Germany has a comprehensive legislative and institutional framework for the effective supervision of the securities markets. The overall level of compliance with the IOSCO principles is high. There are significant industry concerns about the implementation costs resulting from a rapidly changing legislative framework. The German Federal Financial Supervisory Authority (BaFin’s) overall approach to supervision relies very heavily on the flow of information, auditors’ reports, and compliance with legislative obligations. Regulators at both the federal and state levels work with a clear legal framework and clearly defined powers and responsibilities.
The Netherlands Authority for Financial Markets (AFM) has developed a robust supervisory framework, which exhibits high levels of implementation of the International Organization of Securities Commissions Principles. The AFM’s efforts are complemented by The NetherlandsCentral bank's (DNB) program of prudential supervision, which is reasonable and credible. Gaps in the legal framework for issuers, and on management of collective investment schemes, in the case of the DNB, have imposed limitations. Their ability to react in a swift manner to emerging risks in the financial sector is limited.