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ESMA sees room for improvement in cross-border supervision

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europa-toezicht

The European Securities and Markets Authority (ESMA) has published the results of the peer review on the supervision of cross-border activities of investment firms and credit institutions. ESMA has examined the supervision of cross-border financial services in six member states, (the Netherlands, Malta, Cyprus, Luxembourg, and Czech Republic). ESMA has concluded that there is room for improvement in the way these regulators have set up their supervision relating to services being offered across the border. The Netherlands scores comparable to other large, surveyed regulators, such as Germany. The AFM is grateful for ESMA's recommendations and will take them into consideration.

In summary

  • Effective cross-border supervision ensures appropriate investor protection
  • AFM: reinforcement of the role of host supervisors is necessary
  • Dutch companies mainly focus on the domestic market

Effective cross-border supervision ensures appropriate investor protection

ESMA emphasises the importance of effective cross-border supervision in the report 'Peer review on supervision of cross-border activities of investment firms'. Improving the supervision of cross-border investment services ensures that investors across the EU receive the appropriate level of protection regardless of the local jurisdiction that the companies providing the investment services fall under. The AFM recognises the importance of ensuring better protection against harmful providers for both consumers and investors in Europe.

AFM: reinforcement of the role of host supervisors necessary

The way in which the AFM cooperates with other European supervisors has been evaluated positively by ESMA. The AFM sees effective cooperation between home (member state where the financial institution is established) and host (member state where the financial service is offered) as a crucial element in cross-border supervision. To facilitate more effective cooperation, however, current legislation and regulations will need to be adjusted. To that end, the AFM has recently made specific suggestions in a joint position paper with the French regulator AMF, noting that improving the exchange of information and strengthening the role of the host supervisors as necessary adjustments to strengthen cross border supervision.

Dutch companies mainly focus on the domestic market

The scale and way in which companies offer financial services in other EU Member States differs considerably between the six countries studied. These differences have been included in the assessment. ESMA states that, with a few exceptions, companies in the Netherlands mainly focus on the domestic market.

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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