Chapter VII — Competent authorities
Administrative penalties and remedial measures
Summary
Establishes the general framework for competent authorities to impose administrative penalties and remedial measures on financial entities that fail to comply with DORA requirements. Member States must lay down rules on penalties applicable to breaches and ensure their effective implementation.
Key Requirements
- 1
Member States must establish rules on administrative penalties for DORA breaches
- 2
Competent authorities must have power to impose remedial measures
- 3
Penalties must be effective, proportionate, and dissuasive
- 4
Member States must notify penalty rules to the Commission and ESAs
Detailed Analysis
Article 50 establishes the overarching framework for administrative penalties and remedial measures under DORA. It requires Member States to lay down rules on penalties applicable to financial entities that breach the regulation's requirements, ensuring that competent authorities across the EU have the tools they need to enforce compliance effectively.
The article mandates that penalties be effective, proportionate, and dissuasive — the standard EU formulation that ensures penalties serve both a corrective and a deterrent function. Member States have discretion in setting specific penalty amounts and types, but the penalties must be sufficient to incentivize compliance given the size, complexity, and risk profile of in-scope entities.
Member States are required to notify the European Commission and the relevant ESAs of their penalty rules and any subsequent amendments. This notification requirement promotes transparency and enables comparison across jurisdictions, helping to identify disparities that could create regulatory arbitrage. The ESAs may also use this information to promote supervisory convergence in enforcement practices.
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