Brexit

The Dutch government does not see a need at this stage to grant a (temporary) exemption for UK-based investment firms to provide investment services in the Netherlands after 2020. This was announced in a letter (in Dutch) to the House of Representatives on 21 August 2020. The European Commission also published a communication stating that it will not adopt an equivalence decision in this area in the coming period. 

This means that UK service providers - if they do not take additional contingency measures - will no longer be able to provide many of their services to Dutch professional clients after 2020. This applies, for example, to investment services in relation to outstanding uncleared OTC derivative contracts. 

In view of these developments, it is important for Dutch financial institutions – in case they have not yet done so - to engage in a timely manner with their UK investment service providers to prevent disruptions to these services as of 1 January 2021. In this respect it is important to verify that UK investment service providers have the appropriate licences to continue to be able to provide services to Dutch professional clients in 2021, for example by transferring (derivative) contracts to EU entities of UK service providers.

It is expected that the rights of UK financial institutions to provide cross-border financial services in the Netherlands will in many cases no longer apply as of 2021. We therefore call on UK institutions to take timely preparatory measures to ensure compliance with the relevant Dutch laws and regulations after the transitional period. 

DNB recently published a factsheet specifying which cross-border financial services UK institutions will still be allowed to provide to Dutch customers as of 2021, after the end of the transitional period.

For further information about applying for licences from DNB, see here. 

For any other questions:

• infobetaalinstelling@dnb.nl (payment institutions and electronic money institutions).
• crossborderservices@dnb.nl (insurers)
• infocrossborderservicesUKbanks@dnb.nl (banks). 

We are making various preparations for the consequences of the UK's departure from the EU. Firstly, we are discussing licence applications with UK financial institutions wishing to continue operating in the Netherlands and the EU following Brexit and the transitional period. We have already issued many licences (see the Q&A below). At European level, we are also working with other supervisory authorities – through for example the SSM – to set out minimum requirements and expectations for UK-based financial institutions that wish to establish an operation in the EU post-Brexit.

We are also responsible for financial stability and a reliable and efficient payment system. In this capacity we analyse the risks related to Brexit and advise parties such as the Ministry of Finance about legislative amendments. The risks Brexit poses to financial stability have also been discussed several times in the Financial Stability Committee (see information in Dutch here and here). In addition, we monitor that institutions under our supervision and oversight prepare for the consequences of Brexit here in the Netherlands. Lastly, we are making our own preparations related to contracts we entered into with UK counterparties in the context of our own trading operations.

Due to Brexit, various financial institutions are looking to open branches in the Netherlands to retain access to the European markets. We have already issued some 40 Brexit-related licenses autonomously, or acting in an advisory capacity for the Dutch Authority for the Financial Markets (whereby the AFM is the licensing authority). The applicants are a varied group of institutions. Beside several banks and insurance firms, these are mostly payment institutions, electronic money institutions and investment firms, such as trading platforms. Some other licence applications are still being processed.

In May 2019 DNB and the AFM signed a Memorandum of Understanding (MoU) with the Prudential Regulatory Authority (PRA) and Financial Conduct Authority (FCA). This MoU will lay the basis for continued cooperation and exchange of information between the four supervisory authorities post-Brexit, and is based on a previously agreed EBA framework. It will take effect when EU legislation no longer applies in the UK, following the transitional period.

The MoU includes agreements about what types of information can be exchanged about institutions engaged in cross-border activities between the Netherlands and the UK. It also sets out practical agreements about conducting joint supervisory activities. The MoU covers all institutions supervised by the four aforementioned supervisory authorities, with the exception of insurance and reinsurance firms, and pension funds. For these categories of institutions, multilateral EIOPA-based MoUs have since been signed between the EU27 supervisory authorities and the PRA, FCA and The Pensions Regulator (TPR) in the UK. DNB and the AFM are also co-signatories to these MoUs, and we will also sign other MoUs where relevant.