AFM Agenda 2025

In Brief
The rise of new business models due to digitalization, geopolitical tensions, the growing market for sustainability, and the financial sector's vulnerability to cyberattacks are impactful trends affecting both the financial sector and the AFM. These trends guide our work with the aim of limiting potential risks. This Agenda 2025 outlines the activities we will carry out this year regarding our supervision of financial services, capital markets, asset management, and accounting & reporting.

AFM Agenda 2025 | Table of Contents

Key Developments 3
Strategy 8
Priorities and Key Activities 2025 9
3.1 Supervision of Financial Services 14
3.2 Supervision of Capital Markets 19
3.3 Supervision of Asset Management 22
3.4 Supervision of Accounting and Reporting 25
3.5 AFM-wide Topics 29
Finances 2025 33
Appendix: External KPIs 41

AFM Agenda 2025 | Key Developments 3

Key Developments
Trends

AFM Agenda 2025 | Key Developments 4
General Developments
Although inflation is moving towards lower levels, economic growth is expected to remain limited. The rise in food and energy prices, along with the corresponding tightening policy of the European Central Bank (ECB), cooled the economy in 2023. Although the Dutch economy barely grew in 2023, a serious recession was avoided. There was also a shortage in the labor market. Now that the largest price and interest rate increases seem to be behind us and wages rose quickly last year, the financial position of households has improved. Therefore, moderate economic growth is expected for the coming years.1 There is also confidence on financial markets that inflation will return to central bank targets without a sharp economic downturn. On capital markets, this expectation has contributed to historically high stock prices. The favorable economic developments and prospects do not negate that calm on financial markets can quickly turn. For example, further interest rate cuts are expected to be delayed if inflation remains persistently higher than the ECB's target. This could lead to asset write-downs because investors seem to have taken a head start on interest rate cuts later this year, and markets appear highly valued. Furthermore, geopolitical tensions could lead to further geo-economic fragmentation, cyber threats could increase, and disappointing results from the perceived added value of AI could result in a stock market correction. Due to the global interconnectedness of financial markets, unexpectedly strong negative economic news could pose a risk to financial stability. If the crypto market continues to grow and its interconnectedness with the traditional financial system increases, this could also lead to financial stability risks.2

1 See 'Macro Economic Exploration', CPB, September 2024 and 'Spring Forecast 2024', DNB, June 2024.
2 'Financial Stability Report 2024', AFM, June 2024.
3 'Population in the Future', CBS.
4 'Dutch people with a migration background: An exploration of the degree of financial vulnerability and the relationship with financial services', AFM, December 2021.

The financial position of households is relatively stable but remains vulnerable to (unexpected) economic disappointments. Dutch households have remained resilient against rising inflation and interest rates. This is due in part to the government support provided immediately after the outbreak of the coronavirus pandemic and energy crisis, (collective labor agreement) wage growth, the tight labor market, and the fact that many Dutch households have mortgage loans with longer fixed-rate periods. At the same time, attention to the financial position of vulnerable households remains necessary, including due to the long-term effects of higher interest rates on household debts and the cost of living. Specific groups of households, such as those investing in risky assets or holding large consumer credits, are particularly vulnerable.

Demographic developments can eventually lead to a shift in financially vulnerable groups. Demographic developments refer to changes in the size and composition of groups in society. The associated risks often have a slow-moving character but can have significant consequences. For example, the Dutch working-age population has already begun to shrink, so-called 'aging', and the diversity of society is increasing due to migration.3 This creates shifts in financially vulnerable groups. Dutch people with a migration background have a greater risk of income loss after retirement, exclusion by traditional financial parties, underinsurance, and fraud through the use of unregulated parties for transactions abroad.4 Due to aging, extra attention will go to financially vulnerable elderly people. This is especially the group of elderly people with only AOW (state pension), hardly a second pillar pension, and without their own home or accumulated wealth. They are also particularly susceptible to (digital) fraud. Finally, young people are becoming more vulnerable due to debt habituation when using services like installment payments, and they take more risks by – among other things via finfluencers – excessively trading in, for example, cryptocurrencies.

AFM Agenda 2025 | Key Developments 5
AI Digitalization
Digitalization within the financial sector is steadily advancing and changing the business processes and business models of financial institutions. Technology plays an increasingly indispensable role in the operations and business models of financial institutions. For example, banks and insurers use AI models for credit assessments, fraud prevention, and combating cybercrime. Asset managers and capital market parties apply AI models in investment strategies, risk management, and compliance.5 Due to the increasing use of these new technologies and the entry of new innovative (non-financial) players, there is pressure on the business model of traditional financial institutions. Financial institutions dependent on old business models risk pricing themselves out of the market. We also increasingly see financial products or services offered via apps or websites by non-financial companies, whether in the form of 'embedding' in the purchase of a non-financial product. Embedded finance can help increase the accessibility and ease of use of financial services, but also leads to risks in the area of consumer protection. The use of technologies creates new dependencies and makes the financial sector vulnerable to concentration risks. With the digitalization of the financial sector, the dependence on IT systems is increasing. These IT systems are predominantly supplied by a limited group of large (mostly American) tech companies, such as Amazon Web Services, Microsoft Azure, Google Cloud, and Alibaba Cloud. These parties dominate the market for cloud service providers. The failure of one crucial party in the chain could halt service provision for a large part of the sector.6 Furthermore, we see that high IT costs, for example for IT infrastructure and cyber resilience, lead to consolidation. We see this, for example, among capital market parties and parties in the asset management sector. Concentration risks among a few large market parties and chain dependence lead, among other things, to risks for financial stability.

5 See also 'The Impact of AI on the Financial Sector and Supervision', AFM and DNB, April 2024.
6 On July 19, 2024, a software error in a version update by the cybersecurity company CrowdStrike led to large-scale disruptions in Microsoft-controlled systems in various industries worldwide, including aviation.
7 'Green finance: A quantitative assessment of market trends', TheCityUK, March 2022.
8 'Guideline for Sustainability Claims', AFM, October 2023.

Increasing digitalization increases the risk of cybercrime. The dependence on IT increases the vulnerability of the financial sector to cyberattacks, which are often targeted at the weakest link in the chain. Cyberattacks can halt service provision, cause financial damage, and even threaten financial stability. This can have significant financial and economic consequences, affecting both consumers and financial institutions. Furthermore, geopolitical tensions and geo-economic fragmentation increase the chance of cyberattacks, especially because the financial sector is an attractive target for cybercriminals (possibly affiliated with state actors) seeking to disrupt (financial) infrastructure.

Sustainability
The market for sustainable financing has grown strongly. Damage from climate change emphasizes the need to accelerate the sustainability transition and requires significant investments. The financial sector plays an important role in this. We see that the market for sustainable financing has grown strongly in recent years.7 Despite this, the market share of sustainable financing is still a limited part of the total.

Regulation is giving investors more tools to incorporate Environmental, Social, and Governance (ESG) factors into their investment strategies. Much new (European) regulation has been developed in recent years to promote sustainability in the financial sector. For example, the Corporate Sustainability Reporting Directive (CSRD) must increase the transparency of companies regarding their sustainability efforts. Additionally, the Sustainable Finance Disclosures Regulation (SFDR) requires fund managers to clearly communicate how they weigh sustainability risks in their investment policy. Their sustainability claims must also be correct, clear, and not misleading.8

AFM Agenda 2025 | Key Developments 6
Societal polarization can put the popularity of ESG investing under pressure. The popularity of ESG investing seems to be under pressure after years of growth. In the United States (US), investments in sustainable funds decreased for the first time last year, while in Europe, the growth of assets in sustainable funds is flattening.9 The disappointing financial performance of sustainable investment strategies in recent years likely plays a role here. Additionally, societal polarization contributes to the decreasing popularity. This is most visible in the US, where some states are trying to discourage ESG investing and others are trying to encourage it.10 In Europe, societal polarization around the sustainability transition can also spill over into the financial sector. The volume and complexity of regulation around sustainability can have unintended side effects. The various packages of regulation intended to increase transparency around sustainability are essential, but collectively require a lot of time and attention from the institutions involved. There is a risk that the attention institutions devote to meeting transparency requirements comes at the expense of efforts to actually sustain their business model. Additionally, there is a risk that institutions become reluctant to publicly disclose their sustainability goals or lower them, to avoid being accused of incorrect sustainability claims in the future.11

9 'Global ESG Funds Hit With Outflows for First Time in Q4', Morningstar, February 2024.
10 'The ESG-battle: 4 key states shaping regulatory discourse in the US', ESGDive, November 2023.
11 'How companies are starting to back away from green targets', FT, June 2024.
12 'AFM and DNB: Recommendations for a strong European Capital Markets Union', AFM, February 2024.
13 'The future of European competitiveness', EC, September 2024.

Internationalization
Political shifts and geopolitical tensions are straining international relations and may lead to increasing divergence in regulation and regulatory arbitrage. For example, due to geopolitical tensions, geo-economic fragmentation between trading blocs has increased, reinforced by mutual import tariffs and financial-economic sanctions between the EU, US, and China. In response, many countries are striving for strategic autonomy in sectors such as defense, technology, and (fossil) energy. This also applies to European capital markets. There, strategic autonomy translates into increasing resilience and reducing unwanted strategic dependencies on non-European countries. Political developments in, among others, the US and Europe are causing extra uncertainty worldwide. For example, future policy changes in the US and the EU could increase the divergence in regulation between the US and the EU, for example in the area of sustainability or crypto assets. This could lead to regulatory and supervisory arbitrage and undermine the integrity of financial markets. A strong and integrated European Capital Markets Union (CMU) that can operate independently of major financial centers outside the EU strengthens European strategic autonomy and offers protection against these risks.12,13

AFM Agenda 2025 | Key Developments 7
Financial services are increasingly taking on an international character, which brings risks that require an international approach. The Dutch financial markets are attractive to foreign parties. Driven by digitalization, we see an increase in cross-border financial services. In addition to the positive effects of an increase in supply and a greater diversity of providers, the cross-border nature of financial services also brings (cross-border) risks. Think of an increase in malicious foreign providers of risky investment products, an increase in cross-border market abuse on capital markets, and the creation of an uneven playing field between domestic and foreign providers of financial products and services. These risks may be addressed less adequately at the national level and require an international approach.

Integrity and Criminal Behavior
Digitalization makes malicious financial service providers more effective. Unfortunately, digitalization also stimulates criminal behavior on the investment market. New players who fall outside regular licensing can enter the investor market. Many of these new players present (independent) investing as a risk-free and easy way to make money. They often target younger, less experienced investors. Trends such as gamification and the use of low-threshold investment apps increase the risks of criminal behavior. Think of finfluencers with many young followers on social media who falsely present themselves as experts and are not transparent about their own business model. Malicious providers and fraudsters are increasingly facilitated by providers of (malicious) trading software and ready-made misleading websites that project a professional appearance but are intended to deceive investors and take their money. Such malicious activities have a significant impact on (groups of) victims who suffer damage from them.

Preventing and combating money laundering and terrorist financing, and complying with sanctions regulation, require ongoing attention. This applies especially to crypto and real estate markets. The complex and international character of crypto markets can contribute to the emergence of non-integrity (trading) behavior, such as money laundering, financing terrorist activities, or evading sanctions regulation. Specifically, the real estate sector is susceptible to misuse by criminals due to its size, generally high returns, and opacity regarding valuation, pricing, and transfer. Preventing and combating these forms of criminal behavior requires effective (inter)national cooperation with chain partners.

AFM Agenda 2025 | Strategy 8
2. Strategy
The AFM renewed its strategy in 2022. The AFM Strategy 2023-2026 is the basis for the Agenda 2025. The strategy is summarized in the figure below.
The AFM's mission provides direction for the execution of our statutory tasks. The AFM's mission is: 'The AFM advocates for fair and transparent financial markets. As an independent behavioral supervisor, we contribute to sustainable financial well-being in the Netherlands'.
The AFM employs a supervision approach that is risk-based, data-driven, and results-oriented. Risk-based means that the AFM focuses on matters where the most damage can occur for consumers, investors, and other market parties. Data-driven supervision means that we substantiate our supervisory judgments and actions as much as possible with data: collecting, opening up, and analyzing data. With this, we can understand risks, monitor them systematically, and address them targeted if necessary. Results-oriented means that we focus on maximum impact with the formal and informal instruments we have. For the best result, we respond to the motivations and causes of behavior.

In the AFM Strategy 2023-2026, we have identified the long-term trends that have a high impact on Dutch society, the financial sector, and the AFM. Thus, for 2025 as well, digitalization, internationalization, and sustainability are the trends that guide our supervision. Chapter 1 contains a short analysis on this, and the full analysis is included in Trendzicht 2025.
The mission and external developments have been translated into multi-year supervisory objectives for the four supervision areas. These have been elaborated for the coming year in Chapter 3. Additionally, AFM-wide topics, such as combating criminal behavior and financial stability, are elaborated in Chapter 3.5. A professional organization provides a solid foundation for achieving the supervisory objectives and mission. The objectives in this regard can be found in Chapter 3.5.3.

AFM Agenda 2025 | Priorities and Key Activities 2025 9
3. Priorities and Key Activities 2025

AFM Agenda 2025 | Priorities and Key Activities 2025 10 In 2025, the AFM prioritizes the following objectives.
The AFM ensures that supervised institutions manage the effects of digitalization in their market. For our supervision in this area, we increasingly use data and technology:

The AFM supervises the implementation of DORA by enterprises, particularly regarding critical capital market infrastructure.
In addition to DORA, the AFM is well prepared for the implementation of (new) regulation regarding digitalization, such as MiCAR, PSD3/PSR, Financial Data Access Regulation (FIDA), Retail Investment Strategy (RIS), and Artificial Intelligence (AI) Act.
The AFM implements a new data-driven supervision strategy.
The AFM investigates how the impact of significant technological developments, such as embedded finance and AI developments, affects the consumer.

The AFM is internationally influential. We do this by actively contributing to EU regulation and by stimulating effective supervision of European financial markets:

The AFM promotes its risk-based supervision model in the EU. We do this by bringing our way of supervising into supervisory discussions within the European Securities and Markets Authority (ESMA), the European Insurance and Occupational Pensions Authority (EIOPA), and in Brussels. The AFM also organizes meetings with foreign supervisors this year with the aim of sharing knowledge and strengthening mutual cooperation.
In international discussions regarding the centralization of data, the place of enforcement in the supervisory instrumentarium, and CMU, the AFM's position is known and is regularly cited in the debate as a good direction.
The AFM pays attention to international supervision across the board.

The AFM has the objective that (financial) enterprises and consumers are enabled to weigh sustainability risks and sustainability impact in their decisions:

The AFM supervises sustainability information in a coordinated and effective manner.
The AFM is at the forefront of international discussions regarding impactful investing.
The AFM ensures that the transition to a sustainable society is supported by adequate management of sustainability risks by asset managers and appropriate financial products.

The AFM's supervision protects the interests of participants during the pension transition and prevents as many foreseeable disappointments as possible by supervising balanced communication and explainable arrangements for participants in pension funds:

The AFM contributes with its supervision to pension schemes that align with the risks participants can and want to bear, to balanced information provision, and to careful advice and choice guidance.
The AFM substantiates its supervisory messages with data.
The AFM maintains continuous contact with stakeholders in the pension sector to provide a platform for questions and to discuss bottlenecks of the transition as early as possible.

The AFM improves its supervision of market abuse, among other things by collaborating with foreign supervisors:

The AFM conducts research into cross-product and cross-platform trading with insider information.
The AFM combats uncontrolled use of (AI in) trading algorithms by realizing better management in the sector.

The AFM has established a new organizational structure and working method based on 'Supervision with the Future' as of July 1, 2025, where multidisciplinary, data-driven, and disciplined work are paramount.

All departments work from the new organizational structure.
Multidisciplinary, data-driven, and disciplined work have been clearly established within the AFM.

AFM Agenda 2025 | Priorities and Key Activities 2025 11 The AFM is an agile and learning organization and possesses effective IT service provision.

Through the use of Strategic Personnel Planning, Continuous Dialogue, and staffing planning, all managers steer their personnel allocation.
The AFM improves