The AFM imposes an administrative fine on Homburg Capital B.V. for providing investment advice without a licence

On 14 December 2010, the Netherlands Authority for the Financial Markets (AFM) imposed an administrative fine of €192,000 on Homburg Capital B.V. (Homburg). Homburg holds a licence that allows it to carry out orders for clients, but that does not allow it to provide said clients with advice ("execution only"). The AFM has observed, however, that Homburg did provide advice concerning financial instruments, without the required AFM licence.

Based on recordings of telephone conversations between Homburg and clients, the AFM has established that Homburg, in the period of September 2008 and November to December 2009, provided investment advice to clients. This was ascertained in 6 of the 22 examined relevant conversations*.

During these one-on-one meetings, recommendations were made to induce a client to purchase a specific Homburg financial instrument, or to interest a client in the purchase or sale of a specific financial instrument. During the conversations, a product was several times recommended explicitly as suitable for the client. This means that in doing so Homburg provided advice with respect to financial instruments. It does not have a licence for this purpose, which means that it acted in violation of Article 2:96, first paragraph, of the Financial Supervision Act (Wft).

Interested parties can submit the AFM's judgement contained in the decision to the competent court for review.

If you have any questions or comments you can contact the Financial Markets Information Line on: 0900-5400 540 (5 eurocents per minute).

The AFM promotes fairness and transparency within financial markets. We are the independent supervisory authority for the savings, lending, investment and insurance markets. The AFM promotes the conscientious provision of financial services to consumers and supervises the honest and efficient operation of the capital markets. Our aim is to improve consumers’ and the business sector’s confidence in the financial markets, both in the Netherlands and abroad. In performing this task the AFM contributes to the prosperity and economic reputation of the Netherlands.

* Relevant in the sense that it did not concern internal conversations, voicemail messages or meetings during which only a brochure was requested.

The AFM is committed to promoting fair and transparent financial markets.

As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.

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