AFM promotes better and proportionate regulation

Contributing to fair, resilient markets and consumer protection

The AFM notices that regulation often evolves over time. Incidents or crises are typically followed by stricter rules, after which calls for deregulation tend to emerge again over time. This dynamic can result in unstable and less effective regulation. For that reason, the AFM advocates a consistent approach in which dimensioning, quality, and effectiveness of rules are key both when evaluating and potentially amending existing regulation, and when developing new rules. This also entails a careful assessment of the necessity and added value of new regulations, to ensure that measures remain targeted and proportionate.  

Laura van Geest, Chair of the Executive Board of the AFM: “Rules are not a standalone goal for us. What matters is that they achieve their intended purpose: contributing to fair and resilient financial markets and consumer protection. Where rules are unnecessarily complex or burdensome, we must improve them, whether this concerns existing regulation or the development of new rules where necessary. At the same time, we remain committed to robust safeguards where these are needed.” 

Focus on effectiveness and feasibility 

The AFM focuses on several areas where simplification may be possible. This includes: 

• simplifying existing rules and obligations;
• critically assessing national implementation choices within European legislation; 
• streamlining policy rules, guidance, and interpretations; 
• improving processes and the interaction between sector and supervisory authority; and 
• contributing to simplification at the European level. 

This approach has five core principles: protection of public interests, proportionality, effectiveness, clarity, and feasibility.

Open to signals and proposals from the sector 

The AFM is also open to signals and proposals from the sector and encourages market participants to contribute to discussions on how regulation and the supervision arising from it can be improved. At the same time, we constantly perform independent assessments, where the impact on consumers and markets is the leading priority.  

According to the AFM, simplifying regulation requires careful consideration. Not all rules can or should be amended, and change takes time. Otherwise, simplification may in some cases introduce new risks or affect the feasibility of supervision.

Without compromising the protection of public interests 

Through this effort, the AFM aims to demonstrate that it plays an active role in improving regulation, without compromising the protection of public interests. In the coming period, we will continue to contribute to initiatives aimed at simplification and burden reduction and will communicate transparently about these efforts at a high level.