On 23 March 2016, the Dutch Central Bank (De Nederlandsche Bank, DNB) published a position paper on the trust sector for the purpose of a round-table session in the Dutch Parliament. In its position paper, DNB makes reference to a number of issues:
- DNB indicates that trust offices play an important gatekeeper role in ensuring the integrity of the financial system. According to DNB investigations show that trust offices do not (yet) adequately fulfil this function, which potentially leads to significant reputation risks for the financial system in the Netherlands;
- DNB argues that the services provided by trust offices bring about high integrity risks, while the risk management of trust offices is often inadequate. By way of example, DNB refers to the situation where trust offices service organisational structures that aim to enhance the anonymity of the ultimate beneficial owner. In addition, DNB points out that the growth of the trust sector and diversification of trust activities further increase integrity risks;
- DNB believes that the trust sector is primarily fiscally driven and as a result in the centre of public interest. DNB notes that it is remarkable that, even though the existence of a trust office is for a large part dependent on taxation, trust offices pay little attention to the integrity risks associated with it; and
- according to DNB, the business operations of trust offices generally do not meet the required professional standard, as a result of which they are in breach of the Act on the Supervision of Trust Offices (Wet toezicht trustkantoren).
DNB concludes that the existing rules and regulations need to be updated in order to ensure that the trust sector becomes more professional. DNB suggests that, among other things, it should be able to revoke licenses more easily, have the authority to publish the enforcement measures it imposes on trust offices and that trusts office must have an integrated compliance function.
View DNB’s position paper on the trust sector (Dutch only), 22 March 2016.