Interpretations of public offer rules

The AFM has published three interpretations (in Dutch) of the public offer rules (as set out in the Public Offers Decree:

  • The first interpretation relates to the increase in the offer price pursuant to article 15.4 of the offer rules. In the AFM’s view it is allowed under this article to add to a price already offered (and specified in the offer document) but not to change the price otherwise. A bid can 8 Bulletin of Acts and Decrees 2008, 394 be increased by offering a higher amount in cash than the amount originally offered, or by adding a cash element to the offer.
  • The second interpretation concerns voluntary bids which are continued as mandatory bids. The AFM’s opinion is that when a statutory obligation to make a bid arises, a bidder should be able to meet this obligation through the existing voluntary bid. The bidder can do this by shaping the existing bid in such a way that it meets the requirements for a mandatory bid.
  • Finally, the AFM gives its interpretation of the prohibition on potestative conditions pursuant to article 12 of the public offer rules (i.e. conditions which are dependent on an event that is within the control of a contracting party). According to the AFM, the prohibition itself and the final character of the public offer imply that a condition may not contain an element enabling the bidder to influence the fulfilment of a condition.

Guidelines for sound financial advice

The AFM has set out its vision with regard to sound capital accumulation advice in two reports: one set of guidelines for financial service providers and one for investment firms. The AFM’s vision is based on studies and discussions with market parties which are already providing sound advice.

Results of survey on audits of financial companies

The AFM has reported on a review it carried out in 2008 on audits by the four major accountant firms of the 2007 annual accounts of financial companies which were affected by the financial crisis. The AFM reports that relevant shortcomings were found in eleven of the eighteen audits that it assessed. In its report the AFM elaborates on the shortcomings and makes a number of recommendations for improvement. The AFM conducted a similar review in 2009 on which it will report later this year. The 2009 survey focused on the one hand on aspects of the credit crisis and on the other hand on specific aspects of quality control.

Report on cost transparency for pension contribution agreements

The information on costs in connection with pension contribution agreements should be improved. Participants should be aware what part of the contribution is used for pension accrual and what part for costs and risk premiums. The AFM writes this in its report (in Dutch; summary in English) on cost transparency relating to defined-contribution schemes.

Review of disclosures in financial reports

The disclosures in financial reports of listed companies need substantial improvement. The AFM has announced this following reviews (in Dutch; summary in English) conducted in 2009. Disclosures are of great importance to investors in assessing the company’s position. The AFM believes that disclosures on a number of items in financial reports require improvement and that they should be more specific.