Financial markets regulation:Bonaire, Statia and Saba The upcoming changes Bert Hiensch Policy advisor, Financial Markets February 2012

Programme Introduction by the Ministry of Finance Address by the Nederlandsche Bank (DNB) Address by the Authority for the Financial Markets (AFM) 2

Introduction by the Ministry of Finance New legislation: what and why Wfm BES and Wwft BES Upcoming changes overall changes changes per category of financial enterprises (Sources of) further information

Financial Markets Regulation, BES-islands 4

Wfm BES 5 Financial Markets Act BESWfm BESOfficial Journal Financial Markets Decree BESBfm BESState Council Financial Markets Regulation BESRfm BESUnder preparation Supervisory Regulation (DNB)Under preparation

Why new legislation? Harmonisation Updating (Bazel II) Introducing conduct of business rules Twin peaks model 6

Overall changes Allocation of supervisory tasks (DNB and AFM) Harmonised supervisory instruments, e.g.: requesting information, issuing an instruction, imposing an administrative penalty Charging supervisory expenses 7

Specific changes (banks) What remains unchanged? No separate reporting by branches Uniform reporting formats What does change? Introduction of Basel II New conduct of business rules, a.o. on the extension of credit (See also: insurance intermediation) Deposit Guarantee Scheme 8

New rules on the extension of credit Note1 Rules apply to all providers of credit Note2 Credit intermediaries will also be subject to supervision Disclosure of information and rules on advertising Assessment of creditworthiness Maximum lending fee Right of revocation 9

Specific changes (insurance companies) What remains unchanged? No separate reporting for branches Insurance-specific provisions Legal position and remuneration of insurance intermediaries What does change? Information to be supplied to the consumer Right of revocation (life assurance with duration > 6 months) Disclosure of commissions for life assurance (capital and annuities) Credit regulation (mortgage credit) 10

Specific changes (insurance intermediaries) What remains unchanged? Professional expertise requirement Legal position and remuneration of insurance intermediaries (right to portfolio and commissions) What does change? Information to be supplied to the consumer ( role of the intermediary ) Disclosure of commissions for life assurance (capital and annuities) “Remuneration should not be such as to prejudice or possibly prejudice the interests of the consumer or client” 11

Other changes Extended scope of the legislation to include: credit providers, credit intermediaries, advisors, portfolio managers, electronic money institutions Controlled and sound operations Professional expertise employees Suitability test for policy makers 12

Charging supervisory expenses Sector will be charged for supervisory expenses Tariffs will cover only (a small) part of expenses Non-recurring expenses: starting July 1, 2012 Yearly contributions: starting

Non-recurring expenses 14 WhoWhatUSD BankLicense (seat) License (branch)5.000 Insurance companyLicense (seat)8.000 License (branch)4.000 Bank or insurance companyTesting a new policymaker500 Intermediary (legal person)License (seat or branch)500 Testing a new policymaker500 Intermediary (natural person)License250

Yearly expenses 15 WhoCriterionUSD/yearMin-max Bank having its seat in the BESCustomers Deposits (CD) 1.000/ 5 mln CD Bank having its seat abroadCustomers Deposits (CD) 500/ 5 mln CD Insurance company with seat abroad Gross premiums (GP) 500/ 0,25 mln GP Intermediary (legal person)500(fixed tariff) Intermediary (natural person)250(fixed tariff)

Further information Market participants On legislation: Ministry of Finance On supervisory issues: DNB and AFM Public Ministry of Finance, in cooperation with supervisory authorities and market participants 16

Conclusion/questions T (70)