NETHERLANDS Law and Practice Contributed by: Vilmar Feenstra, Robert Veenhoven, Joyce Kerkvliet and Sebastiaan Verkerk, Loyens & Loeff N.V.
• operating conditions, including requirements regarding remuneration, conflict of interest and risk management; • depositary; • fair treatment of investors; and • transparency requirements. When interests are marketed to non-profession - al investors that invest less than EUR100,000, additional investor protection rules pursuant to the Dutch retail top-up regime need to be com - plied with (as discussed in 3. Retail Funds ). 2.3.11 Approach of the Regulator The AFM may be described as a supervisor that duly considers the legal basis for its supervision and enforcement, while adopting a rather prag - matic approach if possible. This is no different when it comes to the supervision of AIFMs based on the Dutch implementation of the AIFMD. 2.4 Operational Requirements For Dutch-licensed AIFMs, the operational requirements pursuant to the AIFMD apply. In general, provided that the offering is limited to professional investors, no gold plating of the AIFMD has taken place in the Netherlands. Gen - erally, there are no restrictions on the types of activity or the types of investments for the AIF, provided that the envisaged activities/invest - ments fall within the investment strategy cov - ered by the AIFM’s licence. Licensed AIFMs must appoint a depositary for the AIF. In principle, in the Netherlands, such depositary is subject to a licence requirement, unless a specific exemption to the licence requirement is available. If the AIF has no legal personality, the legal ownership of the assets under management must be held by a separate legal entity whose sole object stated in the arti -
cles of association is holding the legal ownership of the assets of investment funds. Dutch AIFMs registered under the small manag - ers regime are, in principle, not subject to any specific operational requirements. Certain other operational requirements are also relevant, such as customer due diligence requirements based on the Dutch implementa - tion of the (revised) Fourth and Fifth Anti-Money Laundering and Terrorist Financing Directive, which is applicable to licensed AIFMs and AIFMs registered under the small managers regime. 2.5 Fund Finance All types of investment funds in the Nether - lands generally have access to fund financing and leveraged financing. Traditional subscrip - tion financing remains the main type of financ - ing selected by investment funds in the Neth - erlands, but over the past few years there has been an overall increase in the use of financing by managers and investment funds, including fund-level leverage (such as hybrid credit lines and NAV financings). Traditionally, financings to Dutch investment funds are made available by Dutch banks; however, nowadays, foreign lend - ers including alternative lenders are also active on, or entering, the Dutch fund finance market. An important aspect of incurring leverage at the level of a Dutch investment fund is that the rel - evant fund manager may be required to obtain an AIFMD licence as a consequence of breach - ing the AuM Thresholds. Other than that, for all practical purposes, there are no material regu - latory restrictions on borrowings, provided that borrowed funds are attracted from professional market parties (eg, banks, pension funds and those persons that commit at least EUR100,000).
410 CHAMBERS.COM
Powered by FlippingBook