On 6 May 2009, the Dutch Central Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM) published principles for a controlled remuneration (the Principles). The Dutch financial institutions were urged to comply with the Principles. However, the AFM and the DNB directly stated that there would be official legislation to ratify the Principles in the Act on the Financial Supervision (Wet op het financieel toezicht, AFS).
On 9 April 2010, pursuant to the Principles, the Dutch Ministry of Finance published a consultation on the implementation of the obligation for financial institutions to have a controlled remuneration policy (beheerst beloningsbeleid) in place. The obligation to have a controlled remuneration policy in place will be implemented in the Decree prudential rules AFS (Besluit prudentiele regels Wft) and the Decree Conduct of business rules for financial institutions AFS (Besluit Gedragstoezicht financiele ondernemingen Wft). This obligation means that financial institutions will have to implement a remuneration policy for their directors and employees that does not encourage excessive risk taking and will prevent irresponsible behaviour in relation to its stakeholders, such as shareholders and clients. The Principles and the proposed legislation for the controlled remuneration policy should provide for controlled remuneration from both a prudential and a conduct of business perspective.
Further information on the consultation on the controlled remuneration policy (in Dutch) can be found here on the website of the Dutch Ministry of Finance.
For further information please contact Floortje Nagelkerke in our Amsterdam office.