Banking and Securities Law PDF Print E-mail
Securities law contains regulations on entry, organization and behaviour of players in the securities market. The objective of securities law is to achieve an orderly operation of the securities market and the protection of investors. This last element is the main topic explained hereinafter.

The most important legislation within securities law is the Financial Supervision Act, a law of consolidation, where most of the laws with regulations regarding supervision on the financial markets are brought together. Among other things, the Financial Supervision Act replaces (1) the Credit System (Supervision) Act, (2) the Investment Institutions (Supervision) Act, (3) the Securities Transactions (Supervision) Act and (4) the Financial Services Act. The Financial Supervision Act entered into force on 1 January 2007.

Securities law is continuously changing, not only due to fast developments on the securities markets, but also because of guidelines issued by the European Union. These guidelines are meant to enhance the harmonization of the securities laws within the EU.

Trading and inequality
The trade in securities mostly takes place through the intervention of a bank or a broker (securities institution). These intermediaries carry considerable responsibility to inform the investor regarding the purchase of securities. Sometimes this obligation to notify may seem patronizing, but it is predominantly prompted by the idea that the investor is in a position of inequality opposed to the bank or other more knowledgeable intermediaries. This inequality is mainly caused by the client who knows less about investing than the bank does and financial instruments (securities) are becoming increasingly obscure.

Banks and their duty of care
The duty of care of banks has an increasing content. Banks are required to find out more in-depth information on the financial position of the client, on his level of knowledge and experience, on what the client’s objective is with the investment and on the duration of the investment (Know-Your-Customer Rule) and provide information on the product. The duty of care therefore means that the bank must exercise due care when it provides service, where it will observe the interests of the client to the best of its ability.

The bank’s duty of care is enshrined in Section 400, Book 7 of the Dutch Civil Code. The extent of the duty of care depends on the legal relationship between the bank and the investor. When this relationship is of an advisory nature, the duty of care of the bank will be less far-reaching. This will be different when there is a relationship based on investment management between investor and bank; in that case the bank’s duty of care will be more extensive.

Damages, liability and lawyer for securities law
In case the bank or another intermediary has disregarded its responsibility towards you, advised you incompletely, or else incorrectly and you have incurred damages as a result of this, you should consult an experienced and expert lawyer on securities law as soon as possible. Such a lawyer will be familiar with this complex and obscure subject matter and assist you in claiming damages from the party responsible for those damages. We have this experience and knowledge available, so we may rightly be your partner.

Should you have any questions arising from the aforementioned, please feel free to ask these without any obligations whatsoever. You may also wish to inquire about subjects not dealt with here. We request you to fill out the contact form to the fullest extent. Subsequently, we will contact you.