BANKING REGULATIONS IN THE NETHERLANDS ANTILLES
Attracting funds from the public is prohibited
The Netherlands Antilles have one financial regulator: the Central Bank of the Netherlands Antilles (‘Bank van de Nederlandse Antillen’). The Central Bank is a separate legal entity having its seat at Curacao. The tasks of the Bank include, inter alia, circulating coins and bank notes, enhancing stability of the value of Netherlands Antilles currency, acting as central currency bank, regulating cross-border payment transactions and acting as supervisory body in the Netherlands Antilles (prudential supervision).
The Netherlands Antilles Ordinance on the Supervision of Banks and Credit Institutions 1994 (‘Landsverordening Toezicht Bank- en Kredietwezen 1994′) does not use the term ‘bank’ (other than when referring to the Central Bank). It prohibits anyone to engage in the business of a credit institution (‘kredietinstelling’) in the Netherlands Antilles without a license issued by the Central Bank.
Such Ordinance in principle relates to credit institutions only, but in article 45 prohibits anyone to directly or indirectly turn to the public in the Netherlands Antilles with a view to the attracting of funds by anyone other than a credit institution possessing a permit. This prohibition also applies if certain types of securities were offered, e.g. bonds, in which case an exemption would have to be obtained from the Bank of Netherlands Antilles if moneys are attracted by a party other than a credit institution with a permit.
However, said prohibition would in my view not apply to the offering of shares by a shareholder, as this would appear to qualify as a share sale and purchase transaction rather than the attracting of funds. Unfortunately the Explanatory Memorandum to the Ordinance is silent on this issue. My view is supported, by analogy, by the fact that article 45 contains a specific exemption for collective investment funds which are attracting moneys (e.g. against issue of shares in such fund) for the purpose of letting their participants share in the profit of investments.
Karel Frielink
Attorney (Lawyer) / Partner
