Selected news items for you by our Financial Institutions Team

Claim against Dutch Central by bankruptcy trustees DSB The bankruptcy trustees of the in 2009 collapsed DSB Bank argue that the Dutch Central Bank is liable for damages incurred by the creditors of DSB Bank due to the bankruptcy.

Financial litigation Read more

Costs for approval of prospectuses increased The fee for the approval of a prospectus for both shares offerings and bond issuances has increased substantially following a recent amendment of the Dutch act on funding financial supervision.

Financial regulatory Read more

Demand for residential mortgage loans continues to increase Dutch reported a further increase of residential mortgage loans in the third quarter of 2014, a moderate slowdown in demand for corporate loans from small and medium-sized enterprises (SMEs) and an increase in demand by large enterprises. Other Read more

Dutch bankers’ bonus cap delayed The Dutch government’s plans to cap bonuses in the financial sector at 20% of the base salary has not yet passed the Dutch senate. A more extensive reasoning on the more stringent cap is requested.

Employment & remuneration Read more

Increase of innovative market entrants in 2014 This time of year it is common to draw up the balance. Looking at market entrants, the has seen a rise in the number of licenses issued by the Dutch Central Bank (DCB) to new market parties for new initiatives in 2014. Debt capital markets Read more

LMA launches templates for PPs The Loan Market Association has launched templates for use in European private placement transactions. The project to develop the private placement documents is a response to demand from market parties.

Debt capital markets Read more Luxembourg Stock Exchange signs renminbi clearing deal The Luxembourg Stock Exchange and the Industrial and Commercial Bank of China signed a deal to cooperate on a range of market activities linked to the internationalisation of the renminbi, particularly the listing of RMB denominated securities. Debt capital markets Read more

Overview of capital market developments in the Netherlands Our contribution to the new edition in the International Capital Markets Review gives a concise overview of relevant tax and legal developments in the Netherlands for capital markets professionals.

Debt capital markets Read more

Recommendations for sustainable and responsible growth crowdfunding sector In 2014, 19 new crowdfunding platforms were registered in the Netherlands. The AFM expects to see around EUR 37 million of funds raised through crowdfunding over in 2014. This is a growth of more than Financial regulatory 100% compared to 2013. Read more

More info? Contact your regular Loyens & Loeff advisor or [email protected] / +31 20 578 50 69. Claim against Dutch Central Bank by bankruptcy trustees DSB

The bankruptcy trustees of the in 2009 collapsed DSB Bank argue that the Dutch Central Bank is liable

Financial litigation for damages incurred by the creditors of DSB Bank due to the bankruptcy. In December 2014 the trial against DNB began. From articles in the Dutch Financial Times it follows that last year the bankruptcy trustees of DSB Bank, along with three interest groups, sent a draft writ of summons to the Dutch Central Bank with an invitation to enter into negations. However, the Dutch Central Bank refused to speak about an amicable solution. Now the matter is brought before the Amsterdam court.

The bankruptcy trustees of DSB Bank accuse the Dutch Central Bank of:

• wrongfully granting a banking license to DSB Bank in 2005; • wrongfully issuing a certificate of no objection to Dirk Scheringa (the former owner and statutory director of DSB Bank); and • inadequate supervision.

The bankruptcy trustees of DSB Bank requested the court for a declaratory judgment that the Dutch Central Bank can be held liable. However, during the recent hearing that took place the bankruptcy trustees of DSB Bank stated that the Dutch Central Bank awaits a possible claim between EUR 600 million and EUR 1 billion.

A first judgment is expected in March 2014.

Back Costs for approval of prospectuses increased

The fee for the approval of a prospectus for both shares offerings and bond issuances has increased Financial regulatory substantially following a recent amendment of the Dutch act on funding financial supervision (Wet bekostiging financieel toezicht).

Due to the amendment, the Dutch Authority for the Financial Markets (AFM) and the Dutch Central Bank shall no longer receive state funding for the costs relating to the performance of their supervisory duties. Consequently, the AFM will pass on all costs to market participants, among others, by charging a higher application fee for the approval of prospectuses. The amount of the fee depends on the nature of the request and the applicant. The fees are listed in the annex to the amendment act. For the approval of a prospectus for certain debt instruments by financial institutions, the AFM will charge an application fee of up to EUR 15,000, which is substantially higher than the former application fee of EUR 4,000. The amendment act has entered into effect as of 1 January 2015.

The amendment act can be found here. Back Demand for residential mortgage loans continues to increase

Dutch banks reported a further increase of residential mortgage loans in the third quarter of 2014, a

Other moderate slowdown in demand for corporate loans from small and medium-sized enterprises (SMEs) and an increase in credit demand by large enterprises, according to the ECB’s latest quarterly Bank Lending Survey (BLS).

According to a publication of the Dutch Central Bank, Dutch banks reported a net increase in demand for residential mortgage loans for the third consecutive quarter. On balance 78 percent of the Dutch banking sector reported an increase in demand for this loan category. Banks cited the improved outlook for the housing market and growing consumer confidence as contributing factors in this development. In addition, for the fourth quarter of 2014 a large majority of banks expect a further revival in demand for housing loans .

Dutch banks observed in the third quarter of 2014 a net decline in credit demand from SMEs, however, smaller than in previous quarters. On balance 23 percent of the banking sector reported a contraction in the demand for corporate loans from SMEs. For the fourth quarter of 2014, Dutch banks expect no decline in demand for this loan category.

A net increase in the demand for corporate loans by large enterprises was reported, reflecting a trend seen over the past three quarters, with mergers and acquisitions cited as the main drivers.

Credit standards for residential mortgage loans remained unchanged and also banks made virtually no changes to their credit standards on corporate loans.

Back Dutch bankers’ bonus cap delayed

The Dutch government’s plans to cap bonuses in the financial sector at 20% of the base salary has not Employment & benefits yet passed the Dutch senate. A more extensive reasoning on the more stringent cap is requested. Other EU member states such as Belgium, Denmark, Germany and Finland apply a bonus cap of 50%.

It is questioned why the government so easily puts aside the principle of a level playing field, which is one of the main foundations of the European Union. Also the compatibility of the bill with international laws and regulations such as the right of free movement of services, the establishment and right to undisturbed enjoyment of property enshrined in the Treaty of the European Union is criticised. Finally, members of the senate wonder why, in contrast with subsidiaries of foreign insurers, subsidiaries of foreign banks do not fall within the scope of the legislative proposal.

The government is given four weeks to respond to the questions. The legislative proposal will not come into force on 1 January 2015. Back Increase of innovative market entrants in 2014

This time of year it is common to draw up the balance. Looking at market entrants, the Netherlands has

Debt capital markets seen a rise in the number of licenses issued by the Dutch Central Bank (DCB) to new market parties for new initiatives in 2014. Licenses were granted to a bank and an company set up by new, innovative market parties.

The Netherlands has also seen more initiatives to boost lending to the SME sector. For example by means of crowd funding or by setting up credit unions. DCB is also engaged in talks with these parties, advising them on how to develop their activities within the existing statutory and regulatory framework.

The changing financial environment has led to new applications being submitted and recent legislative changes have led to new types of financial institutions. In DCB's view, innovation, diversity and new initiatives from the financial sector perfectly tie in with maintaining a sound and stable financial sector.

However, in a recent publication DCB has indicated that it must be convinced of an applicant's viability and applies a strict and rigorous consideration procedure to assess whether the institution complies with the requirements regarding its capital and the suitability and integrity of its board members. This is a meticulous process, involving many interviews and careful assessment of all relevant documentation, often even before the actual application is submitted. For example, DCB requests a resolution plan from the applicant, setting out how the institution may be resolved with minimum adverse consequences. With such a plan in place, the resolution of the institution can proceed as smoothly as possible in case of bankruptcy.

As of 1 January 2015, DCB may set more specific requirements for the resolution of banks, both new and existing, as part of its new resolution remit.

Back LMA launches templates for Euro PPs

The Loan Market Association has launched templates for use in European private placement transactions.

Debt capital markets The project to develop the private placement documents is a response to demand from market parties who were keen to promote the development of this product as a viable financing tool in Europe. The standardisation of documentation will hopefully assist in creating a more unified and efficient private placement market.

As private placements across Europe currently take varying forms, some of which are loan facilities and some of which are note issuances, the LMA in cooperation with parties such as the ICMA felt that the formulation of standard form templates incorporating both a loan and a note option would be a big step forward in achieving greater efficiencies by providing a common framework and language for those involved in these transactions.

Although the private placement templates are governed by English law by default and assume the transaction is unsecured and with an investment grade company as borrower/issuer, the documents are drafted in such a way as to be easily adaptable to Luxembourg, Belgian and Dutch law and market sectors.

Back Luxembourg Stock Exchange signs renminbi clearing deal

The Luxembourg Stock Exchange (LuxSE) and the Industrial and Commercial Bank of China (ICBC)

Debt capital markets signed a deal to cooperate on a range of market activities linked to the internationalisation of the renminbi, particularly the listing of RMB denominated securities. They will also be cooperating on securities listings in general as well as on market innovation and new listing products.

The LuxSE currently lists 47 RMB bonds for issuers from 20 countries and 8 RMB investment funds. The LuxSE is the number one listing venue for RMB bonds outside Asia.

Loyens & Loeff assisted the first Hong-Kong issuer whose Renminbi denominated bonds are now admitted to trading on the Euro MTF market operated by the LuxSE.

Back Overview of capital market developments in the Netherlands

Our contribution to the new edition in the International Capital Markets Review gives a concise overview

Debt capital markets of relevant tax and legal developments in the Netherlands for capital markets professionals.

The Dutch chapter of the publication can be found here.

Back Recommendations for sustainable and responsible growth crowdfunding sector

Crowdfunding is a small market, but it is developing rapidly. In 2014, 19 new crowdfunding platforms Financial regulatory were registered in the Netherlands. The AFM expects to see around EUR 37 million of funds raised through crowdfunding over in 2014. This is a growth of more than 100% compared to 2013.

To enable the sector to grow in a sustainable and responsible manner, the legislation and regulation and the intensity thereof should correspond with the development of the market. As the market develops, it is possible and important that the intensity increases. The AFM believes that this will contribute to the professionalism of the market and the protection of lenders and borrowers.

As the AFM is of the view that current legislation and regulation does not sufficiently accommodate sustainable and responsible growth of the crowdfunding sector, it has proposed a number of adjustments are in its report “Crowdfunding – Towards a sustainable sector. A review of (supervision of) the crowdfunding sector”.

One of the proposals is to introduce two supervisory regimes specifically tailored to crowdfunding: a loan based regime and an equity regime. Market parties are invited to respond.

For the full report, please click here.

Back