Loan origination and AIFMD II implementation in the Netherlands

As highlighted in Stibbe’s earlier insights on AIFMD II and loan origination, AIFMD II introduced significant changes for alternative investment funds (“AIFs”) and their managers ("AIFMs"), particularly those that are active in any type of loan origination. 

AIFMD II introduced, amongst other things:

• a ban on "originate-to-distribute" strategies, prohibiting AIFMs from managing AIFs that originate loans solely for the purpose of transferring those loans or exposures to third parties;
• lending concentration restrictions, including a prohibition on lending more than 20% of an AIF's capital to a single borrower that is an AIF, a UCITS or a financial undertaking;
• a risk retention requirement, pursuant to which AIFs must in principle retain 5% of each loan they originate for at least the first eight years;
• additional requirements for AIFs whose investment strategy is mainly to originate loans or where the notional value of the loans represents at least 50% of its net asset value, including a closed-end requirement (subject to exceptions) and leverage caps of 175% (for open-end funds) and 300% (for closed-end funds); and
• an EU passport for AIFMs active in loan origination, allowing them to conduct loan origination activities across all EU Member States on a cross-border basis.

For a full overview of these changes, we refer to our earlier blog.

Dutch implementation of AIFMD II

AIFMD II was implemented into Dutch law through an amendment to the Dutch Financial Supervision Act (Wet op het financieel toezicht) and related regulations. The legislative amendments closely follow the European framework and avoid 'gold-plating'. It was the intention of the Dutch regulator to create a level playing field with leading fund jurisdictions such as Luxembourg and Ireland, ensuring that the Dutch regulatory regime for AIFs remains clear, competitive and predictable. 

Dutch member state options under AIFMD II

AIFMD II leaves a few options for member states on certain matters. Not only in relation to loan origination, but also in areas applicable to UCITS and AIFs more broadly. The Dutch legislator has exercised those options as follows.

No Ban on Consumer Credit

The Dutch legislator has chosen not to prohibit the granting of loans to consumers within the Netherlands, the reason being that granting loans to consumers in the Netherlands is regulated by the Dutch implementation of the Consumer Credit Directive (Directive (EU) 2023/2225) and a licence from the Dutch Authority for the Financial Markets ("AFM") is required for providers of consumer credit.

Additional restrictions under AIFMD II would therefore not provide additional protection for consumers. The decision not to prohibit consumer lending fits the broader Dutch policy objective of avoiding unnecessary regulatory barriers while safeguarding consumer interests through the existing legal framework.

Ancillary Activities and Cross-Border Depositaries

Member States may allow fund managers to carry out certain ancillary activities beyond core fund management, such as credit servicing and the management of benchmarks. The Netherlands has chosen this option, giving fund managers greater flexibility to perform activities closely related to fund management for third parties.

The option to permit cross-border depositaries has also been implemented, facilitating greater flexibility in the appointment of depositaries.

Next steps and impact on the Dutch market

The new rules on loan origination apply in full to newly established AIFs, as well as AIFs active in any type of loan origination on or after 16 April 2024 (when AIFMD II came into force) and this includes the closed-end requirement (subject to exceptions), portfolio composition rules, leverage limits and originate-to-distribute restrictions.

Existing funds that were already in operation before 16 April 2024 and that raised new capital after that date, benefit from grandfathering periods, granting them additional time to comply with the new requirements for loan origination. For funds established before 16 April 2026 that have not raised any new capital since then, certain obligations will not apply permanently.

Now that Dutch implementation of AIFMD II rules for loan origination has been completed, fund managers should identify which of their funds qualify as loan-originating AIFs, review their fund and SPV structures, assess leverage levels, and prepare to update internal policies and fund documentation, where necessary.

The AFM will supervise compliance with the new loan origination rules and is expected to focus on origination policies, conflict-of-interest management and governance standards, particularly in relation to the closed-end requirement for AIFs whose investment strategy is mainly to originate loans. Additional clarity will follow through ministerial decrees and AFM guidance in due course, including as a result of research by the AFM into loan origination activities in the Netherlands. 

Although the Dutch approach is intentionally modest, precision matters. Fund managers, depositaries and investors should monitor developments closely and adapt their operations to Europe’s new framework for loan-originating funds. Market participants should also be aware that AIFMD II also includes other sweeping amendments (also beyond loan origination) for UCITS and AIFs and their fund managers, whether they are based in the EU or offer participations from third countries in the EU.

If you have any questions, please contact any of Marieke Driessen, Max van der Meer or Esmée Bootsman from Stibbe’s Financial Markets team.