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31 March 2020 / article

AFM and DNB consulted on renewed enforcement policy

The AFM and DNB consulted on a renewed version of their enforcement policy. It was possible to submit responses to the consultation until 2 March 2020 and it is anticipated that the finalised version of the policy will be available during the course of 2020.

Background

The AFM and DNB have published a joint consultation document containing a renewed version of their enforcement policy (handhavingsbeleid) (the proposed renewed policy). The proposed renewed policy is intended to replace the existing policy dating from 2003, lastly amended in 2008.1 To view the AFM news item with respect to the consultation (in Dutch only), click here.

The proposed renewed policy notes that it is intended to provide insight into the initial principles and factors which provide direction for the AFM and DNB when determining which enforcement tools to use to ensure the compliance with the legal standards included in financial laws and regulations.2

The proposed renewed policy

Below we will highlight some noteworthy elements included in the proposed renewed policy. We note that the below is not intended to provide a complete overview of the proposed changes.

In general the proposed renewed policy seems to have undergone an update to incorporate developments in the period between the last update (2008) and this date. Reference is made to European developments in the area of supervisory frameworks, such as the single supervisory mechanism and the role of DNB within this framework.

The description of the methods for data collection by the AFM and DNB are also updated, for example reference is made to the use of themed investigations and the instigation of roundtable sessions with stakeholders.

The chapter on ‘initial principles (uitgangspunten)’ includes additional  elaboration with respect to punitive measures and includes new references to customised measures (maatwerk). Also the proposed renewed policy includes a general statement that the supervisors will consider if an administrative fine may be imposed on the offender (overtreder, which may be a legal entity) (including a co-offender, medepleger) and/or on a natural person who acted as the factual leader feitelijk leidinggever), depending on the seriousness of the offense and the culpability of the offender.

The chapter on ‘the use of enforcement measures’ makes a new division between (i) informal measures such as a warning letter or transmission of norms (normoverdracht) via conversation or letter and (ii) formal measures. The (non limitative) list of formal measures has also been updated, for example to include the authority to deny natural persons to exercise certain functions for a period of time (bestuursverbod).

Furthermore a few new indicators have been included which may be taken into account when determining the most effective and fitting enforcement measure, for example, to which extent the offence was reported by the offender himself to the supervisor and if the offender initiated the cessation of the offence, if this happened before or after the offender was aware of an investigation (onderzoek) by the supervisor.

The publication of administrative sanctions has been given a new separate chapter3 and some further elaboration has been added with respect to the section on anonymising, delaying or omitting the making public of an administrative sanction.

Timing & further steps

It was possible to submit responses to the consultation until 2 March 2020. It is anticipated that the finalised version of the renewed policy will be published in the official gazette and on the websites of the AFM and DNB during the course of 2020.

1. See https://wetten.overheid.nl/BWBR0024161/2008-07-11.
2. § 1. Introduction, second paragraph of the renewed policy.
3. Previously included in the chapter on initial principles.



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