As this is the last Netherlands Update in 2011, we have
highlighted three major changes to Dutch financial law that will
take effect on 1 January 2012. These changes were also mentioned in
the May and June issues.
Professional Market Parties: the threshold for
qualifying as a professional market party is raised from EUR 50,000
to EUR 100,000.
Wild West Sign: offerors of securities that
are exempt ⦣8364;" under Section 5:3 paragraph 1
FMSA ⦣8364;" from the prohibition on offering
securities to the public without an approved prospectus, must use a
mandatory exemption notice. The mandatory texts and symbols can be
found on the website of the AFM. No exemption notice is required
for offers to qualified investors.
Licence requirements for investment objects, securities
and participation rights in investment funds: the
threshold for exemption from the licence requirement is raised from
EUR 50,000 to EUR 100,000 per investment object, security or
Government proposes ban on bonuses at state-aided
The government wants to introduce legislation prohibiting
financial institutions supported by public funds from paying out
variable remuneration (bonuses) to their directors. Under the
proposal, the other fixed elements of directors' remuneration
would be frozen. Percentage-based increases of those elements would
be permitted provided that the increases apply equally to all other
employees of the institution.
These proposals concern both new and existing cases of state
funding. For existing cases, transitional provisions are proposed
that take into account to what extent the new rules were
foreseeable by the institution and its directors. The transitional
provisions do not apply to any new aid required before the rules
Proposed notification requirements for cash-settled
The pending Bill on notification of certain cash-settled
instruments introduces notification requirements for holders of
financial instruments where the increase in value of the
instruments is partly dependent on the increase in value of the
underlying shares or related dividends. Examples are contracts for
difference and total equity return swaps.
In Parliament, the question arose whether the Dutch rules on
mandatory public offers also extend to the cash-settled instruments
referred to in the Bill. These rules provide that a mandatory
public offer must be made if at least 30% of the voting rights at
the AGM can be exercised (see also our article below on expected
changes to the mandatory offer rules).
The Minister of Finance indicated that the financial instruments
referred to in the Bill concern potential voting rights, which do
not fall within the scope of the mandatory public offer rules. The
Minister did, however, say that potential voting rights will be
incorporated into the transparency provisions of the FMSA Decree on
Public Offers. Under the planned amendments, the bidder and target
company will both have to periodically notify their stakes in
certain cash-settled instruments.
Public-to-private transactions in the Netherlands
- legislative changes expected per 1 January 2012
A target can request the Netherlands Financial Markets
Authority to require a bidder to "put up or shut up" for
No mandatory offer needs to be made if a bidder has acquired
more than 50% - formerly 30% - of the voting rights in a previous
voluntary public offer
90% - formerly 95% - or more of the independent votes at the
general meeting of shareholders can exempt a bidder from making a
Underwriting banks will have one year to divest an unintended
stake in a listed company following the underwriting of a share
Voting arrangements in irrevocable undertakings of a
target's shareholders will, in principle, not be considered
"acting in concert" if the objective of the voting
arrangements is to ensure the success of the public offer
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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You would have had to be living in a very remote, dark cave to have missed the spectre of MiFID II (to give it its full name: the second Markets in Financial Instruments Directive ("MiFID II")) over the past 12 months.
Firms should take the opportunity to review their client agreements and how they communicate required information.
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