15 February 2018

Financial Markets in brief – new regulation and other developments

There have been many developments in national and European financial markets regulation over the past month. We provide a brief overview of these developments, which include the Dutch Financial Markets Authority’s supervisory priorities for 2018, and the ISDA’s preparations for Brexit.

Highlighted publications

Proposal to replace the Act on Funding of Financial Supervision

A bill replacing the Act on Funding of Financial Supervision has been submitted to parliament. The main element of the proposal is that, in the future, levies will be specified in delegated legislation rather than in the act itself. This will make the system more flexible. The draft decree on the funding of financial supervision contains the rules for apportioning the costs to the different categories of supervised entities.

The principles of the system remain unchanged: financial supervision costs will continue to be funded by financial institutions on a pay-as-you-go basis. Also, part of the funds deriving from penalty payments and administrative fines will continue to be allocated to the State. The new rules are expected to take effect on 1 January 2019.

Financial Markets Amendment Bill 2019

The Ministry of Finance has launched a consultation on the Financial Markets Amendment Bill 2019. Proposals covered by the draft bill include a few amendments to the Act on the accountancy profession. Also, the Financial Supervision Office will be granted a limited power to provide the AFM with confidential information. This should make the AFM’s supervision of accounting firms more effective.

Ministry of Finance planning

The Dutch Minister of Finance has published an overview of the bills, letters and reports that he intends to submit to parliament this year. The document shows that an outline policy document on the review of the Financial Markets Supervision Act will be sent to parliament in March.

AFM publishes Agenda 2018

The Dutch Financial Markets Authority (AFM) has published its Agenda 2018. It contains an overview of the risks the AFM has identified and the priorities it has established for the coming year. Among other areas, the AFM will focus on combatting the use of the financial sector for criminal purposes. In particular, it will invest in data analysis to be able to protect investors from rogue practices and market abuse. MiFID II has given the AFM new tools to do this. Other focus areas are sustainable investments, the consumer credit market, and the introduction of suitability screening for managing directors and supervisory directors of public interest entities.

ISDA and Brexit

Although the consequences of Brexit for ISDA Master Agreements governed by English law are still uncertain, ISDA has started drafting French and Irish law-governed Master Agreements. Should the United Kingdom and the EU fail to conclude a deal that replicates the effect of EU/EEA membership, English law would become “third country law” after Brexit, and English court judgments would not be automatically recognised in EU and EEA member states. In that case, entities may prefer to use an agreement governed by EU law.

ISDA has also published Brexit FAQs on the consequences of Brexit for ISDA Master Agreements.

Other publications

 EC

 

EP

 

EBA

 

ESMA

 

EIOPA

 

ECB

 

Official Journal EU

 

MinFin

 

MinSZW

 

AFM

 

DNB

 

Other

 

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