SUPERVISORY DIRECTORS ARE A TYPE OF BAYWATCHERS

When you dress a lizard in a suit you will have trouble with his tail!

A seminar on Financial Institutions and their Supervisor was held in Aruba on Wednesday April 20, 2016. The seminar was organized by the Aruba Bankers’ Association & Insurance Association of Aruba. I was one of the keynote speakers and delivered my presentation in the English language (click here for the presentation).

I have addressed several issues. Here follow a few quotes:

What makes financial institutions like banks and insurance companies special is that the scope of duties of managing and supervisory directors …
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21
Apr 2016
CATEGORY

Finance

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CREDIT INSTITUTIONS IN THE BES ISLANDS

Strictly regulated

With effect from 1 July 2012, the Financial Markets (BES Islands) Act [Wet financiële markten BES; “Wfm BES”] came into force, with the associated subordinate regulations. The Wfm BES applies to financial institutions in the BES islands (Bonaire, St. Eustatius and Saba). There are several categories of financial institutions, including credit institutions (banks).

A “credit institution” (kredietinstelling) is a party engaged in the business of obtaining callable funds (opvorderbare gelden) from outside a restricted circle (besloten kring) and from parties other than professional market parties (professionele marktpartijen) and of the extension of loans (kredietuitzettingen) at such party’s (own) …
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13
Nov 2013
CATEGORY

Finance

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REGULATORY LAWS IN THE BES ISLANDS

There are three regulators

According to the Dutch Central Bank (“DCB”), financial institutions must be sound, reliable and stable to ensure confidence among businesses, consumers and others. DCB states on its website: “In addition to making certain their customers are properly informed about their products and services, these institutions also have a duty of care towards their customers. The financial services industry should also give a high priority to integrity and should never be used for money laundering, terrorist financing, fraud, corruption or other illegal activities. Finally, the market should function properly and there should be adequate market access, with …
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31
Oct 2013
CATEGORY

Finance

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HAPPY NEW YEAR 2013

Bon aña i tur kos bon pa aña 2013

Viel Glück im Neuen Jahr

De beste wensen voor het nieuwe jaar

Karel Frielink

(1 januari 2013)

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01
Jan 2013
CATEGORY

Various

COMMENTS No Comments

REGULATORY LEGISLATION IN CURACAO

General requirements on the business operation

Regulatory legislation in Curacao does not distinguish between different kinds of products, such as for instance hedge funds, but is of a more general nature. The regulatory legislation of Curacao applicable to financial institutions is divided into four categories being: credit institutions, institutional investors, investment institutions & administrators and trust service providers.

The authority entrusted with the supervision on the financial institutions mentioned above is the Central Bank of Curacao and Sint Maarten.

The regulatory legislation does provide for general requirements on the business operation of the financial institutes involved. The National Ordinance on …
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12
Mar 2012
CATEGORY

Finance

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TRUST SERVICE PROVIDERS IN CURACAO

TSPs are supervised by the Central Bank

Many international group structures include one or more Curacao legal entities or partnerships. The main reasons for this are the internationally competitive conditions for business development in the area of corporate law and the tax system in Curacao, as well as the well-developed professional financial services industry. Trust Service Providers (“TSPs”) are involved in setting up and maintaining such structures. TSPs conduct the management of legal entities and partnerships (“client companies”) on behalf of other enterprises. Management usually involves the TSP acting as manager of the client company and providing a correspondence address …
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21
May 2011
CATEGORY

Legal

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DIRECTORS’ LIABILITY IN THE DUTCH CARIBBEAN

Personal and several liability

The members of the Board of Directors are personally and severally liable towards the NV (or BV, as the case may be) for any loss caused by the improper performance of duties. Each member of the Board who proves that he cannot be blamed for such improper performance and that the activities concerned fall outside the scope of activities addressed to him, and that he has not been negligent in taking steps to avert the related consequences, is not liable (Article 2:14 Section 4 Netherlands Antilles Civil Code; NACC). Therefore, a division of tasks among such …
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04
Aug 2010
CATEGORY

Corporate

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SUPERVISION OF TRUST COMPANIES IN THE DUTCH CARIBBEAN

Trust companies render management services

The supervision of trust companies is dealt with in the National Ordinance on the Supervision of Trust Service Providers 2003 (‘Landsverordening toezicht trustwezen’, the ‘NOST’). Supervision of trust companies (a.k.a. fiduciary or company service providers) falls in the category integrity supervision and not in the category prudential supervision. The supervisor is the Central Bank of the Netherlands Antilles. The ordinance prohibits anyone from rendering fiduciary or trust services without a license.

According to Art. 10 of the NOST, trust services means: (a) establishing an international company or causing it to be established when such is …
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01
May 2010
CATEGORY

Legal

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DRAG-ALONG RIGHTS UNDER THE LAWS OF ARUBA

Drag-along rights may be validly created

On January 1, 2009 the new Aruba Ordinance on companies with limited liability (vennootschap met beperkte aansprakelijkheid; VBA) became effective.

A drag-along right is a right that enables a majority shareholder to force a minority shareholder to join in the sale of his shares in a company (VBA). Generally, the majority shareholder doing the dragging must give the minority shareholder the same price, terms, and conditions that apply to him. The question with regards to Aruban law is whether the articles of association of a VBA may contain drag-along provisions.

Article 25(1) of the …
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16
Jan 2010
CATEGORY

Corporate

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SEPARATION BETWEEN LEGAL AND BENEFICIAL OWNERSHIP OF SHARES IN THE DUTCH CARIBBEAN

The beneficial owner of shares is not a shareholder

On March 1, 2004 the act on corporate law (Book 2 Netherlands Antilles Civil Code) became effective. The Act governs NVs (‘public limited liability company’) and BVs (‘private limited liability company’). The main object of the legislator was to provide flexibility and maximum freedom for organization and presentation. Accordingly, the Act contains few mandatory provisions, such as provisions relating to the interests of creditors and minority shareholders.

Concepts like registered, subscribed and contributed capital do not appear in the Act. As a result  no minimum capital is required unless such a requirement …
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09
Jan 2010
CATEGORY

Corporate

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THE SELLING OF SHARES BY A DUTCH CARIBBEAN COMPANY

Answers to foreign counsel queries

A Netherlands Antilles company (NV or BV) may have assets, both local and foreign. Not seldom such a company wants to sell all or a portion of its assets. If foreign assets or a foreign buyer is involved, foreign counsel always asks questions about the laws of the Netherlands Antilles. Several of those questions will be dealt with here. Let’s assume that a Netherlands Antilles company wants to sell its shares in a Dutch BV.

The Netherlands Antilles NV or BV may sell some or all of its shares in the Dutch BV. It is customary …
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02
Jan 2010
CATEGORY

Corporate

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A COMPARISON OF THE DUTCH BV AND THE DUTCH ANTILLEAN BV

There are similarities and differences

There are certain similarities between the Dutch and the Antillean BV, in fact they are fundamentally the same type of entity. The main object of the Antillean legislator was, however, flexibility and maximum freedom of organization and presentation. Accordingly, the Antillean Act contains few mandatory provisions, such as provisions relating to the interests of creditors and minority shareholders.

An Antillean BV may be established in a form that resembles what a foreign shareholder encounters in his own legal system: the BV can, for example, be organized like a Dutch BV or NV, a Delaware corporation, …
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19
Dec 2009
CATEGORY

Corporate

COMMENTS No Comments