Third-party inducements bans in the Netherlands
On 1 January 2013, the inducement rules for non-MiFID products were amended in the Netherlands by the introduction of a complete ban on third-party inducements. The ban means that financial service providers are no longer allowed to receive inducements for acting as an intermediary or an adviser in respect of these products.
The background to the ban is that the Dutch government wanted to break what was believed to be the strong link between the provider of a product and the intermediaries and advisers. A ban was believed to be the only way to reach a pure market model whereby the consumer and intermediary or adviser determine the reward for the service. An intermediary or adviser would then no longer receive what was said to be a perverse stimulus (in the form of third party inducements) to act in his own interests, and would be able to provide truly objective advice.
The ban applies to the following products: complex financial products (excluding MiFID products); mortgage credits; loss-of-income insurances; funeral insurances; and service provision under the national MiFID regime. Further, the ban only applies to contracts that were entered into on or after 1 January 2013…
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