From January 1 2000 the supervisory authorities for almost all financial, securities and insurance laws of the Netherlands were given authority to impose both fines and cease and desist orders reinforced by monetary penalties, thereby greatly increasing their powers of enforcement. Until now the supervisory authorities' most important means of enforcement was to ask the public prosecutor to start a criminal investigation into the alleged offence, which only rarely led to a prosecution or conviction.
For the financial and securities industry the relevant authorities are the Securities Board of the Netherlands (STE) and the Dutch Central Bank. The STE supervises, among other things, offerings of securities to the public, as well as brokers, asset managers and other types of securities institutions. The Dutch Central Bank exercises supervisory authority over banks and investment funds.
Fines are for fixed amounts, and in the case of certain offences depend on the capital or profits of the relevant firm. The maximum fine that could be imposed for a single act in violation of the laws is NLG 2,000,000.
A fine that exceeds a minimal amount may only be imposed after administrative proceedings before the relevant supervisory authority. However, the oersons imposing the fine cannot be the same as that which established the offence and prosecuted it.
There are two levels of appeal from an order imposing a fine.
Foreign firms that offer financial and securities services through international media such as the internet could be held to offer such services in the Netherlands, and therefore should be aware of the risk that they could be fined or served with a cease and desist order accompanied by heavy monetary penalties for noncompliance.Mark van Dam
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