter malpractice and the sanctioning activity, including issues concerning the assessment of good repute, ensuring more timely and effective decisions concerning supervision and litigation and clearer communication of the main infractions and the respective sanctions with general and special objectives for preventing infractions and the effectiveness of the action for assisting the market and investors;
  3.  Simplifying and clarify regulatory requirements including taking on new responsibilities, namely concerning Sustainable Finance;
  4. Ensuring a swifter response to complaints, registration and authorisation requests and assessment of market operations;
  5.  Adopting a transversal approach to promoting of good governance practices, in particular with regard to the suitability of the holders of relevant duties, compliance, external inspection and audit mechanisms, bearing in mind that sustainable creation of value depends on the consideration of ethical values ​​and principles in governance;
  6. Monitoring the financial soundness of the entities subject to our prudential supervision and their impact on the stability of the national financial system.

The CMVM thus establishes the following five priorities which will be made available on its website and which will be communicated to supervised entities, investors and society:

1.  Promote simpler, more focused and more proportional regulation and supervision.
This will be achieved, for example, by eliminating overlaps and introducing greater clarity in regulatory requirements provided for in the Securities Code and in the General Framework for Collective Investment Undertakings; reducing CMVM's response time in entity registration; focussing supervision on higher risk areas, i.e. the marketing of financial instruments to retail investors and simplifying reporting duties by the supervised entities.

2. Strengthen supervision of the governance of supervised entities. This priority includes, inter alia, the implementation of the CMVM's new duties in matters of prudential supervision; focus on suitability assessment, particularly good repute of managers and holders of essential duties in entities subject to the CMVM's supervision; and the supervision of governance, risk management and internal control models and the financial situation of entities that may have an impact on the financial system's stability.

3.  Reinforce measures to deter malpractice and in the sanctioning activity.
The planned activities include reinforcing the detection of unauthorised financial intermediation; conducting on-site supervision to detect suspected market abuse operations; increase supervision in correcting irregular situations; supervisory actions in the follow-up of complaints unanswered by the complainant; improving alternative conflict resolution instruments.

4.  Contribute to reinforcing sustainable practices and monitor financial innovation. This priority will be achieved by designing and implementing a supervisory model of non-financial information disclosed by issuers, including reporting information on environmental, social and corporate governance factors; identifying specific supervisory needs that focus on possible greenwashing practices; implementing the new CMVM funding model following the sustainability principles of the regulator and of the market, proportionality and justice.

5. Improve the organisation and the public service provided to investors and the market.
By launching the groundworks for a new CMVM website and implementing an electronic one-stop shop for supervised entities; implementing systems and procedures for receiving electronic invoicing from suppliers, a measure that is part of the CMVM's effort for sustainability and reducing red tape; active and significant contribution for the relaunch of the Capital Markets Union and the transition to the new design of European supervision.

The assessment of the 2019 activities and priorities will be detailed in the CMVM's annual report, yet it is possible to mention in advance that the overall execution rate is almost 90%, wherein 33 of the 45 announced initiatives have been concluded (73%) and the remaining 12 initiatives are ongoing with an average execution rate of circa 67%.

Supervision priorities for 2020

 

Considering the risks identified by the CMVM and the articulation of our activity with that of ESMA and its international counterparts, we elected seven priority dimensions for CMVM's supervisory action in 2020:

 

  1. Strengthening the assessment of the suitability of corporate members and holders of qualifying holdings in financial intermediaries, entities that manage collective investment undertakings and other entities subject to CMVM's prudential supervision, including auditors and real estate appraisers by affording special attention to repute assessment and guidelines on suitability requirements;
     
  2. Focussing on the scopes of the financial situation assessment of entities subject to CMVM's prudential supervision and its respective impact on the stability of the national financial system, namely by increasing assessments to the liquidity of collective investment undertakings, financial soundness and business models;
     
  3. Strengthening supervision of the supervised entities' governance, namely as regards the adequate compliance of the internal control mechanisms (compliance), inspection and audit and over bodies and respective members to whom such control duties are legally assigned to, at those entities where the CMVM has this duty 
     
  4. Focussing on trading of financial instruments for retail investors, particularly operations pertaining to the placement of financial instruments issued by the distributor for clients and in the marketing of PRIIPs, and in governance practices of financial products (distribution strategy, setting target markets, etc.) and assessing investors' suitability by financial intermediaries (risk profiles, knowledge, etc)
     
  5. Timeliness and predictability in reacting to registration, authorisation and approval of requests of supervised entities, issuers' operations and complaints assessment
     
  6. Support the market in integrating sustainability factors in the preparation of a new regulatory framework regarding sustainable finance and in adopting best for the adoption of good practices
     
  7. Increasing collaboration for preventing money laundering and financing of terrorism by issuing guidelines, clarifications and recommendations, namely on suspicious transactions indicators regarding money laundering or financing of terrorism; furthermore, promoting increased focus on supervisory entities who act in or relate to the real estate sector, in accordance with the National Risk Assessment on this matter.                  
                    

                       

     

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