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Amendments to the Securities Giro Transfer Act


Amendments to the Securities Giro Transfer Act (Wet Giraal Effectenverkeer, the "Giro Act") entered into force on 1 January 2011. The Giro Act governs the clearing system for most listed companies and has the aim of protecting investors in the event of bankruptcy of their custodian. The amendments were made with the aim of (i) increasing the scope of application of the Giro Act and (ii) enhancing the level of dematerialisation of securities. Among the most significant changes are the following:

Scope of application

It is now possible to include all securities, money market instruments and participation rights in an investment institution (as referred to in the Financial Supervision Act (Wet op het financieel toezicht, (the "FSA")) in a collective depot (verzameldepot) within the meaning of the Giro Act. Before, only securities designated by Euroclear Netherlands could be included in such collective depots. The securities must be transferable. However, under the Giro Act derivatives cannot yet be included in depots.

Since 1 January 2011 any investment company or bank within the meaning of the FSA can hold securities in custody through a collective depot, provided that such institution may provide investment services or operate as a bank under the FSA. Formerly, only a participating institution (aangesloten instelling) could hold securities in custody through a collective depot. Such investment companies, banks and participating institutions are jointly referred to in the amended Giro Act as "intermediaries".


Issuing institutions must convert individual bearer instruments into a global certificate or registered securities before 1 January 2013. As per that date individual bearer instruments may no longer be transferred through the system of the Giro Act. An exemption applies to foreign securities whose governing law does not allow such conversion. Euroclear Netherlands and intermediaries may procure the conversion with the issuing institutions' consent.

Pursuant to the amended Giro Act, delivery of securities out of a securities depot is no longer possible as from 1 July 2011. Investors will therefore no longer be able to request delivery of securities out of an Giro Act securities depot. Subject to certain conditions, exceptions apply in the event securities are delivered for inclusion in a deposit of a foreign central securities depositary, another intermediary or a foreign custodian.


The amended Giro Act clarifies that in the event of an issue of securities, these securities can be included in the Giro Act depots directly. It is therefore not necessary to deposit securities with a participating institution first and to transfer them subsequently to the Giro Act depots. In addition, the amended Giro Act effects that fractions of securities can also be transferred within the Giro Act system.

Click here to view the full text of the amended Giro Act (Dutch only).


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Clair Wermers
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