9 December 2013

Dutch private placement regime amended

The Financial Markets Supervision Act 2014 will soon enter into force and clarifies the Dutch private placement regime for marketing AIFs in the Netherlands and the resulting obligations.

This information is available in English only.

The Dutch First Chamber, on 19 November 2013, formally adopted the Financial Markets Supervision Act Amendment 2014 (Wijzigingswet financiële markten 2014; the “2014 Act”). The 2014 Act is expected to enter into force on 1 January 2014.

Non-EEA AIFMs and EEA AIFMs
The 2014 Act corrects certain inadequacies in the current Financial Markets Supervision Act (“FMSA“). The amendments pertain to the Dutch private placement regime (section 1:13b FMSA) that (i) a non-EEA AIFM can rely on for the offering of units in an AIF in the Netherlands or managing an AIF with seat in the Netherlands, and (ii) an EEA AIFM with an AIFMD licence can rely on for the offering of units in a non-EEA AIF.

According to the 2014 Act:

(a) a non-EEA AIFM can rely on the private placement regime if:

  • the units in the AIF are only offered to qualified investors;
  • the state where the AIFM is established is not listed as a non-cooperative country and territory by the Financial Action Task Force;
  • a cooperation agreement is in place between the Netherlands Authority for the Financial Markets (“AFM“) and the supervisory authorities of the home state of the AIFM, (the “PPR Requirements”).

Although it does not follow from section 1:13b FMSA that notification to the AFM is required, the AFM recently published a notification form (follow this link for notification form) which non-EEA AIFMs must complete if they wish to rely on the Dutch private placement regime. After emailing a completed notification form to the AFM, the non-EEA AIFM may start marketing the identified AIF to qualified investors in the Netherlands. An additional requirement that stems simultaneously with the notification form is the submission of an attestation from the AIFM’s competent authority, and if applicable, the competent authority of the country where the non-EU AIF is established, confirming its ability to effectively comply with the cooperation agreement as referred to above.

(b) an EEA AIFM with an AIFMD licence can rely on the private placement regime for its non-EEA AIF if the PPR Requirements are met, provided that the PPR Requirements pertain to the AIF instead of the AIFM.

Currently, no similar notification form for EEA AIFMs regarding a non-EEA AIF is available on the AFM’s website. The AFM has not announced whether this notification will become a requirement in the future.

On-going requirements
Non-EEA AIFMs and EEA AIFMs that rely on the Dutch private placement regime are still subject to a number of transparency and on-going requirements in accordance with article 36 AIFMD (for EEA AIFMs) and 42 AIFMD (for non-EEA AIFMs). From the 2014 Act it follows that the Netherlands has made use of the possibility to impose an obligation on the EEA AIFM that the AIF of which it offers units in the Netherlands must have a depositary in conformity with article 21 AIFMD. We understand, however, that a supplemental act is being prepared which seeks to cancel this last requirement.

The private placement regime is only applicable if units in an AIF are offered to qualified investors in the Netherlands. Except for Dutch licensed AIFMs, there is no private placement regime available for offering units to non-professional investors in the Netherlands.

The AFM and the Dutch Ministry of Finance have indicated that these rules will be amended to allow marketing by EEA AIFMs with an AIFMD licence to non-professional investors in the Netherlands, provided that additional requirements for the marketing to non-professional investors are met (the ” top-up retail rules”).

The pre-AIFMD “adequate supervision regime” will remain in place until July 2018 and allows AIFMs established in non-EEA countries designated by the Dutch Minister of Finance to market units in an AIF or manage Dutch AIFs to non-professional investors in the Netherlands without requiring a licence. Guernsey, Jersey and the USA (but only if the manager is subject to SEC registration) are expected to remain designated countries. AIFMs relying on this regime must comply with a number of continuing obligations in the Netherlands, including the “top-up retail rules” for the marketing to non-professional investors.

The “adequate supervision regime” that was in place for EEA AIFs with seat in Ireland and Luxembourg was cancelled as from 22 July 2013. The EEA AIFs that relied on this regime prior to 22 July 2013 may use this regime until 22 July 2014. If the private placement rules for marketing to non-professional investors are not amended as mentioned above prior to 22 July 2014, these EEA AIFs will be forced to have an AIFM that is licensed in the Netherlands.