On Dec. 11, NLD DNB stated increased attention to calculation of VKV.
NLD DNB announced increased attention to calculating fixed cost requirement (VKV).
Follows NLD DNB Dec. 2024 issued details of its supervision focus 2025, see #236724.
Focus Summary
NLD DNB established that investment firms, investment holding companies, managers of investment institutions and managers of UCITS (hereinafter: BOBIs) all regularly calculate and report the fixed cost requirement (hereinafter: VKV) incorrectly to DNB.
Given the seriousness, NLD DNB will pay increased attention to this in coming period.
Calculation Requirements
BOBIs must calculate the VKV in order to determine their solvency requirement, as referred to in Article 3:57 of the Wft, but NLD DNB has found may errors in calculation.
For this reason, NLD DNB has decided to communicate additional explanations of these elements, and the supervised institutions have been informed of this by letter, and for more information, see also the reporting manuals for class 2 and class 3 institutions.
For many of the supervised institutions, the VKV is the leading solvency requirement.
An incorrect calculation can therefore result in the capital requirement being reported incorrectly, and in that case all the affected institutions may not hold sufficient capital.
In addition, it may not have the correct insight into the actual prudential situation, and means that problems are not identified, prevented and resolved in a timely manner.
In most cases liquidity requirement is calculated on basis of VKV, and calculation, and thus the statutory minimum amount of liquid assets needed can then also be incorrect.
Required Actions
In 2025, NLD DNB will, among other things, conduct investigations in determination and reporting of VKV by institutions, and NLD DNB expects supervised institutions to have continuous insight in compliance with prudential requirements applicable to them.
Partly on basis of the additional information provided by NLD DNB, it asks institutions in this context to analyse VKV calculation and reporting, and to tighten it if necessary.
Effectiveness
If a firm has not received the relevant letter on the VKV requirements focus, by Jan. 1, 2025, from NLD DNB, they are then asked to contact NLD DNB as matter of urgency.
