DNO for qualifying holdings - Section 3:95 of the Financial Supervision Act (Wet op het financieel toezicht - Wft)

A qualifying holding, which is subject to a DNO, applies in the following cases.

• You or your company will acquire a direct or indirect holding representing 10% or more of an enterprise's issued share capital.

• You or your company can exercise directly or indirectly 10% or more of the voting rights in a company, or you have comparable control.

In determining the number of voting rights of holders of participating interests in a company, we also take into account the votes that the holder has or is taken to have. Control comparable with voting rights may comprise special rights in respect of appointment, dismissal or suspension of management or supervisory board members of the financial enterprise.

You may also have to apply for a DNO if you plan to expand shareholdings or control interests. If expanding your current shareholding means that you reach or exceed the lower limit of 10%, you will need a DNO for expanding your shareholding. DNOs are issued in bandwidths; if you exceed the bandwidth when expanding your holding, you will also need a new DNO.

Calculation method for indirect qualifying holdings

For assessing whether an (indirect) qualifying holding has a significant influence on the financial target company, De Nederlandsche Bank (DNB) applies the calculation method set out in the Joint Guidelines of EBA, EIOPA and ESMA on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector (JC/GL/2016/01) – the revised Joint Guidelines). The first step for this calculation method is to apply the control criterion. When the control criterion does not recognise a qualifying holding, DNB applies the multiplication criterion.

Control criterion

If an indirect shareholder has or will acquire a controlling majority interest over an existing or prospective shareholder of a financial target company, then full control of the underlying shareholder will pass to the acquirer. This applies across the entire chain of indirect shareholders in the financial target company's shareholding structure. Annex II of the revised Joint Guidelines contains examples to illustrate this.

Multiplication criterion

The multiplication criterion entails multiplying the percentages of the holdings across the corporate chain, starting from the participation held directly in the target undertaking, which has to be multiplied by the participation held at the level immediately above (the result of such multiplication is the size of the indirect holding) and continuing up the corporate chain for so long as the result of the multiplication continues to be 10% or more.

Determining bandwidth

When determining the size of the bandwidth for the DNO, applicants must take into account the calculation method described above. In determining the number of voting rights held by a person in an undertaking, account must also be taken of the voting rights that person holds or is deemed to hold pursuant to Section 5:45 of the Wft. This applies, for example, where parties act in concert, as explained in the revised Joint Guidelines. Bandwidths can have upper limits of 20%, 30/33%, 50% or 100%.