New warnings for investors

The Netherlands Authority for the Financial Markets (AFM) has determined its warning sentences. As of 1 July 2011, all collective investment companies will be authorised to provide the so-called "Essential Investor Information". This will be mandatory as of 1 July 2012. In advertisements, the new warning sentence will read: 'Do not run unnecessary risks. Read the Essential Investor Information.'

The Essential Investor Information succeeds the Financial Leaflet (Simplified Prospectus) for collective investment companies. The warnings are based on new European rules. These rules are intended to ensure that consumers are better able to compare unit funds within Europe, for example for the risks they run.

The Financial Leaflet will continue to exist for complex products. These concern, for example, combinations of investing and borrowing, whereby the value of one or more components of this complex product depends on the developments in the market.

Risk Indicator

The warning sentence has to be included in advertisements of collective investment companies. In addition, there is a new "risk indicator", indicating return and risk on a scale of 1 to 7. A standard has also been established for the document entitled Essential Investor Information. The European rules set conditions, inter alia, in respect of understandability, so that knowledgeable investors can decide whether they wish to participate in a unit fund. This document should not exceed two A4's.

The new mandatory warning sentences and risk indicators are now available via the AFM website. There are set standards for print media, the Internet, radio and television.

More information

Collective investment companies that have questions concerning the new rules can apply to the Business Portal (Ondernemingsloket) at telephone number 0900-6800 680. Consumers can obtain more information from the Financial Markets Information Line at telephone number 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.

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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