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If you offer or broker financial products or services in the Netherlands, you are required to provide information in, for instance, quotes, credit prospectuses, Essential information document (Eid) (in Dutch) and other types of documents. The information must be accurate, clear and not misleading. A client must be able to effectively assess the product based on the information. These rules apply to products such as credits, insurances, products concerning payment, savings and deposits or investments.
The Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, AFM) states the requirements that the information must satisfy for each product and service. Financial providers owe a duty of care to their clients. This means they may only sell financial products that are appropriate for their customer. When identifying any breaches, AFM may intervene and impose sanctions.
If you sell or have sold endowment policies (investing money through insurance), you must inform your clients about the results and possible chances for improvement. They 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. For these policies and many 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.
Provision of information loans and mortgages
If 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.
If 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
Intermediaries who give advice about or sell their clients financial products that are subject to the ban on commission, are obliged to provide a service provision document (Dienstverleningsdocument (DVD), in Dutch) to them. In this document they show the services they offer and the costs involved. They are no longer paid by commission, but have to send their client a bill instead. Clients can agree on a fixed rate or an hourly rate in advance.
If you want to offer transferable securities, such as shares and bonds, to the public or want to trade them on a regulated market, you need a prospectus approved by the Netherlands Authority for the Financial Markets (AFM). Your prospectus will set out the terms of the issue.