On 25 October 2021, the Dutch Minister of Finance submitted the legislative proposal for the Amendment Act Financial Markets 2022 (Wijzigingswet financiële markten 2022) to the Dutch Parliament.

The Amendment Act Financial Markets 2022 contains changes to key legislation relevant to the Dutch financial markets, including, but not limited to, the Act on the Financial Supervision (Wet op het financieel toezicht, the AFS), the Financial Supervision Funding Act 2019 (Wet bekostiging financieel toezicht) and the Act on the prevention of money laundering and terrorist financing (Wet ter voorkoming van witwassen en financieren van terrorisme). This legislative proposal is part of an annual cycle of changes to the legislation relevant to the Dutch financial markets.

The most notable changes proposed in the Amendment Act Financial Markets 2021 include:

1. introducing the possibility for payment institutions, payment processing service providers (afwikkelondernemingen), electronic money institutions and investment firms to make use of a segregated assets account (rekening met afgescheiden vermogen);
2. decrease the fluctuation of the levies raised by the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) and the Dutch Central Bank (De Nederlandsche Bank, DNB);
3. introducing an annual audit requirement for payment institutions and electronic money institutions;
4. allowing EU managers of alternative investment funds (AIFMs) to also use of the ‘light regime’;
5. clarifying that EU collective investment in transferable securities (UCITS) managers authorised in their home Member State may manage a Dutch UCITS (without having to apply for a separate licence in the Netherlands); and
6. making the reputation requirement a continuous requirement for holders of a declaration of no-objection (verklaring van geen bezwaar, DNO).

(1) Segregated assets account

The AFM and DNB have long been requesting the introduction of a “statutory quality account” (wettelijke kwaliteitsrekening) and there has been a growing demand for this in the financial markets as well. An important reason is that one of the most commonly used alternatives in the Netherlands, the customer accounts foundation (stichting derdengelden), is a generally unknown phenomenon outside of the Netherlands. This tends to make the settlement of cross-border transactions difficult (e.g. foreign parties are not willing to pay to these foundations because they fear that by doing so they are not discharging their payment obligation).

The Amendment Act Financial Markets 2022 introduces a segregated assets account instead of a statutory quality account. The key difference between the two is that in case of:

• a statutory quality account, the funds in the account belong to the joint interested parties together (as e.g. is the case for notaries in the Netherlands);
• the segregated assets account, the funds in the accounts constitute separate assets solely for the satisfaction of certain claims, which is in line with the asset segregation rules for e.g. alternative investment funds (AIFs), UCITS and pension funds.

Payment institutions, payment processing service providers, electronic money institutions and investment firms will be able to use the segregated assets account for safeguarding customer funds (not financial instruments, as these can already be protected using the system under the Dutch Securities Giro Act (Wet giraal effectenverkeer). The segregated assets account must be held with a Dutch bank in the name of the financial institution concerned, and it should follow from the name of the account that it is held by the account holder in its own name and noting the account holder’s capacity, but for the benefit of one or more third parties (the customers). The funds held in such account form segregated assets that serve exclusively to settle claims from interested parties, i.e. from: (1) third parties for whom the funds have been deposited in the account; and (2) the bank where the segregated assets account is held (provided it concerns claims related to the management of the account). In both cases the claims must be related to the entrustment of the funds to the account holder. This exclusivity of recourse means that in the event of the bankruptcy of the financial institution, the funds in the segregated assets account do not form part of the financial institution’s bankruptcy estate.

The customer funds held in a segregated assets account will qualify as ‘deposits’ which are protected under the Dutch deposit guarantee scheme. However, seeing that the funds are held in the name of the financial institution for the customers’ benefit, customers can only claim compensation if the identity of the customers can be determined at the time the deposit guarantee scheme would be activated. This requirement will be met by having a professional administration by the financial institution (being the account holder), provided certain conditions are met.

(2) Stability of levies

In recent years, the levies raised by the AFM and DNB have been difficult to predict and fluctuated greatly due to a number of reasons, including large (temporary) projects and new market entrants. This was at the expense of the basic principle that levies should be predictable and stable for the supervised institutions involved. In order to absorb large fluctuations in the levies as a result of incidental costs, two instruments are being introduced:

• the AFM and DNB will be able to form reserves to absorb potential incidental costs; and
• it will be possible to spread the operating balance resulting from incidental items over several years, instead of charging it to the supervised institutions in the following year all at once.

(3) Audit requirement for payment institutions and electronic money institutions

According to DNB, the financial data used in the annual financial statements of payment institutions and electronic money institutions have not always been reliable. Therefore, the audit requirement (which currently applies to e.g. banks, insurers and clearing institutions) will be extended to payment institutions and electronic money institutions.

(4) Dutch light regime for EU managers

Article 2:66a of the AFS provides that Dutch AIFMs are able to benefit from the so-called ‘light regime’, which means they do not require am AIFM licence from the AFM, if they meet the following conditions:

• the total value of the assets under management may not exceed € 100,000,000 (leveraged) or € 500,000,000 (unleveraged and no redemption rights for a period of five years); and
• units in the AIF may only be offered to fewer than 150 persons, in denominations of at least €  100,000 per unit, for a total consideration of € 100,000 per investor, or to professional investors only.

Currently only Dutch AIFMs are able to make use of the light regime. It is being proposed that this regime will also be available to EU AIFMs, but only insofar as they exclusively offer units to professional investors.

(5) EU managers managing Dutch UCITS

There will be a rectification of an incorrect implementation of Article 16(2) of the UCITS Directive. Article 2:72 of the AFS now refers to Article 2:69b of the AFS, based upon which it appears that a EU manager of a UCITS, which is already fully authorised in its home Member State to manage a UCITS, would need to apply for a licence in the Netherlands when managing a Dutch UCITS.

(6) Continuous reputation requirement

Anyone that acquires or increases a qualifying holding (gekwalificeerde deelneming) in a financial undertaking subject to Article 3:95 of the AFS (e.g. banks, investment firms, UCITS managers, insurers, certain payment institutions, electronic money institutions) is required to first obtain a DNO from DNB. In this context, DNB screens DNO applicants for both integrity (betrouwbaarheid) and reputation.

Anyone holding a DNO is currently required to continuously meet the integrity requirement, which means that DNB not only screens the integrity of a DNO applicant at the time of a DNO application, but also if e.g. a new director is at later stage appointed to the board of a legal entity holding a DNO. In addition, a reassessment of a person previously screened for integrity may be required if facts or circumstances come to light providing reasonable grounds to do so. Reputation screenings, however, have only been carried out by DNB at the time of a DNO application and not, for example, when a new director is appointed to the board of a legal entity that already has a DNO. The reputation requirement will be in line with the integrity requirement, making it a continuous requirement as well.