Balancing Confidentiality and Transparency: The ECSPR Professional Secrecy Standard in Light of Cross-Sectoral EU Financial Regulation and ECJ Case Law

Abstract

Professional secrecy standards strike the balance between the two conflicting interests of confidentiality and transparency. Art 35 of the Regulation on European Crowdfunding Service Providers for Business contains a standard of professional secrecy for the supervision of crowdfunding service providers. This chapter analyses the different elements of the provision in depth by categorising them into scope of protection, exceptions, obliged persons, and level of protection. Moreover, it compares them with other professional secrecy standards in EU financial regulation (CRD IV, MiFID II, Solvency II, SSM Regulation, SRM Regulation, ESA Regulations). The comparative analysis shows a significant divergence between the different EU legislators’ regulatory approaches. As the ECJ follows a holistic approach comparing the sectoral standards, the ECJ case law is to be considered across sectoral boundaries, and also to crowdfunding services. It gives important guidance on how to understand certain elements of the professional secrecy obligations under the ECSPR. Finally, this chapter answers open questions on professional secrecy beyond the exchange between authorities, potential conflicts with national law, and the consequences of a breach of the professional secrecy standard.

Keywords: crowdfunding supervision, financial supervision, confidential information, professional secrecy, information exchange, disclosure, supervisory files, access to documents, legal proceedings, Regulation on European Crowdfunding Service Providers for Business

JEL Classification: K22, K23, K33, K41, K42