THE DUTCH SUPERVISION ON TRUST COMPANIES (I)
The Dutch Central Bank is the supervisor
The Dutch Act on the Supervision of Trust Offices (‘ASTO’) (‘Wet toezicht trustkantoren’) entered into force on the 1st of March 2004. According to the legislative history, the Explanatory Notes to the Act, the aim of the ASTO is to promote the integrity of the financial system by regulating the trust industry. The Explanatory Notes (Par.3.3) continue:
“The main subject of this bill is the integrity of the trust office and the relational integrity, the integrity of clients of the trust office, in the sense that the buyer (as the ultimate beneficial owner) of the services must be known to the trust office.”
The Dutch Central Bank (the ‘DCB’) shall be entitled to revoke a license granted to a trust office if, for instance, the DCB obtains information, which, had it had been known at the time of granting the license, would have meant that the license would not have been granted (Article 6 (f), ASTO). The DCB shall grant a license, unless, for instance, based on the intentions or antecedents of the persons mentioned hereafter, the DCB is of the opinion that the trustworthiness of any of (i) the managers or supervisory directors of the trust office; or (ii) those persons who determine or co-determine the policy of the trust office; or (iii) those persons who have a qualifying holding in the trust office, is not beyond doubt (Article 4 (a), ASTO).
If a change occurs in the aforementioned antecedents, the trust office shall notify the DCB immediately in writing (Article 5 (3), ASTO). If this provision is not met, the DCB shall be entitled to order a trust office or the competent bodies to follow a certain course of action with respect to the matters in question. The trust office or the competent bodies to which the instruction is given shall be obliged to follow those orders within a period to be stipulated by the DCB (Article 11 (1) of the ASTO).
If the expertise and trustworthiness of (a) the managers and supervisory directors of the trust office; (b) the persons who determine or co-determine the policy of the trust office; or (c) the persons who have a qualifying holding in the trust office, insofar as they determine or co-determine policy under a formal or actual control structure, are no longer beyond doubt, then the DCB shall be entitled to order that these persons shall no longer be allowed to determine or co-determine the trust office’s policy (Article 11 (2) ASTO). This means that it is not necessary to immediately revoke the license of the trust office. In certain circumstances, revoking the license could be excessive. This however, according to the Explanatory Notes, does not affect the ability to revoke the license without prior order, if the circumstances so dictate.
Karel Frielink
Attorney (Lawyer) / Partner
