Aggregated News From Investment Management Regulators

Netherlands

Annual report 2020: a year of coronavirus, volatile markets, Brexit and a new pensions system on the horizon

The 2020 annual report from the Dutch Authority for the Financial Markets (AFM) looks back on a turbulent year. While the economy collapsed due to the pandemic, the stock market was highly volatile. Many consumers turned to the stock market in the coronavirus era. The long-expected Brexit passed off smoothly. The year 2020 also saw the new pensions system taking further shape, with the AFM continuing to stress that scheme members need to be better protected. Volatile stock market and an overheating housing market Social life has come virtually to a standstill since mid-March 2020. The coronavirus pandemic caused an unprecedented...

AFM en DNB are consulting on the Regulation on Sound Remuneration Policies

The Dutch Authority for the Financial Markets (AFM)  and the Dutch Central Bank (DNB) are consulting on the Regulation on Sound Remuneration Policies (Regeling beheerst beloningsbeleid Wft 2021 - Rbb 2021). The new regulation by the AFM and DNB replaces DNB's Rbb 2017. New prudential framework and remuneration standards for investment firms The IFD must be transposed into national laws and regulations by 26 June 2021. The IFD and the Regulation on Prudential Requirements for Investment Firms (IFR) replace, for most investment firms, the prudential requirements established by the Capital Requirements Regulation (CRR) and the Capital Requirements Directive (CRD). The IFD...

Use of and information on non-financial aspects in reporting can be improved

Institutional investors and analysts still only make limited use of non-financial information, for example in their investment decisions. Companies are also failing to encourage this enough by providing relevant and reliable non-financial information. This is the conclusion of an exploratory study by the Dutch Authority for the Financial Markets (AFM). Standardisation and new legislation are important steps to encourage in the use of and information on non-financial aspects in reporting. In brief The effect of non-financial aspects at companies on future performance could be stated more clearly. According to investors, the availability of relevant non-financial information is limited. Institutional investors...

AFM shares recommendations to strengthen audit committees in their role relating to audit of the financial statements

The Dutch Authority for the Financial Markets (AFM) reviewed the role of audit committees of Dutch Public Interest Entities (PIEs) in selecting the audit firm and monitoring of the statutory audit. With its observations and recommendations, the AFM aims to strengthen audit committees in the performance of that role. Leading role in selection process audit firm Room for improvement in monitoring the external audit Transparency selection process not sufficient yet Specific recommendations for strengthening role Important link in financial reporting process Leading role in selection process audit firm Audit committees are increasingly taking a leading role in the process of selecting...

AFM supports creation of international standard setter for non-financial reporting

The Dutch Authority for the Financial Markets (AFM) supports the creation of a standard setter for non-financial reporting by the International Financial Reporting Standards (IFRS) Foundation. This is an important step in the formulation of international standards for non-financial reporting. The AFM’s standpoint is laid down in its response to the consultation of the IFRS Foundation on the creation of a Sustainability Standards Board (SSB). In brief International standards are needed for relevance and comparability A broader scope than solely climate-related is preferred Impact of ESG factors on both business and society Standards have to be verifiable and enforceable International standards...

ESMA appoints Jos Heuvelman as chair Supervisory Convergence Standing Committee

The Board of Supervisors of the European Securities and Markets Authority (ESMA) has appointed Mr Jos Heuvelman, who is a Member of Executive Board of the Autoriteit Financiële Markten (AFM) of the Netherlands, to serve as the chair of the Supervisory Convergence Standing Committee (SCSC) and as chair of the Senior Supervisors Forum. The SCSC’s mandate includes: identifying topics for, and carrying out, peer reviews by ESMA; promoting a common framework within ESMA in relation to supervisory convergence; reporting to the ESMA Board on the implementation of the supervisory convergence work programme; and dealing with cross-cutting issues of supervisory convergence...

French and Dutch financial market authorities call for a European regulation of ESG data, ratings, and related services

The Autorité des marchés financiers (AMF) and its Dutch counterpart, the Autoriteit Financiële Markten (AFM), propose a European regulatory framework for providers of sustainability-related services, which could become one of the key measures of the European Commission's renewed sustainable finance strategy. The proposed framework is aimed at preventing misallocation of investments, greenwashing, and ensuring investor protection. It includes requirements on transparency on methodologies, management of conflicts of interest, internal control processes, and enhanced dialogue with companies subject to sustainability ratings. Fostering the green transition in Europe will require significant investment over the coming years; the European Green Deal estimates that...

AFM consultation on restriction on sale of turbos to retail investors

The Dutch Authority for the Financial Markets (AFM) is holding consultations on measures to restrict the marketing, distribution or sale of turbos. The AFM considers that retail investors are currently not adequately protected against the risks of turbos. Previous research has shown that on average, investors suffer a loss of €2,680 with these risky investments. In brief The AFM is consulting on measures to provide better protection for investors with respect to turbos Turbos are instruments that are similar to the equally risky CFDs, which are already subject to restrictions Solutions from the market at the urging of the AFM Responses...

AFM and Dutch central bank (DNB): Work on the interest rate benchmark transition required

The Netherlands Authority for the Financial Markets (AFM) and the Dutch central bank (DNB) see that financial enterprises in the Netherlands have made progress in their transition to alternative interest rate benchmarks. At the same time, action is still needed, in part where the inclusion of fallback provisions in contracts is concerned. This is apparent from the analysis of a joint request published on AFM.NL on 25 November 2020. In short Many interest rate benchmark contracts refer to alternative benchmarks, including EURIBOR Contracts referring to interest rate benchmarks in other currencies have not yet been converted Fallback provisions insufficiently included As a...

Listed companies need to improve elements of their disclosure of the effects of the coronavirus pandemic

Not all listed companies are entirely clear regarding the effects of the coronavirus pandemic in their semi-annual financial reporting. This is the conclusion of a review by the Dutch Authority for the Financial Markets (AFM). Nearly all the companies reviewed report on the effects of the pandemic, but the quality of this reporting varies widely and needs to improve in certain respects. Identifying points that need improvement in the 2020 annual reporting A quarter of the companies present good information on the consequences of the coronavirus pandemic Good disclosure of all relevant aspects is needed Good reporting is important...

AFM lists trends and risks for the financial sector

The Dutch Authority for the Financial Markets (AFM) is publishing its Trend Monitor, its annual analysis of trends that will affect the financial sector and its supervision in the coming years, today. The continuing low level of interest rates, ever-evolving digitalisation and increasing attention to sustainability are the most influential issues. ‘In the Trend Monitor, we describe various issues that require attention. In some cases, it is up to the sector to deal with them. Other issues require effort on the part of supervisors and policymakers,’ explains AFM chair of the Executive Board Laura van Geest. ‘This edition is presented...

Transparent price formation in the fixed-income and derivatives market still leaves room for improvement

A study by the Dutch Authority for the Financial Markets (AFM) on the effectiveness of the MiFID II regulatory framework for the fixed-income and derivatives markets shows price formation still needs to be more transparent. The MiFID II rules are also considered less suitable for the fixed-income markets. The AFM does, however, note a shift towards on-venue trading for bonds and derivatives. In anticipation of potential changes to the current MiFID II framework, the AFM has conducted an analysis of the fixed-income and derivatives markets focussing on the primary bond markets and the secondary fixed-income markets. The AFM’s recommendations include increasing...

Regulator Information

Abbreviation: AFM
Jurisdiction: Netherlands

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