AFM: Resumption of trading in PostNL N.V.

For the definition of “cluster munition”, Section 21a(1)(a) of the Market Abuse Decree under the Financial Supervision Act refers to Article 2(2) of the Convention on Cluster Munitions. 

The Convention was published in Treaty Series 2009-45. 

According to the definition in Article 2(2) of the Convention, cluster munition means “a conventional munition that is designed to disperse or release explosive submunitions each weighing less than 20 kilograms, and includes those explosive submunitions”. 

Three categories of munition are excluded under Articles 2(2)(a) to 2(2)(c): 

1. “A munition or submunition designed to dispense flares, smoke, pyrotechnics or chaff; or a munition designed exclusively for an air defence role”; 
2. “A munition or submunition designed to produce electrical or electronic effects”; 
3. “A munition that, in order to avoid indiscriminate area effects and the risks posed by unexploded submunitions, has all of the following characteristics”: 
   1. “Each munition contains fewer than ten explosive submunitions”; 
   2. “Each explosive submunition weighs more than four kilograms”; 
   3. “Each explosive submunition is designed to detect and engage a single target object”; 
   4. “Each explosive submunition is equipped with an electronic self-destruction mechanism”; 
   5. “Each explosive submunition is equipped with an electronic self-deactivating feature”;   

Link to the Convention: https://zoek.officielebekendmakingen.nl/trb-2009-45.html
The English text is “authentic” (original text); later in the document is a Dutch translation. 

In accordance with Section 21a of the Market Abuse Decree under the Financial Supervision Act, a financial enterprise with registered office in the Netherlands must adopt effective measures to prevent it from:

1. conducting or commissioning transactions for the purpose of acquiring or offering a financial instrument that has been issued by a company that produces, sells or distributes cluster munitions, or critical components of them;
2. granting loans to a company as referred to in paragraph a;
3. acquiring shares in the capital of a company as referred to in paragraph a that are not freely tradable. 

The ban has to be applied by a financial enterprise that is established in the Netherlands and is a:

• Bank;
• Management company;
• Collective investment scheme; 
• Investment firm; 
• Financial institution; 
• Pension fund; 
• Premium pension institution; or 
• Insurer.

Application of the ban is also mandatory for branches and tied agents abroad of such an enterprise, but only if the head office based in the Netherlands bears responsibility for their operations.

Advising does not strictly fall within the scope of the rules on cluster munitions. 

The ban is clearly aimed at preventing the effecting or commissioning of transactions, the granting of loans and the acquisition of shares that are not freely tradable. Advising within the meaning of Section 1:1 of the Financial Supervision Act does not encompass this. However, the intent of the legislation is that financial enterprises, as referred to in Section 5:68 of the Act, should develop policy for advising in connection with cluster munitions. In any such cases, therefore, the appropriateness of the advice will also have to be assessed in the light of Section 21a of the Market Abuse Decree under the Financial Supervision Act.