Dutch Central Bank (DNB) Fines Investment Firm in Capital Shortfall Case
We don't often see fines for holding inadequate own funds, but recently the Dutch Central Bank has fined a dutch investment firm for doing so.
Financial institutions are obligated to hold a minimum amount of ‘own funds’. This requirement serves as a safety net to mitigate the risks associated with their business activities. The amount of capital an investment firm must hold depends on the specific investment services and activities it performs. For example, a company licensed for investment advice and order transmission in relation to financial instruments would have a different capital requirement than a firm offering a wider range of services.
In this particular instance a firm holding a limited license with only investment advice and order transmission, would be required to hold a minimum amount of EUR 75.000. Non-compliance is a serious offence.
This case highlights the Dutch Supervisor's expectation for financial institutions to maintain continuous compliance as professional organizations. Knowing applicable laws and regulations is an essential responsibility. While internal mistakes may explain the company's lack of awareness, they do not excuse the non-compliance.
Read the full press release here.
Looking for Expert Legal Advice?
I’m here to help you navigate the complexities of financial markets regulation. If you need specialized consultancy in Dutch and EU Financial Markets Regulation or looking for a compliance specialist, let's connect. Visit my services page or reach out directly. Don't forget to subscribe for insights that keep you informed and ahead of the curve.
Read more:
Investing your money is becoming increasingly the norm as it is nowadays promoted more than ever. With so many so called finfluencers to find online and the crypto-millionaires, one must be a fool not to invest, right? However, investing is not without risk and trusting your source of information for investing decisions is crucial. In this blog, I will provide some insights into the initiative of EC to curtail the negative sides of these influencers.