Do you offer or broker financial products or services in the Netherlands, for example assurances, loans or mortgages? You are required to provide correct and clear information. You have to provide this information before you close a deal. The Dutch Authority for the Financial Markets (Autoriteit Financiële Markten, AFM) determines which requirements your information must meet.
Information on financial products
The AFM has drawn up requirements per product and service (in Dutch) with which your information must comply. This applies for example to offers, product information folders and advertising. The information may not be misleading.
Duty of care
Are you a financial adviser, mediator or agent? You have a duty of care of you customers. For example, you have to:
- regularly check if your product still fits your client’s situation
- notify your client immediately if the product of contract changes
You may only sell financial products that are appropriate for your customer. When identifying any breaches, AFM may intervene and impose sanctions.
Essential information document (Eid)
For endowment policies and other investment and insurance products with investment elements (Packaged Retail and Insurance-based Investment Products, PRIIP) an Essential information document (Eid) (in Dutch) is mandatory.
Do you sell endowment policies (investing money through insurance)? You must inform your clients about the results and possible chances for improvement. Clients also must be offered the choice to either end, change or continue their policy. If you fail to do so, you may be fined by AFM.
Do you offer loans? You must inform your clients about the credit conditions and costs before concluding the credit agreement. You do this in the form of an annual cost percentage. Your client can still cancel the credit agreement without stating reasons within 14 days. Your client may also cancel the agreement if you included a condition in the agreement that you did not mention in advance. If you are guilty of unfair trading practices, your client may recover any damage from you as a trader or credit provider.
Do you offer mortgages? You must explain the structure of the variable interest rate, among other things, to your client. You must do this before concluding the mortgage. If the fixed interest period will come to expire, you must make a new offer 3 months in advance.
Service document and ban on commission
Do you give advice about or do you sell financial products that are subject to the ban on commission? You are obliged to provide a service provision document (Dienstverleningsdocument, DVD, in Dutch) to your clients. In this document you show the services you offer and the costs involved. You are no longer paid by commission, but you have to send your client a bill instead. Clients can agree on a fixed rate or an hourly rate in advance.
Do you want to offer transferable securities, such as shares and bonds, to the public? Or do you want to trade them on a regulated market? You need a prospectus that is approved by the AFM. Your prospectus will set out the terms of the issue.