Capital market inspection operation launched

The Bank of Greece and the Capital Market Commission will send “secret agents” who will conduct on-site inspections of banks, insurance companies and businesses providing investment services, following the example of countries such as Germany and France. This new supervisory tool was announced on Tuesday by the minister of national economy and finance, Kostis Hatzidakis, in the context of the need to enhance transparency.

“Mystery shopping,” as the supervisory procedure is called, which is included in the new bill for strengthening the capital market, essentially enables the supervisory mechanisms (Capital Market Commission and Bank of Greece) to conduct inspections of supervised entities with secret “customers.” 

Within this process, specially trained executives of the two watchdogs, acting as customers, will check the behavior of companies regarding compliance with the legislation. They will check, for example, the correct information of the business partners, the level of services provided, the existence of appropriately trained personnel, compliance with the requirements of the legislation, compliance with the prescribed procedures etc. The mystery shopping process is already applied in other EU countries, such as Germany and France, as well as in Belgium, in addition to the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA). As a process, it is not new in Greece, as it has also been adopted, for example, by the energy regulatory authorities, with the so-called “mystery car,” which checks gas stations.

A second measure aimed at shielding the supervisory mechanisms and avoiding phenomena like Folli Follie (that gave fake corporate data) is the establishment of transparent operating procedures for the Capital Market Commission, by issuing, among others, a manual of operational procedures and automatic application of protocols, a manual for the control of complaints and on-site inspections, and guidelines for the calculation of fines and the imposition of sanctions.

In addition to these two measures to ensure transparency, Hatzidakis announced three tax measures as well as eight administrative and institutional measures, which will facilitate the operation of the capital market and make the Athens Stock Exchange more attractive to investors.