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Changes to the Dutch third country regime resulting from MiFID II

On 3 January 2018, the Dutch Financial Supervision Act (Wet op het financieel toezicht, FSA) was amended to implement MiFID II.1  MiFIR2  also applies as from that same date. The MiFID II framework harmonises the regime under which investment firms and banks located outside the EEA (third country firm) can provide investment services or activities in the EEA, while some requirements remain a matter of national discretion. Consequently, the MiFID II framework could have a large impact on third country firms which were already active in the Netherlands, prior to the MiFID II framework.

Most importantly: (i) a new exemption is introduced for third country firms providing investment services or activities to per se professional clients and eligible counterparties on a cross border basis, if such firm is registered by the European Securities and Markets Association (ESMA); (ii) third country firms from Australia, the United States of America and Switzerland, providing investment services to retail clients and elective clients in the Netherlands on the basis of the Dutch third country exemption are no longer authorised to rely on such exemption; and (iii) third country firms providing investment services or activities to retail clients and elective professional clients in the Netherlands are required to apply for authorisation and establish a branch in the Netherlands.

Authorised third country firms are subject to conduct of business supervision by the AFM and prudential supervision by the Dutch Central Bank (De Nederlandsche Bank). An authorisation obtained from the AFM does not provide for EU passport rights to access other European countries.

Legal and Regulatory Risk Note