On 15 January 2024, the Dutch Authority for Financial Markets (Autoriteit Financiële Markten, the AFM) published its supervisory agenda for 2024 (the AFM Agenda 2024). The AFM Agenda 2024 outlines the financial sector’s trends and risks while detailing the AFM’s priorities and other important events for this year. The AFM Agenda 2024 builds on the AFM’s Trend Monitor 2024, which lists important trends and related risks in the financial sector.
The AFM Agenda 2024 starts by listing four major developments that impact the financial sector as well as the AFM’s supervision:
- Sustainability. Climate change relating risks are increasing as meeting the climate targets set out in the Paris Agreement is under pressure. At the same time, there is a growing social and political desire for financial markets to speed up the sustainability transition. However, the sustainability transition is lagging behind the desired pace.
- Digitalisation. Artificial Intelligence (AI) is developing rapidly, which creates opportunities and risks for the financial sector. In addition, the AFM identifies an increase of products and services offered via online platforms.
- Internationalisation. The financial sector is becoming increasingly internationalised, which triggers cross-border issues and risks. This requires supervision to be more internationalised and calls for supervisory convergence.
- The pension transition. In 2024, the AFM will focus on the implementation of the Future Pensions Act (Wet toekomst pensioenen).
We do note that for some reason, the AFM Agenda 2024 no longer explicitly lists integrity and criminal behaviour (which is included in the AFM’s Trend Monitor 2024).
Chapter 2 of the AFM Agenda 2024 describes the AFM’s strategy, which is based on the AFM’s Strategy 2023-2026, and its mission. The AFM has translated its mission and external developments into multi-year supervisory goals and priorities for its four supervisory areas (financial services, capital markets, asset management and financial reporting & audit firms) and detailed these in chapter 3. Chapter 3.5 specifically addresses AFM-wide topics, such as countering criminal behaviour and financial stability. Chapters 4 and 5 respectively address the AFM’s finances for 2024 and its external key performance indicators.
On this basis, the AFM identified five themes for its supervision in 2024 and provides for priorities and activities for each of them:
- Sustainability. The AFM has a comprehensive strategy for monitoring sustainability as its priority, and wants to do so by providing appropriate information and advice on sustainability factors in investments, by enforcing and overseeing reliable ESG reports and by monitoring the preparation for CSRD compliance.
- Digitalisation. The AFM prioritises the management of the effects of digitalisation in the market by using data and technology to supervise technology. The AFM is preparing the supervision of DORA and the AI-act. Digitalisation should be deployed by financial service providers in the interest of the customer and should not lead to the exclusion of (less digitally savvy consumers). The AFM has a DORA implementation plan for its own supervision, and continuously informs the sector about DORA and related key implementation concerns and it conducts baseline measurements/gap analyses to get a picture of how the sector is doing in terms of cyber security.
- Internationalisation. The AFM wants to exert influence internationally by contributing to and improving EU regulations and supervision within the EU, specifically with regard to the topics of money laundering, consumer protection and illegality. The AFAM is preparing for the supervision of MiCAR. By having talks with crypto-asset service providers in the Netherlands, the AFM has a good understanding of how these parties are preparing for MiCAR. Furthermore, the AFM finds that risk-based and data-driven supervision is efficient and leads to desired results.
- Accents in supervision. The AFM implements its supervisory priorities effectively by launching supervision on the pension transition, renewed supervision of financial services providers and by combatting manipulative trading behaviour in relation to equity, bonds and commodities. The provision of information on the pension transition from pension providers to participants should be clear, accurate, timely and balanced. The AFM is adequately prepared to review approximately 200 communication plans (part of pension provider’s implementation plans) until mid-2025.
- Professional organisation. The AFM makes it a priority for 2024 that it is a professional, vital and agile organisation and defines activities for its IT infrastructure and cost framework. It also states that the AFM strives to process 100% of the licence applications and screening applications within the statutory period.
The AFM Agenda 2024 is available here.