When do you – as a provider of investment objects – need to have a licence?
The supervision of financial enterprises is regulated in the Act on Financial Supervision [Wet financieel toezicht] (Wft). The financial product referred to as an investment object is incorporated in the Wft. On account of the specific risks involved, amongst other things, the system of standards for investment objects deviates slightly from the system of standards for other financial products regulated by the Wft.
Under Section 2:55 of the Financial Supervision Act (FSA), a licence is required to offer investment objects. The AFM is the supervisor for compliance with this provision. Typical products offered as investment objects are plots of agricultural land, recreational property, investments in teak, and precious metals such as gold and silver.
The relevant criteria for determining whether a product offered to consumers qualifies as an investment object are:
- It has to involve property, entitlement to property, and or entitlement to a return in cash or part of the proceeds from the sale of property.
- It cannot be obtained free of charge.
- There is the prospect of a return on investment.
- The party that mainly manages the property is not the same as the acquiring party.
An Order in Council can also designate other entitlements as investment objects, for example, a financial interest in a limited partnership for a film or in a shipping venture.
You do not need a licence if an exemption applies.
NB: The above information is a broad summary of the licensing requirements for the provision of investment objects. The licensing requirements themselves are stated in the relevant laws and regulations.