On 1 April 2011, Belgian financial supervision shall be significantly reformed as a result of the decision of the Belgian government to introduce a so-called “Twin Peaks” model. The function of the compliance officer is also – for the first time – legally recognized and regulated.
Reform of the Belgian regulatory landscape
The law dated 2 July 2010 entrusted the Belgian government with reforming the Belgian regulatory landscape, with a view to transferring the supervision of major financial institutions to the Belgian National Bank and focusing the role of the Banking, Finance and Insurance Commission on consumer protection. This reform is now further detailed in the Royal Decree of 3 March 2011, whose main provisions enter into force on 1 April 2011.
As a result of this reform, supervision of banks, insurance companies, payment institutions, stock exchange companies and pension funds will be transferred to the Belgian National Bank.
The Banking, Finance and Insurance Commission will be re-named as the “Financial Services and Market Authority” (FSMA), and will focus on compliance of financial institutions with conduct rules. Supervision of portfolio management and investment advice companies (société de gestion de portfeuille et de conseil en investissement/ Vennootschappen voor vermogensbeheer en beleggingsadvies) will also remain with the new FSMA.
In addition, the Royal Decree inserted a new specially dedicated section on compliance officers in the law dated 2 August 2002 on the supervision of the financial sector. Where the aims and status of compliance officers were – up to now – governed by prudential guidelines only, financial institutions (banks, insurance companies, investment firms and management companies) are now obliged to comply with the new article 87bis of the law on the supervision of the financial sector.
Pursuant to this provision, financial institutions must appoint one or several compliance officers who have the necessary professional reputation and sufficient experience. Compliance officers must be approved by FSMA which now has to further determine the requirements regarding professional knowledge, experience, training and reputation, as well as the approval procedure.
The duties of the compliance officers relate to the control and evaluation of the nature and efficiency of the policy, procedures and measures in place for protecting investor interests, and the proper functioning, integrity and transparency of markets for financial instruments, under the company management’s responsability.