NETHERLANDS: DNB Published Updated UCITS FAQs

Tuesday January 5 2021

De Nederlandsche Bank (DNB) has issued updated FAQs which provide information on whether a Dutch undertaking for collective investment (UCITS) may invest assets under management after Dec. 31, 2020 at a bank with registered office in UK. Additionally, the updated FAQs also provide information concerning if a Dutch UCITS may have a counterparty risk of a maximum of 10% of its assets in a transaction in OTC derivatives, if the counterparty is a UK-domiciled bank.

Updated FAQ:

Question:  After 31 December 2020, may a Dutch undertaking for collective investment (UCITS) have a counterparty risk of a maximum of 10% of its assets in a transaction in OTC derivatives if the counterparty is a bank domiciled in the United Kingdom?

Answer: Yes, DNB has established, for the application of Article 134 (2) of the Decree on the Supervision of the Conduct of Financial Corporations (Bgfo), that prudential supervision in the United Kingdom offers sufficient guarantees with regard to the interests that the law aims to protect. This assessment applies from 1 January 2021 for a period of one year. Whether this period will be extended will partly depend on developments in prudential supervision in the UK. Any equivalence assessments by the European Commission of the UK prudential legal framework and supervision will be taken into account. The extent to which UCITS depend on this assessment will also be taken into account.

Question: After 31 December 2020, may a Dutch Undertaking for Collective Investment (UCITS) invest assets under management in deposits with a bank domiciled in the United Kingdom?

Answer: Yes, DNB has established, for the purposes of Article 130 (f) of the Decree on the Supervision of the Conduct of Financial Corporations (Bgfo), that prudential supervision in the United Kingdom offers sufficient guarantees with regard to the interests that the law aims to protect. This assessment applies from 1 January 2021 for a period of one year. Whether this period will be extended will partly depend on developments in prudential supervision in the United Kingdom. Any equivalence assessments by the European Commission of the UK prudential legal framework and supervision will be taken into account. The extent to which UCITS depend on this assessment will also be taken into account.

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