AFM Supervision Priorities 2017

AFM Supervision Priorities 2017

The Dutch Central Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM) yearly publish their supervision priorities. On 10 March 2017, AFM published its priorities (link, in Dutch) for 2017. The DNB supervision priorities have been published at the end of last year and have been discussed in the Finnius Outlook 2017 (link). Hereinafter we discuss a couple of concrete supervision plans of the AFM for 2017 and their possible impact on financial undertakings.

  • MiFID II: it is important for you to know that the AFM shall actively inform market parties by answering questions and providing interpretations, presentations and information meetings. Further, the AFM announces assessments on the right implementation of MiFID II-criteria at the beginning of 2018. In case your business operations are not modified to MiFID II yet, we recommend to start soon as possible due to the necessary preparation period.
  • Conduct of business investment companies: the AFM will investigate whether investment companies are compliant with rules regarding integrity and ethical business conduct. The investigation will be directed to parties with the highest risks. It is unclear yet which parties are considered to be the most high risk.
  • AIFMD compliance check: In March 2017, the AFM will start an investigation at about 10 selected fund managers of investment firms. The purpose of the investigation is to assess whether these parties are AIFMD compliant.
  • Compliance of the Dutch anti-money laundering act (Wwft) by AIFM-light managers: In Q3 2016, the AFM has sent a survey to exempted fund managers (AIFM-light managers) on their compliance with the Money Laundering and Terrorist Financing (Prevention) Act (Wwft) and the Sanctions Act 1977. In Q2 and Q3 of 2017, the AFM will analyse the results and inform the market. Follow-up investigations are possible. We advise light managers to get their Wwft-processes compliant as far as necessary. In that process, the Fourth Anti-Money Laundering Directive should be taken into account as well, since the Directive will enter into force as of 1 July 2017.
  • Insurance Distribution Directive: By 23 February 2018 Member states should have implemented the Insurance Distribution Directive (IDD). To support market parties in their preparations on the new rules the AFM will provide an overview of changes in legislation, organise information days and formulate Q&A’s. The results will be published by Q3 or Q4 2017.
  • Consumer credit: the AFM considers it important that the provision of consumer credit will be treated unequivocally. Among other things, the AFM will do onsite investigations at telecom providers to determine whether they are compliant with rules regarding sound lending practices in Q3 2017.
  • Crowdfunding: the AFM will further develop the professionalization of crowdfunding. Among other things, the AFM will closely follow the developments regarding the secondary trading of crowdfunding-loans. We recommend to pay attention to the AFM-website for further developments regarding this subject.
  • Innovation and FinTech: this will be an important topic in 2017. The AFM will provide guidance to market parties in both personal conversations as well through presentations and newsletters. In Q4 2017, the AFM plans to provide guidance to financial undertakings on how to implement their general duty in a digitalised environment.
  • Prospectus: the AFM will investigate and develop a framework for understandable prospectuses. The framework will be published in Q3 2017. This guidance should help market parties to better understand the AFM-standards towards developing an understandable prospectus.
  • Reverse listings: in order to have more control over reverse listings, the AFM urges listed companies to timely disclose adequate information on the acquisition of new activities. Furthermore, the AFM will examine her own legal competences and the modus operandi of foreign supervisory authorities regarding reverse listings in Q1 2017.