This newsletter elaborates on certain interesting changes for parties active on the financial markets which changes will or are expected to become effective as per 1 January 2012.

1. Mandatory wording for exempted offerings in the Netherlands – increase of EUR 50,000 threshold

a. Disclaimer in marketing materials
The Dutch Financial Markets Amendment Act (Wijzigingswet financiële markten 2010, the Amendment Act 2010) introduces the requirement to include a cartoon-disclaimer in offering documents and other marketing materials regarding offerings of securities which are exempt from prospectus requirements under the European Prospectus Directive, or offerings of interests in collective investment institutions which are exempt from the national license obligation for investment institutions and managers thereof.

The disclaimers must be included on a prominent place in all offering and marketing materials used for exempt offerings to Netherlands based investors in a prescribed format and size.

Click here for examples of these disclaimers.

Except for offerings to qualified investors only, the disclaimers must be used for all exempted offerings after 31 December 2011. Non-compliance is subject to administrative sanctions imposed by the Dutch Authority for the Financial Markets (AFM), including administrative fines and publication thereof.

If a prospectus is approved by the AFM or another European competent supervisory authority and has been pass ported into the Netherlands, the above-mentioned requirement does not apply. The same goes for collective investment institutions whose manager is authorised to offer the relevant participations to investors in the Netherlands.

b. Threshold non-regulated investment products
As of 1 January 2012, the minimum denomination threshold for certain non-regulated investment products such as deposits, securities, and participations in collective investment institutions which are exempt from supervision, will be raised from EUR 50,000 to EUR 100,000.

Offerors of participations in collective investment institutions (Funds) who currently rely on the EUR 50,000 – exemption, will be required to apply for a license from the AFM ultimately by 31 January 2012, if they plan to continue offering these participations after 31 December 2011. Such offerors will remain to be exempted until the AFM will have decided on the license application, provided they comply with all relevant conduct of business rules as of 1 January 2012. Should the AFM deny the license application, it may set a term for the winding up of the relevant Fund. Offerors of participations in Funds who relied on other grounds for an exemption, do not have to apply for a license.

Based on a press release issued by the AFM, it may be possible for offerors of participations in Funds who previously have solely relied on the EUR 50,000 - exemption and wish to remain exempt from the license requirement, to achieve this by stapling their outstanding participations in order to comply with the newly raised EUR 100,000 - threshold and by complying with the disclaimer mentioned in paragraph a. above as of 1 January 2012.
 

2. Notification requirements for cash-settled instruments

Following developments in the U.S. and surrounding jurisdictions in Europe, the Dutch legislator will introduce a notification obligation for certain cash-settled instruments within the existing framework for disclosure of substantial holdings in accordance with the Transparency Directive. A legislative bill was adopted by the Dutch House of Representatives which includes a notification obligation for holders of financial instruments of which the increase in value depends, in whole or in part, on the increase in value of the underlying shares or related distributions, and which do not entitle the holder to acquire the underlying shares. Examples of such instruments are contracts for difference and total equity return swaps. The new notification requirement is triggered by the size of holdings reaching, exceeding, or moving below, certain thresholds (the first threshold being currently 5%).

Interesting to note is that in the discussions leading up to this bill, it has been determined that cash-settled instruments should not be taken into account when determining whether or not a mandatory public offer needs to be made.

It is expected that, once the bill has been adopted by the Senate, the aforementioned notification obligation will enter into force as of 1 January 2012.
For more information and background, please do not hesitate to contact us:

London:
Peter Corten: peter.corten@loyensloeff.com (corporate law)
Martijn Schoonewille: martijn.schoonewille@loyensloeff.com (banking & finance)

Amsterdam:
Kitty Lieverse: kitty.lieverse@loyensloeff.com (banking & finance)
Jonneke van Poelgeest: jonneke.van.poelgeest@loyensloeff.com (banking & finance)