The levies for ongoing supervision for most financial enterprises and other parties subject to supervision will be lower in 2014 than in 2013. The main reason for this is that the Netherlands Authority for the Financial Markets (AFM) spent less than was budgeted in 2013, chiefly due to lower employee expenses. This resulted in a surplus of €4 million. This sum will be settled with the market. Levies actually rose in 2013.
For most groups, the levies will fall by more than 10%, but slightly less than this for banks and investment firms. For securities issuers, the total levy will in most cases be higher than in 2013, because they received a substantial rebate in 2013 from the levy paid in 2012. For pension funds, the 2014 levy will be approximately the same as in 2013. The levies for credit providers will rise slightly due to an increased supervisory burden, for life insurers they will rise by 8% and for non-life insurers by 16%. For most insurers however, the total levy will be lower in 2014 than in 2013 since there will not be a separate retrospective levy from the previous year in 2014 as there was in 2013 from 2012.
The AFM will be sending an invoice for the levies due for ongoing supervision in 2014 to enterprises between mid-June and the end of 2014, accompanied by a letter providing further explanation. The levies for ongoing supervision in 2014 (in Dutch only) have been established by the Minister of Finance and the Secretary of State for Social Affairs and Employment.
Who pays for the AFM’s supervision?
The funding of financial supervision in the Netherlands is established in the Financial Supervision (Funding) Act (Wet bekostiging financieel toezicht, or ‘Wbft’). This Act states that all the costs of supervision by the AFM shall be borne by the enterprises supervised by the AFM, supplemented by a fixed sum from the government of €20.2 million in 2014.
How are the levies established in each case?
The division of the costs across a group of institutions is usually made using a so-called ‘levy base’, which is a measure of an enterprise that ultimately determines the amount of the levy. For instance, the levy base for advisers and intermediaries is the number of employees directly or indirectly employed as advisers and intermediaries. The more employees working as advisers and/or intermediaries, the higher the levy. For other enterprises subject to supervision, the levy base used is for example the number of retail customers, the revenue from statutory audits or the assets under management. A difference between the levy base in 2013 and in 2014 will, in addition to the change in the levy rate, obviously affect the amount of the levy for an individual enterprise.
Levies to rise in 2015
The government is proposing to abolish the government contribution to the costs of the AFM’s supervision from 2015. This will mean a substantial increase in the levy with effect from 2015. The exact amount of the increase is not yet known, and depends on the amount of the government’s contribution to the costs of supervision for a specific group of enterprises in the past. For the group of advisers and intermediaries, the increase will be approximately 50 per cent of the levy in 2014. The base amount for 2015 is expected to be between €950 and €1,050, with a variable charge on top of this related to the number of employees.
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.