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► Full Reference: Journal of Regulation & Compliance (JoRC) and Institut de Recherche Juridique de la Sorbonne (André Tunc - IRJS) of Paris 1 Panthéon-Sorbonne University, La Vigilance, pointe avancée de l'Obligation de Compliance (Vigilance, advanced point of the Compliance Obligation), Paris 1 Panthéon-Sorbonne University, December 5, 2023, 12 place du Panthéon, salle 6.

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 🏗️ This symposium takes place in the cycle of symposiums organised by the Journal of Regulation & Compliance (JoRC) and its partner Universities, focusing in 2023 on the general theme of Compliance Obligation.

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► This symposium is organised by the Journal of Regulation & Compliance (JoRC) and Paris 1 Panthéon-Sorbonne University, through its Institut de Recherche Juridique de la Sorbonne (André Tunc - IRJS). 

This symposium is held in French.

the symposium is under the scientific direction of 🕴️Marie-Anne Frison-Roche, 🕴️Mustapha Mekki , and 🕴️Jean-Christophe Roda.

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To register for a physical presence: anouk.leguillou@mafr.fr (as places are limited, you will be asked to confirm 48 hours in advance).
To register for an online presence, via Zoom: Click HERE 

🧮 The event will take place at Paris 1 Panthéon-Sorbonne University, 12 place du Panthéon 75005, in Salle 6, on 5 December 2023.

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► Présentation of the theme : The Vigilance Obligation is difficult to define because of the multiplicity of texts and cases in which it can be understood. This is particularly true of the Vigilance mechanism, which illustrates, and even emphasises, the Vigilance Obligation. Through international texts, French law and European texts that have been adopted or are in the process of being adopted, the constraints of vigilance, but also the structures and actions that companies have put in place and the actions that stakeholders have taken, Vigilance has highlighted aspects of the Compliance Obligation, and even modified it. 

The revelatory effect thus produced and the movement thus unleashed, whose roots run deep and whose systemic effects are very significant, justify a greater focus on mechanisms that are interconnected, whereas they are sometimes perceived in silos, which makes it difficult to understand the whole picture. In the same way, because Vigilance is the advanced point of the Compliance Obligation, we can better distinguish and articulate what is sector-specific, in particular in banking and finance or in digital matters, and articulate them with what Vigilance has, like Compliance, of a more general nature. What's more, the intensity of Vigilance varies according to its ambitions and the position of the company subject to it, which is reflected in the variations in legal qualification, ranging from a duty to a criminally sanctioned obligation. 

The different legal systems reflect these developments in their legislation, case law and the practice of companies and stakeholders in specific ways, because these different techniques express standards of behaviour and accountability, which are directly reflected in evidential requirements, concepts of responsibility and institutional translations through possible regulatory bodies.

As a result, the symposium is divided into three parts. After a general introduction on the systemic relationships between Vigilance and Compliance, the first part will focus on the variation in Vigilance Intensities, the advanced point of Compliance, the second part will look at the Tensions that Vigilance generates or exacerbates, and the third part will look at the Modalities that Vigilance uses in Compliance systems.

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The proceedings of this colloquium will form the basis of one chapter in the books: 

📕L'obligation de Compliance, in the collection 📚Régulations & Compliance, copublished by the Journal of Regulation & Compliance (JoRC) and Dalloz.

📘Compliance Obligation, in the collection 📚Compliance & Regulation, copublished by the Journal of Regulation & Compliance (JoRC) and Bruylant.

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Speakers:  

🎤Laurence Dubin, Professor at Paris 1 Panthéon-Sorbonne University

🎤Marie-Anne Frison-Roche, Professor of Regulatory & Compliance Law, director of the Journal of Regulation & Compliance (JoRC)

🎤Bernard Haftel, Professor at Paris-Nord University

🎤Marie Lamoureux, Professor at Aix-Marseille University

🎤Grégoire Loiseau, Professor at Paris 1 Panthéon-Sorbonne University

🎤Véronique Magnier, Professor at Paris-Saclay University

🎤Gilles J. Martin, Emeritus Professor at Côte d'Azur University, member of the Groupe de Recherche en Droit, Économie, Gestion (GREDEG) of the CNRS

🎤Mustapha Mekki, Professor at Paris 1 Panthéon-Sorbonne University

🎤Jean-Christophe Roda, Professor at Jean Moulin Lyon 3 University

🎤Anne-Claire Rouaud, Professor at Paris 1 Panthéon-Sorbonne University

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🔻 read a detailed presentation of the manifestation below 🔻

Virtual currency is a perfect example of the difficulties of interregulation: indeed, the bitcoins are currencies created on the Internet, usually to play games, such as poker. Thus intersect banking regulation, banking supervision, regulation and control of the game, Internet regulation itself.

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Constitutional Law will have an increasingly important role to play in regulatory Law. This is especially true since the State Council uses its power to filter itself become a sort of Constitutional Court or maybe a Supreme Court.

One can think so reading the UBS decision on the 5th of November 2014.

Indeed, to refuse to transmit to the Conseil constitutionnel (French Constitutional Council)  the priority question of constitutionality formulated by UBS, the French Council of State gives what it believes to be the correct interpretation of the constitutional principle of legality of offenses and penalties in banking regulatory Law.

So to say there is no "question", the Conseil d'État says there is no "problem" because, through the interpretation it gives, the provisions of the Code Monétaire et Financier offers to the Supervisory Authority, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), the power to sanction the bank for having not properly implemented its internal control, comply with the constitutional principle of legality of offenses and penalties, which is applicable in administrative repression.

But because to estimate that there is no "question", it must be said that there is no "problem", it is assumed that the High Administrative Court has acted as Constitutional Court.

We must take note. Is this really what the Constituent wanted by instituting a filter system by the constitutional law of the 23rd July 2008 establishing the priority question on constitutionality? Indeed, in this very sensitive and decisive question of repression in banking and finance, is it not at least to the French Constitutional Council itself to say the authoritative interpretation to remember that the constitutional text it is the guardian?

Regulation presupposes that we move from a political conception of Act (that is to say a collective Decision expressed by the State) or a civilist one (that is, a will expressed by one or several individuals in one Contract) to an economic vision of trading organizations whose action is the expression of the market. If one relies on the adjustment of supply and demand, that is to say, the meeting of desires and interests, there will be "self-regulation", which is the "Law of the Market ", referring to competition law. The act of the operators is only a reflection of this law, in action.

La Régulation est alors plus complexe car elle vise autre chose que cette rationalité mécanique, soit en raison d’une défaillance du marché (par exemple en cas de monopole naturel) soit parce qu’on veut obtenir plus que ce que le marché peut donner (par ex. l’accès de tous à des biens communs, comme la santé, même pour des demandeurs insolvables). Dans ce cas, sont élaborées des règlementations, interventions ex ante désignées en anglais par le terme regulation. La règlementation est adéquate si elle incite des agents économiques à adopter des comportements qui concrétisent le but recherché par l’auteur de la règlementation.

Regulation is then more complex because it aims at something other than this mechanical rationality, either because of a market failure (for example in the case of a natural monopoly) or because it wants to obtain more than the market can give ( Eg access to common goods by all, such as health, even for insolvent claimants). In this case, regulations are drawn up, ex ante intervention. The regulation is adequate if it encourages economic agents to adopt behaviors that concretize the aim sought by the author of the regulatory mechanisms.

This strategic use of law then requires the necessary detour through the economic analysis of law, that is to say the analysis of law in its economic effects.

This discipline created in the United States by Ronald Coase (Nobel Prize for Economics in 1991) can be merely descriptive and reveal what economic effects the law produced. This conception, which is that of Richard Posner, makes the economic analysis of law an instrument of expertise for the political decision-maker, who can take this into account if it is necessary to modify the rules. A more radical conception of the so-called "normative economic analysis of law" is to argue that the conclusions of the analysis would oblige the decision-maker to follow it.

The issue is decisive because in the first case the law and the jurists - in particular the Legislator and the judge - still have an autonomous existence, in the second case they no longer exist, they are no more than the binding and explicit form of the "Law of the market" whose nature is a-legal.

Even in its descriptive form, economic analysis of the law is generally rejected in France in that it disregards the role of the law in that it carries moral values. It is in reality to ignore its merely descriptive, instructive and useful function, and the fact that it opens instead the amplitude of the rational choice offered to political decision-makers. Moreover, regulation is not only a technical discipline, it is also a political and philosophical issue. Descriptive economic analysis is more appropriate to it than normative economic analysis of the law, which claims to vassalize or even destroy other disciplines, which are substantially unknown.

ENGLISH

The European Banking Union is based on supervision as much as on regulation: it concerns the operators as much as the structures of the sector, because the operators "hold" the sector.

This is why the "regulator - supervisor" holds the operators by the supervision and is close to them.

He meets them officially and in "soft law" relations. This is all the more necessary since the distinction between the Ex Ante and the Ex Post must be nuanced, in that its application is too rigid, in that it involves a long time (first of all the rules, then to apply them, then to notice a gap between rules and behaviors, then to repair it) is not appropriate if the system aims at the prevention of systemic crises, whose source is inside the operators.

This is why the body in charge of solving the difficulties of the systemic banks for the salvation of the systeme meets the banking sector itself, to ensure that they are permanently "resolvable", so that the hypothesis of their resolution never arises. This is the challenge of this system: that it is always ready, for never be applying.

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In the European Banking Union, the Single Resolution Board (SRB) is in charge of "resolve" the difficulties of European systemic banks in difficulty. It is the public body of the second pillar of the Banking Union. The first pillar is the prevention of these difficulties and the third is the guarantee of deposits. The resolution is therefore more like an Ex Post mechanism.

But in this continuum through these three pillars between the Ex Ante and the Ex Post, the SRB does not wait passively - as would a traditional judge do - that the file of the troubled bank reaches it. Like a supervisor - which brings it closer to the first public in the system (Single Supervisory Board -SSB), which supervises all the banks, it is in direct contact with all the banks, and it approaches the hypothesis of a bank in trouble by a systemic perspective: it is therefore to the entire banking system that the SRB addresses itself.

As such, it organizes meetings, where he is located: in Brussels.

Thus, on June 18, 2019, all banks came to discuss with the Single Resolution Board to know what it wants from the banks and for the banks, in what is called a "dialogue meeting".

To resolve in Ex Post the difficulties of a bank, it has to present a quality (a little known concept in Bankruptcy Law): "resolvability". How build it? Who build it ? In its very design and in its application, bank by bank.

For the resolution body vis-à-vis all players in the banking and financial sector, it's clear: "Working together" is crucial in building resolvability ".

In the projection that is made, it is affirmed that there can be a successful resolution only if the operator in difficulty is not deprived of access to what makes to stay it alive, that is to say the banking and financial system itself, and more specifically the "Financial Market Infrastructures", for example payment services.

Does the Single Resolution Board expect spontaneous commitments from the FMIs for such a "right of access"? In this case, as the Single Resolution Board says, this right of access corresponds to "critical functions" for a bank, the resolution situation can not justify the closure of the service.

By nature, these crucial operators are entities that report to regulators who oversee them. Who enforces - and immediately - this right of access? When one can think that it is everyone, it risks being nobody .... That is why the resolution body, relaying in this a concern of the Financial Stability Board, underlines that it is necessary to articulate the supervisors, regulators and "resolvers" between them.

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To read this program, since it is a proposed program of work for the banking sector, four observations can be made:

1. We are moving more and more towards a general "intermaillage" (which will perhaps replace the absence of a global State, but it is an similar nature because it is always to public authorities that it refers and not to self-regulation);

2. But as there is no political authority to keep these guardians, the entities that articulate all these various public structures, with different functions, located in different countries, acting according to different temporalities, these are the companies themselves that internalize the concern that animates those who built the system: here the prevention of systemic risk. This is the definition of Compliance, which brings back to companies, here more clearly those those which manage the Market Infrastructures, the obligations of Compliance (here the management of systemic risk through the obligation of giving access).

3. Even without a  single systemic guard, there is always a recourse. That will be the judge. There are already many, there will probably be more in a system of this type, more and more complex, the articulation of disputes is sometimes called "dialogue". And it is undoubtedly "decisions of principle" that will set the principles common to all of these particular organisms.

4. We then see the emergence of Ex Ante mechanisms for the solidity of the systems, and the solidity of the players in the systems, and then the Ex Post resolution of the difficulties of the actors according to access to the solidity of the infrastructures of these systems, which ultimately depend on judges (throughout the West) facing areas where all of this depends much less on the judge: the rest of the world.

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One can only be amazed or even upset.

First, the agreement is not yet concluded. It would be in a month or two. How is it that we already know? Secondly, contracts, because the transaction is a contract listed by the Civil Code, are not intended to be public. How is it that we already know everything? The person who gave the information "was keen to remain anonymous." It would have suspected ......

Third, it is true that the regulation of rating agencies is a big issue. Special texts have been taken but academics think the right tools stay missing and that is probably the liability, general legal instrument, which is the most appropriate.

But the responsibility of commitment requires a trial, evidence, respect for the rights of defense, due processs,  legality of offenses and penalties.. Here, $ 1 billion is paid by the company only to avoid that opens a lawsuit against it. The allegation is the rating agency would have underestimated the subprime risk.

But on one hand everyone says that the rating agency has actually done the facts allegued since payroll so that the file doesn't open. On the other hand, and from the perspective of regulating the information that would be out of the trial, a trial being a form of crisis, will not come out.

So this sort of industry fof "Deals of Justice", apart from the fact that some describe the phenomenon as a "racket", isn't a "decriminalization" of regulation for a "civilized regulation" through the transaction contract. On the contrary, this movement that is spreading constitutes an increased repression whic diminishes rights of defense for the operator and information for the sector.

One can only be amazed or even upset.

The Directive innovates and improves the UCITS’ single market in three ways: first by recasting the 1985 Directive on UCITS in order to implement a simpler and harmonized regulatory framework (therefore improving UCITS’ marketing and investors’ protection) ; second, by providing for more cooperation between national and supranational regulators in order to secure and supervise UCITS’ single market ; third, by integrating the Directive into the Lamfalussy process as to ensure that its provisions be well-conceived, concurrently implemented by Member States and efficiently controlled by regulators.