On 20 February 2017, the Dutch Minister of Finance (the Minister) published for consultation amendments to the Decree on Conduct of Business Supervision of Financial Undertakings (Besluit Gedragstoezicht financiële ondernemingen Wft, the Decree). The amendments to the Decree will give the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) the authority to impose a marketing ban in respect of certain financial products. If such a ban would be imposed, financial undertakings would be prohibited from marketing certain financial products that the AFM deems to be ‘risky’ to consumers (or any services related to such products). The ban may only be imposed if the financial products have at least one of the following characteristics:
- the prospective or realized yield of the financial product is not proportionate to the financial risks arising from the financial product;
- the financial risks arising from the financial product exceed the initial investment in the financial product;
- the financial product leads or may lead to a conflict of interest to the detriment of the consumer; or
- the characteristics and functioning of the financial product are so complex that it cannot be assumed that the average consumer is able to make an informed decision about entering into an agreement with respect to such product (even after the consumer has been informed on the characteristics and functioning).
The AFM will has launched a consultation to further detail the marketing ban in the Further Regulation on Conduct of Business Supervision of Financial Undertakings (Nadere Regeling gedragstoezicht financiële ondernemingen Wft, the Further Regulation). It follows from the AFM’s consultation that it intends to impose a marketing ban in relation to, among other things, binary options, cash warrants, contracts for difference, and certain types of derivatives.
View the Minister’s press release (Dutch only), 20 February 2017.
View the proposed amendments to the Decree (Dutch only), 20 February 2017.
View the AFM’s news item (Dutch only), 20 February 2017.
View the proposed amendments to the Further Regulation (Dutch only), 20 February 2017.