The Dutch Authority for the Financial Markets has launched a consultation on the conditions under which model portfolios, automatic rebalancing and risk reduction could operate within execution-only investment services. Building on its earlier review of these investment concepts, the consultation presents possible approaches but does not establish a position on whether the services are permissible. The objective is to clarify how firms can innovate within legal boundaries while protecting investors and maintaining a level playing field. The central issue is how providers handle changes to a model portfolio after the service begins, such as when an instrument becomes unavailable. Such changes can blur the boundary between execution-only investing, investment advice and portfolio management. The authority also seeks views on whether to retain or withdraw its 2016 clarification covering the conditions under which an investment firm may conduct a one-time assessment of a portfolio. After reviewing responses, the authority plans to publish its position separately rather than incorporate it into the 2016 Guidance on the qualification of innovative services, which will undergo a broader evaluation later. It will also issue a feedback statement explaining how responses informed its position.

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