A recently published draft decree will soon finalise the
implementation of the European Market Abuse Regulation (MAR) in the
Netherlands. Although the MAR has had direct effect since July 2016
with significant implementing legislation in force since August
2016, several pieces of legislation still need to be amended as
part of the implementation process. These include the Financial
Markets Supervision Act and the Decree on Administrative Fines in
the Financial Sector. The proposed amendments concern the
turnover-related element of fines, maximum fines, and disclosure of
Once this latest implementation phase is finalised, MAR
supervision and enforcement will be fully in place. According to
the Ministry of Finance, this will mean that the maximum fines set
by the MAR can then be imposed. The Minister of Finance wants to
complete the implementation as soon as possible, since the
implementation deadline was 3 July 2016.
The MAR came into force on 3 July 2016 (see
Financial Markets in brief) and the Dutch Implementation Act
(Wet implementatie verordening en richtlijn
marktmisbruik) on 11 August 2016. With the entry into force of
the new implementing decree, a large part of the Market Abuse
Decree (Besluit marktmisbruik) will no longer apply. In
addition, two member state options will be implemented. This means,
for example, that:
the recorded reason for delays in disclosing inside information
(including the date and time when inside information first existed;
the time when the decision to delay disclosure of inside
information was taken; who was responsible for the decision; and
evidence of fulfilment of each of the conditions for delay) need
only be provided to the Netherlands Authority for the Financial
Markets (AFM) if so requested.
issuers and markets participants do not have to make
transaction information public; it is sufficient for the AFM to
include this information in its public register.
Turnover element of fines
Under the new MAR regime, the AFM and the Dutch Central Bank
(DNB) can impose turnover-related fines. It is currently not
possible to impose fines above the maximum amount in a specific
fine category. By creating a new article (article 3a of the Decree
on Administrative Fines), this maximum amount does not apply if a
turnover-related maximum applies under article 1:82 of the
Financial Markets Supervision Act. Regulatory authorities will
probably formulate guidelines on how they will determine the amount
of a fine under those circumstances; the draft decree provides a
basis for this.
Maximum amount of fines
After the decree enters into force, the supervision and
enforcement of the MAR will be fully implemented. According to the
Ministry of Finance, this means that the maximum amount of fines
issued by the MAR can then be imposed in the Netherlands for MAR
Where European directives or regulations require, it will then
also become possible to set a higher minimum and maximum fine by
issuing an order in council. In addition, for violations of
provisions which are punishable by the second or third fine
category, a turnover-related fine maximum can be determined.
Lastly, the maximum amount of fines in the third category will
The maximum amount of fines for serious infringement will be
raised from EUR 4 million to EUR 5 million and, as a result, the
maximum fine for repeat infringements will be EUR 10 million.
For large enterprises, a fine of up to 10% of net annual
turnover has been introduced. This maximum fine can be raised to
EUR 20 million (for large enterprises) or, in specific cases, 15%
of the net annual turnover. Before issuing this fine, the
supervisor will first take all circumstances into account,
including whether there is serious or reduced culpability, and what
the offender's financial capacity is. In the second category, a
turnover-related fine maximum of 5% is introduced.
Where these amendments lead to higher fine maximums, they will
only apply to violations committed after the decree enters into
Disclosure of enforcement actions
The draft decree implements two relevant changes to the
disclosure of enforcement actions. First, decisions to impose
third-category fines, and in some cases second-category fines, can
be made public after they are issued, rather than after the fine
becomes irrevocable. Second, the AFM and DNB will be able to issue
a warning or statement when specific provisions are violated. The
AFM can also do this in the case of infringements of the MAR.
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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As 3 July 2017 gets closer, and January 2018 is also approaching rapidly, the regulators and the in-scope firms across Europe are well advanced in their efforts for transposing MiFID II.
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