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Providers of investments up to €100,000 under supervision

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On 1 January 2012, the exemption limit for the licence requirement for providers of investments and rights of participation in collective investment schemes will be raised from €50,000 to €100,000. If providers of these investment products between €50,000 and €100,000 still offer, manage or perform such investment products after 31 December 2011, they are required to have a licence. This is a change from the current situation, in which these providers are exempted.

This arises from the amendment of the Exemption Regulation pursuant to the Financial Supervision Act (Vrijstellingsregeling Wft) in connection with an adjustment of the exemption provisions for offering investments and offering rights of participation in collective investment schemes. It was published in the Government Gazette (Staatscourant) on 3 November 2011.

The licence requirement also applies to providers that manage or perform existing agreements with respect to investment objects or that manage collective investment schemes.

A transitional scheme pertaining to the licence requirement applies to providers who offer investment objects or rights of participation in collective investment schemes of between €50,000 and €100,000 before 1 January 2012. No transitional scheme applies to offering securities to the public.

Under the transitional scheme, providers/managers of investment objects/collective investment schemes have to apply for a licence via the Digitaal loket by 31 January 2012 at the latest. They will be able to continue their activities for as long as the AFM is handling its licence application. Licence applicants will be registered in the AFM register as of 1 February 2012. The transitional scheme does not apply to offers made after 31 December 2011.

Parties that come under the transitional scheme do have to comply with the rules of conduct that apply to parties that hold a licence. For instance, they have to have ethical business operations and arrange for separation of assets.

If the AFM rejects the licence application, the provider/manager can only continue its activities if it as yet complies with the Exemption Scheme under the Financial Supervision Act, for example by bundling the investment products offered into a unit of at least €100,000. If a provider/manager cannot comply with the Exemption Scheme under the Financial Supervision Act, it will have to cease its activities and terminate existing agreements, for example by liquidating or transferring agreements to a provider with a licence.

Providers/managers who do not comply with the licence requirement and/or providers who wish to make use of the transitional scheme and do not apply for a licence before 1 February 2012 will be breaking the law. The AFM can take enforcement action in this connection.

If you have questions concerning the transitional scheme, you can contact the AFM at overgangsregeling50K@afm.nl.

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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