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01 January 2007 Supervision Supervision label Factsheet

Not only does the Financial Supervision Act (Wet op het financieel toezicht) prohibit anyone from pursuing the business of banking without a licence, it also prohibits the use of the word ‘bank’ by anyone not holding a licence to carry on the business of a credit institution (bank or electronic money institution).

The prohibition against the use of the word ‘bank’ aims at avoiding confusion about the nature of a corporation that uses the word ‘bank’, or translations or forms thereof, in its name or in the pursuit of its business. Such confusion will arise if a corporation which is not a credit institution is active in the financial markets and uses the word ‘bank’ in its name or in the pursuit of its business.

Prohibition against the use of the word ‘bank’

Section 3:7 of the Financial Supervision Act provides that anyone other than a licensed credit institution is prohibited from using the term ‘bank’ or translations or forms thereof in its name or in the pursuit of its business, unless it does so in a context from which it is evident that it is not active in the financial markets. Blood banks, for example, fall outside the scope of the prohibition, as it is evident that these institutions are not active in the financial markets. For more information on the policy pursued by DNB in respect of the scope of the prohibition, the reader is referred to the text of the consultations on the Act to amend the Financial Markets Act 2011 (Wijzigingswet financiële markten 2011).

Exemption

Some corporations are exempted from the prohibition, such as collective investment schemes set up by banks, subsidiaries of banks, and persons or companies acting as intermediaries for specific financial products on behalf of banks.

Dispensation

DNB may, on request, grant dispensation, for an indefinite period or otherwise, from the prohibition.

Transitional right for dispensations granted under the Act on the Supervision of the Credit System 1992

If, before 2007, an enterprise was granted dispensation from the prohibition under section 83(1) of the Act on the Supervision of the Credit System 1992 against using the term ‘bank’ or translations or forms thereof in its name or in the pursuit of its business, such dispensation is also valid under the Financial Supervision Act. As from 1 January 2007, such dispensation is based on section 3:7(4) of the Financial Supervision Act.

Register

Enterprises which have been granted a dispensation under section 3:7 of the Financial Supervision Act are entered in the register under the Act. This public register states the name of the enterprise, the date on which the dispensation was granted, the permitted activities and any limitations attached to the dispensation.

Relevant to:

  • Clearing & Settlement Systems
  • Clearing institutions
  • Insurers
  • Investment firms
  • Payment institutions
  • Pension funds
  • Premium Pension institutions
  • Trust offices