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Portuguese reg’ boss highlights ‘huge supervision challenges’

Portugal
On the 05/31/19 at 4:28PM

by

Adrien Paredes-Vanheule

Gabriela Figueiredo Dias, board chairman of Portuguese financial watchdog CMVM, gave a speech on 31 May at the occasion of the regulator’s annual conference.
Gabriela Figueiredo Dias, board chairman, CMVM

The Código dos Valores Mobiliários – the Portuguese securities market code - celebrates its 20th birthday in 2019. When it entered into force in 1999, the code introduced several innovations to the local securities market such as the concept of public company and a new system of attribution of voting rights.

Speaking at the annual conference of Portuguese financial market regulator CMVM on 31 May, Gabriela Figueiredo Dias (pictured), board chairman of CMVM, used this example to illustrate accuracy of the decisions taken 20 years ago as the code has absorbed trends and innovation thanks to its flexibility. That allowed it to respond to social and economic challenges, said Figueiredo Dias.

CMVM’s board chairman highlighted the code is subject to an ongoing revision and change proposals will be submitted to the Portuguese government by year-end. She said proposals will include a measure for new issuers in the Portuguese securities market during their first year of trading.

Changes will aim at rendering clearer and simplifying the code in order to bring adequate regulatory responses to the context of globalisation, market openness and integration.

“Challenges are huge in the field of supervision. Financial innovation and new business models, the complexity of negotiation, the increasing interconnection between behavioural and financial stability, the pressure put on banks by the new rules on capital requirements for the distribution of ‘bail-inable’ products, the convergence of supervision in Europe, the new instruments brought by MiFID II”, she listed.

“Everything points to an increase to which we are responding with the adoption of new techniques and new supervisory models, based on risk and knowledge of the supervised realities, ensuring that everything we do serves the purpose that moves us - providing a service of excellence to the community”, Figueiredo Dias added.

Innovation and sustainability integration, 'a survival factor' for market players

CMVM has transformed itself by easing and streamlining procedures, hence achieving time gains. 2018 saw a 67% slump year-on-year in the number of complaints made toward the Portuguese regulator (462 complaints recorded in 2018) and the trend continues in 2019, cited CMVM’s board chairman.

On the supervisory side, she outlined various efforts made by the institution from time reduction in approving marketing prospectuses, authorising funds and securitisation trades to the improvement of communication with a new website upcoming and review of the legislation available on this future site. On 31 May, CMVM adopted a new institutional image, that included a change of logo.

Figueiredo Dias emphasised on the importance of working and contributing to a cohesive and convergent Europe, otherwise Europe would eventually disintegrate and become irrelevant to other political and economic powers. She also raised the inevitability of innovation and the integration of sustainability “as a survival factor” that market players will need to cope with.

CMVM’s board chairman said “growth and European economic and financial resilience depend crucially on our ability to develop more robust and balanced markets, with improved capabilities in the sharing of risks and the absorption of financial shocks thus providing safety and confidence to citizens.”

Figueiredo Dias was named chairman of ESMA's investment management standing committee on 30 January 2019. Her mandate runs until 30 October 2020.

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