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AFM Market Watch

 

The AFM Market Watch is a newsletter that covers current capital market topics in an in-depth way. The AFM Market Watch newsletter covers capital markets related topics such as MAR, MiFID II and transaction reporting. With the AFM Market Watch we will express observations and findings on current, capital market related developments by using data analyses.
 
We will publish our newsletter on a regular basis. Would you like to have the AFM Market Watch automatically send to your inbox? Subscribe to our newsletters and check the box ‘Kapitaalmarkten’.

 

Edition 12 - Sustainability: CSRD, EU GB Regulation and AFM Supervision 

In this Market Watch, we focus on the Corporate Sustainability Reporting Directive (CSRD), our recent research related to the CSRD, and our role as supervisor on this important piece of EU legislation. We also share relevant recent developments in this area. In addition, this Market Watch provides information on the CSRD and the growing role of sustainability information in the context of prospectus supervision, and the importance of reliable, complete, and consistent information. Finally, we highlight the requirements for green bonds under the EU Green Bond Regulation and our oversight of these requirements.

Edition 11 - Alternative performance measures

A thematic review by the AFM into the disclosure of alternative performance measures (APMs) by Dutch-listed entities reveals that the use of APM’s by companies in our sample is generally not up to the standards set by ESMA and often lacks the necessary level of transparency. In this edition of the Market Watch, we highlight how companies, supported by auditors and advisers, need to improve the disclosure of APMs to ensure the quality of (semi-)annual reports, prospectuses and press releases. Users of financial information should also be aware of the potential pitfalls of the use of APMs and engage critically with issuers on these alternative disclosures.

Edition 10 - Substantial holdings and gross short positions

Recent cases, such as the acquisition by Exor NV of a 15% stake in Koninklijke Philips NV, Daniel Křetínský’s stake-building in PostNL NV and the ownership structures of SPACs, have sparked a public discourse about the scope of the notification obligation for substantial shareholdings and gross short positions. In this edition of the AFM Market Watch, the AFM provides background information on the notification obligation and explains in more detail how the AFM has organized its supervision.

Edition 9 - Circuitbreakers & AFM trade suspension

In March of 2023, there was turmoil in the financial markets due to the problems at American banks and Credit Suisse. On March 15, trading in banking shares on the EU stock exchanges came to a standstill. In the Netherlands, the AFM supervises the fair and orderly functioning of the capital markets. In this Market Watch, we explain who plays what role in times of unrest in the financial markets, and which mechanisms come into effect to guarantee orderly trading.

Edition 8 - Algorithmic trading

The absolute majority of trades on Dutch capital markets are traded algorithmically. The algorithmic trading universe is vast, divers, complex, and in constant development, and the AFM has made the supervision of algorithmic trading a key area of attention. In the last years, we have looked at the topic of algorithmic trading from different perspectives as algorithms. In this Market Watch we discuss several distinct aspects of algorithmic trading like the underlying terminology, key insights on Dutch capital markets, and potential benefits and risks.

Edition 7 - Benchmarks

Benchmarks are critical to the efficient functioning of financial markets and can be used in various ways. To price financial products, for instance, to serve as reference rates for fund managers, or to increase price transparency for investors. In the 7th edition of our AFM Market Watch, we aim to increase knowledge about the relevance of benchmarks for the financial markets and AFM’s supervisory role vis-à-vis benchmarks.

Edition 6 – Short selling: quantifying the effects of a ban

To ensure effective supervision, it is important for regulators to measure and evaluate the impact of regulatory actions. Together with the Autorité des Marchés Financiers, the AFM has conducted a joint study on the effects of the short selling ban from 17 March 2020 until 18 May 2020 imposed in France. In this issue of the Market Watch the AFM discusses the outcome of the study and the key takeaways for future supervision.

Edition 5 - An overview of the Dutch SPAC market

Last year the Netherlands was the leading jurisdiction by number of Special Purpose Acquisition Companies in Europe. Sixteen SPACs were listed on Euronext Amsterdam in 2021 alone. Although SPACs have certain benefits, the AFM is concerned about the protection of investors. The AFM regards investing in SPACs as complex and it has substantial risks. The AFM thinks SPACs are suitable for only a (very) limited group of retail investors. In this AFM Market Watch, we provide an overview of the Dutch SPAC market, including its risks and how they are supervised by the AFM.

Edition 4 - Prevention and detection of market abuse

The AFM and market participants have a common interest to keep markets trustworthy and free from market abuse. Preventing and detecting market manipulation and insider trading helps to achieve this goal. This fourth edition of the AFM Market Watch provides detailed information on the detection of potential market abuse and the reporting of STORs.

Edition 3 - Investing and social media in light of GameStop

Dynamics on social media can lead to significant price fluctuations of financial instruments. This was apparent in the GameStop hype, for example. Are you allowed to just give tips via social media? And what is your own responsibility as an investor? In the third edition of the AFM Market Watch, we look at the risks of investment decisions made under the influence of social media, and what questions you should ask yourself before making an investment. We also discuss the rules for investment recommendations and for the dissemination of information that messages, including on social media, must comply with.

Edition 2 - Market manipulation

One out of every six Dutch citizens makes private investments. They must be able to rely on the proper operation of the market in which they conduct their transactions. Market abuse damages that trust. In the second edition of AFM Market Watch, we address a specific aspect of market abuse: market manipulation.

Edition 1 - Short selling during COVID-19

The COVID-19 related turmoil has fuelled new discussion around the practice of short selling. In this first edition of our AFM Market Watch, we share our data-based observations how the AFM dealt with short selling in the Dutch financial markets during COVID-19.