BANKING REGULATIONS IN THE DUTCH CARIBBEAN
Attracting funds from the public is prohibited
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.
The prohibition to solicit funds from the public is not applicable to investment institutions who solicit funds for collective investments in order to let the participants share in the proceeds of the investments. The Central Bank can grant individual exemptions from this prohibition in case one does not qualify as an investment institution.
In my opinion, said prohibition would 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 par. 3 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
Curacao-based Attorney (lawyer) / Partner
