Private placement rules and law in the Netherlands

1. Summary of private placement provisions for fund interests (if applicable)

An AIFM whose seat is in Guernsey, Jersey, the US (provided that the US AIFs are registered with the SEC) or Hong Kong (provided that the Hong Kong AIFs are registered with the Securities and Futures Commission and will only be offered to non-professional investors in the Netherlands) and which is adequately supervised in its country of origin, may offer units in an AIF in the Netherlands or manage a Dutch AIF without a licence. The units may be offered to both qualified and non-qualified investors (except for Hong Kong AIFs). The AIFM must file a notification of its intention to offer units in the Netherlands with the Dutch Authority for Financial Markets (Autoriteit Financiële Markten, the “AFM”) and needs to comply with certain requirements.

Other Non-EU AIFMs are allowed to offer units in an AIF in the Netherlands or to manage a Dutch AIF without a licence if the offer is solely addressed to qualified investors. The following conditions must be satisfied: (i) there should be an appropriate cooperation arrangement between the AFM and the supervisory authorities of the third country where the Non-EU AIFM is established, (ii) the third country where the Non-EU AIFM is established may not be listed as a NCCT by the FATF and (iii) the Non-EU AIFM must comply with certain transparency requirements.

The AIFMD does not apply to the following entities:

  1. institutions for occupational retirement provision;
  2. holding companies;
  3. supranational institutions, in the event that such institutions or organisations manage AIFs and in so far as those AIFs act in the public interest;
  4. national, regional and local governments and bodies or other institutions which manage funds supporting social security and pension systems;
  5. employee participation schemes or employee savings schemes; securitisation special purpose entities;
  6. AIFMs in so far as they manage AIFs whose only investors are the AIFMs themselves or their parent undertakings; their subsidiaries or other subsidiaries of their parent undertaking and where those investors are not themselves AIFs.

Marketing

The AFM has published the following indicators to determine whether an AIFM offers units in an AIF in the Netherlands:

  1. the failure to use disclaimers or inadequate maintenance thereof;
  2. failure to include a list of countries at which the activities are expressly aimed, or inadequate maintenance thereof;
  3. use of Dutch as the language of the activities;
  4. the regular distribution area of the used media is amongst others the Netherlands;
  5. canvassing (for example via e-mail) of residents in the Netherlands;
  6. supply of information about the Netherlands tax system;
  7. supply of information about a foreign tax system in relation to the Netherlands;
  8. references to or the supply of information about Dutch laws;
  9. “hyperlinks” on the internet which lead the user to a website where units in AIFs are offered;
  10. mentioning of a contact point / person in the Netherlands.

Reverse solicitation

Currently it is assumed that a transaction regarding units in an AIF that is solely performed upon the initiative of an investor is not considered an offer of units in an AIF in the Netherlands. Only under exceptional circumstances it will be possible to rely on reverse solicitation

Pre-marketing

The AIFMs in a designated state and other non-EU AIFMs need to submit a pre-marketing notification form to the AFM prior to engaging in pre-marketing activities in the Netherlands. Any subscription of an investor within 18 months of the AIFM in a designated state or other non-EU AIFM begun pre-marketing shall be considered marketing to which the registration procedure applies. 

2. Consequences of non-compliance with placement regimes for fund interests

In the event that a Non-EU AIFM does not comply with the Dutch private placement provisions, the AFM may impose an administrative fine or an order for incremental penalty payments, or it can issue instructions to follow a specific line of conduct.

Prospectus requirement

A prospectus must be prepared and approved by the competent authority if transferable securities are offered to the public in the Netherlands, unless an exemption applies under the Prospectus Regulation. Exemptions from the obligation to issue a prospectus for an offering include (i) offerings addressed solely to qualified investors, (ii) offerings addressed to fewer than 150 non-qualified investors per EU State and (iii) offerings addressed to investors who acquire securities for at least EUR 100,000 in each separate offer. 

3. Private placement rules for non-fund investments

No party may offer investment objects to consumers in the Netherlands without a licence granted for that purpose by the AFM. Investment objects relate to property, entitlement to property, and or entitlement to a return in cash or part of the proceeds from the sale of property. There must be the prospect of a return on investment, and the party that mainly manages the property must not be the same as the acquiring party. An exemption from the licensing requirement exists for offers of investment objects for a nominal amount per investment object of at least EUR 100,000.