Licences and European passports

Have you received an investment offer that might be too good to be true? Make sure to check the investment firm and the investment they are offering. Please note: the AFM does not directly supervise foreign investment firms with a European passport.

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Frequently asked questions - Licenses and European passports

What is a European passport?

If a financial enterprise from a country within the European Economic Area (the European Union + Norway, Liechtenstein and Iceland) has a licence from the supervisor in that country and wishes to offer products and services in the Netherlands, it must register with the AFM. The enterprise is then issued a European passport and is entered in the AFM register.

A European passport may apply to various types of enterprise, including insurers, financial services providers or investment firms. An enterprise with a European passport remains subject to supervision in its country of origin. The supervisor in that country will thus have carried out the testing process. The AFM does not repeat this process, and therefore also does not supervise the conduct of foreign enterprises holding a European passport. A licence from a national supervisor is not a certification of quality.

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Who supervises financial enterprises with a European passport?

If a financial enterprise with a European passport offers services in the Netherlands without having a branch office there, it is not, in principle, subject to (direct) supervision by the AFM. It is subject to supervision by the supervisor in the country in which it is located.

If a financial enterprise with a European passport opens a branch office in the Netherlands, the AFM supervises compliance with applicable legislation and regulation and on the service provision itself.

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What should you do if you have a complaint or dispute with a financial enterprise that has a European passport?

The AFM regularly receives reports regarding enterprises with a European passport. These reports are very varied, but many of them concern investment firms. In many cases, the reports concern brokers offering investment or trading services. Trading services usually involve investment products that carry a very high risk that you will lose your investment if you are not an experienced investor. These investment products are frequently referred to as forex (foreign exchange) or CFDs (contracts for difference).

If you are a Dutch consumer and you have a dispute or have been harmed or even defrauded by an enterprise with a European passport, these are the steps you should take:

Submit your complaint to the investment firm itself.

Submit your complaint to the supervisor in the country in question. If you receive no response, or a response that is not satisfactory, do not leave the matter there. Make sure that your complaint remains open! Ask for a status update regularly. Details of all supervisors are available in the IOSCO list.

Submit your complaint to the financial ombudsman in the country in question.

A financial enterprise with a European passport is not obliged to be affiliated to the Financial Services Complaints Tribunal (Klachteninstituut Financiële Dienstverlening, or Kifid) in the Netherlands. You will thus have to rely on the complaints procedures that apply in the country in which the enterprise is located. In cases involving bankruptcy, Dutch law will moreover not apply, and the case will be decided in accordance with the laws and regulations in the country that granted the licence. See the list of financial ombudsmen/dispute resolution organs in all EU Member States.

Report the matter to the AFM.

If the AFM finds that an enterprise has not complied with legislation and regulation, the AFM may bring this to the attention of the competent supervisor. You can notify the AFM using our contact form.

If you have been defrauded, you should always report the matter to the police. In addition, you can initiate legal proceedings from the Netherlands. Search on the internet for a Dutch law firm that has experience with proceedings against foreign investment firms or brokers. In cases involving multiple victims, it may be possible to initiate a class action.

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