Restructuring and insolvency law in the Netherlands

Restructuring

The main legislation governing insolvency proceedings in the Netherlands is the Dutch Bankruptcy Act (Faillissementswet). The Dutch Bankruptcy Act includes provisions for restructuring, such as the “Act on Court Confirmation of Extrajudicial Restructuring Plans” (Wet Homologatie Onderhands Akkoord or WHOA). This act, which came into effect on 1 January 2021, provides a legal framework for companies facing financial difficulties to restructure their debts and avoid bankruptcy. The WHOA allows debtors to propose a restructuring plan that can be binding on all creditors if approved by the court, even if some creditors do not agree with the plan. This legislation aims to provide a more flexible and efficient way for companies to reorganise and continue their operations.

Restructuring proceedings are often, but not exclusively, initiated by the debtor. To start formal restructuring proceedings under the WHOA, the debtor or, in some cases, a creditor, shareholder or works council, can file a petition with the court.

Key Steps in Initiating Proceedings

• Filing a petition: the process begins with the filing of a petition by the debtor or other stakeholders to the competent court. The petition should include a request for the appointment of a restructuring expert or, if the debtor initiates the process, a request for the appointment of an observer
• Appointment of a restructuring expert or observer: the court may appoint a restructuring expert to draft the restructuring plan if the petition is filed by a party other than the debtor. If the debtor files the petition, the court may appoint an observer to oversee the process and protect the interests of the creditors
• Development of a restructuring plan: the debtor or restructuring expert will develop a restructuring plan, which must meet certain legal requirements. The plan should provide a clear overview of the financial situation, the proposed restructuring measures, and the classification of creditors and shareholders into different classes based on their rights
• Consultation and voting: the proposed restructuring plan is then presented to the creditors and shareholders for consultation. After consultation, the creditors and shareholders vote on the plan by class. Approval requires a majority in number representing at least two-thirds of the amount of the claims or interests in each class
• Court approval (Homologation): if the plan is approved by the required majority of creditors and shareholders, the debtor or restructuring expert can request the court to confirm (homologate) the plan. The court will assess whether all formal requirements have been met and whether the plan is reasonable and feasible
• Implementation: once the court confirms the plan, it becomes binding on all parties, including dissenting creditors and shareholders. The debtor can then proceed with the implementation of the restructuring plan.

WHOA or Dutch Scheme

The WHOA, also known as the Dutch Scheme, is a relatively new legal framework introduced in January 2021. It is inspired by the US Chapter 11 proceedings and the UK Scheme of Arrangement. The WHOA allows companies to offer a court-sanctioned restructuring plan (akkoord) to their creditors and shareholders without declaring bankruptcy. Its characteristics include:

• Flexibility: providing a flexible framework for restructuring, allowing for a wide range of measures such as debt rescheduling, debt for equity swaps and the sale of assets
• Debtor in possession: the debtor remains in control of its assets and operations during the process, which is known as “debtor in possession”
• Cramdown mechanism: inclusion of a cramdown mechanism means that the court can confirm a restructuring plan even if not all creditors or classes of creditors agree, provided that certain conditions are met
• Cross-class cramdown: all creditors and shareholders can be bound by the restructuring plan, even those who voted against it, as long as at least one class of creditors has voted in favour
• Best interest test: the best interest test requires that the restructuring plan ensures that dissenting creditors and shareholders receive at least as much as they would in a liquidation scenario. This test ensures that the plan is fair and equitable, providing minimum guaranteed returns to those opposed to the plan
• Speed and efficiency: a quick and efficient process, with the possibility of completing a restructuring within a few months
• Public and private process: can be executed as a public process (with court involvement) or a private process (without court involvement until the plan needs to be confirmed).

Informal Restructuring/Workout

Informal restructuring, often referred to as a workout, is a non-statutory process where a company negotiates directly with its creditors to restructure its debts outside of formal insolvency proceedings. Its characteristics include:

• Voluntary Agreement: the process relies on the voluntary agreement of creditors and does not involve the courts
• Confidentiality: informal restructuring can be conducted in private, which can help preserve the company’s reputation and business relationships
• Flexibility: the terms of the restructuring are highly flexible and can be tailored to the specific needs of the company and the preferences of the creditors
• No Automatic Stay: unlike formal proceedings, there is no automatic stay of creditor actions, which means that creditors can still pursue their claims during negotiations unless they agree otherwise.

In Dutch bankruptcy proceedings, creditors are classified into different categories based on the priority of their claims. This classification determines the order in which creditors are paid from the proceeds of the debtor’s assets. The primary types of creditors in Dutch bankruptcy proceedings are:

• Estate creditors (administrative claims): those whose claims arise after the bankruptcy declaration and are related to the administration and liquidation of the bankruptcy estate. These claims are given the highest priority and must be paid before any distribution to other creditors. Examples include the trustee fees and the costs incurred to preserve or realise the assets of the estate, such as storage fees or maintenance costs
• Secured creditors: hold a security interest in specific assets of the debtor. This means they have collateral backing their claims, such as a mortgage, pledge or lien. The category of creditors consists of mortgage holders and pledge holders. These creditors are paid from the proceeds of their specific collateral. If the collateral does not fully cover their claim, they become unsecured creditors for the remaining amount
• Preferential creditors: have statutory priority over other creditors but are subordinate to secured creditors. These claims are often granted by law and include claims from the tax authorities for unpaid taxes and social security contributions, from employees for unpaid wages, holiday allowances and severance payments, and from pension funds for unpaid pension contributions
• Unsecured creditors: paid only after secured and preferential creditors have been paid out. The unsecured creditors include, among others, trade creditors and unpaid rent
• Subordinated creditors: agree to be paid after all other creditors have been paid. This subordination can be voluntary or contractual. 

In the Netherlands, there is no statutory obligation to initiate restructuring procedures when a company faces financial difficulties. However, not doing so can have serious consequences for the directors of the company:

• Personal liability: directors can be held personally liable for the deficit in the bankruptcy estate if it can be proven that improper management was a major cause of the bankruptcy. This is particularly the case if the management did not fulfil its administrative and publication duties as required by law
• Director disqualification: directors may be disqualified from holding a directorship position in the future
• Criminal liability: in some cases, not filing for insolvency in time can lead to criminal charges if it is considered that the directors intentionally avoided filing for bankruptcy to the detriment of creditors.

The representative bodies play a crucial role in the restructuring proceedings. Their main duties include the representation of stakeholders such as creditors and employees. Creditors can be represented by a creditors’ committee. Employees can be represented by a work council or trade unions. Employees must be informed and consulted about the restructuring plan, as it may affect employment conditions.

Representative bodies may be involved in negotiating the terms of the restructuring plan. They can provide input and suggest amendments to the plan to protect the interests of the parties they represent. They may also have the right to vote on the restructuring plan before it is submitted for court approval.

It is the duty of the representative bodies to keep the stakeholders they represent informed about the progress of the restructuring proceedings. They must also facilitate the exchange of information between the debtor and the affected parties to ensure transparency and build consensus on the restructuring plan.

If the restructuring plan is contested, representative bodies may play a role in the court proceedings. They can present the views and arguments of the stakeholders they represent to the court. They may also request the court to appoint an expert to assess the restructuring plan or to provide an opinion on specific aspects of the plan.

After the court confirms the restructuring plan, representative bodies may monitor the implementation of the plan to ensure that it is carried out according to the agreed terms. They may also act on behalf of the stakeholders they represent to address any issues or disputes that arise during the implementation phase.

The restructuring process can be either formal or informal, and the specific duties of shareholders can vary depending on the type of restructuring process undertaken. However, there are general responsibilities and roles that shareholders typically have in such proceedings. Shareholders have the right to participate in decision-making processes that affect the restructuring of the company. This usually involves voting on important matters such as the approval of a restructuring plan, changes to the articles of association or the issuance of new shares. The extent of their involvement and the weight of their vote will depend on the class and number of shares they hold.

One of the key duties of shareholders in a formal restructuring process is to approve the restructuring plan. Shareholders’ approval is often required for the plan to be implemented, especially if it involves significant changes to the equity structure of the company, such as debt-to-equity swaps or the issuance of new shares.

In some cases, shareholders may be asked to make additional financial contributions to support the restructuring process. This could involve injecting new capital into the company to improve its liquidity or to cover restructuring costs. Shareholders are not obliged to provide additional funds but doing so can be crucial for the success of the restructuring and the preservation of their investment.

Shareholders have the right to be informed about the restructuring process. The company’s management is typically required to keep shareholders updated on the progress of the restructuring, including any proposed plans, negotiations with creditors and the overall financial health of the company. Being well-informed enables shareholders to make decisions that are in the best interest of the company and their investment.

In certain circumstances, shareholders may face liability if their actions during the restructuring process are deemed to have been detrimental to the interests of creditors or other stakeholders. For example, if shareholders were to extract value from the company to the detriment of creditors, they could potentially be held liable for damages.

Insolvency

The main legislation governing insolvency proceedings in the Netherlands is the Dutch Bankruptcy Act (Faillissementswet). The Bankruptcy Act regulates insolvency proceedings such as bankruptcy (faillissement), suspension of payments (surseance van betaling) and the debt restructuring scheme for natural persons (schuldsanering natuurlijke personen). The Bankruptcy Act also contains provisions for the recognition and enforcement of foreign insolvency judgements under the EU Insolvency Regulation and the UNCITRAL Model Law on Cross-Border Insolvency.

Bankruptcy proceedings can be initiated by the debtor, a creditor or the public prosecutor. The procedure for initiating bankruptcy in the Netherlands, by a creditor, requires clear evidence that the debtor is in a state of cessation of payments. This means there must be at least two creditors (plurality of creditors) and the debtor is no longer paying. If a creditor files for bankruptcy, the creditor’s right to claim must also be demonstrated.

Suspension of payments can only be requested by the debtor. A debtor who foresees that they will be unable to pay their due debts can file a request for suspension of payments with the court. This request must be submitted via a petition signed by the debtor and their attorney, and it must be accompanied by a list of debts substantiated with appropriate documents. Upon submission, the court immediately grants a provisional suspension of payments and appoints an administrator. The management of a company is authorised to apply for suspension without a mandate from the general meeting, enabling decisive action to maintain the continuity of business operations.

• Inability to pay debts: a debtor (either an individual or a company) is considered insolvent if they are unable to pay their debts as they fall due. This is the most common ground for filing for bankruptcy
• Multiple creditors: insolvency proceedings can be initiated if there are multiple creditors and the debtor is unable to pay at least one of them. A single creditor cannot file for bankruptcy solely based on their own claim unless there is evidence of multiple creditors
• Debtor’s request: a debtor can voluntarily request to be declared bankrupt if they recognise their inability to meet financial obligations.

The Bankruptcy Act provides two types of insolvency proceedings for companies:

• Bankruptcy (faillissement): a liquidation procedure that aims to distribute the debtor’s assets among the creditors
• Suspension of Payments (surseance van betaling): a legal procedure designed to provide temporary relief to a debtor facing financial difficulties, allowing them to reorganise and restructure their debts. This process aims to help businesses avoid bankruptcy and continue their operations.

Key features of the Bankruptcy procedure

Initiation of bankruptcy

• Petition filing: bankruptcy can be initiated by the debtor, one or more creditors or the Public Prosecutor. The petition is filed with the court
• Court declaration: the court examines the petition and, if the criteria are met (inability to pay debts and presence of multiple creditors), declares the debtor bankrupt.

Appointment of a trustee

• Trustee (Curator): upon declaration of bankruptcy, the court appoints a trustee. The trustee is chosen from a list of Dutch bankruptcy lawyers who are often appointed as bankruptcy trustees
• Role of Trustee: the trustee takes control of all the debtor’s assets, investigates the debtor’s financial affairs, and determines the validity of creditors’ claims.

Automatic stay

• Suspension of claims: once bankruptcy is declared, an automatic stay is placed on the debtor’s assets. This means that creditors cannot pursue individual claims against the debtor outside the bankruptcy process
• Legal actions halted: all ongoing legal actions against the debtor are suspended and new actions cannot be initiated without the trustee’s consent.

Asset liquidation

• Inventory of assets: the trustee makes an inventory of all the debtor’s assets, including tangible and intangible property
• Sale of assets: the assets are sold through public auction or private sale, depending on what the trustee deems most beneficial for the creditors
• Liquidation proceeds: the proceeds from the sale of assets are used to pay off the creditors according to the legal priority of claims.

Creditor claims

• Filing of claims: creditors must file their claims with the trustee. The trustee reviews and verifies each claim’s validity
• Ranking of claims: claims are ranked based on their priority. Secured creditors are paid first, followed by preferential creditors (such as tax authorities and employees), and finally unsecured creditors.

Distribution of proceeds

• Payment to creditors: the proceeds from the liquidation are distributed to creditors in accordance with the ranking of their claims
• Final distribution: after all assets are liquidated and claims are settled, any remaining funds are distributed to the debtor or the shareholders. In most cases, however, no distribution to debtors is possible due to the limited estate.

Closure of bankruptcy

• Final report: the trustee prepares a final report detailing the administration of the bankruptcy estate, the liquidation process and the distribution of proceeds
• Court closure: the court formally closes the bankruptcy case after the trustee’s final report is approved.

Legal oversight

• Supervision by Court: the court oversees the entire bankruptcy process to ensure it is conducted lawfully and fairly. A bankruptcy judge is appointed to supervise the trustee’s activities and address any legal issues that arise during the process.

Public notification

• Publication: the declaration of bankruptcy and the appointment of the trustee are publicly announced to inform creditors and other stakeholders
• Transparency: the entire process is conducted transparently to maintain trust and fairness among all parties involved. A report is published periodically where creditors and interested parties can read how the proceedings are progressing.

Key features of the Suspension of Payments procedure

Initiation of suspension of payments

• Debtor’s request: only the debtor can request a suspension of payments. This request is filed with the court
• Court assessment: the court evaluates whether the debtor’s financial situation warrants a suspension of payments and whether there is a reasonable prospect of reorganising and paying off debts. In practice, suspension of payments is almost always granted as, with time constraints, there is little time to comprehensively assess the financial situation.

Provisional suspension

• Provisional order: if the court finds the request reasonable, it grants a provisional suspension of payments. This order temporarily protects the debtor from creditor claims
• Appointment of administrator: the court appoints one or more administrators (bewindvoerders) to oversee the debtor’s financial activities and assist in the reorganisation process.

Automatic stay

• Creditor claims: during the suspension period, creditors cannot enforce their claims against the debtor, providing the debtor with breathing space to reorganise
• Legal actions halted: existing legal proceedings against the debtor are paused and new actions cannot be initiated without the court’s permission
• Continuation operations: the debtor continues business operations during the suspension period, aiming to return to solvency.

Role of administrators

• Supervision: the appointed administrators supervise the debtor’s business operations and financial activities, ensuring transparency and compliance with legal requirements
• Assistance: administrators help the debtor develop a plan to restructure debts and negotiate with creditors.

Meeting of creditors

• Negotiations with creditors: the debtor negotiates new terms with creditors, which may include extended payment deadlines, reduced debts or other restructuring measures
• Creditors’ meeting: if debtor and the administrator are able to draft a plan, a meeting of creditors is scheduled. During this meeting the debtor’s situation is discussed and the proposed reorganisation plan is presented
• Approval of plan: for the suspension of payments to become definitive, a majority of creditors representing a majority of the claims must approve the plan.

Definitive suspension

• Court confirmation: if the creditors approve the reorganisation plan, the court can grant a definitive suspension of payments, usually for a maximum period of 1.5 years, extendable if necessary
• Implementation: the debtor implements the reorganisation plan under the supervision of the administrators.

End of suspension

• Successful reorganisation: if the debtor negotiates new terms with creditors, which may include extended payment deadlines, reduced debts or other restructuring measures
• Failure to reorganise: if reorganisation fails, the suspension of payments can lead to bankruptcy proceedings. The court may declare the debtor bankrupt if it becomes clear that reorganisation is not feasible.

Legal oversight

• Court supervision: the entire process is supervised by the court to ensure compliance with legal standards and to protect the interests of creditors and the debtor
• Administrator reports: administrators regularly report to the court on the progress of the reorganisation and the debtor’s financial status.

Public notification

• Publication: the provisional and definitive suspension of payments orders are publicly announced to inform creditors and other stakeholders
• Transparency: the process is conducted transparently to maintain trust among all parties involved.

In Dutch bankruptcy proceedings, creditors are classified into different categories based on the priority of their claims. This classification determines the order in which creditors are paid from the proceeds of the debtor’s assets. The five primary types of creditors in Dutch bankruptcy proceedings are listed under Q4 of Restructuring above.

Yes, a solvent liquidation of a company is an alternative to regular insolvency proceedings in the Netherlands. This process is used when a company is solvent but decides to cease its operations and liquidate its assets. Characteristically, this form of liquidation means the company can pay all its debts, making the process faster and less complex compared to regular insolvency proceedings.

The solvent liquidation process begins with a resolution by the shareholders of the company to dissolve it. This resolution is documented and filed with the Dutch Chamber of Commerce (Kamer van Koophandel). Next, the company’s directors are usually appointed as liquidators unless the shareholders appoint another individual or entity. The liquidators are responsible for winding up the company’s affairs, including selling assets and paying off debts. After settling all debts, any remaining assets are distributed among the shareholders or members according to their ownership interests. Finally, the liquidators prepare the final accounts, which must be approved by the shareholders, after which the company is formally dissolved and deregistered with the Dutch Chamber of Commerce.

One of the main advantages of a solvent liquidation is its time and cost efficiency. The process generally proceeds faster and is less expensive than formal insolvency proceedings. Additionally, the directors and shareholders retain more control over the liquidation process, helping to protect the reputation of both the company and the directors. However, the process requires compliance with all legal requirements, including notifying creditors and following proper procedures for asset distribution to avoid disputes.

It is not required for the company to be debt-free. The law states that if there are no assets, the company can be dissolved without liquidation. However the directors must respect the interests of creditors and cannot proceed with liquidation if there are still assets at the time of the resolution to dissolve the company, as this would disadvantage creditors. It is also important for the management to demonstrate that there are no assets at the time of the liquidation.

Financial restructuring from creditor's perspective

When a lender in the Netherlands seeks to monitor a borrower more closely than the standard information covenants in a credit agreement allow, there are several strategies that can be applied to increase oversight and reduce risk. These strategies can be implemented at the inception of the lending relationship or as part of a renegotiation or amendment to the existing credit agreement if the lender’s concerns arise post-origination.

• Tightening of covenants: in the Netherlands, it is common to adjust financial covenants such as debt-to-equity ratios and interest coverage ratios based on the borrower’s financial health. The lender may propose more stringent financial covenants or thresholds, such as lower debt-to-equity ratios, higher interest coverage ratios or stricter working capital requirements
• Additional reporting requirements: Dutch lenders can impose additional reporting requirements, such as monthly financial statements and forecasts. Requesting compliance certificates, especially for larger loans, is a common practice. The frequency of financial reporting can be increased from quarterly to monthly or even weekly financial statements
• Enhanced information rights: access to management and board observation rights are often contractually stipulated. This is particularly relevant for larger companies or high-risk loans. The lender can require detailed budgets, cash flow projections and business forecasts on a regular basis, alongside periodic compliance certificates confirming adherence to all covenants and terms of the credit agreement. Audit rights can be negotiated, allowing the lender to conduct financial or operational audits at its discretion
• Collateral management: periodic appraisals and inventory checks are frequently applied as part of collateral management in the Netherlands, especially in sectors such as real estate and industry
• Use of third-party services: hiring independent financial advisors or monitoring agents is not uncommon, particularly for complex financings or restructurings
• Amendments to loan terms: milestone-based disbursements and reserve accounts can be included in loan agreements, particularly for project financings and startups
• Security and guarantees: additional collateral and personal guarantees from owners or major shareholders are standard practices to reduce the lender’s risk
• Default triggers: Material Adverse Change (MAC) clauses and cross-default provisions are standard in many loan agreements, offering extra protection for the lender.

When a creditor extends credit facilities or offers support to a company in financial difficulties in the Netherlands, and this is conditional on additional or extended guarantees or the taking of asset security, several issues can arise. These issues are often complex and multifaceted, involving legal, financial and ethical considerations.

One of the primary concerns is the risk of the transaction being classified as an act of preference (actio pauliana) under Dutch insolvency law. If the company were to go into bankruptcy, the bankruptcy trustee might challenge the transaction. The trustee could argue that the creditor received an unfair advantage over other creditors by obtaining additional guarantees or security shortly before the bankruptcy. If the trustee is successful, the transaction could be set aside, meaning the creditor would lose the benefit of the additional security or guarantees.

There is also the principle of pari passu, which means that in the event of insolvency, all unsecured creditors should be treated equally. By obtaining additional guarantees or security, a creditor may disrupt this balance, potentially leading to disputes with other creditors who may see their chances of recovery diminished.

Directors of the company must also be cautious. If they agree to provide additional guarantees or security while the company is in financial distress, they could be at risk of breaching their fiduciary duties. This is particularly the case if such actions are deemed to be detrimental to the interests of the company or its other creditors. Directors could potentially face personal liability if it is determined that they acted negligently or with intent to prefer one creditor over others.

The valuation of the assets over which security is taken is another issue. In a distressed situation, asset values can be volatile or difficult to ascertain. If the security is later deemed to have been overvalued, this could lead to further complications, including potential clawback actions in insolvency proceedings.

There are also regulatory considerations. Depending on the sector in which the company operates, there may be specific regulations that limit the ability to grant certain types of guarantees or security interests. Compliance with these regulations is crucial to avoid legal penalties or invalidation of the guarantees or security interests.

From a contractual perspective, the terms of the extended credit or guarantees must be carefully negotiated and drafted to ensure they are enforceable and do not expose the creditor to additional risks. This includes ensuring that the terms do not trigger any default under existing agreements or contravene statutory provisions 

Non Performing Loans

Selling a non-performing loan (NPL) in the Netherlands involves a comprehensive and structured process to ensure compliance with legal and regulatory requirements. The lender evaluates the NPL to determine its value, the likelihood of recovery and the appropriate pricing. This evaluation often includes a thorough review of the borrower’s financial situation, the collateral and any other relevant factors. The lender proceeds to market the NPL. Identifying potential buyers is crucial; these could include other financial institutions, private equity firms, specialised NPL investors or debt collection agencies. To protect sensitive information, prospective buyers are typically required to sign confidentiality agreements before receiving detailed information about the NPL.

During the due diligence phase, potential buyers thoroughly assess the risk, value and recovery prospects of the NPL. The lender must be prepared to respond to any queries from these potential buyers. Following due diligence, the bidding and negotiation phase begins. Potential buyers submit their bids for the NPL, which the lender evaluates based on price, terms and the buyer’s ability to complete the transaction. The lender then negotiates with the preferred bidder to finalise the sale terms.

Once terms are agreed upon, a sale agreement is drafted. This sale and purchase agreement (SPA) outlines the terms and conditions of the NPL sale. Once reviewed, the SPA is executed, involving the signing of the agreement and the transfer of ownership of the NPL. The transfer and notification phase follows the execution of the SPA. If applicable, the transfer is also registered with relevant authorities or registries. Finally, post-sale management involves handing over all documentation and information needed for the buyer to manage the NPL.

If the underlying credit agreement prohibits transfer or assignment, which means a change in the lender of record is not permitted, a lender can still transfer the economic risk and/or benefit of the loan through other mechanisms. In the Netherlands, one common method is through sub-participation agreements. A sub-participation agreement allows the original lender (the grantor) to transfer the economic risk and benefits of the loan to a third party (the participant) without transferring the actual ownership of the loan. This arrangement does not require the borrower’s consent, as it does not change the lender of record. The borrower continues to make payments to the original lender, who then passes these payments to the participant according to the terms of the sub-participation agreement. Alternatively, other mechanisms can be used to transfer economic risk and benefits, such as synthetic securitisation, which involves using credit derivatives to transfer the credit risk of the loan to another party without transferring the ownership of the loan. Additionally, credit default swaps (CDS) and risk-sharing agreements can be employed to achieve similar objectives.

In the Netherlands, the Financial Supervision Act (Wet op het financieel toezicht or Wft) governs the financial markets and may require parties involved in the purchase, sale and transfer of loans to obtain a licence. Activities such as lending, brokering loans and managing loan portfolios are considered providing financial services, necessitating authorisation from regulatory bodies. The Dutch Authority for the Financial Markets (AFM) supervises the conduct of financial institutions and markets, particularly focusing on consumer loans. Firms engaged in consumer credit activities, including intermediaries, must obtain an AFM licence to operate legally. Additionally, the Dutch Central Bank (DNB) oversees prudential supervision to ensure the stability and soundness of financial institutions. If the transfer of loans involves entities like banks or insurance companies, DNB supervision and potentially a licence could be required.

The purchase, sale and/or transfer of loans can be classified as providing financial services, encompassing several regulated activities. Loan origination and servicing are key components of these financial services. If a party is involved in originating new loans or managing existing loan portfolios, they typically require authorisation under the Wft. Similarly, credit intermediation, which involves acting as an intermediary in the sale or transfer of loans, also falls under the definition of providing financial services and necessitates a licence. Additionally, there are stringent regulatory requirements for consumer loans aimed at protecting consumers. These requirements include ensuring transparency in terms and conditions and adherence to responsible lending practices. Compliance with these regulations is essential to maintain lawful and ethical operations within the Dutch financial markets.