On 1 April 2016, the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) informed market participants that the Securities Giro Act (Wet giraal effectenverkeer, Wge) will be amended in order to provide more protection for derivatives investors. The amendments entered into force on 1 April 2016.
The new rules set out improved protection for investors in derivatives against the bankruptcy of their intermediary. Under the new rules the derivatives positions of clients will fall within a separate derivatives capital, in this way the derivatives positions are separated from the own funds of the intermediary. The new rules set out obligations for investment firms. First, they must inform their clients in respect of their capacity and the consequences relating to property law in the event of bankruptcy. Secondly, they must improve their record keeping in respect of the derivatives capital of their clients.
View the AFM’s news item (Dutch only), 1 April 2016.