Proper market supervision requires consistent government policy. For example, there must be special attention in supervision policy for the independence of supervision, the relationship between supervision and policy, the political and social expectations and the transparency of supervision.
This was written by the 'Market Supervisors Council' to the Ministry of the Interior and Kingdom Relations. The following parties participate in the Market Supervisors Council: the Netherlands Authority for the Financial Markets (AFM), the Dutch Data Protection Authority (CBP), De Nederlandsche Bank (DNB), the Netherlands Competition Authority (NMa), the Dutch Healthcare Authority (NZa) and the Independent Post and Telecommunications Authority (OPTA).
The Ministry of the Interior and Kingdom Relations requested a joint contribution from the market supervisors for the new Frameworkdetermining Vision on Oversight.
It is the first time that the Market Supervisors Council announces a joint vision. "Market supervision is mission-driven supervision", according to Effective Market Oversight. "The intended effects of supervision are the main objective. Mission-driven market supervision comprises much more than merely the strict application of powers when implementing and enforcing certain statutory rules. It is determined on a case-by-case basis what instrument is most effective to achieve the desired objective."
"Market supervision should be independent of the political mood of the day and from sectoral interests. Political interference is undesirable and often not allowed from a European perspective."At the same time, the Council argues for direct contact between Parliament and the supervisor, so that the supervisor can inform the Lower House. "It is important for independence, for example, that the supervisor has sufficient and, in the long term, a stable budget to exercise its powers and comply with its responsibilities." The market supervisors recommend that, as regards bona fide supervision, liability is reduced.
Dialogue between supervision and policy
The Market Supervisors Council aims to achieve a "better guarantee of a continuous dialogue between the supervisor and policymakers concerning the effectiveness, the feasibility and the enforceability of intended regulations in practice. It will therefore be clear that a good working relationship between market supervisors and parent Ministries requires a continuous, structured and open dialogue, which focuses centrally of solving the problems in the market."
It should be acknowledged, according to the market supervisors, that there is no such thing as a risk-free society. "Market supervision can prevent part of the risks within the budgetary boundaries, but it also has its limitations." They envisage an own responsibility for promoting realistic expectations among other parties.
"A good supervisor explains why it supervises and makes its supervisory decisions transparent." The market supervisors observe that society demands more openness, but that they are not always able to comply as a result of statutory restrictions. That is why current transparency provisions should be reconsidered. "Customisation by the legislator and the supervisor will be the solution in this respect. What may be desirable transparency for one market supervisor, may not be for another market supervisor."
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.