Regulatory Alerts2026-05-21
Execution-only investing: automatic rebalancing and risk reduction
The Dutch Authority for the Financial Markets (AFM) is developing amendments to the 2016 Guidelines for Qualifying Innovative Services to clarify the conditions under which automatic rebalancing and risk reduction may be offered within execution-only investment services. This initiative responds to market requests for regulatory certainty while ensuring that such life-cycle strategies align with responsible innovation principles, legal boundaries, and client interests. The AFM expects to launch a formal consultation on the proposed framework in the third quarter of 2026.
News
21/05/26
A level playing field, more clarity for market participants, room for responsible innovation and careful protection of investors. From this perspective, the AFM aims to provide greater clarity on investment concepts, including automatic rebalancing and risk reduction within execution-only services. The market requested more clarity; we intend to provide this by further developing this topic in the Guidelines for Qualifying Innovative Services.
In brief
The AFM sees sufficient grounds to explore the market's request
We are working on further developing this topic in the Guidelines for Qualifying Innovative Services
Consultation expected to start in the third quarter of 2026
The AFM sees sufficient grounds to explore the market's request The market has asked the AFM for greater clarity on automatic rebalancing and automatic risk reduction within execution-only services. We understand this need for guidance and are actively working on it. At present, we see sufficient grounds to investigate under what conditions rebalancing and life-cycle investing within execution-only may be possible.
We are working on further developing this topic in the Guidelines for Qualifying Innovative Services We intend to further clarify these conditions by further developing the existing framework within the Guidelines for Qualifying Innovative Services (2016). Through this development, we aim to reflect current developments within execution-only, without undermining the demarcation of execution-only services. We are explicitly examining how the framework can contribute to responsible innovation, within legal boundaries and with the client's interest as the leading starting point. The AFM will pay attention to the European landscape in this regard.
Consultation expected to start in the third quarter of 2026 Our exploration is currently underway; once completed and the potential conditions have been elaborated, we will consult the market on the proposed framework. We expect the consultation period to start in the third quarter of 2026.
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