On 30 June 2021, the legislative proposal for the Security Assessment Investments, Mergers and Acquisitions Act (Wet veiligheidstoets investeringen, fusies en overnames, the Legislative Proposal) has been submitted to the Dutch Parliament (Tweede Kamer).
The Legislative Proposal applies to acquiring activities in relation to target companies that qualify as a vital provider. For the financial markets, the following companies qualify as a vital provider:
- a central counterparty (centrale tegenpartij) as defined in Regulation (EU) 648/2012 (EMIR) with its seat in the Netherlands;
- a clearing institution (clearinginstelling) as defined in Article 1:1 of the Act on the Financial Supervision (Wet op het financieel toezicht, the AFS) which holds a licence from the Dutch Central Bank (De Nederlandsche Bank, DNB) and which settles more than one billion transactions in total per year;
- a financial undertaking (financiële onderneming) as defined in Article 1:1 AFS that holds a licence from DNB or the European Central Bank (ECB) to carry out the business of a bank and which, in carrying out the business of a clearing institution, settles more than one billion transactions in total per year;
- a settlement undertaking (afwikkelonderneming) as defined in Article 1:1 AFS that holds a licence from DNB; and
- a central institution (centraal instituut), which is further defined as a central securities depositary as meant in Article 2 of Regulation (EU) 909/2014 (CSDR), with its seat in the Netherlands.
The Legislative Proposal is currently under review in the Dutch Parliament. The date of entry into force is therefore still unknown. However, once the Legislative Proposal has been approved by both the Dutch Parliament and the Dutch Senate (Eerste Kamer), it will apply retroactively from 8 September 2020.
The Legislative Proposal introduces a reporting requirement for acquisition activities that lead to changes in the control over vital providers and companies that possess sensitive technology, including certain vital providers in the area of infrastructure for financial markets. This reporting requirement is for both the acquirer (verwerver) and the target company (doelonderneming). Any intention to carry out an acquiring activity needs to be reported to the Dutch Minister of Economic Affairs (Minister van Economische Zaken, the Minister). The Minister will then decide whether the acquiring activity can be carried out or whether the reporting party must apply for a assessment decision, because the acquisition may result in a risk to national security. If based on its assessment, the Minister is of the opinion that the acquiring is associated with risks to national security, the Minister may attach conditions to the acquisition. In addition, the Legislative Proposal gives the Minister the power to prohibit the acquisition.
The Minister has a number of enforcement measures at his disposal when the reporting requirement has not been met, including a suspension of the voting rights in the target company and an administrative fine which can amount to up to 10% of the turnover of the company.
The Legislative Proposal can be viewed here (Dutch only).