In March, De Nederlandsche Bank (DNB) published a consultation on the Policy Rule on the Application of SREP Guidelines to Managers. This policy rule clarifies how DNB applies the SREP (Supervisory Review and Evaluation Process) guidelines to managers. In the Netherlands, not only investment firms but also managers of investment institutions providing MiFID services fall under the IFR/IFD regime. Based on national legislation, these managers are therefore subject to the ICARAP requirement, which authorizes DNB to apply SREP. From DUFAS, we have submitted a response to this consultation, sharing our concerns about the impact of this supervisory regime on Dutch managers.
In the consultation response, we reiterated our concerns about the application of the IFR/IFD regime to managers. By applying the IFR/IFD regime, Dutch managers are subject to a much more complex prudential supervision regime with higher capital requirements, than managers in other relevant EU member states that have an identical product and service offering. This leads to an uneven playing field and competitive disadvantage and does not fit within the current (European) political trend and the Cabinet's desire for more European level playing field/less national heads.
In addition, we call attention to proportionality in the application of the SREP guidelines. It is clear from the law that the ICARAP requirement applies only to the provision of investment services, not to the entire business of the manager. Capital requirements and the identification of (additional) risks should be aligned with activities, and a clearer distinction should be made between investment services and fund management. While the consultation paper's explanatory statement notes that managers can observe proportionality, it does not clearly justify how proportionality can be applied in practice.
