The Minister of Finance has submitted an extensive set of measures to the Second Chamber regarding the financial markets:
- Financial Markets Amendment Bill 2012
This bill is part of a periodic amendment cycle which in principle covers the laws and regulations of all national financial markets. Amendments resulting from European legislation do not form part of this process. The Financial Markets Amendment Bill 2012 includes the following substantive changes:
- Money Transfer Offices Act
This Act is to be repealed. Provisions on money transfers have already been moved to the FMSA. Under the bill, the rules for other types of money transactions – e.g. currency exchange transactions – will also be moved to the FMSA. Additionally, a licence requirement has been introduced for exchange businesses.
- Public offer rules
In June of last year, the Ministry of Finance held a consultation regarding the revision of public offer rules, including the introduction of the put up or shut up provisions. The revisions proposed under the bill are related to this consultation.
- Amendment of Trust Offices Supervision Act
To reduce the risk of money laundering through services provided in the Netherlands by unregulated foreign trust offices, the bill proposes to bring these services within the scope of the Trust Offices Supervision Act. The bill also proposes to consider mediation in connection with the sale of legal entities as a service within the meaning of the Trust Offices Supervision Act.
- War risks cover
Under the bill, insurance companies are no longer banned from covering war risks abroad.
- Enforcement of European financial markets regulations
The bill introduces a framework for designating a supervisory authority charged with enforcing European financial markets regulations and, where necessary, imposing sanctions.
- European Auction Regulation
The bill implements the European Regulation on the auctioning of emission allowances (no. 1031/2010) which includes rules on the structure of and access to auctions and the appointment and duties of an auctioneer, and provisions regarding the auction monitor.
- Bill on strengthening the governance of DNB and the AFM
In a letter to the Second Chamber earlier this year, the Minister of Finance proposed a number of changes to the governance of the supervisors. The Bill contains a number of those proposals:
- establishing a Supervisory Chairman and a financial institutions supervisory council
- widening the statutory task of the supervisory boards of DNB and the AFM
- limiting the number of re-appointments within the managing boards of DNB and the AFM
- profiles and an integrity and suitability test for managing and supervisory directors of DNB and the AFM.
- Bill introducing notification requirements for cash-settled instruments
Cash-settled instruments (e.g. contracts for difference and total return equity swaps) can be used to influence the exercising of voting rights on underlying shares without there being a legal entitlement to the shares themselves. In certain circumstances, these instruments may also enable the holder to acquire a stake in a listed company in a simpler way, and without notification as required by the FMSA's transparency requirements. In view of this, the cabinet proposes to extend the current rules for notification of votes, capital, control and capital interest in issuing institutions by introducing a notification requirement for cash-settled instruments. The notification requirement will apply to those who, at the time the bill takes effect, are deemed to have at least 3% of the capital at their disposal and have not previously notified the AFM of this. In addition, an initial notification requirement has been proposed for persons with at least 3% of the capital at the time that this bill takes effect, and who have previously notified the AFM of this. This latter notification only needs to be made if, as a result of this bill taking effect, the number and type of shares has changed as compared to the previous notification.
- Bill implementing CRD II
CRD II is the collective name for three directives amending the Capital Requirements Directive. The implementing bill, among other things, amends the FMSA and the Prudential Rules Decree FMSA. These amendments relate to
- The waiver from DNB's supervision for banks belonging to a central credit institution that exercises control on business operations, procurement, solvency and liquidity of the member banks. Banks in countries that became EU member states after 1980 are affected by the waiver deadline. The bill will rectify this.
- Criteria for including hybrid capital instruments in the core capital or higher additional capital.
- Tightening existing exemptions in order to achieve a stricter regime for large positions
- Introduction of the "college of supervisors", a cooperative body for supervisors of cross-border banks.
- Stricter rules for securitisations
The bill also implements provisions of CRD III with regard to enforcement by the DNB of remuneration principles. The substantive remuneration rules have already been incorporated into the Controlled Remuneration Decree FMSA and supervisory regulations of DNB. The other CRD III provisions will also be implemented into the supervisory regulations of the DNB. These concern (i) the capital requirements for the trading portfolio, and (ii) the rules for re-securitisations.
- Bill introducing suitability test and closer cooperation between supervisors
This bill amends the rules with regard to the expertise of day-to-day policy makers of financial undertakings, and members of the body that supervises the financial undertaking's policies and general course of business. The bill proposes to replace the existing expertise test by a wider suitability test. In addition, a proposed measure outlines that where supervisors do not unanimously agree on a director's integrity and suitability, the negative view will prevail, even if that is not the lead supervisor's view
- Bill on Financial Markets BES and bill to prevent money laundering and financing of terrorism BES
The last two bills relate to the supervision of the financial markets on the islands of Bonaire, St Eustatius and Saba. Since the islands have become part of the Dutch state, the Dutch Minister of Finance is responsible for the sound operation and integrity of the financial markets on those islands. The bills replace the temporary supervisory legislation, which has been in force since 10 October 2010.