Banking and Financial Sector

What falls under banking and the financial sector?

Banking and financial sector law regulates two things simultaneously: the contracts by which money and collateral change hands, and the rules that financial service providers must adhere to. On the one hand, there is financing, credit agreements, and collateral such as pledges, mortgages, and sureties. On the other hand, there is supervision under the Financial Supervision Act (Wft), exercised by the Authority for the Financial Markets (AFM) and De Nederlandsche Bank (DNB).

Our lawyers and in-house counsel assist both international corporations and the local entrepreneur — from assessing a credit offer to a dispute regarding the bank's duty of care or a licensing question under the Financial Supervision Act (Wft).

Financing and credit agreements

Those providing financing rarely simply hand over money: the bank sets conditions, covenants, and security. We assess credit offers and financing documentation, negotiate the provisions that matter to you, and pay attention to the consequences of, for example, a right of termination or a change in interest rates. At its core, a loan is a consumption loan within the meaning of Article 7A:1791 of the Dutch Civil Code; the agreements surrounding it determine whether the financing remains workable for you.

When formalizing a loan between companies or within a group, a clear agreement helps prevent conflicts. For this purpose, please also refer to our loan agreement contract, which you can use as a basis and which we tailor to your situation.

Collateral: pledge, mortgage and surety

Credit is almost always backed by securities. Pledges on movable property and claims are regulated in Articles 3:227 et seq. and 3:236 et seq. of the Dutch Civil Code; mortgage rights on registered immovable property in Article 3:260 of the Dutch Civil Code. Suretyship—in which someone binds themselves for the debt of another—is regulated in Article 7:850 of the Dutch Civil Code, with special protection for the private surety in Article 7:857 of the Dutch Civil Code. For the entrepreneur, it is particularly important that a suretyship or joint and several liability signed in a personal capacity is only affected if the company defaults on payment; we assess in advance the extent of that obligation.

Duty of care of the bank

Banks and other financial service providers have a special duty of care towards their customers. This duty of care arises from the agreement and from the principles of reasonableness and fairness (Article 6:248 of the Dutch Civil Code), and has been further defined in case law—becoming more stringent the more complex a product is and the less professional the customer. Violation can lead to liability for damages based on breach of contract or unlawful act (Articles 6:74 and 6:162 of the Dutch Civil Code, respectively). Examples include insufficient warning regarding an interest-bearing product, over-lending, or an unjustified termination of credit. We assess whether the bank has breached its duty of care and which route—a complaint, Kifid, or court—best serves your interests.

Supervision: Wft, AFM and DNB

Any enterprise providing financial services—brokering, advising, offering credit, or providing investment services—quickly falls under the Financial Supervision Act. The Dutch system operates on a twin-peaks model: DNB exercises prudential supervision over the soundness of institutions, while the AFM exercises conduct supervision over how institutions behave towards customers. Both can set licensing requirements and impose hefty fines. We assess whether your activities require a license, guide you through license applications, and assist you in enforcement proceedings by the AFM or DNB.

Disputes with banks and financial institutions

If things go wrong, it often involves credit termination, enforcement of collateral, a rejected damage claim, or a dispute regarding advice. Where necessary, our lawyers litigate before the court and the Financial Services Complaints Institute (Kifid); our legal experts resolve many cases through negotiation and settlement. The guiding principle is always: first assess your position and the documents, then choose the route that keeps the most options open.

Relationship with other areas of law

The banking and financial sector borders on multiple practice groups. For broad questions regarding financial regulation and financing practice, we collaborate with our financial law. For acquisitions involving financing and collateral, we engage the corporate, mergers and acquisitions team, and for payment issues or bankruptcy, our insolvency law. This ensures you have a single point of contact, even if your question has multiple facets.