During the warmest week of the year, in the middle of summer, the AFM (Dutch Authority for the Financial Markets) is turning its attention to the solar panel sector. Companies that lease solar panels may require a licence. The AFM also points out that this could apply to other sustainability products offered through hire purchase.
According to the AFM, leasing solar panels with an option to purchase, with the intention of transferring ownership to consumers, is considered hire purchase rather than simple leasing. Hire purchase is a form of instalment buying and is therefore classified as consumer credit. The provision of consumer credit is subject to a number of regulations. Under the Financial Supervision Act (Wft), it is prohibited in the Netherlands to offer consumer credit without a licence granted by the AFM.
A lease agreement for goods without a purchase option does not involve offering credit, and thus does not require an AFM licence. The situation becomes more complicated when a lease agreement includes a purchase option.
If a lease agreement includes a purchase option and has the intention to transfer ownership of the product, it is considered hire purchase. While the first condition is objectively determinable, the second condition is more challenging to assess.
The AFM’s website lists several indicators, such as:
Offering consumer credit requires a licence. The company must demonstrably meet a number of requirements. For instance, directors must be assessed for suitability and reliability. You can request a step-by-step guide at the button below, which outlines the necessary steps to obtain a licence. We have also included useful tips based on our experience.
With the publication of this notice, the AFM has made it clear that hire purchase cannot be offered without a licence.
We advise companies offering solar panels or other sustainability products through hire purchase to promptly verify whether a licence is required and to apply for one if necessary. Given the AFM’s indication that there may be a licensing requirement, it is anticipated that there will be no leniency for companies claiming ignorance in the future.
Substantial fines are imposed for offering financial products without the required licence. Based on the tone of the notice, it seems the AFM is not aiming to heavily penalise companies for past activities conducted without a licence. However, it is crucial to act appropriately now that a clear standard has been established.
