The Minister of Finance has submitted a Bill (in Dutch) amending the FMSA in connection with the implementation of the EU Directive on holdings in the financial sector (also known as the Antonveneta Directive)6. To comply with the directive, the provisions in the FMSA with regard to acquisitions and increase of qualifying holdings are to be changed.
Directive on holdings in the financial sector The Directive followed the European Commission’s finding that the number of cross-border takeovers and acquisitions of holdings in the European financial sector was lagging behind compared to other sectors. Studies showed that non-prudential considerations played a role in the assessment of a proposed acquisition, in particular considerations on the (un)desirability of the acquisition of an entity in one member state by an entity from another member state.
The Directive provides for an amendment of the prudential assessment criteria and procedure. This should ensure a more consistent and transparent assessment of a proposed qualifying holding. In addition, the Directive introduces a limited set of (strictly prudential) criteria. The purpose of the exhaustive nature of this set of assessment criteria is to ensure that all member states apply the same assessment to a proposed qualifying holding.
Amendments to the FMSA
The Directive makes amendment of the FMSA necessary. As the Directive precludes other assessment criteria from being included in the evaluation of an application for clearance, the existing content-based assessment by the Minister of Finance will be removed. The Dutch Central Bank assesses, as prudential supervisor, the solidity of a proposed acquisition or increase of a qualifying holding. However, the Minister of Finance’s responsibility for the stability of the financial system and regulation of the financial sector is considered to be important and should be taken into account in considering acquisitions and increases of such qualifying holdings. Accordingly, a provision has been added requiring the Dutch Central Bank to timely inform the Minister of Finance of applications for clearance or plans to grant or withdraw clearance if these are relevant to the proper functioning and organisation of the financial system. The Dutch Central Bank will be allowed to inform the Minister with a view to his responsibility for the financial system and the Minister will have to treat this information as strictly confidential. The Dutch Central Bank will not be allowed to supply information to the Minister which is essential for the processing and assessment of the application, i.e. the concrete financial solidity assessment carried out by the Dutch Central Bank.
The deadline for implementing the Directive in the Netherlands was 21 March 2009. Since that date national legislation has to be interpreted and applied in conformity with the Directive. This means that until the implementation bill becomes law there is a de facto transition period. During that period the Minster of Finance is still formally entitled to co-decide on applications for clearance but the Central Bank is in fact carrying out the entire assessment. In doing this, the Central Bank may only apply the prescribed prudential criteria in assessing a new application. The assessment made by the Dutch Central Bank – and by the Minister of Finance in the case of the “big five” – as to the desirability of the acquisition can no longer be made.