The need for the European Commission's Savings and Investments Union (SIU) strategy has become more urgent amid changing dynamics between Europe and the US, the Dutch Authority for the Financial Markets (AFM) has said, arguing that action is needed to enhance financial resilience and "recalibrate" supervision.

Presenting the authority's annual report, AFM chair of the executive board, Laura van Geest, stressed the need for cooperation, acknowledging that the change in direction for the US under Donald Trump’s presidency is causing concern in Europe.

Indeed, Van Geest emphasised that whilst, for the time being, financial markets have smoothly absorbed the shocks caused by unpredictable US policy and policy responses to it, "the changing status quo requires action".

"Our financial sector is strongly intertwined with the US. Dutch pension funds and households invest a lot in US equities, we are largely dependent on US technology and a joint supervisory approach is no longer self-evident," she continued.

"This is uncomfortable and makes us vulnerable."

However, she suggested that this period of change also brings renewed momentum for joint efforts in building a more autonomous and competitive Europe, stressing that "the need to achieve the SIU has become more urgent".

"We can contribute to this by reducing fragmentation in the capital markets and streamlining supervision within the EU," she explained.

In line with this, the AFM 2024 annual report confirmed that it has been making "every effort" to align supervision in the Netherlands to the wider financial sector regulations established at the European level, including on environmental issues, data, and cyber security.

In particular, the AFM confirmed that it is looking to become more data-driven in its supervision, using data and data analysis structurally to execute more effective supervision.

The transition to the new pension system was highlighted as an example of this, as the AFM used data to monitor the most important trends and developments in the pension sector and to conduct risk-based supervision.

Particular efforts have been seen to improve sustainability supervision, as the AFM noted that sustainability plays an increasingly important role in consumer choices, with pension providers often including sustainability claims in communications.

Indeed, the AFM revealed that there has been a 12 per cent increase in the number of pension schemes promoting sustainable characteristics and a 10 per cent increase in the number of pension administrators that take their negative impact into account, based on pension administrators’ responses in the self-assessment.

Given this trend, the authority emphasised that members should be able to have confidence that sustainability claims are fair and in line with their expectations.

The AFM therefore launched an exploratory study into sustainability claims by banks, investment firms, pension funds and insurers to determine the extent to which sustainability claims in the market are correct, clear and not misleading.

It will be using the results of the exploratory study to determine its priorities in supervision for 2025.

Informal enforcement has also been used to raise standards, as the AFM revealed that, as a result of continuous supervision of the provision of information and various regular supervisory investigations in the field of pensions, it sent another 60 supervisory letters in which it drew companies’ attention to aspects requiring improvement.

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