The Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, AFM) has launched a consultation on amendments to the Further Regulation on Conduct of Business Supervision of Financial Undertakings (Nadere Regeling gedragstoezicht financiële ondernemingen Wft, the Further Regulation) in respect of the segregation of client assets. According to the AFM, the Securities Giro Act (Wet giraal effectenverkeer) provides better legal protection than safekeeping via a giro system (beleggersgiro).
Therefore, the AFM intends to prohibit the use of a giro system for the safekeeping of financial instruments. In line with such prohibition, the AFM is also considering prohibiting the safekeeping entities (bewaarbedrijven) that have been established by credit institutions to safe keep financial instruments (the so-called VABEF institutions). In addition, the AFM proposes to allow investment firms to safe keep and administer financial instruments, but on the proviso that if they do so it must be in accordance with the rules of the Securities Giro Act. Monies will always have to be administered on an account in the name of the client with a licensed credit institution.
The deadline for comments on the proposed amendments to the Further Regulation is 29 February 2016.
View the proposed amendments to the Regulation (Dutch only), 2 February 2016.