What measures can the AFM impose?
The AFM has various enforcement measures and tools at its disposal to ensure compliance with laws and regulations. Besides our formal measures based on a statutory power (e.g. an instruction or fine), we also make frequent use of a range of informal measures. Most of the measures are aimed at companies that are subject to our supervision, such as financial service providers and audit firms.
Informal enforcement
The AFM has two different informal enforcement instruments at its disposal: a supervisory letter or conversation and a warning.
Supervisory letter or conversation
Where the AFM establishes that a minor offence has been committed, it can send the offender a supervisory letter or hold a supervisory conversation with it. In both cases, the AFM establishes that a party is committing or has committed an offence, although the letter or conversation does not qualify as a measure. A supervisory letter can also be a preliminary step toward a possible measure. As the AFM only sends a supervisory letter in minor cases (or as a preliminary indication of a measure), we do not consider that a supervisory letter by itself is reasonably relevant with regard to the propriety of a person in a position subject to assessment. Therefore, the AFM does not designate the offence in the supervisory letter as an antecedent, but rather as other supervisory information that is taken into account as such in the assessment of a person by the AFM.Former policy: Instructive letter or instructive conversation on compliance with standards
As of 1 January 2024, the AFM has ceased using this instrument. Prior to 1 January 2024, the AFM used an instructive letter on compliance with standards to inform a company in writing or orally about the offence it had committed and to notify the company concerned that it had infringed certain laws and regulations.
Warning letter or conversation
The warning letter or warning conversation is an informal measure used in the case of more serious and/or culpable offences. The company is warned that it is committing (or has committed) an offence against laws and regulations and it is urged to recognise the importance of complying with those laws and regulations. It should be noted that a warning aimed at rectification does not preclude the AFM from additionally imposing a fine for the offence that has already been committed. A warning serves as a supervisory antecedent (see below: 'Supervision antecedents').
Formal measures and instruments
The formal measures and instruments available to the AFM include those listed below.
Instruction
An instruction (usually) imposes on a company that is failing to comply with applicable laws and regulations an obligation to adopt a course of action in relation to one or more matters specified in the instruction within a reasonable period set by the AFM. A company must comply with this instruction. An instruction may, for instance, involve the dismissal of a policymaker or co-policymaker whose suitability and/or propriety is no longer beyond doubt.Order for incremental penalty payments
An order for incremental penalty payments is an instrument whereby an offender is required to comply with a certain measure (order) within a set term. An order is aimed at making the offender undertake certain actions (e.g. comply with a standard or eliminate the effects of an offence) or refrain from certain actions (infringement of standards). If the offender does not comply with the order within the term set, ‘the penalty is incurred’. This means that the company must make an incremental payment (the penalty) for not complying with the order. An order aimed at preventing recurrence can also be imposed. A party on whom an order aimed at preventing recurrence is imposed must make one or more incremental penalty payments if they commit the same offence again.The penalty can be set at a lump sum, an amount per unit of time that the order is not complied with or an amount for each breach of the order. The amount of the penalty is determined by the seriousness of the infringement of a standard or standards and the intended effect of the imposition of the penalty, and is subject to a maximum.
Administrative fine
If an offence, once established, continues, enforcement action will be taken aimed at stopping the offending and restoring compliance with the standard. The AFM will also consider whether there are grounds for imposing an administrative penalty on the offender (including any co-offenders) and/or the de facto manager. The more serious the offence and the greater the level of culpability of the offender (and any co-offenders) and/or the de facto manager, the more appropriate this will become.Appointment of a conservator
The AFM can appoint a conservator to oversee certain bodies or representatives of a financial undertaking if the financial undertaking concerned is not complying with the Financial Supervision Act (Wft). The conservator is appointed by an appointment decision, which sets out, among other things, the interests by which the conservator should be guided. The AFM appoints the conservator for a maximum term of one year, with the option to extend this term by no more than one year at a time.A dynamic purchasing system has been introduced, and interested entrepreneurs providing conservatorship services are invited to submit proposals. The invitation to tender has been published on TenderNed.
Withdrawal or restriction of licence
The AFM can, under certain circumstances, fully or partially withdraw a licence from a licence holder as well as impose restrictions or conditions on the licence. Licence withdrawal is possible at the request of the licence holder as well as on the initiative of the AFM, if, for instance, the AFM determines that a firm does not meet certain standards and establishes that no other means are available to enforce (ongoing) compliance with the standards concerned.Licence withdrawal is also possible if, for example, the AFM determines that the licensed enterprise has concealed facts or circumstances or provided incorrect or incomplete data when applying for a licence. If this information would have been grounds for the AFM to reject the licence application, the AFM may withdraw the licence that was granted.