Recent publications on AFM Agenda, remuneration of financial enterprises, MiFID II disclosure  and DORA

News Update Financial Regulatory

Publication of the AFM Agenda 2023, new remuneration measures for financial enterprises, marketing of financial products and DORA
31 January 2023

In this News Update we discuss the AFM Agenda 2023; entry into force of Further Remuneration Measures for Financial Enterprises Act; ESMA and NCAs on the marketing of financial products; and DORA – the new framework for digital operational resilience in the financial sector.

AFM Agenda 2023

On 12 January 2023, the Dutch Authority for the Financial Markets (AFM) published its Agenda for 2023. The agenda describes the major trends and risks in the financial sector and outlines the AFM's priorities and activities in the coming year. A summary of some relevant aspects relating to the financial services sector is set out below. 

Trends and risks

The AFM begins by listing several trends for 2023, characterised by geopolitical and economic turbulence associated in part with the Russian invasion of Ukraine. Sharply rising energy prices and hikes in prices of numerous other goods have driven inflation to record highs, prompting interest rate increases. These circumstances could lead to an economy that will grow at a considerably slower rate in 2023, or may even stagnate. 

The AFM also refers to major changes in the financial sector that are being triggered by digitalisation and platformisation. New European laws and regulations aim to influence the direction of various digital developments and tackle potential risks. The Digital Operational Resilience Act ("DORA"), for example, aims to reinforce the digital resilience of companies, while the Markets in Crypto Assets Regulation represents a first step towards the regulation of cryptocurrencies. 

For the financial services sector, the AFM foresees most risk in the pensions transition. It observes that this system change is complex and has far-reaching consequences for millions of households. Furthermore, the transition involves high impact and irreversible choices that individuals need to make around their retirement date and while they are employed. This increases the importance of providing careful guidance on the decisions to be made. In addition, the AFM says it is looking at the way in which the high inflation and, by extension, the rising interest rates might affect the risk of overextension of credit.

The AFM also identifies points for attention relating to the following: easy access to high-risk products such as cryptocurrencies, the pressure which the consolidation trend in the financial services sector may place on the quality of the services, and consumers in vulnerable situations who are lured into purchasing less appropriate, or even illegal, financial services. 

Priorities and activities

The AFM lists the following objectives for its supervision in 2023: 

  • The AFM will provide clarity on how the pensions sector must handle the implementation of, among other things, new open standards such as decision-making guidance, engagement confirmation and risk preference of pension members. To ensure that pension scheme members’ interests are given central priority in the new pensions system, proper implementation of new standards is essential.
  • Financial service providers will prevent overextension of credit, in particular in the light of rising interest and inflation rates. In addition, they will reduce the risk of non-insurance or underinsurance. They should not lose sight of their duty of care, which will continue after a customer has purchased a product.
  • Financial service providers will use digitalisation in the customer’s interest. This means that the greater accessibility of financial services will not detract from the safeguards for the customer’s interests. This applies also to execution-only. The influencing of customers through apps and websites, the use of customer data and online marketing, the product range and the personalisation of insurance premiums will contribute to customers’ well-being.
  • Financial service providers will comply with the new legislation on sustainability that will enter into force in January 2023. This will reduce the risk of greenwashing and will help customers make a well-informed choice that is compatible with their sustainability ambitions.

Please refer to the AFM Agenda 2023 for more details.

Entry into force of Further Remuneration Measures for Financial Enterprises Act

On 1 January 2023, the Dutch Further Remuneration Measures for Financial Enterprises Act (Wet nadere beloningsmaatregelen financiële ondernemingen, "Wnbfo") entered into force. The Wnbfo amends the Financial Supervision Act (Wet op het financieel toezicht, "Wft") on several points regarding remuneration within financial enterprises. 

The main amendments to the previous legislation are: 

  • Additional requirements for financial enterprises seeking to award bonuses exceeding the cap set out in the Wft using the exception for staff not covered by a collective labour agreement, as this exception is often being used for staff for whom it is not intended. For example, the exception can no longer be applied to those performing internal control functions or directly engaged in providing financial services to consumers. The new legislation also imposes a requirement on financial enterprises who use the exception to the bonus cap to report this to the supervisor each year, stating reasons. 
  • In line with European legislation for investment firms, the bonus cap will not apply to certain traders dealing on their own account (proprietary, or 'prop' traders). The new Act states that the exception only applies if the prop trader also qualifies as a local enterprise. The AFM have been applying a tolerance policy regarding this issue for years. This policy now lapses. 
  • A statutory retention period of five years for shares and related financial instruments that are part of the fixed remuneration of directors and employees of financial enterprises. This principle already applied to directors of listed companies under the Dutch Corporate Governance Code ("CGC"). However, this statutory retention requirement is broader, applying to employees as well as directors and to all financial enterprises rather than just those that are listed. Moreover, while the CGC operates on a 'comply or explain' basis, compliance with this legislation is mandatory. 
  • An obligation to account for the relationship between the remuneration of the enterprise's directors, supervisory directors and employees and the enterprise's social function, and for the manner in which that relationship was established. There should be accountability in retrospect based on the disclosure and information obligations already in place, e.g. in the governance policy.

ESMA and NCAS on the marketing of financial products 

On 16 January 2023, the European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, announced the launch of a common supervisory action (CSA) with national competent authorities (NCAs). The CSA, which will be conducted over the course of 2023, concerns the application of the disclosure rules under the Markets in Financial Instruments Directive II (MiFID II) with regard to marketing communications across the European Union.

ESMA states that it is aware of the key role that marketing communications and advertisements can play in determining consumer behaviour and influencing investment decisions. That is why it is launching the CSA to assess the application by investment firms and credit institutions of the MiFID II requirements on marketing communications.

ESMA explains that the CSA will involve NCAs reviewing whether marketing communications (including advertisements) are fair, clear and non-misleading, and examining how firms select the target audience for their marketing communications, especially in the case of riskier and more complex investment products.

Finally, ESMA also sees the 2023 CSA as an opportunity to collect information about possible ‘greenwashing practices’ observed in marketing communications and advertisements.

ESMA believes this initiative and the related sharing of practices across NCAs will help ensure consistent implementation and application of EU rules and enhance the protection of investors in line with ESMA’s objectives.

DORA: the new framework for digital operational resilience in the financial sector

On 16 January 2023, the Digital Operational Resilience Act ("DORA") entered into force. The relevant European Supervisory Authorities are currently developing technical standards with which financial enterprises must comply, whilst NCAs will oversee compliance and enforce the regime as required. The new legislation will apply from 17 January 2025. 

DORA is designed to consolidate and upgrade ICT risk management requirements throughout the financial services sector to ensure that all participants in the financial system are subject to a common set of standards to mitigate ICT risks for their operations. DORA will, for the first time, bring rules addressing ICT risk in finance together into one single legislative act. 

Please refer to the News Update IT & Cybersecurity for more details.

Other financial regulatory publications

We have highlighted a selection of other publications by legislatures and regulators for the financial markets and financial supervision since our January 2023 News Update. 



European Supervisory Authorities – ESAs


European Insurance and Occupational Pensions Authority

Single Resolution Board

Basel Committee on Banking Supervision

If you have any financial regulatory questions, please do not hesitate to contact Berry van Wijk, Juan Vervuurt, Gijs Hamelijnck and Lisanne Haarman. For questions related to Investment Management, you can also contact our colleagues Oscar van Angeren and Marthe Bollen.

Written by:
Berry van Wijk

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Advocaat | Partner

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Gijs Hamelijnck

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Advocaat | Senior Associate