Yesterday various amendments to the Financial Supervision Act (Wet op het financieel toezicht, the "FSA") were adopted by the First Chamber of the Dutch Parliament pursuant to the Amendment Act Financial Markets 2013 (Wijzigingswet financiële markten 2013, the "Amendment Act").
The Amendment Act contains a few substantive amendments to the FSA as well as numerous technical amendments. The Amendment Act will enter into force on 1 January 2013. Among other changes, the Amendment Act provides for an oath for the financial sector and for a prohibition on commission, introduces a service information document for all financial service providers, amends the public offer rules and introduces a publication announcement regarding predominant control.
Oath for the financial sector
The Amendment Act provides for a statutory basis for a moral and ethical declaration in the financial sector in the form of an oath or affirmation (the "Oath"). The obligation to take the Oath will apply to policy makers and supervisory directors of financial enterprises that are obliged to take a suitability test under the FSA.1
Further rules with respect to the Oath will be laid down in the Amendment Decree Financial Markets 2013 (Wijzigingsbesluit financiële markten 2013, the "Amendment Decree") and in the Regulation oath or affirmation for the financial sector (Regeling eed of belofte financiële sector, the "Regulation"). The Amendment Decree and the Regulation will likely enter into force at the same time as the Amendment Act, on 1 January 2013. However, definitive versions of the Amendment Decree and the Regulation have not yet been published. It is expected that the Minister of Finance will present his draft plan with respect to the application of the Oath to other employees of financial enterprises in the spring of 2013.
Prohibition on commission
The Amendment Act also provides for a statutory basis for a prohibition on commissions (the "Prohibition") for financial service providers. Further rules will be laid down in the Amendment Decree. It is expected that the Prohibition shall apply as of 1 January 2013 to financial service providers with respect to the provision of advice and brokerage services of payment protectors, complex products, mortgage loans, life insurance policies, funeral expenses insurances or products to be laid down in further regulation. The Prohibition will also apply to individual disability insurance products.2
Based on the Draft Decree, it is expected that the Prohibition will not apply to (i) commissions that are paid directly by the consumer or the client, unless the amount is obviously unreasonable in view of the nature and scope of the financial service, (ii) commissions that are necessary for the provision of the financial services, (iii) commissions that are paid by an advisor or broker to another advisor or broker, and (iv) business gifts, to the extent that the joint annual value does not exceed EUR 100.
The Netherlands Authority for Financial Markets (Autoriteit Financiële Markten) can grant an exemption from the Prohibition. The Prohibition will only apply to agreements agreed on or after 1 January 2013. Agreements that have been entered into up to 1 January 2013 shall therefore not be affected by the Prohibition.
Service provision document
The Amendment Act introduces an obligation for financial service providers to inform the consumer (or client if it concerns an insurance product) about the financial service prior to the provision of thereof regarding a financial product, including products to which the Prohibition applies. The financial service provider shall provide information with respect to (i) the nature and scope of the financial service, (ii) the way in which the financial service provider will be rewarded, (iii) the costs of the financial service that the consumer pays, if it concerns a financial service with respect to a financial product to which the Prohibition applies, (iv) the interests of the financial service provider that may affect the financial services to the consumer, and (v) other subjects to be laid down in further regulation.
Based on the Draft Decree, the information needs to be provided to the consumer by means of a service provision document (dienstverleningsdocument), which is tailored to the service that is requested by the consumer. The obligation to provide a service provision document is expected to enter into force on 1 July 2013.2 Although the obligation to provide a service provision document is expected to enter into effect as of 1 July 2013, the obligation to provide the consumer with the aforesaid information prior to the provision of the financial service will be applicable to financial service providers as of 1 January 2013.
Public offer rules
Any person who acquires predominant control in a public limited company that has its registered office in the Netherlands and whose shares (or depositary receipts for shares issued with the company's concurrence) are admitted to trading on a regulated market, is obliged to make a public offer for all the shares and all the depositary receipts. The FSA contains exemptions to this obligation. One of the current exemptions applies to any person who acquires predominant control by declaring unconditional a public offer concerning all the shares of a public limited company, or all the depositary receipts for shares of the public limited company that were issued with that company concurrence. To avoid the possibility that the public offer rules can be circumvented, the Amendment Act introduces a restriction to this exemption. The exemption will only apply if a person, as a result of declaring the voluntary offer unconditional, is entitled to exercise more than 50 percent of the voting rights in the general meeting of the public limited company.
Further, a person who acquires predominant control or has lost or reduced its predominant control within thirty days of acquiring it, is obliged to make a public announcement in that respect without delay. A person can also be obliged by the Enterprise Division of the Amsterdam Court of Appeal (Ondernemingskamer) to make a public announcement without delay.
Notification obligation regarding a request to place an item on the agenda
If a shareholder of an issuer with its registered office in the Netherlands requests to place an item on the agenda of the shareholders meeting, the shareholder shall include in the request its share interest. The shareholder shall include the percentage that the financial instruments represent in the issued capital of the issuer and that imply a short position with respect to the shares. In the event that the request is made by two or more shareholders, the request shall include the percentages in the issued capital that they together represent.
Newsflash Capital Markets, 2012, issue 5