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Consultations on guidelines for appropriate commissions for financial service providers

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New provisions have been introduced, as of 1 January 2009, in the Decree on Conduct of Business Supervision of Financial Undertakings (Bgfo) for financial service providers in the area of commission payments and remuneration transparency. The MiFiD inducement rules were used as starting points in this process. These rules should lead to appropriate commissions. The provisions are intended to better protect consumers if they wish to purchase a complex product or acquire a mortgage loan. There is an inherent risk of a reward-driven 'colouration' of the advice issued by intermediaries in the commission system, because the intermediary is paid by the provider.

With these consultations, the Netherlands Authority for the Financial Markets (AFM) provides interested parties with the opportunity to comment on the AFM's guideline on the application of the inducement rules that apply to financial service providers.

Guideline
This consultation document provides a guideline for the application of the inducement rules that apply to financial service providers. An important part of the specific requirements that relate to inducements are included in open standards. The AFM's guideline mainly relates to these open standards and the manner in which commissions should be made transparent. The AFM provides starting points – through the use of examples, among other things – for the application of the inducement rules. This means that the AFM imposes no further rules. The guideline can be downloaded (in Dutch) in PDF format next to this text.

The AFM had already previously presented a draft guideline to the market – for the purpose of consultations – concerning the application of the inducement rules that apply to investment undertakings. These consultations have since been closed.

Respond!
The application of the inducement rules was discussed with sector organisations during several sessions in the recent months. The AFM drew up this guideline on the basis of these discussions. You can download this document by means of the link provided at the right side of this page. The AFM provides interested parties, by means of these consultations, with an opportunity to comment on the AFM guideline. We would ask you respond in any case to the question provided below.

  1. At what points can you agree with the AFM's guideline?
  2. At what points are you unable to agree with the AFM's guideline and do you anticipate problems?
  3. What would you propose in order to implement improvements?

The AFM would like to receive your response before 19 June 2009 at provisies@afm.nl stating 'consultation'.

The AFM promotes fairness and transparency within financial markets. We are the independent supervisory authority for the savings, lending, investment and insurance markets. The AFM promotes the conscientious provision of financial services to consumers and supervises the honest and efficient operation of the capital markets. Our aim is to improve consumers’ and the business sector’s confidence in the financial markets, both in the Netherlands and abroad. In performing this task the AFM contributes to the prosperity and economic reputation of the Netherlands.

The AFM is committed to promoting fair and transparent financial markets.

As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.

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