LICENSE REQUIREMENT FOR INVESTMENT INSTITUTIONS IN THE DUTCH CARIBBEAN
Applications to be filed with the Central Bank
The National Ordinance on the Supervision of Investment Institutions and Administrators 2002 (‘Landsverordening toezicht beleggingsinstellingen en administrateurs’, the “NOSIIA”) prescribes a license for all Investment Institutions, unless:
(i) the participation rights therein are not offered, nor are monies or other goods for participation therein requested or obtained, in or from the Netherlands Antilles.
The words “or obtained” indicate that the NOSIIA will also be triggered where investments were unsolicited. The NOSIIA applies to (a) all Investment Institutions, which are established in the Netherlands Antilles, wherever their investors or potential investors are located and (b) all Investment Institutions that are established outside the Netherlands Antilles, provided that participation rights therein are offered (or monies or other goods for participation therein are requested or obtained) in the Netherlands Antilles. It is important to note that these requirements are easily triggered. For instance, if an entity only sends marketing material to potential investors this will already be considered to be an offer, subject to (iii) below;
(ii) the participation rights therein are offered by one or more individuals (‘natuurlijke personen‘) other than in the course of their profession or business;
(iii) or the Central Bank has granted an exemption.
In order to obtain a license, an Investment Institution must show to the Central Bank that it and its allied custodian(s), if any, meet requirements relating to (a) competence and integrity, (b) financial resources, (c) management and business operation and (d) information to be submitted to the Central Bank and the public. The above requirements have been further detailed in directives and guidelines issued by the Central Bank.
Regulated Investment Funds (as opposed to Investment Companies) will in addition have to show that (1) the management company is a legal entity with full legal capacity, (2) the fund’s assets will be deposited with a custodian which is independent of the management company and (3) the fund’s assets will be segregated from the assets and liabilities of the management company, the custodian as well as any other natural person or legal entity.
License applications must be filed with the Central Bank by using a standard form, which also indicates what documents must be submitted for approval. The Central Bank is required to decide on the application within 60 days. However, this 60 days term starts when all information necessary to decide on the application has been provided (to be determined by the Central Bank). Depending on how much time is needed to collect all necessary information and to draft the necessary documentation the application process will therefore generally expected to take 2-6 months. The Central Bank keeps a public register of all licensed Investment Institutions and publishes all licenses it has granted.
Karel Frielink
Curacao-based Attorney (lawyer) / Partner
