12 April 2017

Financial Markets in brief – new regulation and other developments

There have been many developments in national and European financial markets regulation during the past month, including the European Commission’s launch of a consumer financial services action plan. In this article, we provide a brief overview of this and other developments.

Highlighted publications

European consumer financial services action plan

The European Commission has presented an action plan to facilitate a single market for consumer financial services. These financial services include bank accounts, car insurance and money transfers. The Commission wants to focus on:

increasing consumer trust and empowering consumers when buying financial services at home or from other member states
reducing legal and regulatory obstacles affecting businesses seeking to expand abroad
supporting the development of an innovative digital world

As part of this action plan, the Commission has launched a consultation on technology and its impact on the European financial services sector. It focuses on:

technology neutrality, so that the same rules apply to traditionally-sold products and services as products sold digitally, to ensure innovation and a level playing field
proportionality, ensuring the rules are suitable for regulated entities of different sizes, business models, and entities performing different activities
improved integrity to safeguard transparency, privacy and security for consumers

Netherlands response to Capital Markets Union consultation

The Dutch Ministry of Finance, the Dutch Ministry of Economic Affairs, the Netherlands Authority for the Financial Markets (AFM) and the Dutch Central Bank (DNB) have published a joint reaction to the consultation on the Capital Markets Union. Although they welcome the Commission’s proposals, they propose additional actions on the disclosure of information, financial reporting, sustainability, and European oversight and supervisory convergence.

Minister of Finance letter about new legislation

The Dutch Minister of Finance has published his yearly letter to the Dutch financial supervisors AFM and DNB, in which he responds to their requests for additional legislation. The Minister will explore the feasibility of a number of their suggestions, including:

additional regulation for automated advice
better protection of consumers’ interests in data analysis
a general duty of care for pension providers
the possibility of hearing appeal cases about the suitability assessment of board members behind closed doors
using the Dutch citizen service number (BSN) for the deposit guarantee scheme

Decree on disclosure of non-financial information in force

This ‘decree‘ entered into force on 24 March 2017. The Decree implements the EU directive on disclosure of non-financial and diversity information. The disclosure of diversity information is dealt with in a separate decree, which entered into force on 31 December 2016. Both decrees apply to annual reports for the 2017 financial year.

The decree requires public interest entities (PIEs) to include in the annual reports a non-financial statement containing information on environmental matters, social and employee-related matters, respect for human rights, and anti-corruption. This statement must include a description of the policies, outcomes and risks related to those matters. If there are no such policies, the entity has to explain their absence. The accountant will audit the non-financial statement. This audit is in line with the audit of the management report. Currently banks, insurers and reinsurers are designated as PIEs. Recently, a draft decree has been published for consultation that designates large pension funds as PIEs as well. The consultation ends on 1 May 2017.

Remaining MiFID II provisions to be implemented in Dutch legislation

The Dutch Minister of Finance has published a draft decree for consultation, implementing the remaining MiFID II provisions for investments firms. These provisions include:

minimum criteria on knowledge and expertise required when informing or advising clients
requirements for the product development process
requirements for the provision of information to investors
requirements for investor protection
requirements for inducements

Other publications

EBA

ESMA

EIOPA

ECB

Official Journal EU

MinFin

MinSZW

AFM

DNB

Other

Financial Markets in brief – new regulation and other developments

Fields of expertise