The financial regulators are tying entrepreneurs up in red tape

annemarie van gaalThe financial regulators should see someone about their out of control tick box fetish which only serves to frustrate entrepreneurs, says Annemarie van Gaal.

VNP-NCW boss Hans de Boer recently sprang to the defence of the banks. The banking sector, he said, is being thwarted by a number of completely superfluous rules set by financial regulators DNB and AFM. According to De Boer it’s a policy that ‘undermines the sector’s earning capacity’.

I often find myself on the receiving end of complaints from insurers who employ dozens of people whose only task is to coordinate the agreements made with the regulators. This is not very nice for them but fortunately the financial sector is able to meet whatever rules the regulators throw at them with extra staff. But what if this regulatory tidal wave were to hit not only banks and insurers but small and medium-sized companies as well?

Last week I met a very angry entrepreneur. ‘That AFM is off its trolley,’ he fumed. In his search for a new pension insurer for his staff he was confronted with a list of documents which he needed to hand over.

Not only did his insurance advisor want a liquidity overview and prognosis, he also needed the company’s annual reports of the last three years, the business plan and the financial data of the parent company. And the staff handbook, an example of a staff contract and the contact data of the works council. Sigh.

My entrepreneur didn’t see the need to give his insurance advisor access to his accounts receivable and payable. The advisor told him his hands were tied and that it was the AFM which gave him the checklist.

The AFM wants to be sure the entrepreneur can pay the pension premiums in time. ‘Why?’ he said. ‘If I have a bad month and fail to pay, my staff will get a letter from the pension insurer to tell them their boss hasn’t paid the premiums and they are no longer insured which will impact on their pensions. So who’s running the risk here?’

And what really stuck in his craw was the fact that all this checking would take a lot of time and at €80 an hour his advisor would be laughing but he would not. Hans de Boer thinks the regulators are holding back the earning capacity of the financial sector but please spare a thought for the small and medium-sized companies.

More rules are never the answer. The tick box fetish of the regulators is completely out of control and only serves to frustrate entrepreneurs.

Annemarie van Gaal is an entrepreneur and investor

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