Overview of recent regulatory developments
This overview includes a selection of relevant legal developments regarding financial markets regulation including amendments to the prospectus regime and increased focus by DNB on compliance with the Dutch Sanctions Act.
Amendments to prospectus regime
Recently a new Prospectus Regulation (2017/1129) has been published. The new Prospectus Regulation addresses various deficiencies in the existing prospectus regime. For example, it aims at making prospectuses better and shorter. The new Prospectus Regulation repeals the Prospectus Directive (2003/71/EC, as amended) with effect from 20 July 2017, 21 July 2018 and 21 July 2019.
Notably, the amendment that takes place with effect from 20 July 2017 relates to the increase of the 10% threshold for admitting securities to trading without a prospectus. This threshold will be increased to 20% of the securities already admitted to trading. As with the previous 10% threshold, the 20% threshold shall be calculated over a period of 12 months. The same 20% threshold will apply to shares admitted to trading following conversion of convertible instruments.
Further changes will take place with effect from 21 July 2018, such as the introduction of an exemption threshold of EUR 1 million (calculated over a period of 12 months) as opposed to the existing EUR 2.5 million. However, under the new regime Member States may elect to exempt offerings up to an amount of EUR 8 million. The majority of the new regime will enter into force with effect from 21 July 2018.
DNB focuses on compliance with Dutch Sanctions Act
The Dutch Central Bank (DNB) recently announced that approximately 40% of branches of foreign insurance undertakings are not compliant with the Dutch Sanctions Act. This follows from an investigation into the matter by DNB. DNB reiterated that it has repeatedly stressed the need for compliance with the Dutch Sanctions Act. It also stressed the importance of compliance with the Dutch Anti-Money Laundering and Anti-Terrorism Financing Act by branches of life insurance undertakings. From experience, we can add that DNB and the AFM are becoming increasingly focused on compliance with the Dutch Sanctions Act in individual cases, and that actions by DNB or the AFM may have considerable impact, especially if insufficient compliance is demonstrated.