On 19 April 2016, the Dutch Minister of Finance published a further report (the Report) in relation to the legislative proposal implementing the Market Abuse Regulation (No 596/2014) and the Directive on criminal sanctions for market abuse (2014/57/EU) in Dutch legislation (the Proposal). The Report contains the advice from the Advisory Division of the Council of State (Afdeling advisering van de Raad van State, the Advisory Division) on the Proposal as well as the Dutch Minister of Finance’s response.

The Advisory Division made the following two comments in relation to the Proposal:

  • the Proposal introduces a general legal basis which will allow the Dutch Government to set further rules necessary to properly implement European regulations relevant to the Dutch financial markets (of course only with respect to the matters regulated in and permitted under such regulation) by way of an order in council (algemene maatregel van bestuur) and therefore without having to involve the Dutch Parliament. In the explanatory notes to the Proposal, the Dutch Minister of Finance explains that this ability is necessary in order to be able to meet the short implementation deadlines often provided for in regulations. In its advice, the Advisory Division indicates that it believes that the proposed delegation basis is too broad and is not in line with the general rules that decide whether further rules are set by means of a law, order in council or ministerial decree. The Advisory Division advises that the proposed delegation basis should be limited and make reference to specific provisions in the Act on the Financial Supervision (Wet op het financieel toezicht); and
  • the explanatory notes to the Proposal provide that the request from the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) to: (i) gain access to traffic data from, amongst others, telecommunications service providers; and (ii) obtain the authority to freeze securities accounts will be reviewed at a later date. The Advisory Division indicates that it will need to be heard if the Proposal will be amended to the effect that the AFM will be granted such far-reaching powers.

It follows from the Report that the Dutch Minister of Finance will not follow the Advisory Division’s advice in relation to the first of the abovementioned points. As regards the second point, the Dutch Minister of Finance emphasises that the granting of such powers will not form part of the Proposal, but if the granting of such powers requires a legislative change, the Advisory Division will be asked for its advice.

View the Advisory Division’s advice (Dutch only), 14 March 2016.

View the Report (Dutch only), 19 April 2016.