Prudential supervision seeks to ensure the soundness of financial undertakings and to contribute to the stability of the financial sector.
From the moment when DNB grants an authorisation, a bank must, pursuant to section 3:71 of the Act, submit to DNB its annual accounts certified by an external auditor, its annual report and other data within six months of the end of the financial year.
Section 3:88 of the Act stipulates, among other things, that the external auditor must provide DNB with any and all information which may in reason be deemed necessary for the proper performance of DNB’s supervisory function.
Pursuant to section 3:57 of the Act, DNB has power to impose rules on banks in the interests of their solvency. The solvency directives are contained in the Supervisory Regulation on Solvency Requirements for Credit Risk (Regeling solvabiliteitseisen voor het kredietrisico) , the Supervisory Regulation on Solvency Requirements for Market Risk (Regeling solvabiliteitseisen voor het marktrisico), the Supervisory Regulation on Solvency Requirements for Operational Risk (Regeling solvabiliteitseisen voor het operationeel risico) and the Supervisory Regulation on Reporting Forms for Financial Undertakings (Regeling staten financiële ondernemingen Wft).
Pursuant to section 33:63 of the Act, DNB has power to impose rules on banks in the interests of their liquidity. The liquidity directives are contained in the Supervisory Regulation on Liquidity (Regeling liquiditeit Wft) and the Supervisory Regulation on Reporting Forms for Financial Undertakings (Regeling staten financiële ondernemingen Wft).
Supervision of the administrative organisation and the integrity of operations:
- Corporate governance
- Controlled conduct of business
- Integrity of operations
- Integrity risk control
The regulations regarding controlled and sound operations are contained in:
- Part 3.3.2 (Expertise, fit and proper qualities and integrity) of the Act
- Part 3.3.3 (Structuring and organisation) of the Act
- Chapters 3 to 5 of the Decree on Prudential Rules for Financial Undertakings (Besluit prudentiële regels Wft)
- The Regulation on Protected Accounts under the Financial Supervision Act (Regeling afgeschermde rekeningen Wft)
Other integrity aspects of supervision:
- Integrity sensitive positions
- Assessment of prospective policymakers
- Assessment upon application for a declaration of no-objection
- Assessment of expertise
Pursuant to the Anti-Money Laundering and Anti-Terrorist Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme), you are obliged to report unusual transactions. Further information is obtainable from the Financial Intelligence Unit – the Netherlands, PO box 3016, 2700 KX Zoetermeer (telephone 079 345 9900), established under that Act.
The Sanctions Act 1977 (Sanctiewet 1977) obliges each individual undertaking to take the measures required under that Act in the areas of administrative organisation and internal control. See also financial sanctions.
Pursuant to section 3:95(1) of the Financial Supervision Act (Wet op het financieel toezicht), a declaration of no-objection is required for holding, acquiring or increasing a direct or indirect interest of at least 10% in a bank, or for exercising any control entailed by such an interest. We also draw your attention to the provisions of section 3:96 of the Act concerning acts in respect of which a bank likewise needs a declaration of no-objection.
Costs of supervision
Pursuant to the Financial Supervision Act (Wet op het financieel toezicht), the costs incurred by DNB in connection with the exercise of ongoing supervision may be charged to the supervised undertakings.
Measures and sanctions
DNB has power to compel a financial undertaking which does not satisfy the provisions contained in or issued under the Financial Supervision Act (Wet op het financieel toezicht) to observe a certain line of conduct by issuing a direction. If such a direction is not or not sufficiently complied with, DNB may appoint a trustee in respect of all or certain organs or representatives of the financial undertaking.
In addition, DNB has the following enforcement measures at its disposal:
- cease and desist order
- administrative fine
DNB also has more specific powers which it may use in certain situations if obligations under the Financial Supervision Act (Wet op het financieel toezicht) are not complied with.
One is the power to determine under certain circumstances that an auditor is no longer competent to issue the declarations referred to in the Act in respect of a certain financial undertaking (section 1:78 of the Act).
Moreover, DNB has power to issue a public warning in the event of the violation of certain provisions of the Act (section 1:94 of the Act).
Supervision by the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten – AFM)
The Financial Supervision Act (Wet op het financieel toezicht) contains one section setting the objectives for the supervision exercised by the Netherlands Authority for the Financial Markets. Section 1:25(1) of the Act provides that supervision of market conduct shall focus on orderly and transparent financial market processes, clear relations between market parties and due care in the treatment of clients.
Other arrangements and agreements
The other arrangements and agreements are contained in the overview of obligations of and arrangements for credit institutions.