Board of Appeal Decisions

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Selected cases related to investor and insurer protection

DecisionSummary
Appeal by SV Capital OÜ (Estonia) against the European Banking Authority
BoA 2013-008
The decision concerned the question whether the suitability of the managers of a significant branch of a bank may be a matter within EU law, and not just national law. Allowing the appeal, the Board of Appeal interpreted Directive No. 2006/48/EC consistently with the EBA Guidelines on the assessment of the suitability of members of the management body and key function holders. It came to the conclusion that the “fit and proper” requirement is not restricted to the persons who direct the business of the credit institution. The matter therefore was within the EBA’s powers of investigation. Although the appellant criticised the way in which the EBA dealt with its complaint, the Board of Appeal made it clear that it did not accept that criticism. It considered that the EBA dealt with the complaint in an appropriate manner. The ground on which the appeal was allowed was one of interpretation of the applicable legal provisions. The case was remitted to the EBA to adopt the appropriate decision in accordance with the Board of Appeal’s findings.
Board of Appeal Decision Global Private Rating Company v. ESMA
BoA 2013-014
This is the first appeal against a decision by ESMA refusing an applicant registration as a credit rating agency. The Board of Appeal unanimously decided that the appeal should be dismissed, and that ESMA’s refusal decision should be confirmed. It stated that it accepted the appellant’s point that the registration of a credit rating agency by ESMA is a new process, and recognised that the procedures will to an extent take time fully to work out. Nevertheless, because of the responsibilities placed on credit rating agencies and their importance in the financial system generally, it considered that the onus must be on an applicant to satisfy ESMA that the relevant requirements are met. The application and its contents must be very clear, and it is not ESMA’s responsibility as regulator to remedy deficiencies.
Appeal by SV Capital OÜ (Estonia) against the European Banking Authority
2014/C1/02
Following the Board of Appeal’s affirmative decision of 24 June 2013, the appellant requested the EBA to initiate an investigation against the Estonian and Finnish Financial Supervision Authorities because their alleged failure to take action in respect of individuals in the Estonian branch of Nordea Bank Finland PLC whom it was alleged were not fit and proper persons to be key function holders in the bank. The EBA decided that it would not initiate an investigation.  The Board of Appeal decided that the EBA had been right to raise the matter with the national supervisors, but that having done so, it was entitled to take no further action in the light of their responses. The Board accordingly dismissed the appellant’s appeal against the EBA’s decision.
Decision by the ESA BoA concerning Investor Protection Europe sprl
2014/BOA/05
The Joint Board of Appeal of the ESAs decides on the inadmissibility of an appeal brought by Investor Protection Europe (IPE) sprl, a company based in Brussels, against a decision of the European Securities and Markets Authority (ESMA) of 10 June 2014 not to initiate an investigation under Article 17 of the ESMA Regulation regarding an alleged breach of Union law by the Commission de Surveillance du Secteur Financier of Luxembourg.  
Appeal by Onix Asigurari SA against European Insurance and Occupational Pensions Authority
BOA/2015/001
The Joint Board of Appeal of the ESAs decides on the inadmissibility of an appeal brought by Mr Simone Lentini who is domiciled in Romania, and Onix Asigurari SA which is a Romanian insurance company. According to the material before the Board of Appeal, Mr Lentini is the sole shareholder in Onix. The appeal is brought against what is said to be a decision of the respondent, European Insurance and Occupational Pensions Authority (EIOPA), dated 24 November 2014. The Board notes at the outset that the respondent contests that this is a decision in respect of which an appeal lies.
Appeal by Kluge, Belyaev, Radio Elektroniks OÜ (Estonia) and Dyakov against a decision of European Securities and Markets Authority
BOA 2016 001
The Joint Board of Appeal of the ESAs decides on the inadmissibility of an appeal brought by Mr Andrus Kluge, Mr Boris Belyaev, Radio Elektroniks OÜ, and Mr Timur Dyakov against a decision of the European Banking Authority of 19 August 2015 non to initiate an investigation under Article 17 of the EBA Regulation regarding an alleged breach by the Estonian Financial Supervision Authority (“EFSA”) of the requirements of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (“the Credit Institutions Directive”) in relation to its supervision of the affairs of the credit institution AS Eesti Krediidipank.
Appeal by FinancialCraft Analytics Sp. Z o.o., formerly named Global Rating Sp. Z o.o., against a decision of the European Securities and Markets Authority
BoA 2017 01
The Joint Board of Appeal of the ESAs decides on the inadmissibility of an appeal by Global Rating Sp. z o.o. against decision ESMA/2016/1626 of the Board of Supervisors of the European Securities and Markets Authority (the respondent, ESMA) dated 8 December 2016 refusing to register the appellant as a credit rating agency pursuant to Article 16(3) of Regulation (EC) No 1060/2009 (the “refusal decision”).
Appeal by “A” [Appellant] against the European Securities and Markets Authority
BoA 2018-01
The Joint Board of Appeal of the ESAs decides on the rejection of an appeal against decisions of the ESMA not to initiate an investigation against a named national authority under Article 17 of the ESMA Regulation. 
Appeal by “B” [Appellant] against the European Securities and Markets Authority
BoA D 2018 02
The Joint Board of Appeal of the ESAs decides on the inadmissibility of an appeal against a decision of the Chair of ESMA of 29 August 2017 not to open a formal investigation against the Cyprus Securities and Exchange Commission (CySEC) pursuant to article 17 of Regulation (EU) No 1095/2010 (the “ESMA Regulation”). The appellant asks for the decision to be cancelled and the procedure to be reopened. The appellant states that the appellant is representing a number of clients damaged by the activities of a Cypriot investment firm called IronFX Global Ltd (IronFX). 
Appeal by Skandinaviska Enskilda Banken AB (SEB) against the European Securities and Markets Authority
boa30.18
The Board of Appeal unanimously decides to dismiss the suspension application made by the appellant, Skandinaviska Enskilda Banken AB (“SEB”), to suspend a decision which it has appealed against until the appeal proceedings are concluded. The decision in question is a decision by the Board of Supervisors of the European Securities and Markets Authority (“ESMA”, or “the respondent”) dated 11 July 2018. By this Decision, ESMA (i) adopted a supervisory measure in the form of a public notice and (ii) imposed a fine of EUR 495,000 on SEB and four other banks. This was on the basis of a finding that the banks had negligently breached Regulation (EC) No 1060/2009 on credit rating agencies as amended (“CRAR”) by issuing credit ratings without being authorised by ESMA to do so.
Appeals by Svenska Handelsbanken AB, Skandinaviska Enskilda Banken AB, Swedbank AB, Nordea Bank Abp against the European Securities and Markets Authority
BoA D 2019 01, 02, 03 and 04
These are the decisions of the Board of Appeal of the European Securities and Markets Authority (ESMA) in respect of four appeals each of which raises issues which are the same or similar. The appellants, Svenska Handelsbanken AB, Skandinaviska Enskilda Banken AB, Swedbank AB, and Nordea Bank Abp, are credit institutions established in Sweden. They are referred to collectively in this decision as “the banks”. The question on the appeals is whether in issuing corporate research which included what have been called “shadow ratings”, the banks required to be registered under the Regulation (EC) No 1060/2009 on credit rating agencies (the “Credit Rating Agencies Regulation”, or “CRAR”).
Appeal by Creditreform Rating AG against decision of the European Banking Authority
boa-2019-d-05_decision
The German credit rating agency Creditreform AG appealed on 16 July 2019 challenging the adoption by the Joint Committee of the European Supervisory Authorities (“ESAs”) of certain draft implementing technical standards proposed for endorsement by the European Commission.  It also made an application for suspension. The draft implementing technical standards propose to amend the correspondence (“mapping” in the CRR nomenclature) between certain of Creditreform’s long-term corporate credit assessments and certain credit quality steps (“CQS”) as set out in the Capital Requirements Regulation No. 575/2013. The appellant challenges the legality of this downgrade. The Board of Appeal dismissed the appeal as inadmissible, in accordance with settled case law of the CJEU finding that acts having a preparatory nature, like the draft implementing technical standards, are not subject to an autonomous judicial or quasi-judicial review but are subject to review through a check of the legitimacy of the final act adopted by the European Commission.
Appeal by Jeffrey Michael Howerton against the European Securities and Markets Authority
BoA D 2020 01
The Board of Appeal’s decision considered as inadmissable the Appellant’s claim that six national financial supervisory authorities and ESMA should have taken supervisory steps in relation to an alleged non-application of Union law. The Board of Appeal does not see, therefore, how the six national financial supervisory authorities and ESMA could investigate and take supervisory steps with regard to the facts described by the Appellant in his complaints and in the appeal.
Appeal by Jeffrey Michael Howerton against the European Insurance and Occupational Pension Funds Authority
BoA D 2020 02
The Board of Appeal finds that Mr Howerton’s appeal merely reiterated the very same complaints which had been raised in the past by the Appellant towards the European Securities and Markets Authority (ESMA) and which the Board of Appeal determined to be inadmissible in that context. As in the ESMA Decision, the Board of Appeal fails to see how the facts described by the Appellant, and previously filed in a complaint directed to EIOPA, may involve insurances and occupational pension funds or any other subject-matter within the remit of EIOPA and of the Board of Appeal. In addition, the Board of Appeal notes that the Appellant, at the time of filing this new appeal, was fully aware of the reasons of inadmissibility of the appeal filed against ESMA. The Board of Appeal, therefore, considers the appeal as manifestly inadmissible and does not allow for any further consideration.
Appeal by Scope Ratings GmbH against the European Securities and Markets Authority
BoA D 2020 03
The Joint Board of Appeal unanimously decided to dismiss the appeal brought by the credit rating agency Scope Ratings GmbH against the European Securities and Markets Authority (ESMA) in relation to the interpretation of the applicable legal provisions of the Credit Rating Agencies (CRA) Regulation. Central to this appeal is the appellant’s 2015 covered bond methodology, its application in the context of unsolicited ratings issued by the Appellant in 2015, and the Appellant’s subsequent amendment of this methodology in 2016. On 28 August 2020, the appellant challenged the Decision of the ESMA Board of Supervisors of 28 May 2020, and published on ESMA’s website on 4 June 2020, which had (a) found that Scope Ratings infringed points 43 of Section I, 3a and 3b of Section II and 4a of Section III of Annex III of the CRA Regulation, (b) adopted a supervisory measure in the form of a public notice pursuant to Article 24 of the CRA Regulation and (c) imposed on Scope Ratings a fine pursuant to Article 36a of the CRA Regulation.
Board of Appeal of the ESAs- Decision on Howeverton vs EBA
BoA D 2021 01
The Joint Board of Appeal of the ESAs decides on the inadmissibility of an appeal by the appellant Jeffrey Michael Howerton. the appellant requested the European Banking Authority (“EBA”) to initiate an investigation under Article 17 of Regulation (EU) No 1093/2010. The request alleges breaches of intellectual property rights regarding a script which the appellant sought to sell to Netflix. The appellant refers to abuse by several persons who attended Brown University in the United States around the time when the appellant was there and who may now work for law enforcement authorities including the California Department of Justice, the FBI and the Mossad. The appellant complained of these matters to numerous bodies including, in the Netherlands, de Nederlandsche Bank; in Liechtenstein, the Financial Market Authority and the Conciliation Board; in Italy, Banca d’Italia; in Malta, the Malta Financial Services Authority, the National Audit Office and the Ombudsman; in Ireland, the Central Bank of Ireland; in Denmark, the Danish Financial Supervisory Authority and the Ombudsman; in Germany, BaFIN; and in Luxembourg, the Commission de Surveillance du Secteur Financier, Banque du Luxembourg and the Luxembourgish Ombudsman.
Board of Appeal of the ESAs- Decision on “A” vs ESMA
BoA D 2021 02
Central to this appeal is a Decision by ESMA not to investigate the approach adopted by a Member State’s NCA as regards the valuation of Structured Retail Products (SRPs) and the identification of a series of EU law provisions which, the Appellant “A” argues, have not been applied correctly by the NCA. The Appellant’s request to ESMA relates to the approach adopted by the NCA in relation to the concept of “fair value” of SRPs and, specifically, which implicit costs should be regarded as being included within the fair value of an SRP and which other costs and fees can be regarded as separate and external to fair value.
After careful consideration, the Board of Appeal unanimously decided that the appeal is inadmissible.
Board of Appeal of the ESAs – Decision on Societatea de Asigurare-Reasigurare City Insurance SA vs EIOPA
BoA D 2021 03
The appeal was brought in relation to a balance sheet review (BSR) exercise of the Romanian insurance sector that is carried out by the Autoritatea de Supraveghere Financiară with the support of EIOPA.
Central to this appeal is the question if, and to what extent the appellant can challenge EIOPA’s role and its involvement in the Romanian BSR exercise via an appeal under Article 60 of the EIOPA Regulation. After careful consideration, the Board of Appeal unanimously decided that the appeal is inadmissible.

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