In 2020, the Dutch Authority for the Financial Markets (AFM) will continue to focus on the protection of consumers in vulnerable situations. Furthermore, the supervisory attention given to the Dutch capital market will increase. Because of Brexit, many foreign market parties have chosen the Netherlands as their place of business. A much larger volume of available transaction data enables the AFM to supervise the capital market more closely.
The AFM publishes these and other supervisory priorities and activities today in its annual supervisory agenda. They are based on the trends from the AFM Trend Monitor 2020.
An important objective of the AFM is the protection of consumers, particularly those in vulnerable situations. With its supervision, the AFM aims to make a sustainable contribution to the quality of financial products and services with long-term effects. For example, a short-term consumer credit which has a detrimental effect on the financial well-being of the consumer in the long-term.
Following the conclusion of the pension agreement, the government is now working on a proposal to amend the Pensions Act. As an advisory member of the Pension Agreement Working Group (Stuurgroep Uitwerking Pensioenakkoord), among other things, the AFM is working hard to ensure that the financial position of members after retirement is in line with their expectations because information, choice guidance and products are appropriate. One of the ways in which this is done is by supervising the quality of the information that pension funds provide to their members.
Finally, the AFM strives to ensure that the selection and advisory processes in a digital environment are clear and customer-oriented, for example in execution-only services and automated advice.
It is important for investors, banks and suppliers, for example, that information about a company’s financial performance is correct, comprehensive and reliable. Unreliable figures and an inadequate quality of statutory audits can lead to wrong investment decisions. The recent AFM report about the quality of the other PIE audit firms, the third MCA report (14 January) and the forthcoming CTA report (end of January) will provide more insight into the effect of the measures taken so far. And they will clarify the need for additional interventions to strengthen the audit sector and improve the quality of the statutory audit in the Netherlands.
The United Kingdom’s choice to leave the European Union brings with it business, economic and political uncertainty. This calls for additional efforts in the supervision of capital markets. As a consequence of European regulation, growing markets and an increase in the number of parties subject to supervision, the AFM will have more transaction data at its disposal. This will enable the AFM to exercise closer supervision, as a result of which it can apply itself to ensuring a robust infrastructure and honest trading conduct.
Key activities include continuous data-driven monitoring of transactions and orders on trading platforms per institutional category. The AFM also works together structurally with European regulators in building systems. These make it possible to receive, process and store data, improving the exchange of data and the detection of market abuse.
The financial playing field is becoming more international and increasingly driven by technology. New trading platforms with super-fast trading based on algorithms pose new supervisory challenges. In order to continue to fulfil its role as supervisory authority in an effective manner, the AFM must therefore continually adapt. The AFM is doing this with a revised strategy for 2020-2022, by which it builds on the strengthening of supervision in recent years.
View more extensive information about the supervisory activities in the AFM Agenda 2020.
Journalists may contact Yolanda Bieckmann, AFM Press Officer, via 020-7972435 or [email protected].