Short Reads

DNB Supervisory Outlook 2017

DNB Supervisory Outlook 2017

DNB Supervisory Outlook 2017

19.12.2016 NL law

In 2014, the Dutch Central Bank ("DNB") published its long-term vision on supervision for the years 2014-2018. Recently, DNB published its supervisory outlook for 2017.

DNB identified low interest rates, technological innovation, inability to adapt to changes by financial institutions, the complexity and unintended consequences of laws and regulations, terrorist financing and money laundering, climate-related risks (especially for non-life insurers and lenders to CO2 heavy industries) and financial, economic and political risks, such as risks related to Brexit and the US elections as key risks for the years ahead.

  • Technological innovation – Current laws do not always sufficiently mitigate the risks related to technological innovation. DNB's focus will be on the impact of blockchain technology on the financial sector, topics related to cybercrime, and financial sector technological innovation generally.
     
  • Outsourcing – DNB will focus on the risks associated with outsourcing by financial institutions.
     
  • Climate risks – In 2016, DNB published a paper about the transition to a carbon-neutral economy. Follow-up research will focus on risk management methods, including a "stress test" for climate risks and research on climate risks for insurers.
     
  • Adaptability of the financial sector and strategic decision making – DNB will look into the ability of financial institutions to adapt to changing circumstances and will conduct an assessment at a number of insurers and pension funds on the quality of their strategic decision-making process. Based on the results of this assessment, DNB will issue best practice guidelines and will inform the sector by means of a publication and a seminar.
     
  • Integrity screening – DNB announced that it will continue to make improvements to the process of the integrity screening of directors.
     
  • Systematic integrity risk analysis ("SIRA") – Financial institutions are required to have an adequate SIRA in place. DNB will review whether the SIRA leads to appropriate risk-mitigation policies.
     
  • Aggressive tax planning and anonymity of clients – DNB will investigate whether financial institutions facilitate arrangements preventing individuals and companies from being visible to governmental authorities.
     
  • Measures relating to anti-terrorism financing and sanctions – DNB will review whether the required improvements to mitigate the risks of involvement in terrorist financing and potential breaches of the Dutch Sanctions Act have been adequately implemented.
     
  • Banks – DNB will assess individual institutions in relation to their yearly risk assessment (the Supervisory Review and Evaluation Process (SREP)). Internal models for the calculation of market risk, counterparty risk and credit risk, defaulting loans and credit risk will also be reassessed.
     
  • Insurers – DNB will look into the impact of technological innovation on the insurance sector, whether the risk management function satisfies the requirements set out in Solvency II and the profitability of insurance products by reviewing the Product Approval and Review Process (PARP). DNB will also conduct a "stress-test" for insurers.
     
  • Pension funds – DNB will review the provision of information of pension funds to their clients, It will also look into whether the business models are sustainable.
     
  • Trust offices – Trust offices will be part of the cross-sector assessment relating to the measures they have implemented so far to prevent terrorist financing and the Sanctions Act 1977.
     
  • Investment firms and AIFMs – DNB will conduct on-site assessments of risk at large investment firms and AIFMs.
     
  • Payment institutions and electronic money institutions – Payment institutions must draw-up a recovery and resolution plan. DNB will expand its supervisory capacity relating to payment institutions and electronic money institutions.
     
  • Money transfer offices – DNB will extend its transaction monitoring and network analysis to money transfer offices to ensure an effective supervision of anti-money laundering and anti-terrorist financing measures.

The other Dutch financial regulator, the Netherlands Authority for the Financial Markets ("AFM"), which focuses on market conduct supervision, also formulated its long-term vision under its supervisory agenda in January 2016, covering the period 2016-2018. On 25 March 2016, the AFM updated these plans in its agenda for 2016. Further plans have not yet been made public for 2017.

Team

Related news

20.05.2020 NL law
Perpetual securities not considered equity for Dutch corporate income tax purposes

Short Reads - In a decision of Friday 15 May 2020, the Dutch Supreme Court confirmed that fixed-to-floating rate perpetual equity securities (“perpetual securities”) should not be considered a “participation loan” (deelnemerschapslening) for Dutch tax purposes. Under Dutch tax law, characterization of a debt instrument as a “participation loan” implies that such instrument is deemed equity for Dutch corporate income tax purposes. Characterization of the perpetual securities as a participation loan would have meant that the interest would have been regarded non-deductible dividend.

Read more

04.05.2020 NL law
Reputation assessment to be introduced for UBOs of several regulated institutions

Short Reads - On 21 April 2020, the legislative proposal for the Financial Markets Repair Act 2020 (the “Proposal”) was submitted to Dutch Parliament (Tweede Kamer). The Proposal repairs deficiencies and omissions that have occurred in the implementation in Dutch law of certain pieces of European legislation in the field of financial markets. A number of proposed changes are related to the implementation of the (amended) fourth Anti-Money Laundering Directive (“AMLD”).

Read more

01.05.2020 EU law
Commission adopts banking package in response to COVID-19 pandemic

Short Reads - On 28 April 2020, the European Commission adopted a banking package aimed at facilitating bank lending to support the economy and help mitigate the economic impact of the COVID-19-pandemic. The package intends to encourage banks to make full use of the flexibility embedded in the EU’s prudential and accounting frameworks, to allow banks to fully support citizens and companies during this pandemic by providing funding. The package includes an Interpretative Communication on the EU's accounting and prudential rules, as well as specific “quick fix” amendments to EU banking rules.

Read more

This website uses cookies. Some of these cookies are essential for the technical functioning of our website and you cannot disable these cookies if you want to read our website. We also use functional cookies to ensure the website functions properly and analytical cookies to personalise content and to analyse our traffic. You can either accept or refuse these functional and analytical cookies.

Privacy – en cookieverklaring