READ
Applying for an AFM or DNB licence in the Netherlands: three tips!
Date:February 22, 2018
Those who want to offer financial services or products in the Netherlands must, in many cases, obtain a licence from the Dutch Authority for the Financial Markets (AFM) or the Dutch Central Bank (DNB). But applying for such a licence is a complex process and involves proper preparation. Here, we share three tips for a smooth licence application.
1. Make sure your licence application is in order
The Financial Supervision Act (abbreviated as Wft in Dutch) regulates the supervision of financial institutions in the Netherlands, which is overseen by the AFM and the DNB. The DNB is charged with prudential supervision and checking the solvency and liquidity of a company — its financial stability. The AFM monitors a company’s behaviour and the way it serves its clients. Different licences exist for credit institutions, financial services providers, fund managers, investment firms and so on.
The AFM and the DNB work together closely, but each organisation is responsible for granting specific licences. So, make sure you apply to the right institution. Information about the different licence categories can be found on the websites of the AFM and the DNB. Study the information carefully and ensure that your application for the correct licence is lodged with the appropriate body. An incomplete or incorrect application can lead to it being delayed or rejected. You may have to deal with both regulators. For example, the AFM handles licences for investment firms, but shareholders with a stake of 10% or more must request a declaration of no objection (DNO) from the DNB.
2. Pay close attention when describing your business operations
When applying for an AFM licence, you must provide a description of your company’s business operations. This description should demonstrate compliance with the applicable statutory provisions regarding administrative organisation and internal control (AO/IC). It should also take account of the required reports for the regulator. However, many descriptions are incomplete because, for example, they do not include all of a company’s work activities and processes. Moreover, standard descriptions that do not provide details of specific activities will not suffice.
Bear in mind that obtaining a licence is not just a formality. When describing your business operations, the regulator needs to see that you, the applicant, have thought carefully about your plans and seriously considered your responsibilities as a financial services or product provider.
3. Provide strong evidence
You can apply for an AFM or DNB licence online via the AFM Portal or My DNB. Make sure you answer the questions as completely as possible and that you include all the required attachments. Provide high-quality information so that the regulator acquires a good understanding of your company’s intended activities and processes. Demonstrate that you are aware of the legal requirements and show how you will ensure compliance with the regulations. Properly substantiate each section and provide an accompanying letter that concisely sets out your case. Applications that are complete and well-founded can be assessed more quickly and easily.
Applying for a licence?
Would you like to apply for a DNB or AFM licence?
Latest insights
READ MORE