On 4 February, the Dutch Minister of Finance published an amendment to the Exemption Regulation under the Financial Supervision Act (Vrijstellingsregeling Wft). The amendment provides for a temporary exemption from the licencing requirement for investment firms that provide investment services on a cross border basis from the United Kingdom in the Netherlands to professional parties or trade for their own account.
Purpose is to mitigate the negative effects of a hard Brexit – where the United Kingdom would leave the European Union without an agreement – and provide UK investment firms with the opportunity to properly prepare for a post-Brexit future.
Without this temporary exemption, investment firms having their registered office in the United Kingdom would no longer be able to provide investment services or carry out investment activities in the Netherlands on the basis of their European passport following a hard Brexit. In that case these firms should have obtained a licence from the Dutch Authority for the Financial Markets (AFM). As a result of the amendment of the Vrijstellingsregeling Wft, these firms are now partly exempt from the ongoing prudential and conduct-of-business supervision in the Netherlands, provided that these firms remain subject to supervision in the United Kingdom. The exemption does not apply to services provided to retail clients.
The temporary exemption will apply until 1 January 2021. The exemption will only enter into force in case of a hard Brexit will cease to have effect in any event two years after it has come into force.