The Dutch Central Bank has announced that it will enforce stricter capital requirements compliance by payment institutions and electronic money institutions. The announcement follows indications that some of these institutions fall short of the capital requirements imposed by the Dutch Financial Markets Supervision Act (Wft). To avoid enforcement measures and disclosure of penalties or fines, payment institutions and electronic money institutions should carefully map and monitor their capital requirements and provide additional capital if necessary.
The specific capital requirements that the Dutch Central Bank (DNB) is targeting are the requirements on minimum own funds and solvency.
If a payment institution or electronic money institutions, for which DNB is the prudential supervisor, does not comply with either or both of these requirements, DNB will use the following tools from its enforcement toolkit:
DNB has stated that it can impose an order subject to a penalty and a fine for the same breach, and that it can take additional enforcement measures in case of repeated or structural breaches of the capital requirements. Also, DNB points out that in some instances it is obliged by law to disclose the imposed orders or fines.
To avoid enforcement measures and disclosure of orders subject to penalty or fines, payment institutions and electronic money institutions should carefully map and monitor their capital requirements and provide additional capital if necessary.
De Brauw has extensive in-depth experience advising financial institutions on capital requirements, as well as navigating any potential or actual conflict with supervisory authorities, and our experts can assist you with all facets of these matters.
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