There have been many developments in national and European financial markets regulation during the past month. Supervisory authorities have published a large number of consultation documents, draft rules and other information since the last edition of In context. We provide an overview of this news, signal important court decisions and also list relevant articles in international legal journals.
Bill to amend the Act on funding of financial supervision
A bill amending the Act on funding of financial supervision has been submitted to parliament. The main element of the bill is that the government contribution to the financial markets supervision budget will be abolished. Instead, financial supervision costs will be funded by the financial institutions on a pay-as-you-go basis. Also, a part of the funds deriving from penalty payments and administrative fines will be allocated to the State The bill is expected to take effect on 1 January 2015.
The Council of State has expressed reservations about the proposed bill. One of its conclusions is that there are no grounds for abolishing the supervision budget. Although the explanatory memorandum refers to the “group benefit” as a justification for passing on the supervisory costs to the financial sector, the Council of State points out that financial supervision is primarily a matter of public interest. Therefore, it should be publicly funded.
Bill on the remuneration policy of financial institutions submitted to parliament
The Minister of Finance has submitted a bill on harmonising the remuneration policy. The main proposal is the introduction of a bonus cap for employees in the financial sector. For more on this subject see In context July 2014 .
Act implementing the Capital Requirements Directive
The Act implementing the Capital Requirements Directive (CRD IV) into Dutch law has been published. This Act will take effect on a date to be determined by Royal decree.
The implementing Act prohibits distributions undermining the capital buffers, increases the maximum fine, and eases the obligation to obtain a statement of no objection for CET 1 capital reductions. It also extends the powers of the Dutch Central Bank (DNB) to take measures, and it changes the restrictions for significant banks and investment firms on the maximum number of positions that managing and supervisory directors may hold. In addition, the implementing Act imposes an obligation on DNB to draw up resolution plans for banks and certain investment firms. Banks and certain investment firms also have an obligation under CRD IV to draw up recovery plans, but this obligation will be laid down in the Prudential Rules Decree (see our Legal Alert].
The bill also introduces a bonus cap. This is intended to be a temporary measure, which will be repealed once the bonus cap in the Bill on the remuneration policy of financial institutions takes effect.
Finally, the rules for the publication of fines and penalties will be amended. The proposed new rules apply to all financial institutions.
Financial Markets Amendment Bill 2016
The Ministry of Finance is currently holding a consultation on the Financial Markets Amendment Bill 2016. Proposals covered by the draft bill include:
Implementation of the FATCA Treaty
The Dutch Ministry of Finance has launched a consultation on a decree implementing the FATCA Treaty. The decree requires Dutch financial institutions to provide information about bank accounts of US tax subjects, and to report financial institutions that do not comply with their FATCA obligations.
The Netherlands and the United States entered into a treaty on the implementation of the FATCA Treaty in December 2013. A bill providing for the ratification of the treaty will be submitted to parliament shortly.
Levies for financial enterprises
The levies for ongoing supervision for most financial enterprises and other parties subject to supervision will be lower in 2014 than in 2013. The main reason for this is that the AFM spent less than was budgeted in 2013, chiefly due to lower employee expenses.
The AFM has published a brochure (in Dutch) in which the levies for ongoing supervision are explained in more detail.
DNB announces 2014 supervisory themes
The Dutch Central Bank will continue to pay extra attention to institutional conduct and culture this coming year. Business models and strategies will also be important themes.
DNB publishes good practices for fighting corruption
The Dutch Central Bank has published good practices to help banks and insurers fight corruption in the form of bribery or conflicts of interest. These good practices reflect the outcome of a theme-based examination, which showed that these sectors can do more to identify and effectively tackle corruption risks
New European regulation
The following directives and regulations in the area of the financial markets have entered into force in the last month:
Recovery and resolution of credit institutions and investment schemes
Deposit guarantee schemes
European Securities and Markets Authority – publications
European Banking Authority – publications
IOSCO – publications
Basel Committee on Banking Supervision – publications
Capital Markets Law Journal
Journal of International Banking Law & Regulation
7 July 2020
15 June 2020
12 June 2020
27 May 2020
22 May 2020
19 May 2020
19 May 2020
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24 April 2020
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