DNB indicated that it will monitor more strictly whether financial institutions comply with their capital and liquidity requirements. To this end, the new DNB enforcement policy in respect of capital and liquidity requirements entered into force on 10 March 2026 (the “Enforcement Policy”).
Why is DNB publishing a new Enforcement Policy?
The goal of the Enforcement Policy is to ensure that capital and liquidity shortfalls are remedied as soon as possible. DNB has noticed that such shortfalls are increasingly common and persistent.
The Enforcement Policy fits within the general trend of increased supervisory attention for the prudential situation of financial institutions, which has been one of DNB’s priorities since the publication of the Good Practices for Prudential Reporting (Good practices Handreiking prudentiële rapportages) in 2024.
What are the consequences of the Enforcement Policy?
Under the new Enforcement Policy, DNB will principally start a formal supervisory enforcement procedure for each capital or liquidity breach by a financial institution. Specifically, DNB indicates that it will:
(i) Impose an order subject to a penalty (last onder dwangsom) – For every infringement of the capital or liquidity requirements by a financial institution, DNB imposes an order subject to a penalty with the following characteristics:
a. A four (4) week deferral period in which the infringement can be remedied by the financial institution;
b. After that, a daily penalty of EUR 5,000 up to a maximum of EUR 75,000.
(ii) Impose a administrative fine (bestuurlijke boete) – Where the financial institution continues to infringe its capital or liquidity requirements after the maximum penalty of EUR 75,000 has been imposed; and
(iii) Impose a administrative fine (bestuurlijke boete) – Where a financial institution infringes its capital or liquidity requirements again within a 25 month period following the previous infringement.
The amount of the fine imposed is subject to several conditions, such as the severity of the breach, the duration of the breach and the degree of culpability.
When will the Enforcement Policy be applied?
DNB will impose an order subject to a penalty or a supervisory fine if the relevant prduential requirements are breached, these being:
(i) The minimum own funds requirement (minimum vermogensvereiste);
(ii) The solvability requirement (solvabiliteitsvereiste); and
(iii) The liquidity requirement (liquiditeitsvereiste).
These requirements differ per type of financial institution (see table below), but share the characteristic that they must be met at all times – thus not only on reporting dates – and that they must be met by means of maintaining eligible capital.
To whom does the Enforcement Policy apply?
The Enforcement Policy is applicable to the financial institutions as included in column one (1) of the table below.
Key Takeaways
- DNB will principally initiate a formal enforcement procedure for each capital or liquidity breach, imposing an order subject to a penalty (last onder dwangsom) with a 4-week remediation window and a daily penalty of up to EUR 5,000 (capped at EUR 75,000);
- Administrative fines (bestuurlijke boete) will follow if the breach persists or recurs within 25 months; and
- The policy applies to a broad range of financial institutions, including: investment firms, fund managers, payment institutions, crowdfunding service providers and crypto-asset service providers.
Contact
Financial Institution | Minimum OFR | Solvability requirement | Liquidity requirement | ||||
Wft | Bpr | EU | Wft | Bpr | EU | ||
Investment firms | 3:53 | 48(1)(f)-(i) | 14 IFR | 3:57 | 59(4) | 13 and 15 IFR | 3:63 Wft, 106b Bpr |
Investment holding company | N/A | N/A | 7 and 14 IFR[1] | N/A | N/A | 7, 13 and 15 IFR | 7(3) and 43 IFR |
Fund manager | 3:53 | 48(1)(c)-(e) | N/A | 3:57 | 59(1), 63 and 63b | N/A | 3:63 Wft, 106, 109 |
Payment institution | 3:53 | 48(1)(j) and (k) | N/A | 3:57 | 59(1), 60a | N/A | N/A |
Electronic money institution | 3:53 | 48(1)(n) | N/A | 3:57 | 59(1), 64 | N/A | N/A |
Crowdfunding service provider | N/A | N/A | 11(1)(a) ECSPR | N/A | N/A | 11(1)(b) ECSPR | N/A |
Crypto asset service provider | N/A | N/A | 67(1)(a) MiCAR | N/A | N/A | 67(1)(b) MiCAR | N/A |
[1] See art. 8-11 of Commission Delegated Regulation (EU) 2024/1771 for detail on how to apply the capital and liquidity requirements on a consolidated basis.
What should financial institutions do?
Financial institutions must ensure that they are at all times in control of their capital and liquidity position. This requires a strong and efficient prudential management framework (the “PMF”). A PMF ensures that the financial institution at all times:
- Meets its capital requirements;
- Meets its liquidity requirement; and
- Retains and manages the capital that is eligible to cover the capital and/or liquidity requirement.
In our experience, most infringements of the capital and liquidity requirements are not caused by due to financial issues, but by a misunderstanding of the regulatory requirements by the financial institution. Therefore, a PMF should:
- Provide the financial institution with a clear overview of the applicable quantitative and qualitative capital and liquidity requirements;
- Enable the financial institution to continually (intraday) monitor its capital and liquidity position;
- Impose reflection moments at key corporate decisions (e.g., what is the prudential effect of an interim dividend, management fee payment or change of articles of association);
- Set out a clear capital and liquidity shortage remediation plan that can be effectuated immediately and shared with DNB if a shortage occurs;
- Ensure continuous updates and education on the development of the prudential requirements.
How can we help?
We frequently advise financial institutions on their quantitative and qualitative prudential requirements, including in light of remediation procedures with DNB. Moreover, we assist our clients in formulating PMF’s, provide training to key stakeholders on the applicable prudential framework and provide expert guidance on highly technical prudential interpretation questions.
If you would like to discuss the Enforcement Policy or the prudential requirements in general, please feel free to reach out to Jan Jans ([email protected]) or Maarten Mol-Huging ([email protected]).
See also our previous newsflashes on the prudential requirements for financial institutions: DNB news on direct financing of CET1, DNB Consultation on IFR Supervisory Regulation, PI/EMI Prudential Reporting Changes and Prudential Reporting for PIs and EMIs.