AFM-DSI covenant on competence of investment professionals proves efficient and effective
The covenant between the Financial Markets Authority (AFM) and the DSI Foundation on the professional competence of investment professionals is an efficient and effective instrument within the AFM’s risk-based supervision. That is the conclusion of the audit commissioned by the AFM and conducted by research firm KWINK Group. The covenant, in force since 2018, helps professionals in the investment sector to demonstrably meet professional competence requirements from European regulations. However, KWINK does come up with a number of recommendations for improvements.
In brief
- Covenant supports compliance with professionalism requirements MiFID II and Wft
- Broad support for covenant, but vulnerable in some parts
- AFM and DSI plan to extend covenant
Covenant supports compliance with professionalism requirements MiFID II and Wft
Employees of investment firms who inform or advise on investments must have the appropriate professional competence to properly fulfill their responsibilities. Through the covenant with DSI, investment firms can demonstrate that employees registered in one of the relevant professional competence registers are competent in accordance with the requirements of MiFID II and the Wft. AFM and DSI have had a covenant on this since 2018.
Broad support for covenant, but vulnerable in some parts
Commissioned by the AFM, research firm KWINK group conducted an effectiveness audit of the operation of this covenant between June 2025 and January 2026. The study shows that there is broad support among participating institutions for certification by DSI. However, according to KWINK group, the system is vulnerable in parts. For example, it happens to a considerable extent that people have followed a DSI-accredited training course, but then do not register in the relevant DSI register. As a result, they do not pay into DSI and are not on the DSI register as being professionally competent. Another point for attention is that the training and examination offerings sometimes do not match the practice. Monitoring can also be improved.
AFM and DSI plan to extend covenant
The current covenant expires at the end of 2026. AFM and DSI intend to renew the covenant then. In doing so, they intend to take to heart the recommendations that KWINK Group is now giving, such as developing an approach to get as many people as possible who have completed DSI-accredited training to register in the DSI register, continuing to work to ensure the best possible connection between exams and training and practice, and improving monitoring.
It will also include the results of recent surveys conducted by the AFM itself among investment firms and banks on how they ensure the professional competence of employees who provide information and advice on investments. A new covenant between AFM and DSI is expected to be published in the fall.
Registration in the DSI registers offers supervised institutions the opportunity to demonstrate the professional competence of their employees. At the same time, registration is a support tool. It is not a legal requirement to meet professional competence requirements through DSI certification. A supervised institution can also demonstrate by other means that employees who inform or advise on investments have the appropriate professional competence.
For more information on the AFM’s sector report, visit this link: Research: DSI covenant on competence of investment professionals efficient and effective
