News item | 23-06-2022 | 09:48
To ensure that perverse incentives in the financial sector are counteracted and confidence in the financial sector is increased, employees of financial companies, whose fixed remuneration consists partly of shares, are allowed to sell them only after five years. Financial companies are also obliged to take their social position into account in their remuneration policy by involving stakeholders in advance in remuneration proposals and to account for them.
This is the core of the Remunerations in the Financial Sector Act, which was submitted by the previous cabinet and will come into effect on 1 January 2023. The law also establishes that traders on their own account are exempt from the bonus ceiling. This is in line with new European regulations for investment firms.
The financial sector plays an important role in Dutch society. For example, banks take care of payment transactions and provide credit to consumers and companies, insurers offer products that insure consumers and companies against risks that they cannot or do not want to bear themselves and financial advisors help consumers and companies to make choices. This bill addresses perverse incentives in remuneration with a view to the interests of the customer and financial stability, and can thus increase public confidence in the sector.
Link to the law;
- Text of the law: Parliamentary paper 35514, no. 2 | Overheid.nl > Official announcements (officielebekendmakingen.nl)
- Explanatory Memorandum: Parliamentary paper 35514, no. 3 | Overheid.nl > Official announcements (officielebekendmakingen.nl)
- Further report: Parliamentary paper 35514, no. 4 | Overheid.nl > Official announcements (officielebekendmakingen.nl)