The Ministry of Finance is in the process of making an integral revision of supervisory legislation reform in the financial services industry. The entire legislation on financial supervision must be revized as a result of the interaction between various financial sector and the required improvements to financial supervision. The Ministry of Finance has commenced consultation with the financial industry on the first part of the new legislation in connection with this revision.
While there were clear divisions between the various financial sectors in the past, these divisions are fading. Currently, a bank not only performs banking activities but also sells insurance and insurers offer banking services. This means that the approach of a separate supervisor for each sector no longer works. For these reasons, supervision of the financial industry was reformed at organizational level in 2002. Supervision of conduct is exercised by the Netherlands Authority for the Financial Markets (Autoriteit Financi'le Markten) (AFM) and supervision of the prudential regulations (that is, supervision of the reliability of financial enterprises) by the Netherlands Central Bank (De Nederlandsche Bank) and the Pensions and Insurance Board (Pensioen & Verzekeringskamer).
This also makes revision of supervisory legislation imperative. Current financial supervisory legislation will hereby be converted into one law, the Financial Supervision Act (Wet op het financieel toezicht). The general part of the Financial Supervision Act will address subjects relevant to both supervisory areas. Examples of this are the determination of the definition, the organization of the supervisory authorities (including the institutional position of the supervisor), the authority of the supervisors, secrecy rules and procedures. In this way, uniform legislation can be carried out for the broad spectrum of supervisory activities.
The objectives of the new law are greater transparency and to increase goal and market orientation. Market orientation must play a part in the level of competitiveness of the Netherlands financial industry from both national and international perspectives.
It is proposed that the following supervisory legislation be integrated into one Financial Supervision Act: the Credit Systems Supervision Act 1992 (Wet toezicht kredietwezen); the Insurance Industry Supervision Act 1993 (Wet toezicht verzekeringsbedrijf); the Securities Transactions Supervision Act 1995 (Wet toezicht effectenverkeer); the Investment Institutions Supervision Act (Wet toezicht beleggingsinstellingen); the Funeral Provisions Insurance Industry Supervision Act (Wet toezicht natura-uitvaartverzekeringsbedrijf); the Disclosure of Major Holdings in Listed Companies Act 1996 (Wet melding zeggenschap in ter beurze genoteerde vennootschappen); and the proposed Financial Services Act (Wet financi'le dienstverlening). The latter will replace the Consumer Credit Act (Wet op het consumentenkrediet) and the Insurance Brokerage Business Act (Wet assurantiebemiddelingsbedrijf).
It is intended that the Financial Supervision Act will enter into force on January 1 2005.