The Act on Financial Supervision (Wet op het financieel toezicht (Wft)) has come into effect on 1 January 2007. The Wft brings together practically all the rules and conditions that apply to the financial markets and their supervision. In total, the Wft replaces eight existing supervision Acts. The extensive system of supervision of financial institutions that exists in the Netherlands (supervision of banks, insurers, collective investment schemes, etc.) will therefore soon be regulated by a single Act and subordinate regulations based on this Act.
The idea behind the Wft is that legislation for the financial markets should be targeted, market-oriented and clear. The tasks of the Dutch Central Bank (DNB) (prudential supervision) and those of the AFM (supervision of conduct of business) are to be separated in such a way that there is no overlap. Moreover, the rules governing financial institutions have been simplified and the Wft also reduces the administrative burden on the business sector. The intention behind the Wft was not to revise the material standards for financial supervision but instead to anchor the functional supervision model in law and to make the regulations as consistent as possible across the various supervised sectors and not so much the types of institutions.
The simplification and reduction of the administrative burden is achieved by, among other things, turning eight Acts into one, by creating a single general rule for as many issues as possible, and by describing the tasks of both supervisory authorities and regulating the cooperation between the DNB and the AFM in law.