Dutch Hedge Funds Face Supervision

The Dutch government has proposed new regulations for the domestic financial sector over the past year after it paid out some 40 billion euros ($53 billion) to rescue local banks and insurers during the 2008 credit crisis.

ABN AMRO had to be nationalized -- the finance ministry plans eventually to privatize it -- while ING, Aegon and SNS Reaal received almost 14 billion euros of state aid in total. Only Aegon has repaid in full.

"The 2008 credit crisis made clear that we cannot continue on the old road. These historic events require historic reforms. Something really has to change in the financial sector," finance minister Jan Kees de Jager said on his blog.

He sent a third package of regulations to parliament, of which the most important focus was supervision of stock market speculators, he said.

"I want more clarity of the wheeling and dealing of these fast boys and girls. This will enable me to look behind the scenes and prevent surprises," De Jager said.

Except in certain cases, investment funds -- including hedge funds -- will face a higher minimum capital requirement. This will be at least 125,000 euros plus 0.02 percent of assets managed above 250 million euros, De Jager said in a letter to parliament.

Currently, funds need 125,000 euros for assets under management below 250 million euros, or 225,000 euros when assets top 250 million euros.

The Dutch central bank will also have the power to limit leveraged finance if this is needed to safeguard financial stability, De Jager said.

The lower house of parliament accepted laws in February which limit bonus payments and give regulators the power to nationalize, or force the sale of bank or insurance assets, when such a company runs into trouble.

It also voted in favor of forcing companies to change their accountant at least every eight years.

The Dutch senate, or upper house, still has to approve this proposal and the set of laws which passed the lower house in February.

De Jager also wants to pass two new bank taxes through parliament, one that plans to tax debt by 0.011 to 0.022 percent and raise 300 million euros a year, and one to fund a deposit guarantee scheme that aims to raise 4 billion euros over a longer period.

(Reporting by Gilbert Kreijger; Editing by David Hulmes)