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News Bulletin for financial enterprises in the Dutch Caribbean - Edition 1 - January 2013
Dear relatie,
We are pleased to present you with this first News Bulletin for financial enterprises in Bonaire, Sint Eustatius and Saba.

As you know, the AFM has been conducting the supervision here pursuant to the Financial Markets (BES Islands) Act (Wet financiële markten BES - Wfm BES) with effect from 1 July 2012. The Wfm for the Dutch Caribbean defines new rules for dealing with consumers (conduct-of-business rules). These rules include regulations on the provision of clear information, rules concerning the granting of loans and the handling of complaints. In addition, the AFM examines whether enterprises are acting in the interests of their clients: are they complying with their duty of care? A licence is also required for offering, providing, and brokerage of
credit. We want to use this news bulletin to keep you informed of developments in the supervision that are relevant to you.

The news bulletin discusses topical questions such as: What does the AFM concern itself with, in the supervision of your enterprise? What new laws and regulations are due to be put into effect, and what are their consequences for your enterprise? The news bulletin will also contain references to the 'Frequently Asked Questions' (FAQ) concerning the supervision in the Dutch Caribbean. These links will mean that you can easily find information on the website of the AFM on topics relevant to you and your enterprise.

If you prefer to read the news bulletin in Dutch follow this link:
Nieuwsbulletin financiële ondernemingen Caribisch Nederland

Topics in this news bulletin
Reference to the frequently asked questions
Announcement of Self Assessment (SA)
AFM’s website
Maximum credit interest rate
Continuous supervision costs with effect from 1 January 2013
Tips on suitable advice
Results of stakeholders’ survey on Bonaire
Reference to the frequently asked questions

The AFM regularly receives questions from institutions about how statutory regulations* must be construed or interpreted. The AFM records answers to these questions on its website under the ‘Frequently Asked Questions’ (FAQ) heading. The questions and answers are arranged in four categories: ‘General’, ‘Licence’, ‘Conduct-of business supervision’, and ‘Legislation’. We recommend that you consult these Frequently Asked Questions regularly.  

The latest FAQs concern the issue of expertise, and various questions about completing the model to prevent irresponsible lending.

* Financial Markets (BES Islands) Act (Wfm BES), the Financial Markets (BES Islands) Decree (Besluit financiële markten BES), the Financial Markets (BES islands) Regulations (Regeling financiële markten BES), the Money Laundering and Terrorist Financing (Prevention) (BES Islands) Act (Wet ter voorkoming van witwassen en financieren van terrorisme BES), the Money Laundering and Terrorist Financing (Prevention) (BES Islands) Decree (Besluit ter voorkoming van witwassen en financieren van terrorisme BES ) and published policy rules.

You can consult these questions and answers via:  
  FAQ's concerning supervision in the Dutch Caribbean 
Announcement of Self Assessment (SA)

The AFM would like to obtain insight into the (development of the) market of the Dutch Caribbean. For this purpose, it will therefore make use of a questionnaire (Self Assessment (SA)), which will be sent to all the enterprises registered in the AFM’s Financial Markets Act (Wfm) Register for the Dutch Caribbean.

This supervision tool is also used in the Netherlands. The AFM can also adjust its supervision as a result of the findings from the SA.

An invitation for this SA will be sent to all the registered enterprises in January or at the start of February 2013. The questionnaire is available in both Dutch and English.

The AFM allows enterprises six weeks to complete and return the SA. The letter accompanying it will explain the process in more detail.
AFM’s website

The AFM has renewed its website for the islands in the Dutch Caribbean. The texts are now also available in English.
Maximum credit interest rate

In the autumn of 2012, the Ministry of Finance consulted the market concerning the maximum credit interest rate of 24% per year, also called the effective Annual Percentage Rate (APR), coming into effect on 1 January 2013.

This means that enterprises must adjust their processes for this maximum rate, where necessary. In particular, this affects the assessment of whether the enterprise has been conducting a policy of responsible lending (see the: Model of the AFM) and possible adaptation of the information provided (e.g., brochures, advertisements, etc).

  Download the Model for maximum lending
Continuous supervision costs with effect from 1 January 2013

With effect from 1 January 2013, the enterprises under supervision of DNB or the AFM must pay an annual fee for the costs of the continuous supervision. The rates can be found in Appendix 2 of the 2012 Financial Markets (BES islands) Regulations. The rates vary, for enterprises under the supervision of the AFM, from USD 250 for an advisor to USD 2,000 for a provider of credit (legal entity). The rates for the application for or changing of a licence, the application for an exemption, or the approval of a prospectus (so-called one-off supervision costs), already came into effect as from 1 July 2012.

  2012 Financial Markets (BES islands) Regulations
Tips on suitable advice

In November 2012, the AFM conducted a survey at various enterprises on Bonaire and one enterprise on Curacao into the extent to which they meet the requirements applicable for lending and providing of suitable advice in connection with the granting of credit and the offer and provision of life insurance policies. From this survey, the AFM has derived a number of recommendations for enterprises:

Gathering of information can be improved
  • The enterprises are aware that they are not allowed to grant a higher amount of credit than is legally permitted (and is responsible). The AFM is pleased to note this. The model for determining responsible lending (see our website) was present in all the surveyed files. However, we would like to point out to the enterprises that the filling in of certain fields in this model, such as living expenses, the current financing costs (including alimony and premiums for risk insurance linked to the credit), the type of household, and the effective interest rate (effective APR) could be accomplished in an even better manner. The reasons for filling in certain fields in a certain way could also be recorded in a better manner.
  • The costs of the credit must always be included in the calculation of the effective interest rate.
  • Due to the fact that the model has not always been properly filled in, it cannot be demonstrated, in all the cases, that responsible lending has occurred. We are aware that, with effect from 1 July 2012, the new regulations mean that less credits can be granted to clients with a low income, and that the clients must also become accustomed to the gathering of information by the enterprises. However, this should not be a reason for the failure to gather and record this information.
  • The gathering of information concerning knowledge, experience, and risk appetite must improve. The questionnaires used by the enterprises must be more specific on this point, in order to enable the file to show that suitable advice has been provided.
  • The various documents that substantiate the advice must be easier to find in the file. This pertains, in particular, to bank statements, payslips, and policy and/or insurance terms and conditions for the insurance concluded. In this context as well, this information is needed to determine whether suitable advice has been provided, or whether responsible lending has occurred.
Poor suitability
  • Some files that we examined showed that, based on the model, the maximum loan amount was provided. The result is that the clients run a risk that the slightest change in their private life will mean that they can no longer repay the loan. The file must contain a record stating that the client is aware of this risk.
  • In some files, we saw that a life insurance policy entailing a constant insured amount had been taken out, in addition to an annuity mortgage. The AFM believes that the client should have had it explicitly explained that the risk insurance could also have been taken out with a decreasing annuity. This fact should be shown in the file.
  • When contracts for life insurance policies are concluded, these are sometimes based on the amount the client can and wants to pay each month. A substantiation of the required insured amount must be present in the file. The AFM believes that such substantiation is necessary, to be able to give a suitable advice.
Results of stakeholders’ survey on Bonaire

At the end of September 2012, the AFM had a survey conducted, in order to examine the opinions of the enterprises (business stakeholders) on Bonaire with regard to the AFM. A total of 17 (= 33%) of the 51 people who were invited to participate filled in the questionnaire. The AFM takes the results seriously and uses these findings to adjust its supervision even better to parties, and to continue working together with the market towards a fair and transparent financial market.

What are you positive about?
  • The general opinion concerning the AFM was positive; 56% were positive, while 38% replied neutral. For de Nederlandsche Bank (DNB) these scores were 69% and 25% respectively.
  • Concerning the provision of information on the new regulations by the AFM, 44% were satisfied. With regard to the way in which the AFM prepared enterprises for the new regulations, 38% were satisfied, while a quarter were neutral.
  • The website of the AFM was considered reasonable to good (two-thirds). At the time the questions were asked, it was observed that the site was not available in English, was not conveniently arranged, and was not always easy to find. In the meantime an English website has also been made available.
  • The group that considers that the AFM has sufficient discussions with market parties (12%) is the same size as the group who is not satisfied about this; the remaining answers were neutral.
  • 93% of those surveyed were positive about the personal contact with the AFM. The letters and emails from the AFM were considered to be constructive (60%), pleasant in tone (70%), and easy to understand (80%).
  • As positive aspects of the new regulations, the respondents also stated that there is now a duty of care towards the client, there is more clarity regarding the application of credit standards for the prevention of excessive credit provision, and that the emphasis is now on properly informing clients.
What can improve?
  • One in five of those surveyed has doubts about the practical knowledge of the employees, considers the AFM is not visible enough, and believes that the AFM has insufficient discussions with the market parties.
  • Negative aspects reported were that the rules are too ‘European’, that no account is taken of the local culture, and that too much information is requested from clients, which they also do not want to provide. Furthermore, it was stated that some people with low incomes are now able to borrow less money than before, and that the public should be better informed about this.
We would like to sincerely thank all participants who filled in the questionnaire for their contribution.


If you still have any questions as a result of this news bulletin, please send an email to We will then respond as soon as possible.

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