On 2 March 2016, the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) published guidelines which aim to assist investment firms in dealing with practical issues in relation to the ban on inducements (provisieverbod) for investment firms (the Guidelines).

The ban on inducements for investment firms has been in effect since 1 January 2014. In short, the ban prohibits Dutch investment firms from receiving or paying return commissions, kick back fees and lead commissions in relation to investment services provided to non-professional investors. The ban also applies to foreign companies with a branch office in the Netherlands that provide investment services. As a result, clients of investment firms must pay directly to the investment firm for any investment advice, individual asset management and execution-only services.

The AFM noticed that the ban on inducements for investment firms has led to a number of questions, the answers to which cannot always (directly) be found in the relevant rules and regulations. The Guidelines address a number of questions and practical situations the AFM has previously dealt with. This should assist investment firms in making the right decisions in similar situations. The Guidelines deal with, among other things, questions on how to deal with promotions, referral fees and marketing events.

View the AFM’s news item on the guidelines (Dutch only), 2 March 2016.

View the AFM’s guidelines on the ban on inducements for investment firms (Dutch only), March 2016.