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AFM imposes an administrative fine on AFAB for insufficiently guaranteeing the quality of its financial services

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On 5 August 2010, the Netherlands Authority for the Financial Markets (AFM) imposed an administrative fine of €6,000 on AFAB Holding N.V. (AFAB), because it failed to sufficiently guarantee expert services on the part of the employees of AFAB Geldservice B.V. (AFAB Geldservice) when concluding consumer and mortgage loans. The Rotterdam District Court reduced the fine to €5,400 by means of a decision dated 1 November 2012.

The fine concerns the period of June 2008 to June 2009. AFAB Geldservice was an institution affiliated with AFAB.

The Financial Supervision Act (Wft) contains requirements for financial service providers concerning the expertise of employees who directly involved in providing financial services. Said expertise has to be guaranteed by the financial undertaking that provides the service. It is required to employ a sufficient number of directors with sufficient expertise in order to guarantee the quality of the financial services.

AFAB has failed to demonstrate that, in the period from June 2008 to June 2009, sufficient care was taken to guarantee the expertise of customer relations officers. AFAB also failed to demonstrate that a sufficient number of de facto directors with relevant diplomas were available to guarantee the quality.

In addition, AFAB also failed to demonstrate that the business operations of AFAB and AFAB Geldservice was structured in such a way that the expertise of the persons who provided the financial services was guaranteed as a result thereof. This means that, in the opinion of the AFM, AFAB acted contrary to Article 4:9, second paragraph, of the Wft.

The AFM's decision has since become final and it is no longer possible for interested parties to submit the AFM's decision to a court for review.

If you have any questions or comments you can contact the Financial Markets Information Line on: 0800-5400 540 (free of charge).

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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