Articles

Financial Markets Amendment Act 2015

Financial Markets Amendment Act 2015

Financial Markets Amendment Act 2015

23.01.2015 NL law

On 1 January 2015 the Financial Markets Amendment Act 2015 entered into force as part of the annual cycle of amendments to national legislation regarding the financial markets. This Act has amended the rules on the language to be used in annual financial reporting. Furthermore, certain rules relating to the auditors profession have been clarified including the scope of the prohibition for audit firms to perform other (advisory) services to so-called public interest entities[1] (ondernemingen van openbaar belang, "Oobs") for which the audit firm performs the statutory audits.

There was some uncertainty concerning the language that should be used for the annual accounts and the annual reports of companies whose shares are listed on a regulated market and that have the Netherlands as the member state of origin. Book 2 of the Dutch Civil Code provides that companies should draw up their annual accounts and annual report in Dutch (whereas the general meeting could decide to use another language) and that these accounts and reports could be filed with the Chamber of Commerce in Dutch, English, French or German. However, pursuant to the Dutch Financial Supervision Act ("FSA") companies listed on a regulated market can make regulated information, including annual accounts and annual reports, available in Dutch or English. These language options did not correspond with each other. To clarify this, the Financial Markets Amendment Act 2015 provides that the language options from Book 2 of the Civil Code do not apply to regulated information as referred to in the FSA, that has to be provided by these companies. As a consequence thereof, it is no longer necessary to have the general meeting of shareholders of these companies resolve to draw up the annual accounts in English.

Pursuant to the Dutch Audit Profession Act (effective from 1 January 2013), the prohibition on audit firms performing other services in addition to the statutory audit services only applied to the relationship between the audit firm and an Oob (section 24b of the Audit Firms Supervision Act). The Financial Markets Amendment Act 2015 changes this by not only applying this prohibition to the audit firm that holds the licence but also to all Dutch parts of its network, and in certain cases also to another member of the network outside The Netherlands. This broader interpretation of the scope of the prohibition was already introduced by the Dutch professional organization of accountants (Nederlandse Beroepsorganisatie voor Accountants) ("NBA") and corresponds with the original intention of the legislator. In addition, the prohibition not only applies to the Oob itself but now also to entities that are affiliated with the Oob, whether they are incorporated in the Netherlands or not.

 


[1] Public interest entities are: (i) all entities that are both governed by the law of a Member State and listed on a regulated market; (ii) all credit institutions in the EU; (iii) all insurance undertakings in the EU, regardless of whether they are life, non-life, insurance or reinsurance undertakings; and (iv) entities designated by Member States as public interest entities, for instance undertakings that are of significant public relevance because of the nature of their business, size, or number of employees.

 

 

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