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News Bulletin for financial enterprises in the Caribbean Netherlands - Edition 7 - March 2015
Dear relation,
In this edition of our newsletter for financial enterprises on Bonaire, Sint Eustatius and Saba we will discuss the following topics:

If you prefer to read the news bulletin in Dutch follow this link: Link naar nieuwsbrief NL
Topics in this news bulletin:
  New standard amounts in model for responsible lending
  Credit cards and creditworthiness test / giving suitable advice
Prohibition on tie-in sales
  Dealing with back-to-back loans
Current professional competence requirements
 Notifying changes in executive boards, shareholders and supervisory boards

New standard amounts in model for responsible lending
Every year, the Ministry of Finance changes the standard amounts to be used when assessing creditworthiness on the Caribbean Netherlands islands. The changes are made in accordance with Section 2:5 of the Financial Markets BES Islands Regulation. The changes will come into effect on 1 April 2015 and take housing expenses into account. The new standard amounts apply to credit you grant on or after 1 April 2015. The adjustments are based on the development of the consumer index for the Caribbean Netherlands, as determined by the Central Bureau of Statistics Netherlands. In 2014, consumer prices on Bonaire rose by 1.5%, on St Eustatius by 2.6%, and on Saba by 2.0%.

As from 1 April 2015, there will also be an adjustment to one of the parameters for the calculation model. The 5% criterion (5% of the standard amount) will increase to 6%. There are indications that the basic amount all households are assumed to have in the way of financial resources is in need of adjustment. In response, the Financial Markets BES Islands Decree has been amended, resulting in an increase in the maximum amount of credit that can be granted. This increase should remove some bottlenecks from credit granting, without compromising the purpose of the creditworthiness test. It is therefore essential that you use the new model for credit that you grant after 1 April 2015.

View the modified amounts and modified model on:
Model for maximum lending in the Caribbean Netherlands

Change in maximum credit fee

The Minister of Finance has set the maximum fee for granting credit at 23% as from 1 April 2015. The change has been made in accordance with Section 2:5 of the Financial Markets BES Islands Regulation. It is important that from this date on you do not charge more than 23%.
Credit cards and creditworthiness test / giving suitable advice
Issuing a credit card is subject to all the laws and regulations that apply to consumer credit if the card:
  • has a repayment term longer than three months (partial or spread payments); or
  • has a repayment term shorter than three months, and the costs of having the card are not insignificant. 
The requirements applying to the issuing of such cards are the same as those applying to the granting of ordinary consumer credit or mortgage loans. For the type of credit card defined above, the AFM’s credit model has to be completed, including information about financial position, risk appetite, knowledge and experience, and purpose. The interest rate must also be part of the pre-agreement information. 

During the issuing process for the cards, the rules for responsible lending and suitable advice (if advice is provided) must be followed. 

When are costs insignificant?

The AFM considers costs insignificant if they are lower than the relative or the absolute maximum the AFM uses. Whether this is the case depends on all the costs for the credit, i.e. including those for processing, late payment and the compulsory provision of security. These aggregate costs have to be insignificant compared with the amount of credit, in relative as well as absolute terms.

Insignificant costs in relative terms

According to the AFM, costs are insignificant in relative terms if their annualised total is not more than 1% of the amount of credit. This percentage has to be calculated over the period from the inception of the credit agreement to the date when the credit has to be repaid. For credit that has to be repaid within three months (the maximum period for credit eligible for this exception), the figure is therefore 0.25%. 

Insignificant costs in absolute terms

According to the AFM, costs are insignificant in absolute terms if their annualised total is not more than $40. 

Calculated for three months, the maximum period for short-term credit, the maximum amount is $10. In the case of credit for a period of one month, this means a limit of $3.33.
Prohibition on tie-in sales
Section 5:16 of the Financial Markets BES Islands Act sets out the prohibition on tie-in sales. In brief, it states that when concluding a credit agreement the provider must not force an agreement for an additional financial product or service on the client. There are some exceptions, two of them being:
  • If the client has the right to choose the company with which he/she concludes an agreement for the additional product or service;
  • If a client can be compelled to maintain a current account into which the payments required under the credit agreement have to be paid. However, the client must not incur unreasonable costs as a result. It is not permitted to demand that this current account regularly receives transferred amounts representing salary or pension (making the account a salary account). The underlying concept is that the consumer must be able to decide where his/her regular income is to be deposited.
If an agreement has been concluded that contravenes this prohibition, the agreement is capable of annulment. 
Dealing with back-to-back loans
We have received questions from the market concerning how to deal with back-to-back loans. These are loans where the consumer (borrower) pledges the amount to be borrowed to the lender.

When granting back-to-back loans to consumers, the following have to be taken into account. A back-to-back loan can also entail the risk of over-indebtedness. Specifically, the consumer has to pay interest charges on the loan, whereas the interest he/she receives on the underlying savings (amount pledged) is much less. The AFM therefore considers that granting a back-to-back loan has to follow the same procedure that applies to the granting of a standard consumer loan or mortgage loan. Hence, when providing advice on a back-to-back loan, the AFM’s credit model has to be completed, including information about financial status, risk appetite, knowledge and experience, and purpose.
Current professional competence requirements 
To be permitted to act as a broker or authorised agent for insurance products in the Caribbean Netherlands, recognised qualifications are required. has a list in Dutch of the recognised qualifications for life and non-life insurance.

The AFM is currently looking into the possibility of adapting the list, and will know more about this in the autumn. (Dutch only)
Notifying changes in executive boards, shareholders and supervisory boards 
The AFM is aware that it often does not receive notification from companies about changes in the composition of their executive boards, shareholders or supervisory boards. Prior to their appointment, policy-makers for advisers, brokers, authorised agents, credit providers, portfolio managers, and operators of securities markets must be screened by the AFM. Only after gaining the AFM’s approval the policy-maker is allowed to be appointed. For this reason, the AFM is repeating the information regarding when it has to be notified about such changes.

Who qualifies as a policy-maker and what criteria they have to satisfy is explained on the AFM’s website. And also more information on submitting a notification:

Forms for the Caribbean Netherlands

Changes in reliability 

Licensees are under an obligation to inform the AFM if the reliability of their policy-makers has changed. More information on this subject is available on:

  Criteria the director of a financial enterprise has to satisfy

If an executive director or supervisory director is planning to resign, or if a majority shareholder wants to sell its shares, the licensee must inform the AFM of this in good time. The AFM will then assess whether after the resignation of the executive director or supervisory director the remaining members of the respective boards possess sufficient knowledge and experience to manage or supervise the company. The AFM usually takes up to eight weeks after receiving notification to decide whether to approve the change. Accordingly, submit notification of such a change at least two months before the intended resignation.
If you have any questions as a result of this news bulletin, please send an e-mail to We will respond as soon as possible.

You can read more useful information on our website:

  To the Caribbean Netherlands website
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