Financial Supervision Act

Part I General part

Chapter 1.1 General provision

Section 1.1.2 Scope of application in regard of financial enterprises

§ 1.1.2.1 General provisions

Article 1:2 European and national Central Banks excluded from the scope of the Act
- 1. The present Act, with the exception of the present Part and of Chapters 5.1, 5.1a, 5.3 and 5.5 and Section 5.4.2, shall not apply to the European Central Bank, the central banks of the Member States, the national institutions of the Member States with a similar function and the government institutions of the Member States charged with or involved in the administration (management) of the public debt, international institutions under public law in which one or more Member States participate and institutions as referred to in Article 2 of the Recast Banking Directive.
- 2. In derogation from paragraph 1, the present Part and Part IV ‘Conduct Supervision Financial Enterprises’ shall apply to the provision of payment services and the issuance of electronic money by:
a. the European Central Bank and the Central Banks of the Member States;
b. Member States and regional or local government bodies of the Member States;

Article 1:3 Financials enterprises without the objective to make profits
For the purpose of the provisions arising from the present Act, a financial enterprise shall also include a person belonging to one of the categories of financial enterprises that does not have the objective to make profits.

Article 1:3a Application of rules of the Regulation as referred to in Article 288 of the Treaty on the functioning of the European Union
For the purpose of the present Act, the rules set out by or pursuant to a Regulation as meant in Article 1:24, paragraph 3, or Article 1:25, paragraph 3, are equated, as far as it concerns the Dutch Central Bank and the Authority Financial Markets charged with the execution (performance) and enforcement of those rules, with provisions set out by or pursuant to the present Act.

§ 1.1.2.2 Payment service providers, clearing institutions, electronic money institutions and banks

Article 1:4 Dutch Central Bank is no clearing institution or bank
The Dutch Central Bank is not a clearing institution or a bank within the meaning of the present Act.

Article 1:5 Performances excluded from the scope of the Act
The present Act does not apply to:
a. the issuance of payment instruments as referred to in Article 1:5a, paragraph 2, under (k);
b. the issuance of money values used to perform a payment transaction as referred to in Article 1:5a, paragraph 2, under (l).

§ 1.1.2.2a Payment services

Article 1:5a Application of the provisions of the present Act to payment services
- 1. What is provided in the present Act in regard of payment services shall apply to payment services performed in the European Community and the States which are a party to the Agreement on the European Economic Area, to the exclusion of the rules set by virtue of Article 4:22 for the implementation of Title III of the Payment Service Directive, which shall only apply if both, the payment service provider and the payee, or if only the payment service provider involved in the payment transaction, is established or residing in a Member State.
- 2. The provision of payment services within the meaning of the present Act does not include:
a. payment transactions made exclusively in cash directly from the payer to the payee, without any intermediary intervention;
b. payment transactions from the payer to the payee through an agent authorised to negotiate or conclude the sale or purchase of goods or services for account of the payer or the payee;
c. the physical transport in the pursuance of a professional practice or business of banknotes and coins, including their collection, processing and delivery;
d. payment transactions not made in the pursuance of a professional practice or business, consisting of the cash collection and delivery within the context of a non-profit or charitable activity;
e. the provision of services where cash is provided by the payee to the payer as part of a payment transaction following an explicit request by the payer (payment service user) just before the execution of the payment transaction through a payment for the purchase of goods or services;
f. the performance of money exchange transactions;
g. the performance of payment transactions based on any of the following documents issued by a payment service provider with a view to placing funds at the disposal of the payee:
1° paper cheques in accordance with the Geneva Convention of 19 March 1931 providing a uniform law for cheques;
2° paper cheques similar to those referred to in point (1°) and governed by the laws of Member States which are not party to the Geneva Convention of 19 March 1931 providing a uniform law for cheques;
3° paper-based drafts in accordance with the Geneva Convention of 7 June 1930 providing a uniform law for bills of exchange and promissory notes;
4 °paper-based drafts similar to those referred to in point (3°) and governed by the laws of Member States which are not party to the Geneva Convention of 7 June 1930 providing a uniform law for bills of exchange and promissory notes;
5° paper-based vouchers;
6° paper-based traveller's cheques, or;
7° paper-based postal money orders as defined by the Universal Postal Union, established in 1874 under the Convention of Bern;
h. the performance of payment transactions carried out within a payment or securities settlement system between settlement agents, central counterparties as referred to in Article 212a, under (c), of the Bankruptcy Act, clearing institutions, Central Banks of Member States, other participants in the aforementioned systems, and payment service providers, all without prejudice to Article 5:88;
i. payment transactions in connection with the provision of services in respect of negotiable securities, including the distribution of dividend and other income in relation to negotiable securities, and repayment (redemption) and sale, carried out by persons referred to under (h) or by investment firms, banks or other institutions allowed to have the custody of financial instruments;
j. the provision of services by technical service providers in support of the provision of payment services, without them entering at any time into possession of the funds to be transferred, including processing and storage of data, trust and privacy protection services, data and entity authentication, information technology (IT) and communication network provision, provision and maintenance of terminals and devices used for payment services;
k. the performance of payment transactions which can be used to buy goods or services, which transactions are to be performed (executed) by means of payment instruments providing for a well defined need and that can be used exclusively:
1° either in the premises (business buildings) used by the issuer;
2° either on the basis of a commercial contract with the issuer within a limited network of service providers;
3° or for a limited range of goods or services;
l. the performance of payment transactions which can be used to buy goods or services, which transactions are executed by means of any telecommunication, digital or information technology (IT) device, provided that the provider of such device does not act only as an intermediary between the payment service user and the supplier of the goods and services, and to the extent that the bought goods or services are delivered to and have to be used through one of the aforementioned devices;
m. the performance of payment transactions to be carried out between payment service providers, their agents or branches for their own account;
n. the performance of payment transactions between a parent company and its subsidiary or between subsidiaries as referred to in Article 3:268, paragraph 1, under (c), or between subsidiaries as referred to in Article 3:268, paragraph 1, under (c), of the same parent company, without any intermediary intervention by a payment service provider other than an enterprise forming part of the same group, or;
o. the withdrawal of cash from a cash dispenser to the extent that the operator thereof does not provide other payment services and acts in the name and on behalf of one or more payment service providers, and to the extent that this operator is no party to a framework agreement for payment services of those who withdraw the financial means from a payment account;

§ 1.1.2.3 Insurers

Article 1:6 Dutch institutions and societies excluded from the scope of the Act
- 1. The present Act shall not apply to:
a. the Social Insurance Bank (Sociale Verzekeringsbank);
b. the Employee Insurance Agency (Uitvoeringsinstituut werknemersverzekeringen) as referred to in Chapter 5 of the Work and Income (Implementation Structure) Act (Wet structuur uitvoeringsorganisatie werk en inkomen);
c. health insurance funds admitted under the Compulsory Health Insurance Act (Ziekenfondswet);
d. Mutual Insurance Societies having their registered seat in the Netherlands and mutual enterprises having their registered seat outside the Netherlands that only conclude non-life insurance contracts with regard to damage or loss caused by armed conflict, civil war, insurrection, civil commotion, riot and mutiny; and
e. enterprises exclusively operating in the assistance sector that only grant cover in the event of an accident with or breakdown of a road vehicle, where, under the cover, assistance in the event of an accident or breakdown in the Netherlands or immediately across the border is limited to:
1°. on-the-spot technical assistance in respect of which the enterprise as a rule uses its own personnel or equipment;
2°. the transport of the road vehicle to the nearest or most suitable location for repair, and the possible transport of the driver and passengers, usually with use of the same means, to the nearest location where they can continue their journey by different means;
3°. the transport of the road vehicle, possibly with the driver and passengers, to their domicile, their point of departure or their original destination within the Netherlands;
and, insofar as the cover extends to include an accident or breakdown abroad, where the assistance is limited to the activities listed under (1°) and (2°), the driver or a passenger is a member of the enterprise and the assistance or the transport is provided merely on presentation of a membership card, without payment of any additional premium, by a similar organisation working in the State involved that undertakes this on the basis of reciprocity.
- 2. Where a life insurance contract, besides the liability to make payments in money, includes liabilities of another nature, or where the life insurance contract includes liabilities relating to incidents with an uncertain cause and affecting a natural person, the life insurer’s business shall not lose its character and such liabilities shall not be deemed to have been assumed in the conduct of the business of a non-life insurer.

Article 1:6a Partly exclusion of designated reinsurers from the scope of the Act
- 1. The present Act, to the exclusion of the present Part and of Chapters 5.1, 5.3, and 5.5 and Section 5.4.2, shall not apply to reinsurers which are appointed pursuant to paragraph 2.
- 2. The Minister may, if he deems it necessary from the point of view of society, designate reinsurers formed by virtue of contracts between life insurers, non-life insurers or funeral expenses and benefits in kind insurers, which contracts have the objective to combine claims on account of insurance, without which contracts it would not be possible on the market to obtain adequate reinsurance coverage for the risks referred to.
- 3. The decision on such designation may be revoked by the Minister if he no longer deems the designation necessary from the point of view of society, if the contracts have no longer the objective to combine claims on account of insurance, or if it is no longer impossible to obtain adequate risk coverage for the risks referred to without the contracts concerned.

Article 1:7 Lloyd’s of London
For the purposes of the present Act, the reinsurers, life insurers and non-life insurers united under the name of Lloyd’s of London, United Kingdom, shall be regarded collectively as one reinsurer, one life insurer or one non-life insurer.

Article 1:8 Pension funds and pension companies
- 1. Not regarded as the conduct of business of a life insurer or non-life insurer are the conclusion or settlement of life insurance contracts and non-life insurance contracts, respectively, for one’s own account by a pension fund, insofar as that pension fund does so in the performance of a pension contract as referred to in Article 1 of the Pensions Act or an occupational pension scheme as referred to in Article 1 of the Occupational Pension Scheme (Compulsory Membership) Act.
- 2. Not regarded as the conduct of business of a life insurer or non-life insurer are the conclusion or settlement of life insurance contracts and non-life insurance contracts, respectively, for one’s own account by enterprises that do not conclude or settle any life insurance contracts or non-life insurance contracts for their own account other than those serving to perform a pension contract with a director and major shareholder as referred to in Article 1 of the Pensions Act.
- 3. Not regarded as the conduct of business of a reinsurer are the conclusion or settlement of reinsurance contracts for one’s own account by a pension fund, insofar as that pension fund accepts risks from other pension funds which have been accepted by the latter pension funds in the context of the conclusion or settlement of pension contracts as referred to in Article 1 of the Pensions Act or occupational pension schemes as referred to in Article1 of the Obligatory Occupational Pension Scheme Act.

Article 1:9 Funeral expenses and benefits in kind insurer
- 1. An insurer who holds a licence as referred to in Article 2:37, paragraph 1, or Article 2:40, paragraph 1, for conducting the business of a life insurer in the sector General Life Insurance, and who on that basis conducts the business of a funeral expenses and benefits in kind insurer, shall be governed only by the provisions concerning the conduct of the business of a life insurer.
- 2. An insurer who holds a licence as referred to in Article 2:48, paragraph 1, or Article 2:50, paragraph 1, for conducting the business of a funeral expenses and benefits in kind insurer, shall be governed only by the provisions concerning the conduct of the business of a funeral expenses and benefits in kind insurer.

Article 1:10 Small-sized Associations and Mutual Insurance Societies
An Order in Council shall specify which of the rules that are set pursuant to the present Act in regard of conducting the business of a non-life insurer and the business of a funeral expenses and benefits in kind insurer, shall not apply, under conditions to be specified in that Order in Council, in respect of the following categories:
a. Mutual Insurance Societies of limited size having their registered seat in the Netherlands that conduct the business of a non-life insurer and enterprises operating on a mutual base of limited size having their registered seat outside the Netherlands that conduct the business of a non-life insurer;
b. non-life insurers having their registered seat in the Netherlands that confine themselves to the conclusion and settlement of export credit insurance contracts for the account of or guaranteed by the State of the Netherlands;
c. Associations and Mutual Insurance Societies of limited size having their registered seat in the Netherlands that conduct the business of a funeral expenses and benefits in kind insurer.

Article 1:11 Swiss Confederation
For the purpose of what is provided by or pursuant to the present Act in regard of the business of a non-life insurer, the Swiss Confederation shall be regarded as a Member State, on the understanding that deviating rules may be set by Order in Council in relation to specific subjects.

§ 1.1.2.4 Collective investment schemes

Article 1:12 Units in collective investment schemes
- 1. Without prejudice to Article 2:69a, paragraph 3, the present Act, except for the present Part and for Article 3:7 and Chapters 5.1, 5.3, 5.4 and 5.5, shall not apply to collective investment schemes which offer units to:
a. less than one hundred persons not being qualified investors, or;
b. only qualified investors.
- 2. Without prejudice to Article 2:69a, paragraph 3, the present Act, except for the present Part and for Article 3:7 and Chapters 5.1, 5.3, 5.4 and 5.5, shall not apply to management companies and depositaries insofar as they manage (administer) collective investment schemes as referred to in paragraph 1 or insofar as they are charged with the safekeeping of the assets of such collective investment schemes.
- 3. Where a supervisory status certificate is granted pursuant to Article 2:69a, the following Articles shall not apply to the relevant management company, collective investment scheme and depositary: 3:53, paragraph 1, 3 and 5, 3:63, paragraph 1, 2 and 3, 3:88, paragraph 1, 3, 5 and 6, 4:9, paragraph 1, 4:10, 4:11, paragraph 1 and 4, 4:13, 4:14, paragraph 1, 4:16, paragraph 1, 4:25, paragraph 1, 4:26, paragraph 1 and 8, 4:42, beginning and under (a), 4:43, paragraph 1, 4:44, paragraph 1, 4:45, 4:50, paragraph 1, 4:51, paragraph 1, 4:52b, 4:55 and 4:55a.
- 4. Paragraph 1 does not apply to master institutions for collective investments in negotiable securities that at least have two feeder institutions as unit holder and of which the units are transferable and which shall be repurchased or repaid, either directly or indirectly, out of the assets upon the request of the unit holders.
- 5. In the event of an offer of units as referred to in paragraph 1, opening words and under (a), not being transferable units in a collective investment scheme of which the units shall not be repurchased or repaid, either directly or indirectly, out of the assets upon the request of the unit holders, as well as in the event of advertisements and documents in which such offer is announced, it shall be stated that the present Act does not require a license for the collective investment scheme involved and that no supervision is exercised over that collective investment scheme as referred to in the Part ‘Prudential Supervision Financial Enterprises’ and the Part ‘Market Conduct Financial Enterprises’.
- 6. In the event of an offer of units as referred to in paragraph 1, opening words and under (a), not being transferable units in a collective investment scheme of which the units shall not be repurchased or repaid, either directly or indirectly, out of the assets upon the request of the unit holders, as well as in the event of advertisements and documents in which such offer is announced, it shall be stated that the offer is or will be made exclusively to qualified investors.
- 7. What is provided in the present Act on offering of units in a collective investment scheme, does not apply to the offering of units in a collective investment scheme where the offer is made by natural persons not acting in the pursuance of their professional practice or business with respect to units they own.
- 8. The Authority Financial Markets shall specify the way in which a statement as referred to in paragraph 5 has to be made.

Article 1:13 Provisions applicable to collective investment schemes and their management companies
- 1. What is provided pursuant to the present Act in regard of collective investment schemes forming a unit trust or investment company and that have a separate management company, shall be addressed to its management company.
- 2. What is provided pursuant to the present Act in regard of a management company shall apply accordingly to a an investment company that does not have a separate management company, except for what is provided in Articles 1:60, paragraph 1, 2:65, paragraph 1, under (a), 2:67, 2:71, 2:72, 3:57, 3:95 and 4:59.
- 3. What is provided pursuant to Articles 4:46, 4:49, 4:50 and 4:52 in respect of a management company shall apply accordingly to a collective investment scheme having its registered seat in a designated State and that does not have a separate management company.
- 4. The registered seat of a unit trust, not being an institution for collective investments in negotiable securities, finds itself in the State where its management company has its registered seat.
- 5. What is provided pursuant to the present Act in regard of collective investment schemes offering units in the Netherlands and of management companies of such collective investment schemes and depositaries associated with such collective investment schemes, shall apply accordingly to collective investment schemes that have offered units in the Netherlands, management companies of such collective investment schemes and depositaries associated with such collective investment schemes.
- 6. What is provided pursuant to the present Act in regard of collective investment schemes and unit trust shall apply accordingly to sub funds.

Article 1:14 Application of rules for institutions for collective investments in negotiable securities to other financial enterprises
What is provided in the present Act in regard of institutions for collective investments in negotiable securities does not apply to:
a. collective investment schemes that, pursuant to their articles of incorporation or fund regulations, may enter into loans for amounts exceeding the maximum stated in the UCITS Directive, or may pursue an investment policy that is broader than the restrictions arising from the UCITS Directive; and
b. investment companies that primarily invest via subsidiaries in objects other than financial instruments as referred to in Section 4:60, paragraph 1.

Section 1.1.3 Scope of application in regard of financial services

§ 1.1.3.1 General provisions

Article 1:15 Provision of services by and individual portfolio management on behalf of pension funds
The present Act, except for Part V ‘Conduct Supervision Financial Markets', shall not apply to:
a. the provision of financial services - with the exception of offering units in a collective investment scheme -, by pension funds, insofar as they provide these financial services to the sector, enterprise or professional group with which they are associated; and
b. individual portfolio management on behalf of pension funds as referred to under (a) or funds allied which such pension funds by persons that are associated with the fund to which this financial service is provided.

Article 1:15a Clients and consumers
- 1. What is provided in the present Act in regard of clients shall apply accordingly to persons to whom a financial enterprise intends to provide a financial service.
- 2. What is provided in the present Act in regard of consumers shall apply accordingly to natural persons who did not act in the pursuance of a professional practice or business to whom a financial enterprise intends to provide a financial service.

§ 1.1.3.2 Services of the information society

Article 1:16 Application of the Act to services of the information society
- 1. The present Act, except for Articles 2:36, paragraph 2 up to and including 4, 2:38, 2:39 and 2:46, shall not apply to financial services that may be classified as a service of the information society as referred to in Article 15d, paragraph 3, of Book 3 of the Dutch Civil Code and that are provided by a financial enterprise having its registered seat in another Member State or from a branch office situated in another Member State by a financial enterprise having its registered seat in a non-Member State.
- 2. If measures are required for the protection of one of the interests referred to in Article V, paragraph 6, under (a), of the Act amending the Electronic Commerce Directive (Aanpassingswet richtlijn inzake elektronische handel), the Minister may decree, where necessary under the application of Article V, paragraph 6, that Part IV ‘Conduct Supervision Financial Enterprises’ and the provisions based thereon shall apply in full or in part, in derogation from paragraph 1, to a particular financial service as referred to in that paragraph.

Article 1:17 Service of the information society as provision of financial services
The provision of financial services in the Netherlands shall include also the provision of financial services that may be classified as a service of the information society as referred to in Article 15d, paragraph 3, of Book 3 of the Dutch Civil Code in another Member State by a financial enterprise having its registered seat in the Netherlands or by a branch office situated in the Netherlands of a financial enterprise having its registered seat in a non-Member State.

§ 1.1.3.3 The provision of investment services and performance of investment activities

Article 1:18 Application of the Act to investment services and activities
Insofar as not provided otherwise, the present Act, except for Part V ‘Conduct Supervision Financial Markets’, shall not apply to the provision of investment services and the performance of investment activities insofar as:
a. these are provided to or performed for the enterprise of which the investment firm is a subsidiary, for its subsidiaries or for another subsidiary of the enterprise of which it is a subsidiary;
b. these consist of the administration of an employee participation scheme in relation to financial instruments;
c. these are provided or performed by investment firms whose main business consists of trading for own account in commodities or derivatives on commodities and which do not form part of a group whose main business consists of providing other investment services, performing other investment activities or conducting the business of a bank;
d. these are provided or performed by life insurers, non-life insurers or reinsurers;
e. it concerns investment services provided by investment firms which perform these financial services as an occasional activity in the context of another professional activity that is subject to statutory or administrative regulations or to a professional code of conduct and is not prohibited on that basis;
f. it concerns advisory services regarding transactions in financial instruments in the context of another professional activity, and no specific payment is made for this financial service;
g. these consist of trading for own account in financial instruments or providing investment services with regard to derivatives on commodities or financial instruments as referred to the definition under (j) of financial instrument in Article 1:1 to clients of the main business of the party providing the service, if:
1° this trading or this service can be regarded at group level as a secondary activity of its main business, and;
2° the group’s main business does not consist of providing investment services, performing investment activities or conducting the business of a bank;
h. it concerns trading for own account, with the exception of own-account trading by market makers or own-account traders who frequently act in an organised and systematic manner outside a regulated market or multilateral trading facility by offering a system accessible to third parties for concluding transactions with them;
i. these consist of acting exclusively as a local firm.

Article 1:19 Repurchase or sale of units in collective investment scheme by its management company
What is provided in the present Act in Article 1:1 under (a) and (b) in regard of the definition of the provision of an investment service shall not apply for repurchase or sale of units in collective investment schemes by the management companies of those collective investment schemes.

§ 1.1.3.4 Financial services in regard of credit

Article 1:20 Application of the Act to provision of credit
- 1. The present Act shall not apply to:
a. a credit that is offered pursuant to a statutory provisions to a limited public with the aim to serve a general interest:
1° free of interest or against a lower interest rate than the usual interest rate on the market, or;
2° against an interest rate not exceeding the usual interest rate on the market and under conditions which are more favourable for the consumer than the usual ones on the market;
b. financial services in regard of credit which is offered by an employer exclusively to his employees as an ancillary activity:
1° free of interest or against a lower interest rate than the usual interest rate on the market, or;
2° against an interest rate not exceeding the usual interest rate on the market and under conditions which are more favourable for the consumer than the usual ones on the market;
c. credit related financial services consisting of a lease contract or from which such a contract forms a part, unless the contract concerns property to be designated by Order in Council and intends to provide the use en enjoyment of the property to which the contract relates for a period longer than six months, whether or not this period is the result of a prolongation of the contract or of the conclusion of a new contract;
d. credit-related financial services consisting of the taking delivery of movable property of a consumer in exchange for making available a sum of money to the consumer, insofar as the repayment claim against the consumer will cease to exist if the financial enterprise converts the relevant movable property into cash, and;
e. financial services related to credit which has to be repaid within three months and for which only insignificant costs are charged to the consumer.
- 2. The present Act, except for Articles 4:19, 4:22, 4:33 and 4:35, shall not apply to financial services related to an overdraft facility under which the consumer is obliged to repay within one month.

§ 1.1.3.5 Financial services relating to insurance

Article 1:21 Application of the Act to insurance brokerage services and risk and liability insurance
The present Act shall not apply to:
a. insurance brokerage services, insofar as:
1° the provision of the brokerage services only requires knowledge of the insurance cover offered;
2° it concerns an insurance that is not a life insurance contract and does not cover liability risks;
3° the broker concerned has a main professional activity other than the provision of insurance brokerage services;
4° it concerns an insurance that is supplementary to the delivery of property or the provision of a service by the broker concerned, which will be the case where the relevant insurance contract covers the risk of defects (breakdown), loss or damage to the property delivered by that broker, or covers the risk of damage to or loss of baggage or other risks in connection with a journey booked through that broker, even if the insurance covers life insurance or liability risks provided that this cover is ancillary to the main cover regarding the risks in connection with that journey, and;
5° it concerns an insurance contract of which the amount of the annual premium does not exceed € 500 and the full period of the insurance contract, including any extensions, does not exceed a period of five years; and
b. financial services relating to insurance in respect of risks and liabilities situated in a non-Member State.

Article 1:22 Brokerage services for insurances and reinsurances performed from the Netherlands
What is provided pursuant to Article 4:9, paragraph 1 up to and including 4, 4:10, 4:11, paragraph 2 and 3, 4:13, paragraph 1 and 2, 4:15, paragraph 1 and 2, 4:19, 4:20, paragraph 1, 4:23, paragraph 1 up to and including 3, and 4:73, paragraph 1 up to and including 5, shall apply accordingly to the provision of brokerage services in respect of insurances and reinsurances performed from the Netherlands for clients that have their habitual residence in another Member State.

Section 1.1.4. Affecting the validity of juridical acts

Article 1:23 Voidability of juridical acts under private law
The legal validity of a juridical act under private law performed in conflict with the rules laid down by or pursuant to the present Act cannot be affected because of such conflict, unless provided otherwise in the present Act.

Chapter 1.2 Supervisors

Section 1.2.1 General provisions

§ 1.2.1.1 Stated duties

Article 1:24 Prudential supervision by the Dutch Central Bank
- 1. Prudential supervision shall be focussed on the solidness of financial enterprises and their contribution to the stability of the financial sector.
- 2. The Dutch Central Bank has the duty, insofar as that is based on the present Act, to exercise prudential supervision over financial enterprises and to decide on the access of financial enterprises to the financial markets.
- 3. Where a Regulation as referred to in Article 288 of the Treaty on the functioning of the European Union relates to the solidness of financial enterprises, the stability of the financial sector or to financial enterprises as referred to in paragraph 2, the Dutch Central Bank may be entrusted by Order in Council with the implementation and enforcement of rules set by or pursuant to that Regulation.

Article 1:25 Conduct supervision by the Authority for the Financial Markets
- 1. Conduct supervision shall be focussed on orderly and transparent financial market processes, integrity in relations between market parties and a treatment with due care of clients.
- 2. The Authority for the Financial Markets has the duty, insofar as that is based on the present Act, to exercise conduct supervision on the financial markets and to decide on the access of financial enterprises to those markets.
- 3. Where a Regulation as referred to in Article 288 of the Treaty on the functioning of the European Union relates to orderly and transparent financial market processes, integrity in relations between market parties and a treatment with due care of clients or to financial enterprises as referred to in paragraph 2, the Authority for the Financial Markets may be entrusted by Order in Council with the implementation and enforcement of rules set by or pursuant to that Regulation.

Article 1:25a Supervision by the Board of the Competition Authority
- 1. The Board of the Competition Authority meant in Article 1, under (c), of the Competition Act has the duty, insofar as that is based on the present Act, to exercise supervision over the compliance with Article 5:88.
- 2. Articles 1:49, 1:55, paragraph 1, 1:56, paragraph 1, 2 and 5, 1:58, paragraph 1 up to and including 4, 1:59, 1:65, paragraph 1 and 5, 1:68, 1:72 up to and including 1:75, 1:79, 1:80, 1:81, except for paragraph 3 thereof, and Section 1.5.1, except for Article 1:93a, shall apply accordingly.
- 3. Article 1:47, paragraph 1 and 3, shall apply accordingly to the exercise of the powers referred to in Article 1:75, 1:79 ad 1:80 by the Board meant in paragraph 1, on the understanding that the Dutch Central Bank as well as the Authority for the Financial Markets may bring forward their views.

Article 1:25b Policy rules to be set by the Minister of Finance
- 1. The Minister may set policy rules in regard of the application by the supervisors of what is provided in Chapters 1.2 and 1.3.
- 2. The policy rules shall be announced in the Government Gazette ('Staatscourant').

Article 1:25c Extrajudicial (out of court) proceedings for the settlement of disputes
Where a Regulation as referred to in Article 288 of the Treaty on the functioning of the European Union requires the designation of a body for starting extrajudicial (out of court) proceedings for the settlement of disputes on the field of financial markets, the body that will be competent in that respect shall be designated by Order in Council.

Article 1:25d Exclusion of liability of the Dutch supervisors and their members and employees
- 1. The Dutch Central Bank, the members of its Board of Directors and Supervisory Board and its employees shall not be liable for damage caused by an act or omission (negligence) committed by them in the performance of a duty assigned by law or in the exercise of a conferred power, unless the damage results for a significant part from an intentionally improper fulfilment of duties or from an intentionally improper exercise of powers or is for a significant part to blame to gross negligence.
- 2. The Authority for the Financial Markets, the members of its Board of Directors and Supervisory Board and its employees shall not be liable for damage caused by an act or omission (negligence) committed by them in the performance of a duty assigned by law or in the exercise of a conferred power, unless the damage results for a significant part from an intentionally improper fulfilment of duties or from an intentionally improper exercise of powers or is for a significant part to blame to gross negligence.

§ 1.2.1.2 Institutional provisions

Article 1:26 Board of Directors of the Authority for the Financial Markets
- 1. The Board of Directors of the Authority for the Financial Markets shall have a minimum of three and a maximum of five members. The Chair and the other members of the Board of Directors shall be appointed by Royal Decree. Each appointment shall be for a maximum period of four years. The Supervisory Board may submit a non-binding recommendation to the Minister for every appointment of a member of the Board of Directors. A reappointment in the same position may take place twice, each time for at the most four years.
- 2. The Chair and the other members of the Board of Directors may be suspended by the Minister or dismissed by Royal Decree by the Minister, if they no longer meet the requirements for the exercise of their duties or have failed seriously to perform them properly. The Chair and the members may also be dismissed upon their own request.
- 3. The Minister shall ensure that the appointments, suspensions and dismissals referred to in this Article are published in the Government Gazette ('Staatscourant'). An interested party may lodge an appeal against such decisions with the Committee of Appeal for Trade and Industry.
- 4. Before the Supervisory Board makes a recommendation it shall, after having heard the Board of Directors, edit a job description.
- 5. The Supervisory Board shall set the remuneration and the pension and expense reimbursement schemes of the Chair and the other members of the Board of Directors, subject to the Minister’s approval.

Article 1:27 Supervisory Board of the Authority for the Financial Markets
- 1. The Authority for the Financial Markets shall have a Supervisory Board.
- 2. The Supervisory Board watches over the policy of the Board of Directors and the general state of affairs, and gives advice and provides assistance to the Board of Director.
- 3. The Supervisory Board consists of minimal three and maximal five members. The Chair and the other members of the Supervisory Board are appointed by the Minister. Each appointment shall be for a maximal period of four years. The Supervisory Board may submit a non-binding recommendation to the Minister for every appointment. A reappointment may take place twice, each time for at the most four years.
- 4. The Chair and the other members of the Supervisory Board may be suspended or dismissed by the Minister when they are unfit or incompetent to fulfil their duties or for other important reasons related to the personal qualities of the person involved. The Chair and the members may also be dismissed upon their own request.
- 5. The Minister shall ensure that the appointments, suspensions and dismissals referred to in this Article are published in the Government Gazette ('Staatscourant').
- 6. Before the Supervisory Board makes a recommendation it shall edit a job description.

Article 1:27a Reliability and proper credentials of the Directors and Supervisory Directors
- 1. The Board of Directors and the Supervisory Board of the Dutch Central Bank and the Board of Directors and the Supervisory Board of the Authority for the Financial Markets shall consist of members whose reliability is unquestionable and who have the proper credentials to fulfil their duties.
- 2. The Supervisory Board shall make a reasoned assessment of the reliability and proper credentials of a person as referred to in paragraph 1.
- 3. A job description shall be made in regard of the Board of Directors and the Supervisory Board of the Dutch Central Bank. It shall be edited by the Supervisory Board, after having heard the Board of Directors, subject to the approval of the Minister, respectively, the shareholder.
- 4. A job description shall be made in regard of the Board of Directors and the Supervisory Board of the Authority for the Financial Markets. It shall be edited by the Supervisory Board, after having heard the Board of Directors, subject to the approval of the Minister.

§ 1.2.1.3 The power to issue rules of law

Article 1:28 Legislative power of the Dutch Central Bank and the Authority for the Financial Markets
- 1. Where the power to issue generally binding rules (rules of law) is assigned on the basis of the present Act to a supervisor, the supervisor shall only issue such rules after consultation of an eligible representative delegation of enterprises under its supervision.
- 2. In case of special circumstances, the Dutch Central Bank shall be authorized to issue temporary, generally binding rules in order to contribute to the stability of the financial sector as referred to in Article 1:24. Paragraph 1 shall not apply in such event.
- 3. In case of special circumstances, the Authority for the Financial Markets shall be authorized to issue temporary, generally binding rules in order to improve the orderly and transparent financial market processes as referred to in Article 1:25. Paragraph 1 shall not apply in such event.
- 4. The supervisor shall notify the Minister without delay of any generally binding rules it has adopted.

Article 1:29 Replacement or withdrawal of general binding rules by the Minister
- 1. Where generally binding rules adopted by a supervisor are, to the opinion of the Minister, in conflict with the law, a Treaty or a binding resolution of an international institution, and the supervisor has failed to remove the observed shortcoming after consultations, the Minister shall adopt rules for the relevant matter by ministerial regulation and simultaneously revoke the generally binding rules that were adopted by the supervisor in respect thereof.
- 2. Where generally binding rules adopted by the supervisor result in an unreasonable burden for the financial markets, and the supervisor has failed to remove the observed shortcoming after consultations, the Minister may adopt rules for the relevant matter by ministerial regulation and simultaneously revoke the generally binding rules that were adopted by the supervisor in respect thereof.
- 3. Where rules are adopted by the Minister on the basis of paragraph 1 or 2, he shall, without delay, submit a recommendation for amendment of the Order in Council in which the supervisor has been granted the power to adopt generally binding rules.
- 4. Where generally binding rules have been issued pursuant to Article 1:28, paragraph 2 and 3, by a supervisor, that to the opinion of the Minister are in conflict with the law, a Treaty or a binding resolution of an international institution or result in an unreasonable burden for the financial markets, and the supervisor has failed to remove the observed shortcoming after consultations immediately, the Minister may withdraw the generally binding rules.

Article 1:29a Information to be made public by the Dutch Central Bank
- 1. The Dutch Central Bank shall make the following information public:
a. what is provided by or pursuant to Part III ‘Prudential Supervision Financial Enterprises’;
b. the way in which in the Netherlands use is made of the options available under Directives of the European Union that are specifically addressed to investment firms and banks;
c. the general principles it practices when making use of its policy discretion which it has by or pursuant to Part III ‘Prudential Supervision Financial Enterprises’;
d. the general criteria and methods on the basis of which the evaluation referred to in Article 3:18a is made, and;
e. the aggregated statistical data regarding the main aspects of the implementation of the prudential rules.
- 2. The information that is made public pursuant to paragraph 1 must be sufficient to allow a meaningful comparison to be made between the exercise of the prudential supervision by the supervisory authorities of the various Member States.

Section 1.2.2 Rendering of accounts

Article 1:30 Budget of the supervisors
- 1. Each year, the supervisor shall draw up a budget for the next year in regard of the to be expected profit and loss, investment expenditures and income and expenditures relating to the exercise of the duties assigned to it under the present Act and the activities resulting therefrom. The budget shall be prepared in such a manner that the loss and expenditures are structurally covered by the profit and income.
- 2. The budget items shall be accompanied by explanatory notes.
- 3. Unless the activities to which the budget refers have not been carried out earlier, the budget shall contain a comparison with the budget of the current year and the most recent annual accounts or accounting report approved by the Minister.
- 4. The supervisor shall submit the budget to the Minister for approval by 1 December of the year preceding the budget year.
- 5. Approval may be withheld if the budget is in conflict with the law or public interest. In the event of such conflict, the approval shall be withheld only after the supervisor has been given the opportunity to adjust the budget within a reasonable term to be specified by the Minister.
- 6. Immediately upon approval, the supervisor shall publish a notification of the budget in the Government Gazette ('Staatscourant') and keep it available for electronic inspection during a period of one year following the approval.
- 7. Where our Minister has not approved the budget by 1 January of the year to which it refers, the supervisor may, in the interest of the proper exercise of its duties, have disposal of no more than four twelfth parts of the amounts permitted in the corresponding parts of the budget of the preceding year for entering into obligations and incurring expenses.

Article 1:31 Differences between the real and budgeted figures
Where in the course of a year substantial differences arise or threaten to arise between the actual and the budgeted profit and loss or income and expenditures, the supervisor shall notify the Minister thereof without delay, with mention of the reason for the differences.

Article 1:32 Lay out of the budget
Rules may be set by Ministerial Regulation in respect of the lay out of the budget.

Article 1:33 Annual accounts of the Authority for the Financial Markets
- 1. Each year, the Authority for the Financial Markets shall prepare the annual accounts relating to the duties assigned to it under the present Act and the activities resulting therefrom.
- 2. The lay out of the annual accounts of the Authority for the Financial Markets, in which account is rendered with respect to the financial management and the performances accomplished in the past financial year, shall, where possible, be in accordance with Title 9 of Book 2 of the Dutch Civil Code.
- 3. The annual accounts shall be accompanied by a statement regarding the fair presentation, issued by an auditor designated by the Authority for the Financial Markets.
- 4. To the statement referred to in paragraph 3, the auditor shall add a report of findings in regard of the rightful collection and spending of resources by the Authority for the Financial Markets by virtue of the present Act.
- 5. To the statement referred to in paragraph 3, the auditor shall also add a report of findings on the question as to whether the management and organisation of the Authority for the Financial Markets by virtue of the present Act meet the requirements of efficiency.
- 6. The annual accounts shall be submitted by the Authority for the Financial Markets to the Minister for approval before 1 May of the year following the financial year.
- 7. Approval may be withheld if the accounts are in conflict with the law or public interest.
- 8. Immediately upon approval, the Authority for the Financial Markets shall publish a notification of the annual accounts in the Government Gazette ('Staatscourant') and keep them available for electronic inspection during a period of one year following the approval.

Article 1:34 Report on the rendering of accounts of the Dutch Central Bank
- 1. Each year, the Dutch Central Bank shall draw up a report on the rendering of accounts relating to the duties assigned to it under the preset Act and the activities resulting therefrom.
- 2. The report on the rendering of accounts shall be accompanied by a statement regarding the fair presentation, issued by an auditor designated by the Dutch Central Bank.
- 3. To the statement referred to in paragraph 2, the auditor shall add a report of findings on the rightful collection and spending of resources by the Dutch Central Bank by virtue of the present Act.
- 4. To the statement referred to in paragraph 2, the auditor shall also add a report of findings on the question as to whether the management and organisation of the Dutch Central Bank by virtue of the present Act meet the requirements of efficiency.
- 5. The report on the rendering of accounts meant in paragraph 1 shall be submitted by the Dutch Central Bank to the Minister for approval before 1 May of the year following the financial year.
- 6. Approval may be withheld if the report on the rendering of accounts is in conflict with the law or public interest.
- 7. Immediately upon approval, the Dutch Central Bank shall publish a notification of the report on the rendering of accounts in the Government Gazette ('Staatscourant') and keep it available for electronic inspection during a period of one year following the approval.

Article 1:35 Net operating result
- 1. The difference between the profit of the supervisor realised at the end of a budget year and the loss of the supervisor realised at the end of that budget year constitutes the net operating result.
- 2. Where a net operating result arises in any financial year and the supervisor wishes to include this in the costs to be charged as referred to in Article 1:40, the supervisor shall submit a proposal to this end in the annual accounts or the report on the rendering of accounts.

Article 1:36 Annual report of the supervisor
- 1. Each year, the supervisor shall prepare an annual report. The annual report shall describe the performance of duties and the policies as pursued to this end by virtue of the present Act in the preceding year. The annual report shall also describe the policies pursued in respect of quality assurance.
- 2. The supervisor shall submit the annual report to the Minister before 1 May. The Minister shall send a copy of the annual report to Parliament.
- 3. The supervisor shall keep the annual report available for electronic inspection.

Article 1:37 Amendment of the articles of incorporation of a supervisor
- 1. The supervisor shall submit an intended amendment of the articles of incorporation (articles of association) in advance to the Minister for approval. Articles 10:29 up to and including 10:31 of the General Administrative Law Act (Algemene wet bestuursrecht) shall apply accordingly.
- 2. The approval referred to in paragraph 1 may be withheld:
a. if the articles of incorporation, after their amendment, are adjusted insufficiently to the provisions of the present Act;
b. if the articles of incorporation, after their amendment, provide insufficient safeguards for an independent performance of duties by the supervisor;
c. on account of a conflict with the law or public interest.

Article 1:38 General instructions for the fulfilment of duties by the supervisor
- 1. In performing its duties under the present Act, the supervisor shall ensure:
a. a timely preparation and implementation;
b. the quality of the procedures followed in this respect;
c. the treatment with due care of any person who comes into contact with the supervisor;
d. the treatment with due care of objections and complaints received.
- 2. The supervisor shall make arrangements enabling any person who comes into contact with the supervisor to submit proposals to improve working methods and procedures.
- 3. In the annual report referred to in Article 1:36, the supervisor shall report on the activities relating to the implementation of paragraph 1 and 2.

Article 1:39 Consultations
- 1. The supervisor shall organise consultations on:
a. the budget to be prepared by the supervisor;
b. the profits and losses realised by the supervisor as well as income and expenditures, and the activities performed;
c. the costs for enterprises which relate to the fulfilment of its duties on the basis of the present Act and the activities resulting therefrom.
- 2. The consultations shall be held by the supervisor with an eligible representative delegation of enterprises under its supervision. The supervisor may also admit eligible client organisations to the consultations. The Minister shall designate civil servants who will attend the consultations on his behalf.
- 3. The consultations shall be held twice every year.
- 4. The supervisor shall make a report of the consultations available to the public within a reasonable term after the consultations.

Article 1:40 Costs to be charged by the supervisors to financial enterprises
- 1. The supervisor shall charge the costs of the activities it has carried out in the performance of its duties on the basis of the present Act to the enterprises in respect of which the activities are carried out, insofar as these costs are not included in the National Budget. Among other things, the costs shall include the costs incurred in preparation of the performance of new aspects of its duties, before these were assigned to the supervisor.
- 2. The supervisor which in the context of a request for a license or approval on the basis of Article 1:48, requests another supervisor for advice, may charge on behalf of that other supervisor costs relating to the activities carried out by the latter in that context.
- 3. The costs shall be based on the budget which the Minister has approved and on the net operating result if the Minister has approved the annual accounts or the report on the rendering of accounts, including a proposal as referred to in Article 1:35, paragraph 2.
- 4. The budgeted costs shall be reduced by the proceeds from fines and forfeited penalty payments, insofar as the underlying decisions of the supervisor in the preceding year have become final and binding.
- 5. Further rules may be set by or pursuant to Order in Council in respect of paragraph 1 up to and including 3. In that Order in Council a distinction may be made between costs to be charged occasionally or annually, and an arrangement may be made with respect to the authority of the supervisor to charge, in specific circumstances, the costs not or not entirely if charging all costs would lead to an unfairness of considerable nature. These rules shall, inter alia, relate to an attribution of supervisory activities to enterprises.
- 6. Tariffs shall be set by ministerial regulation on the basis of which the costs referred to in paragraph 1 up to and including 3 shall be recharged.

Article 1:41 Assessment of feasibility of policy intentions and intended statutory provisions
If asked for, the supervisor shall provide the Minister information that is required for the assessment of the feasibility of general policy intentions and intended statutory provisions, insofar as these refer to the supervision to be exercised by the supervisor under the present Act.

Article 1:42 Provision of data and information by the supervisor to the Minister
- 1. The Minister may request the supervisor to provide data or information that is required for an investigation into the adequacy of the present Act or the manner in which the supervisor implements or has implemented this Act, if this is necessary for a proper supervision.
- 2. The supervisor shall provide the data and information meant in paragraph 1 to the Minister, unless it concerns confidential data or information within the meaning of Article 1:89, paragraph 1, which:
a. relates or can be traced back to an individual person or company, with the exception of data or information that is related or can be traced back to an individual financial enterprise:
1° to which a license is granted on the basis of Part II ‘Market Access Financial Enterprises’, or which holds a supervisory status certificate as referred to in Article 3:110 or of which the licence or certificate has been revoked or has ceased to exist, and;
2°. in respect of which a moratorium of payments has been granted, or emergency regulations have been declared applicable in accordance with Section 3.5.5, or which has been declared bankrupt or has been dissolved under a court order;
b. relates to enterprises which are or have been involved in an attempt to enable a financial enterprise to continue its business, or;
c. received from a supervisory authority or obtained on account of a verification at a branch office situated in another State of a financial enterprise based in the Netherlands, and no explicit permission was granted by that supervisory authority or by the supervisory authority of the State where the verification on site was performed.
- 3. The Minister may instruct a third party to examine the data or information supplied under paragraph 2, and to report to him in this respect. The Minister may also authorize the third party acting on his instructions to obtain data or information on his behalf, in which case paragraph 1 and 2 shall apply accordingly.
- 4. The Minister shall only make use of the data or information obtained under paragraph 2 or 3 in order to form an opinion on the adequacy of the present Act or the manner in which the supervisor implements or has implemented this Act.
- 5. The Minister and the parties acting on his instructions shall be required to observe the confidentiality of the data or information received under paragraph 2.
- 6. Notwithstanding paragraph 4 and 5, the Minister may inform Parliament of the findings and conclusions derived from the data or information and may make the conclusions of the investigation public in a general outline.
- 7. The Government Information (Public Access) Act (Wet openbaarheid van bestuur), the National Ombudsman Act (Wet Nationale ombudsman) and Title 9.2 of the General Administrative Law Act shall not apply to the data or information referred to in this Article which is held by the Minister or by the third party working on his instructions.

Article 1:43 Rights of the Minister when the supervisor has seriously failed to fulfil its duties
- 1. If, in the opinion of the Minister, the supervisor has seriously failed to perform its duties, the Minister may take the required measures.
- 2. In the application of paragraph 1, the Minister may decide to carry out one or more aspects of the supervisor’s duties himself, or to have them carried out by the other supervisor. In such a case, the relevant powers of the supervisor shall transfer to the Minister or the other supervisor, respectively.
- 3. Except in urgent situations, the aforementioned measures shall not be taken than after the supervisor has been given the opportunity to perform its duties properly within a term to be specified by the Minister.
- 4. The Minister shall, without delay, inform Parliament of the measures taken under paragraph 1.

Article 1:44 Information of Parliament about the functioning of the supervisors
- 1. Three years after the present Act has entered into force of and every five years thereafter, the Minister shall submit a report to Parliament on the efficiency and effectiveness of the functioning of the supervisors.
- 2. Three years after the present Act has entered into force, the Minister shall submit a report to Parliament on the collaboration of the supervisors under the present Act.
- 3. If asked for, the supervisors shall provide the Minister with data and information to make these reports.

Article 1:45 No appeal against certain decisions of the Minister
No appeal as referred to in Article 8:1 of the General Administrative Law Act shall be open against the decisions of the Minister in respect of the approval of the budget, the annual accounts or the report on the rendering of accounts.