The Dutch central bank DNB is tightening up regulations on bonus payments for executives of trading houses, to bring them into line with the strict rules for bonuses in the banking sector.
The decision was prompted by an investigation by the European Banking Authority (EBA) into whether the exemption for trading houses agreed earlier by the central bank complies with European law, the bank said in a statement.
Until now, trading houses were exempt from the strict regulations applying to banks.
The EBA claims the Dutch central bank had interpreted the regulations of the European authority too broadly. The 13 companies affected by the changes have until 31 March 2018 to comply with the new regulations. If they cannot do so they have until end-2019 to submit a recovery plan.
FlowTraders, Intertrust, TMF Optiver and IMC are among the trading houses based in the Netherlands. According to the Financieele Dagblad, they have a tradition of paying their staff relatively low salaries and large bonuses.
The Netherlands imposes stricter regulations for financial sector bonuses than the rest of the European Union. Bankers in the Netherlands can receive a maximum of 20% of their fixed salary as a bonus each year. The maximum in the rest of the EU is 100% of regular pay.
But these regulations are politically sensitive. The banks themselves and other critics argue they hinder companies and their employees from settling in the Netherlands. In particular, they say, the bonus camp is a barrier to large banks faced with leaving London in the wake of Brexit.