The Netherlands

Higher supervision levy for financial institutions

According to a recent regulation, most financial institutions in the Netherlands will have to pay a higher supervision levy this year. Unlike previous years, the various categories of supervision will be charged on the basis of a percentage set for each category of institution. There is no longer a connection between costs and actual supervision efforts. The new system is intended to prevent fluctuations that have occurred so far.

The AFM has published an explanation and a FAQ in connection with the new charges.

Changed notification rules for capital and controlling rights take effect on 1 July

Holders of 3% or more of the votes in issuing institutions will have to notify the AFM of their stake before the end of July 2013. This requirement, among other things, is being introduced by new legislation implementing the recommendations of the Dutch Monitoring Commission Corporate Governance Code. Effective as of 1 July 2013, listed companies will need to be aware of the following changes:

  • The lowest threshold for notification of capital interests or controlling rights (gross long position) is currently 5%. As of 1 July, a new 3% threshold takes effect. Investors will also have to notify their gross short position. The same thresholds apply to this type of notification as those for gross long positions. Notification requirements for net short positions have been in place since March 2012, when the European regulation on short selling and certain aspects of credit default swaps took effect.
  • From 1 July, only holders of at least 3% of the shares may request an agenda item for general meetings. The current threshold is 1%. If the company has provided for the lower 1% threshold in its articles, the 1% threshold will continue to apply. The existing alternative threshold of EUR 50 million will be abolished under the new legislation.
  • A listed company will be able to know the identity of the ultimate investor. The company may submit identification requests to the central institute, affiliated institutions, other intermediaries, certain organisations abroad, and custodians of investment institutions. No information may be provided about investors that represent less than 0.5% of the issued share capital.
  • When certain conditions are met an investor individually or with other investors holding a stake of at least 1% of the issued share capital, or holding shares or depositary receipts representing a joint market value of at least EUR 250 000, have the right to ask the company to pass information on to other shareholders before a general meeting. The company must do this unless the information sends or may send an inaccurate or misleading signal about the company or unless the nature of the information is such that it would be not be reasonable and fair to require the company to pass it on. The company may also refuse to pass the information on if the request is made less than seven days before the general meeting. Shortly De Brauw will publish an extensive legal alert about these new rules.

Implementation of the AIFM Directive

A bill implementing the Directive on Alternative Investment Fund Managers (AIFM Directive) has been published. It will come into force on 22 July. The Directive applies to a wide range of investment funds that are not already regulated at European level by the UCITS Directive.

AFM to grant licences for auctioning emission allowances

The European emission trading system has entered its third phase. This means that emission allowances may be offered via auctions. The AFM is authorised to grant licences for placing bids at these auctions. It may also impose fines, or issue orders subject to penalties, in the event of violations of the European Auctioning Regulation.

Dutch Council of State critical about Financial Markets Amendment Bill 2014

The introduction of a general duty of care for financial services providers is unnecessary because Dutch civil law already contains a general duty of care, and the Supreme Court has assumed a special duty of care for financial organisations. This is the view set out by the Council of State in its advice on the Financial Markets Amendment Bill 2014, which provides for this general duty of care.

In its advice, the Council of State also points out that supervisors have adequate powers to intervene when a financial service provider breaches the civil law duty of care. In addition, the bill has little added value on this point, as a consumer would still have to turn to the civil courts to obtain damages. Finally, the Council is not convinced that the duty of care sufficiently recognises the consumer's own responsibility.

The Minister of Finance has nonetheless decided not to amend the bill. According to him, developments in the financial sector sometimes happen faster than regulatory changes. Sometimes, specific rules do not exist but a financial services provider is clearly dealing with a customer's interests without due care. A public-law duty of care ensures in such case that the supervisory authority can intervene before consumers suffer damages.

The Council of State has also expressed reservations about the proposal to extend the FMSA's confidentiality provisions. The bill provides that financial supervisors may pass on confidential information to the Financial Expertise Centre, an entity in which a number of government agencies collaborate, while carrying out supervisory tasks as outlined in the FMSA. Following the Council of State's comments, the Minister of Finance has amended the bill so that information may only be provided if it assists the agency in question in carrying out its statutory duties.

Other amendments to the bill include:

  • Direct supervision of clearing and settlement institutions
  • Adjustment of the description of prudential supervision to clarify that it does not only focus on the solidity of individual companies, but also on the stability of the financial system
  • Improvement of the effectiveness of the supervision on financial reporting and information provided to investors. The AFM may force supervised undertakings via the Enterprise Chamber to provide further explanation in their financial reports
  • Obligation of issuing institutions to tell users of information in the financial reports about changes in or events relating to the annual financial reports that occur after the reports are drawn up
  • Amendment of asset separation rules for investment institutions and UCITs
  • Revision of the regime for homeowner's saving deposits in connection with the deposit guarantee system and transfer plan
  • Addition of a provision in the Act on the prevention of money laundering and terrorism financing stating that brokers must also include their client's counterparty in the client audit

AFM publications

Help in drawing up services documents

Financial services providers have to supply a standard services document when they offer products covered by the ban on commissions. In a special newsletter, the AFM has explained who the new standard document applies to and what the precise changes are. The AFM's website offers a document generator which enables service providers to prepare a statute-compliant document.

Licence for crowd-funding platforms

The AFM and DNB have drawn up a step-by-step plan that initiators of crowd-funding platforms can use to check if they need a licence or dispensation.


Commission clarifies disclosure requirements for convertible and exchangeable debt securities

The European Commission has published a delegated regulation on disclosure requirements for convertible and exchangeable debt securities. The main focus is the disclosure regime applicable to the issuer of the underlying shares or to the underlying shares themselves.  

The new rules will be included in the Prospectus Regulation.

New rules for rating agencies published

De European Commission has published a regulation and directive setting out new rules on rating agencies. The main elements of the regulation are:

  • Investors may not hold investments of 5% or more in more than one rating agency at the same time
  • A rotation mechanism is introduced for rating agencies issuing ratings of re-securitisations
  • Rating agencies will be liable if they violate the Rating Agencies Regulation intentionally or with gross negligence, causing damage to an investor
  • To increase competition on the rating agencies market, the use of smaller rating agencies is stimulated
  • An issuer or an affiliated third party must engage at least two different rating agencies to provide ratings on structured finance instruments
  • Additional rules are introduced for sovereign ratings

The directive is aimed at preventing institutions dealing in occupational retirement provisions, UCITs and alternative investment funds from over-relying on ratings when they make their investments.

The regulation and directive comes into force on 20 June 2013. The directive must be implemented by 21 December 2014.

Publication of quarterly information to be phased out

Listed companies will no longer be required to publish their quarterly financial information. This follows from amendments to the Transparency Directive that were adopted by the European Parliament in June. In addition, the following changes have been adopted:

  • Investors will have to notify, as holdings of shares, all financial instruments of similar economic effect. This should prevent them from secretly building a controlling stake in a listed company ("hidden ownership").
  • A system of country-by-country reporting (CBCR) will be introduced to increase transparency of payments (taxes, royalties and bonuses) made by oil, gas, mining and logging industries to their host governments worldwide. The current system is based on a single set of information at a global level. In addition, all payments exceeding EUR 100,000 will have to be disclosed. The new system should apply to EU privately owned large companies, or companies listed in the EU, that are active in the extraction or the logging industry.

The Transparency Directive covers only listed companies. As some of the proposed amendments are relevant to non-listed companies, the European Commission has proposed corresponding amendments of the Accounting Directives. The new rules will also apply to trade-in emission allowances.

EU Council approves CRD IV

The EU Council has approved the new capital requirements for banks (CRD IV). The regulation and directive are expected to come into force on 1 January 2014.

See Financial Markets Newsletter of April 2013 for a summary of the amendments.

No new solvency requirements for pension funds in the near future

European Commissioner Barnier recently announced that the European Commission is planning to come forward with proposals to improve transparency and governance of occupational pension funds in the autumn of 2013, but that the new directive will not contain new solvency provisions. The European Commission needs more time to draw up solvency requirements that address the major differences between pension systems in the European Union. It is not yet known when the Commission will introduce extra solvency requirements.

European Parliament wants more transparent supervision by European Central Bank

The European Parliament has conditionally approved legislation which calls for the setting up of a single EU banking supervisory system. This means that the ECB will directly supervise the largest banks in the Eurozone and will also be closely involved in the supervision of other banks.

In discussing the legislative proposals, the European Parliament wanted a more transparent operation and greater accountability for the ECB in carrying out these tasks, as compared to its monetary tasks. This has led to a number of changes to the European Commission's proposal:

  • There will be a strict division between ECB employees with monetary roles and those with supervisory roles.
  • The European Parliament will have to approve the appointment of the chair and vice-chair of the ECB's supervisory board and their potential dismissal.
  • National parliaments may organise hearings with the supervisory board chair and members and request written replies from the ECB.
  • The ECB will get better access to banks' documentation, and the European Parliament will get better access to ECB documentation.
  • Non-Eurozone countries will be encouraged to take part in the new system.
  • The European Banking Authority (EBA) will continue to carry out its existing tasks. It will promote consistency of supervision in the entire EU and draw up a supervision handbook. The EBA's ability to carry out stress tests and to obtain information from banks and national supervisors will be improved.

The European Parliament will hold its final vote on the proposals when talks with ECT about accountability arrangements are completed (probably in September 2013).The new supervisory system is expected to take effect in the summer of 2014.

De Brauw published a legal alert about the European banking union plans earlier this year. If you wish to receive a copy, please ask your contact at De Brauw or download it at

Consultation about the need for separation of banking activities

The European Commission has outlined the various scenarios for the separation of banking activities in a consultation paper. The consultation period ends on 3 July 2013.

Consultation on the European system of financial supervision

The European Commission is holding a consultation to review the effectiveness and efficiency of the European system of financial supervision. The European Parliament has also commissioned a consultation on the functioning of the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority.

European Securities and Markets Authority - publications

  • Prospectus Q&A's (19th updated version, May 2013) (link).
  • ESMA heeft een nieuwe versie van haar Q&A's on prospectuses gepubliceerd. Nieuwe onderwerpen zijn de definitie van winstraming, de vraag hoe recent de gecontroleerde historische financiële informatie over het laatste boekjaar moet zijn, en de vraag of de samenvatting van een prospectus informatie moet bevatten over de kosten die tussenpersonen in rekening brengen wanneer zij effecten aanbieden (retail cascades). Een aantal vragen is geschrapt omdat de desbetreffende onderwerpen inmiddels in gedelegeerde verordeningen zijn opgenomen.
  • Updated Q&A on EMIR Implementation (link)
  • Guidelines and Recommendations regarding written agreements between members of CCP colleges (link)
  • Guidelines on key concepts of the AIFMD (link)
  • ESMA and the EBA publish final principles on benchmarks (link)
  • Review on impact of short selling regulation (link)
  • Technical advice on CRA regulatory equivalence on Argentina, Brazil, Mexico, Hong Kong and Singapore (link)
  • Consultation on guidelines on reporting obligations under Article 3 and Article 24 of the AIFMD (link)
  • Data on prospectuses approved and passported (link)
  • Joint Committee of the European Supervisory Authorities calls for action on cross-sectoral risks (link)
  • ESMA 2013 Regulatory Work Programme (link)

European Banking Authority - publications

  • Near-final draft Regulatory Technical Standards on own funds covering, among others, areas such as Common Equity Tier 1, additional Tier 1, deductions from Common Equity Tier 1 and from own funds in general and transitional provisions on grandfathering (link)
  • Draft Technical Standards for the definition of material risk taker for remuneration purposes (link)
  • Draft Regulatory Technical Standards on the assessment and scenario for recovery plans (link)
  • Draft Guidelines on capital measures for foreign currency lending (link)
  • Draft Regulatory Technical Standards on own funds (link)
  • Draft Technical Standards on the definition of market and on option risks under the standardized approach for market risk (link)
  • Draft Technical Standards on securitisation retention rules (link)
  • Draft Technical Standards on Passport Notifications (link)
  • Draft Implementing Technical Standards on joint decisions on institution-specific prudential requirements (link)
  • Draft Technical Standards to define the conditions and methodologies used to determine the overall exposure to a client or group of connected clients resulting from a transaction with underlying assets (link)


IOSCO publications

  • Principles for the valuation of Collective Investment Schemes (link)
  • Consultation on principles for financial benchmarks (link)

Bank for International Settlements - publications

Asset encumbrance, financial reform and the demand for collateral assets (report)