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Alternative manners of financing; easing of the rules; a first update

  • Netherlands
  • Banking and finance


In the coalition agreement of the Dutch government, the government has indicated that it shall support new alternative manners of finance, such as credit unions, crowdfunding and SME bonds, by clearing or simplifying any legal impediments, promotions and through the use of know how and existing instruments.

In December 2012 the Dutch Lower House (Tweede Kamer) requested the Minister of Economic Affairs to elaborate on the manner in which the indicated support shall be carried out. The Minister answered by letter of 7 February 2013 (1).

The abovementioned request of the Dutch Lower House reveals that the Dutch Lower House appreciates the relevance of alternative manners of financing.

To us, the letter of the Minister does not yet bring the necessary course of action in relation to clearing of legal impediments. In sum, the letter does not include useful suggestions in respect of simplifying the relevant legislation. However, there may be hope on the horizon just yet, as there are several ongoing and new research projects regarding alternative manners of financing and we hope to provide a more concrete update on these research projects in the near future.

Some kind of consensus seems to have been reached as to the fact that alternative manners of financing may provide a solution when issues arise relating to business financing. The Minister mentions in his letter that he envisages to facilitate, where possible and useful, such alternative manners of financing. The Minister confirms that the Dutch government is in favour of dealing with potential impediments in this respect.

Research has indicated that (potential) offerors of alternative manners of financing mostly come across the following bottlenecks:

(i) unknown for the groups of entities towards whom they are oriented;
(ii) legislation, especially regarding innovative concepts of financing that has not been considered at the time of implementation of such legislation;
(iii) insufficient knowledge of the markets at which new initiatives are aimed, because little or no information is available, as well as unfamiliarity with developments in such markets; and
(iv) lastly, it may be difficult to attract sufficient funds to launch the project due to the unfamiliarity with and the uncertain return on investment in such alternative manners of financing.

The Dutch government contemplates to facilitate the alternative manners of financing in four different ways, namely by (i) clearing of (legal) impediments in the relevant legislation, (ii) promotions, (iii) the use of know how and (iv) the use of existing instruments.

Clearing impediments

Financial supervision must provide high protection for consumers, savers and investors. At the launch of an alternative finance project, the question arises as to which rules and regulations must be complied with. The exact structure of the project is of great importance in this respect. For that reason, it is not possible to determine beforehand whether, for instance, a crowdfunding initiative requires a licence pursuant to the Dutch Financial Supervision Act (Wet op het financieel toezicht). Further discussions between the initiators, the government, the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, “AFM”) and the Dutch Central Bank (De Nederlandsche Bank, “DNB”) are considered necessary to gain insight into any legal impediments. The Minister indicates that the government attaches significant value to continue such discussions. If and to the extent that it appears from such discussions that (general) impediments apply which are reasonable in respect of protecting consumers, savers and investors, the Dutch government shall examine how to effectively clear and/or simplify any such impediments.

The Minister mentions that with regard to crowdfunding initiatives several offerors have obtained from the AFM a licence on a voluntary basis or a statement that their activities comply with the relevant rules and regulations. The letter indicates that the Ministry of Economic Affairs has launched a research project regarding (recent) developments of crowdfunding. The relevant rules and regulations shall also be touched upon in this research and we shall monitor as the research develops.


The Minister considers it desirable to provide information on new alternative manners of financing, as unfamiliarity with such alternatives regularly is the main obstacle of using them. Although the initial information must be provided by the offerors, the Minister recognises that the government has a responsibility in this respect as well. Any activities regarding promotions shall be continued and expanded. The Minister mentions for instance (i) support to entrepreneurial conferences, (ii) attention by way of the bsuiness credit desk (ondernemerskredietdesk) and (iii) support to the Dutch foundation (stichting) Qredits Microfinanciering Nederland. Furthermore, it appears from the letter that the government will launch a business platform (Ondernemingsplein) to improve services to entrepreneurs. The business platform shall consist of a combination of the Dutch Chambers of Commerce (Kamers van Koophandel) and the innovation office Syntens.

Use of know how

With respect to the use of know how for the benefit of new offerors of alternative manners of financing several possibilities are mentioned:

(i) the Ministry of Economic Affairs shall conduct a semi-annual monitor with regard to business financing and additionally, incidental research projects may be supported;
(ii) the departments of the Ministry of Finance and of the Ministry of Economic Affairs and related organisations have considerable knowledge of and information regarding the market for business financing. Where possible this knowledge and information shall be made available to the (potential) offerors of alternative manners of financing;
(iii) questions relating to supervisory aspects may always be directed to the AFM and DNB; and
(iv) (potential) offerors may consult the Innovation Room. The Innovation Room shall assess whether the proposed alternative manner of financing is affected by the relevant legislation and supervision.

Use of existing instruments

Furthermore, existing instruments shall be used and created to set up new financiers. The Minister indicated that this may not lead to an increase of the financial burden for the government. Another possibility is that the government may provide for start-up financing for new initiatives, under the budget section for stimulating entrepreneurship, in the event that existing instruments provide insufficient opportunities.

(1) Letter of the Minister of Economic Affairs, TK 2012-2013, 32 637, nr. 49.