AFM Legislative Brief 2025

Foundation for the Authority for the Financial Markets Chamber of Commerce Amsterdam, no. 41207759 Reference of this letter: LeWk-25042136 Visit address Vijzelgracht 50 P.O. Box 11723 • 1001 GS Amsterdam Telephone +31 (0)20-7972000 • www.afm.nl AFM - Confidential Public version

The Minister of Finance E. Heinen Korte Voorhout 7 2511 CW THE HAGUE

The Minister of Social Affairs and Employment Dr. Y.J. van Hijum Parnassusplein 5 2511 VX THE HAGUE

Ref. LeWk-25042136 - AFM Legislative Brief 2025 Date 24 April 2025 Our reference LeWk-25042136 Page 1 of 5 Subject: AFM Legislative Brief 2025

Dear Mr. Heinen, Mr. van Hijum,

The AFM advocates for fair and transparent financial markets. As an independent conduct supervisor, we contribute to sustainable financial well-being in the Netherlands. To perform our duties effectively, a well-functioning regulatory framework is essential. In the annual legislative brief, we bring to the attention of the legislator which adjustments in laws and regulations the AFM deems necessary to keep its supervision agile, effective, and future-proof. On the one hand, we do this by identifying bottlenecks which the AFM believes can be resolved by adjusting legislation. On the other hand, we propose improvements or tightening of legislation that can contribute to a strong and reliable financial sector.

The content of the AFM's regulatory framework is increasingly influenced by (new) European laws and regulations. Thus, developments in the field of digitalization and sustainability not only lead to new requirements for market participants, but also to new tasks for supervisors. At the same time, at the national and international level, the discussion on regulatory burden, the competitive position of companies in Europe, and burden reduction plays a role. The AFM supports the importance of efficient and effective regulation. It is therefore important to align as much as possible with the original texts when implementing European regulation at the national level. For the sake of a level playing field in Europe and limiting regulatory burden, we support the government's stance of avoiding national gold-plating.

In the Netherlands, we also have legislation that is less or not influenced by European regulation. It is important that we continue to investigate together with the legislator where laws and rules can be simplified, improved, or tightened, without losing sight of the intended goal of the laws and rules. In this way, we can ensure effective and efficient supervision of the financial markets, also in the future.

In light of the above, we ask in this legislative brief for your attention for the following legislative wishes:

Information provision to the Pension Register Foundation Dutch citizens can view information about their AOW (state pension) and their pension accrual via the website Mijn Pensioen Overzicht (MPO). Pension administrators can also use an Application Programming Interface (API), which enables the participant to retrieve pension information from other administrators so that a pension administrator can take this information into account in its choice guidance. The Pension Register Foundation (SPR) is responsible for MPO and the API. The information available on MPO (and thus also via the API) does not always prove to be correct and up-to-date. As a result, participants may make wrong choices when making financial decisions and suffer serious harm. We request the legislator to tighten the existing statutory norm for pension administrators regarding the timely provision of correct pension information about participants to the SPR.

Based on signals, the AFM has established that information available to participants on MPO is not correct or not up-to-date. As a result, there is a considerable chance that a participant bases his/her financial choices on incorrect or outdated information. These choices can therefore have a significant (financial) impact on the livelihood security of these participants, and they may end up in a vulnerable position. This means the risk of this bottleneck for participants and society is large.

Currently, pension administrators must report changes to the SPR within a certain period after the change has been processed in the pension administrator's administration. It is difficult for the AFM to determine when certain information has been processed in the pension administrator's administration and to determine whether the information was provided to the SPR in a timely manner. It is very important for the participant to have access to current information. The current norm does not sufficiently guarantee this, as it is not determined when changes in the administration must be reported. Furthermore, the participant should be able to assume that the information is correct, which is not always the case. There is an additional risk that pension administrators do not all provide the information in the same way, causing the SPR to make adjustments.

It is therefore of great importance for pension participants that pension administrators provide correct information to the SPR in a timely manner. Both employers and pension administrators have responsibility for this. The requested adjustment of the legal framework ensures that pension administrators provide correct information to the SPR in a timely manner. The AFM can then take enforcement action if necessary if the pension information is not correct or not provided in a timely manner. As a result, participants will have access to more current information than is currently the case. This prevents any delays in processing information in the pension administrators' administrations from leading to participants making decisions based on outdated information. The desired statutory adjustment will have a positive effect on the information position of participants who, based on information from MPO or the data provided via the API, can make well-founded (financial) decisions.

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Regulated market vvgb regime: introduction of a bandwidth Parties must have a declaration of no objection (vvgb) for holding a stake of more than 10% in a regulated market, which is a trading platform where financial instruments are traded. With every increase in this stake, a vvgb must (again) be requested. To reduce the administrative burden for all parties involved (besides holders of a vvgb, also for the AFM and the Minister of Finance), it is proposed to introduce a bandwidth. Within this bandwidth, a vvgb does not need to be requested when the stake increases.

Obtaining a vvgb has multiple objectives. For example, it is tested whether the ownership structure of the regulated market remains transparent and whether the supervision is not hindered by the change. It is also tested whether the holder's influence does not pose a threat to the interests the law intends to protect and whether the healthy and prudent management of the regulated market is not jeopardized. The law currently states that for every minimal increase in the qualified stake, a vvgb must be requested (again). In cases where the stake fluctuates, the repeated requirement to apply for a vvgb regime can lead to an administrative burden.

A possible solution could be to limit the necessity of obtaining a new vvgb by introducing a bandwidth in the legislation. This can reduce the administrative burden. The law can specify that a new vvgb is only needed when the stake in a regulated market reaches or exceeds a determined threshold value. One could look at the threshold values that apply under European regulation for other similar trading platforms, i.e., 20%, 30%, and 50%.1 The first threshold of 10% remains unchanged. Also under the proposed regime, parties must request a vvgb in advance before acquiring a stake of 10% or larger.

Reintroduction of approval requirement for accounting professional regulations The Dutch Institute of Accountants (NBA) is responsible for drawing up professional regulations. The AFM believes that these requirements for accounting organizations must serve the public interest. However, the NBA also performs other tasks, such as representing the common interests of accountants. The AFM sees the risk that the representation of the public interest by the NBA does not always run parallel to the execution of other NBA tasks. This can lead to a conflict of interest. To safeguard the public interest, the AFM wishes the reintroduction in the Act on the Accounting Profession (Wab) of the requirement of approval by the Minister of Finance regarding professional regulations of the NBA that relate to accounting organizations and statutory audits. These professional regulations thus relate to the AFM's supervision of the Act on Supervision of Accounting Organizations.

1 Given the similarities in the nature of the activities of a regulated market and a MTF (multilateral trading facility) and the similar objectives the legislator often has regarding regulated markets and MTFs, one could consider using the same threshold values in this case that apply under Article 11 of MiFID II for parties that qualify as investment firms.

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Until 2019, there was already a provision in the Wab that required professional regulations relating to statutory audits to receive approval from the Minister of Finance. The approval requirement was deleted for the sake of burden reduction, but it is unknown what that burden reduction consisted of at the time. Without the approval requirement, there is a risk that professional regulations are formulated too loosely, so that important problems are not addressed. This can complicate AFM supervision and create a gap in societal expectations, where the impression exists that professional regulations are created completely independently while in reality multiple interests may be at play.

The AFM did not previously publicly object to the deletion of the approval requirement, because at that time there was an intention to regulate requirements for accounting organizations by law. At that time, the NBA would limit itself to professional regulations for individual accountants. Since this intention did not lead to legislation, the AFM finds it desirable to reintroduce the approval requirement, also from a rule of law perspective. Given the importance of public trust in the quality of professional regulations, the AFM finds it necessary to ensure that this legislation fully serves the public interest. An approval requirement is a suitable means for this.

Abolition of double reporting obligation for directors and supervisors Since the introduction of a reporting obligation for managers in the Market Abuse Regulation (MAR) in 2014, alongside the existing national reporting obligation, the Netherlands has had a double reporting obligation for directors and supervisors of listed public limited companies. According to both reporting obligations, these persons must report to the AFM when they carry out transactions in the instruments of the issuing entity where they work (e.g., shares or options). In the context of both burden reduction for the sector and preparations for the centralization of data at the European level, the AFM wishes to abolish this national gold-plating by deleting the reporting obligation based on Article 5:48 of the Financial Supervision Act (Wft). As a result, only the European reporting obligation will apply for all relevant persons.

To prevent persons from having to report the same information twice, the AFM included a 'Temporary solution to prevent double reporting obligation' in its Brochure Insider Trading in 2014. Based on this temporary solution, a report under the national regime also satisfied the reporting obligation that applies in Europe. For the European reporting obligation, there is a threshold of €20,000 per calendar year, within which reporting persons do not need to make a report. The national reporting regime does not have such a threshold and is therefore stricter. This means that reporting persons must report all their transactions in the issuing entity where they work based on the current national regulations. Deleting the national reporting obligation will therefore lead to burden reduction for directors and supervisors.

Although deleting the national reporting obligation will lead to less transparency, the AFM recognizes the extra burdens that the national reporting obligation entails. As described in the introduction of this legislative brief, the AFM supports the importance of limiting regulatory burden for the sector and avoiding national gold-plating. For directors and supervisors, the proposed change means fewer reports and thus administrative relief. Because it does affect the degree of transparency for investors, the AFM proposes to test the proposed change via a public consultation.

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Wishes from previous legislative briefs Several ministries have worked on the legislative wishes that the AFM has included in previous legislative briefs in recent times. For example, we are pleased with the proposed changes regarding the outsourcing rules for financial service providers and the deletion of the three-yearly reliability test on the BES islands. We express our thanks and appreciation for the cooperation and the steps taken regarding various legislative wishes.

In light of a recent court ruling regarding the non-binding nature of the Regulation on tackling flash loans2, the AFM recalls its legislative wish regarding flash loans from 2018. Finally, we would also like to ask for attention for outstanding legislative wishes that were included in previous legislative briefs.

Of course, we can provide further explanation regarding our legislative proposals. We look forward to your response.

Sincerely, Authority for the Financial Markets

L.B.J. van Geest Chairman of the Board

J.R. Heuvelman Board Member

2 College of Appeal for Business, 28 January 2025, ECLI:NL:CBB:2025:26.

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