The Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) currently allows certain groups of proprietary traders (persons dealing on own account) not to comply with the 20% bonus cap. In 2017, propriety traders faced a situation where they would be subject to the bonus cap with immediate effect, while they were first excluded. With its tolerance policy, the AFM wanted to prevent undesirable side effects in the face of further European rules. Immediate enforcement of the bonus cap would have forced these proprietary traders to immediately change their entire business model.

On 13 September 2019, the AFM announced that it will be continuing its tolerance policy this until after 31 December 2019, but only for proprietary traders who currently benefit from this tolerance policy. The AFM has decided to continue its tolerance policy because this is in line with future European and Dutch legislation, as confirmed in the legislative proposal for the Act further remuneration measures financial sector (Wet nadere beloningsmaatregelen financiële sector, the Proposal) that is in line with the European revised prudential framework for investment firms.

The AFM will continue to tolerate the non-compliance with the 20% bonus cap until the Proposal enters into force or as soon as it becomes clear that the legislative change will not be taking place.

View the AFM’s news item (Dutch only), 13 September 2019.