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Dutch market regulator eyes pension fund role

NETHERLANDS - The Dutch Ministry of Finance is on a collision course with the ministry of Social Affairs over a possible extension of the regulatory powers of its stock market watchdog AFM to cover pension funds.

The stock market watchdog, which falls under the Finance Ministry, monitors the conduct of all parties that are active on the savings, lending, investment and insurance markets. Since September of this year, that includes the share dealings of Dutch pension funds.

Up until recently, supervision of the Dutch pension fund market has largely been in the hands of the newly merged pensions watchdog DNB/PVK, which falls under the responsibility of the Social Affairs ministry.

According to Dutch press reports, the finance ministry now wants to extend the AFM’s powers to include supervision of all communications between pension funds and its participants. This is against the wishes of the Social Affairs ministry, which is in favour of keeping pension fund supervision under the umbrella of one single regulator.

PGGM, the 58 billion-euro fund for Dutch healthcare and social workers, voiced concern over a potential broadening of the AFM’ supervisory role. “Good supervision is important, but it has so be done in the most efficient manner possible,” a PGGM spokesman said. He added: “There is a risk that may not be the case if you split pension fund supervision over different parties. There is also a danger ‘double supervision’ could lead to higher costs for pension funds.”

But a spokesman for ABP, the country’s biggest fund, said it would not mind a split of regulatory powers “as long as good supervision prevails, and there is no overlap”.

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