AFM and DSI extend covenant on professional competence. The Netherlands Authority for the Financial Markets (AFM) and Stichting DSI (DSI) have extended the covenant they have had since 2018 with regard to the professional competence of employees who provide information or advice on investments. “Extending this covenant strengthens confidence in the investment sector,” said Tanja Nagel, chairman of Stichting DSI.
This is a tacit extension of two years. This means that AFM and DSI will continue the agreement without amendments.
DSI certified persons are demonstrably competent
The covenant follows from professional competence requirements included in MiFID II. It states that anyone who informs or advises on investments (relevant persons) must be demonstrably ‘competent’. The requirements for this are described in guidelines from the European regulator ESMA. The AFM considers skilled personnel to be an important precondition for good investment services and careful treatment of clients.
“We are very pleased with the continuation of the covenant with the AFM,” says Tanja Nagel. “DSI certifications are an initiative of the financial sector itself to strengthen confidence in the investment sector. Recognition of this certification by the regulator offers additional confirmation of the quality and added value of a registration in one of the DSI registers”.
DSI certificates comply with ESMA guidelines
The AFM and DSI have agreed in the covenant that DSI only admits relevant persons in its registers who comply with the ESMA guidelines. Once in the registers, the obligation to keep knowledge up-to-date applies. DSI has introduced the “Continuing Professional Education program (Permanent Vakbekwaam Programma)” for this purpose. Trainers offer this program to certified persons on the basis of learning objectives updated annually by DSI.
In accordance with the covenant, the AFM recognizes that everyone included in a relevant DSI register is professionally competent. Currently, around 5,000 professionals from the investment sector are certified in one of the seven ESMA registers at DSI.
ESMA guidelines apply to the entire investment firm
A DSI registration for the relevant persons does not mean that the company fully complies with the ESMA guidelines. The standards in the guidelines are broader. For example, organizational requirements for the company have been included. Employees must also be aware of (and understand and apply) the company’s internal rules of conduct and procedures. Because the elaboration of this is specific to each company, it is not part of the certification at DSI.
The extension of the covenant will make it easier for investment firms to comply with the ESMA guidelines. A DSI registration is not mandatory. Companies that do not want this can also demonstrate to the AFM for each employee that they are professionally competent and how this is organized within the organization.
Link to AFM-DSI covenant – click here
Link to Include ESMA Guidelines – click here
Link to MiFID II – click here
Link to AFM press release – click here