Private company law overhaul to take effect on 1 October 2012
A bill introducing simpler and more flexible rules for Dutch private limited liability companies ("BVs") has been improved by both chambers of the Dutch parliament and will come into force on 1 October 2012.
A legal alert outlining the new "Flex BV" rules will be sent to our clients shortly.
Revised Prospectus Directive implemented in the Netherlands
The revised Prospectus Directive, which came into force on 31 December 2010, was implemented in the Netherlands on 1 July. The main changes to the Dutch Financial Markets Supervision Act (FMSA) are:
- The exemption from the requirement to prepare a prospectus now applies to offers with a minimum denomination of EUR 100,000 per investor or per unit. Previously, the limit was EUR 50,000. The threshold for dispensation under the Transparency Directive has also been raised to EUR 100,000.
- The requirement to produce a prospectus does not apply if the offer is directed at fewer than 150 persons per member state, none of whom are qualified investors.
- Clarification that the exception for offers with a total value of less than EUR 100,000 concerns the total value in the EEA.
- The exception to an obligation to produce a prospectus for offers to employees will be extended to (i) securities of issuing institutions with a head office or registered office in the EEA, and (ii) securities that are admitted to trading on a market outside the EEA.
- The definition of "qualified investor" now matches the definition of professional client under the MiFID.
- The obligation to annually publish an information document has been abolished.
- The requirements for the summary have been specified. The European Commission may expand the requirements for the contents and lay out of the summary (see the amended Prospectus Regulation for this).
- The prospectus is deemed to be available to the public if it has been placed on the website of the issuing institution or the website of the financial intermediaries.
- A prospectus is valid for twelve months after approval, instead of twelve months after publication.
Offers of securities to the public currently fall outside the scope of the Prospectus Directive if the total value of the offer is less than EUR 2.5 million. The amended Prospectus Directive provides for the option to raise this threshold to EUR 5 million, but the Netherlands have not used this option.
Finally, two omissions have been rectified. Firstly, the FMSA now requires that the prospectus identifies the person responsible for the prospectus. This requirement was incorrectly omitted from earlier implementing legislation. Secondly, the FMSA did not include the exemption for offers of securities already admitted to trading on a regulated market situated or operating in the Netherlands. This omission has also been rectified.
FMSA Exemption Regulation amended
The implementation of the Prospectus Directive has also led to amendments to the FMSA Exemption Regulation. The main changes are:
- If a securities offer is exempted under section 5:3(1) FMSA, the resale of the securities is regarded as a new offer of securities to the public which will, in principle, require a prospectus. Under the amended Exemption Regulation, however, the seller does not have to prepare a prospectus if (i) a valid prospectus is available, and (ii) the issuer or party responsible for drawing up the prospectus has consented in a written agreement to the use of this prospectus by written agreement.
- An exemption has been included for securities re-offered to the public or re-admitted to trading on a regulated market if the same securities were offered to the public or admitted to trading on a regulated market on a previous occasion before 1 July 2005 with a prospectus meeting the statutory requirements in effect before the implementation of the Prospectus Directive. This new exemption is similar to section 23 c of the old exemption regulation that was abolished when the FMSA came into effect.
- Non-equity securities issued by banks in a continuous or repeated manner and offered to the public or admitted to trading on a regulated market will be exempted from the prospectus requirements if the total value of the offer or admission is lower than EUR 75 million. The old threshold was EUR 50 million.
- An error occurred during the implementation of the revised Prospectus Directive: an employer with its head office in the EEA but its seat or registered office outside the EEA and whose securities are not admitted to trading, was unable to use the exemption of section 5:3(2) FMSA. This error has been rectified.
Intervention Act introducing special measures against financial undertakings enters into force
This Act came into force on 13 June and has retroactive effect from 20 January 2012. The Act introduces two categories of measures to add to and strengthen the government's powers of intervention in financial institutions:
- The first category relates to timely and efficient liquidation of failing banks or insurers. The bill gives the Dutch Central Bank (DNB) the power to draw up a plan behind the scenes for the transfer of deposits, other liabilities or assets, or shares to a private third party. DNB could also seek a court decision ordering a transfer scheme, emergency scheme or bankruptcy. A request to order a transfer scheme must be accompanied by the transfer plan. A request for an emergency scheme or bankruptcy may be filed without the plan. After the court order, the transfer plan is implemented by the transferor, the emergency administrator or the bankruptcy trustee.
- The second category of measures is intended to safeguard the stability of the financial system as a whole. To that end, the Act grants two special powers to the Minister of Finance: the power to intervene in the internal affairs of a financial institution and the power, where necessary, to take over ownership.
De Brauw has issued a legal alert about the new Intervention Act, which can be downloaded from our website.