The Dutch Authority for the Financial Markets (AFM) published an assessment of criminal conduct risks in securities offerings that rely on the Netherlands’ prospectus exemption, prompted by the planned increase of the exemption threshold to EUR 12 million in June 2026. The AFM identifies substantial risks of misuse and urges investors to factor these risks into their decisions, while calling on “gatekeepers” to be alert to abuse of the exemption regime. The review focused on offerings using the current EUR 5 million exemption, under which issuers do not need an approved prospectus but must notify the AFM and provide an information document. Since 2020, the AFM estimates more than EUR 2 billion of securities have been offered under the exemption, with some providers raising tens of millions by repeatedly using the maximum amount within successive 12-month periods or by combining offerings across different security categories such as shares and bonds. The AFM also observes that offers just below EUR 5 million are relatively common and account for a significant share of issuance, that proceeds are often used for higher-risk investments (including real estate, land and precious metals) rather than SME financing, and that marketing is frequently directed at retail investors alongside claims of high, potentially unrealistic returns. The AFM reports receiving more than 300 misconduct signals and cites findings including funds being diverted from the stated purpose, use of new investor money to pay interest and redemptions to existing investors, and use of proceeds for private purposes. With the EU Listing Act expected to raise the cap to EUR 12 million from June 2026, the AFM expects criminal conduct risks to increase even as it supports the objective of improving capital-market access for SMEs. It indicates it will move towards more proactive, data-driven supervision and stresses the importance of retaining the notification requirement and the obligation to make an information document available.
Dutch Authority for the Financial Markets 2025-11-04
Dutch Authority for the Financial Markets warns of significant criminal conduct risks in prospectus-exempt offerings as exemption cap is set to rise to EUR 12 million
The Dutch Authority for the Financial Markets (AFM) assessed criminal conduct risks in securities offerings under the Netherlands’ prospectus exemption, as the threshold is set to increase to EUR 12 million in June 2026. The AFM highlights substantial misuse risks, urging investors and gatekeepers to remain vigilant. It plans to enhance proactive, data-driven supervision while maintaining notification and information document requirements.