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11 December 2020 / article

AFM and DNB renewed enforcement policy enters into force

The renewed enforcement policy (handhavingsbeleid) of the DNB and the AFM was published in the official gazette and entered into force on 3 November 2020.

Introduction

On 2 November 2020 the renewed enforcement policy (handhavingsbeleid) of the Dutch Central Bank (DNB) and the Dutch Authority for Financial Markets (AFM) was published in the official gazette (Staatscourant). To view the published enforcement policy (in Dutch only), click here. The renewed enforcement policy replaces the existing policy dating from 2003, lastly amended in 2008.1 The renewed enforcement policy entered into force on 3 November 2020. The AFM and DNB published a joint consultation document containing a proposed version of their enforcement policy in January. It was possible to submit responses to the consultation until 2 March 2020. The renewed enforcement 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 renewed enforcement policy

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

  • In general the renewed enforcement 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 renewed enforcement 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).
  • 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.

Consultation Feedback

The AFM and DNB have published a feedback statement (in Dutch only) outlining their feedback to input received during the consultation period. This feedback statement, among others, (i) provides further background for the renewal exercise, (ii) further clarifies that the AFM and DNB take into account the guidelines and recommendations of the European supervisory authorities, (iii) notes an addition to the enforcement policy to further clarify the choice for the use of formal or informal measures, (iv) further clarifies the distinction in approach to be made with respect to motivation of enforcement of open norms compared to closed norms and (v) clarifies the role of Q&A’s of the AFM and DNB.

Contact

Should you require any assistance in the field of Financial Regulatory, please contact your trusted adviser of our Financial Regulatory Team.

 

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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