In context

Financial Markets in brief – new regulation and other developments

May 11, 2017
In context

There have been many developments in national and European financial markets regulation during the past month. The Minister of Finance held a consultation on the identification of holders of bearer shares, and the Dutch Central Bank published guidance on the fit and proper test for directors of financial undertakings. In this article we provide a brief overview of these and other developments.

Highlighted publications


Execution of Benchmark Regulation
The Minister of Finance has launched a consultation for a draft bill to amend the Financial Markets Supervision Act (Wft) and the Economic Offences Act (WED) as part of the execution of the Benchmark Regulation. The bill extends the enforcement powers of the competent supervisory authority (AFM) to include the power to temporarily ban persons from performing certain roles as a benchmark administrator. Also, the bill sanctions the breach of the following Benchmark Regulation provisions:

  • the obligation for market parties to exclusively use benchmarks that have been created under the rules provided in the Benchmark Regulation;
  • the obligation to have a licence to operate as a benchmark administrator.


The consultation period will end on 30 May 2017. The bill will enter into force on 1 January 2018.


Consultation on the Act on identification of holders of bearer shares
The Ministry of Finance held a consultation on the identification of holders of bearer shares last month. The draft bill states that bearer shares may only be issued using a global note. It also proposes that bearer shares may only be transferred through a securities account held with an intermediary, such as a bank or an investment firm. The result is that bearer shares would no longer be able to be transferred anonymously. Investigative authorities would, under certain conditions, have access to the details of the account holders for the purpose of combating: tax evasion, money laundering and terrorist financing, and other forms of financial and economic crime.


The proposed bill complies with the recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes and the Financial Action Task Force. These organisations have repeatedly recommended that the Netherlands completely dematerialise or abolish bearer shares.


Minister of Finance answers questions about new legislation
The Dutch Minister of Finance has answered a number of questions from members of parliament regarding financial markets legislation. His answers can be summarised as follows:

  • The Minister of Finance will investigate the need for additional regulation of automated advice.
  • To achieve better protection of consumers’ interests in data analysis, the Minister of Finance and the supervisors will discuss this topic before the end of the year.
  • The Financial Markets Amendment Act 2018 will be submitted to parliament in autumn; for an overview of the proposed amendments, please see our September 2016 In context article.


Reporting of infringements under the Market Abuse Regulation
A Dutch regulation on the duties and international cooperation of financial supervisors has been amended to meet the requirements of the implementing directive of the Market Abuse Regulation (MAR). The implementing directive provides for (anonymous) reporting to competent authorities of actual or potential infringements of the MAR. It includes rules on the relevant procedures, confidentiality, the register that has to be kept, and the publication of information on the website of the supervisor. The Dutch financial markets supervisor AFM already complies with these regulations.


Guidance on the fit and proper test
The Dutch Central Bank (DNB) has published fact sheets to help candidates applying for positions in the management board or supervisory board of financial undertakings to better prepare for the fit and proper test. DNB provides examples drawn from its experience regarding:


The examples aim to give candidates better insight into how the DNB approaches this test and what it considers important.


For more information on this topic, also see Suitability and integrity screening – seven practical tips and European authorities consult on suitability test guidance – our perspective.


De Brauw has extensive experience in advising on the fit and proper test and in helping candidates prepare to successfully meet test requirements.


Notification obligation for cybersecurity breaches
A pending bill on data processing and notification requirements in connection with cybersecurity will require vital providers to notify the National Cybersecurity Centre (NCSC) of a severe ICT breach. On 18 April 2017, the State Secretary for Safety and Justice launched a consultation on a draft general order in council designating financial institutions, among other entities, as vital providers. According to the consultation document, DNB will designate which specific financial undertakings are deemed to be vital providers. The notification requirement applies to a severe ICT breach involving any of the following services: settling over-the-counter payments, mass cash payments, high grade payments, and securities transactions.


The notification must be made to the NCSC, which is part of the Ministry of Security and Justice, so that it can assess the risks and assist the financial institution involved in preventing or limiting the negative consequences of the ICT breach in order to protect national security. In addition, the NCSC can advise other organisations running similar risks about the measures that they can take to prevent or limit a similar breach.


The consultation period ends on 16 May 2017.


The Netherlands to pioneer blockchain technology
The National Blockchain Coalition, a public-private partnership between financial and government institutions and independent knowledge institutions, has presented its action agenda to the Minister of Economic Affairs. Through this partnership, the Netherlands aims to be an international pioneer for the application of blockchain technology. The action agenda sets out three main lines of action:

  1. developing blockchain solutions for the reliable identification of individuals, legal entities and objects;
  2. creating the social, legal and economic conditions under which blockchain applications can thrive; and
  3. developing the human capital and expertise required to implement blockchain applications.


ESA publications on anti-money laundering and terrorist financing


Official translations of final Guidelines on risk-based supervision

The EBA, EIOPA and ESMA (the ESAs) have published 22 language versions of the final guidelines on the characteristics of a risk-based approach to anti-money laundering and terrorist financing supervision under the Fourth Anti-Money Laundering Directive.


Consultation Paper on abuse of transfers of funds
The ESAs have launched a public consultation on draft guidelines that set out what payment service providers should do to detect and prevent the abuse of fund transfers for terrorist financing and money laundering purposes. These guidelines are part of the ESAs’ wider work on fostering a common AML approach and promote a common understanding of payment service providers’ obligations in this area.


The consultation runs until 5 June 2017.


Other publications 














Official Journal EU











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