A characteristic of budget management activities is that customers of businesses engaged in such activities instruct their employer or their benefits agency to remit (part of) their income to a budget management account and to have these funds managed by a budget manager. If the accounts are held in the names of the customers, the prohibition against inviting repayable funds is not infringed. However, if the accounts are held in the name of the budget manager or if the funds are paid into a special purpose account (inzakerekening), the budget manager is deemed to obtain repayable funds from the customers and therefore acts in contravention of the prohibition contained in Section 3:5(1) of the Financial Supervision Act (Wet op het financieel toezicht – Wft).
Accounts in the name of the customer
If the funds are managed from accounts in the name of the budget manager or from special purpose accounts, the budget manager must convert the accounts into bank accounts in the names of the customers in order to cease breaching the prohibition. In that case, the customers may authorise the budget manager to arrange for the transfers on their behalf.
In respect of part of his activities, it is possible that the budget manager may invoke Section 24a of the Exemption Regulation (Vrijstellingsregeling Wft). This section provides for an exemption to the prohibition of Section 3:5(1) of the Wft for one specific category of debt counsellors, i.e. administrators offering the debt management scheme described in Title III of the Bankruptcy Act. The exemption only applies to administrators entered in the national register maintained by the Council for Legal Assistance (Raad voor de Rechtsbijstand).
If the budget manager opts to leave the funds on the budget management account in the name of the corporation and not to invoke the Exemption Regulation, the account comes within the scope of the prohibition contained in Section 3:5(1) of the Wft.In that case, DNB may grant dispensation from the prohibition of Section 3:5(4) of the Wft. To be eligible for such a dispensation, the corporation must submit an application to DNB. For more information, please refer to the fact sheet on Dispensation from prohibition on the acquisition of repayable funds.