The Netherlands’ Authority for the Financial Market (AFM) has teamed up with its UK regulatory counterpart to develop closer ties between the two countries’ monetary systems.
A partnership agreement was signed by the regulators as part of a strategic move amid ongoing Brexit uncertainty to ensure the stability of their financial markets, whatever the outcome of the withdrawal negotiations.
Since the 2016 UK referendum vote to leave the European Union, financial institutions in both the UK and Netherlands have applied for licences to operate in each of the two countries.
This has increased the need for “cooperation and information sharing” between the regulators to ensure “effective oversight” of firms and capital markets.
Stronger ties between Netherlands Authority for the Financial Market and UK Financial Conduct Authority
Andrew Bailey, chief executive of the UK’s Financial Conduct Authority (FCA), said: “We have always had a strong relationship with the Dutch AFM and this agreement strengthens that relationship.
“Given the increasing interconnectedness of financial services markets, having close relationships with other countries’ regulators helps to ensure that we can protect consumers, and maintain our oversight of firms and markets.”
Earlier this year, the FCA made dealing with Brexit its top priority for the current financial year, calling the “most immediate challenge” faced by the regulator.
The FCA-AFM agreement seeks to develop closer ties between the two nations in areas including fintech, data-led supervision and encouraging good behaviour within firms.
They will also share best practice approaches, and explore the scope for secondments between the regulators, as well as training opportunities.
AFM chairwoman Merel van Vroonhoven said: “We are looking forward to working together in this partnership.
“We see UK financial institutions moving to the Netherlands, especially international regulated markets, other trading platforms and traders.
“Their choice for the Netherlands will impact our capital markets and trading infrastructure.
“The closer cooperation with the FCA will put us in a better position to protect investors and capital markets through the sharing of information and expertise to minimise risks.”
With the nature of the UK’s proposed exit from the European trading bloc still far from certain, the partnership arrangement has been agreed to remain intact in either a deal or no-deal scenario – and will accompany the multilateral memorandum of understanding between the FCA and EU regulators that was announced in February.
