The text of the Royal Decree can be found here.
The Royal Decree introduces requirements as to the (1) advertising and (2) provision of pre-contractual information with regard to the offering (“commercialisering”/ “commercialisation”) of financial products to non-professional clients.
The Royal Decree broadly applies to financial products (“financiële producten”/ “produits financiers”) within the meaning of the Markets in Financial Instruments Directive as implemented in Belgium by article 2, first paragraph, 39° of the Act of 2 August 2002 on the supervision of the financial sector and on financial services (the Act of 2 August 2002). The Royal Decree’s provisions hence apply to (1) saving products (including: deposit accounts, branch 21, 22 and 26 products); (2) investment products (including: investment instruments, certain branch 23 products, saving certificates and regulated savings accounts) and (3) insurance products (together referred to as Financial Products). The Royal Decree explicitly excludes certain categories of Financial Products (including certain additional pension and insurance products) as well as Financial Products that exceed a certain threshold (for instance Financial Products that require a minimum initial investment that exceeds 100,000 EUR, or in case of open-ended UCIs, exceeding 250.000 EUR).
The Royal Decree applies to Financial Products that are offered to non-professional clients (“niet-professionele client”/ “client de détail”) within the meaning of the Markets in Financial Instruments Directive as implemented in Belgium by article 2, first paragraph, 29° of the Act of 2 August 2002 (Non-Professional Clients). Accordingly, the Royal Decree also applies to certain companies (for instance SME’s).
Standardisation of pre-contractual information
The Royal Decree introduces the requirement to provide Non-Professional Clients with a short, standardized and easily understandable document that outlines certain particulars of the Financial Product (Standardised Information Sheet). Non-Professional Clients must be provided with the Standardised Information Sheet free of charge and in due time before the intended purchase of (or subscription to, becoming a party to, acceptance of, signing or opening of) a Financial Product. The Standardised Information Sheet could be provided on paper, through a durable medium or through a website meeting certain requirements. The Royal Decree states which information mandatorily has to be included in the Standardised Information Sheet. The Standardised Information Sheet must further meet various detailed and technical requirements such as amongst others the requirement for information to be fair, clear and not misleading, sufficiently precise and not too technical; provisions on the inclusion of examples, on the and the mandatory inclusion of the label indicating the Financial Product’s degree of risk; the presentation of charges; the requirement as to the maximum length of the Standardised Information Sheet (i.e. three (3) A4-size pages)).
Please note that certain Financial Products are excluded. A key exception involves Financial Products that are publicly offered on the basis of a prospectus.
Publicity as well as other documents communications with regard to Financial Products are governed by the Royal Decree. The Royal Decree among others:
- includes requirements as to comparative advertising;
- prohibits any misleading publicity;
- introduces a label indicating the Financial Product’s degree of risk;
- outlines the minimum information that must be included; and
- contains requirements as to the presentation, in publicity, of past performance, simulated data, rankings or ratings, as well as cross-references in the publicity to a benchmark.
Prior FSMA approval
The Royal Decree submits advertising and Standardised Information Sheets to prior approval by the Financial Services and Markets Authority (FSMA). Prior approval by the FSMA should also be sought in the event of amendments. Please note however that certain exceptions apply.
As from its entry into force (see further below), the Royal Decree will not only replace, but also significantly expand the protection of non-professional clients provided by the royal decree of 18 June 2013 with regard to information requirements for the offering of regulated savings accounts1
The Royal Decree finally amends two other royal decrees:
- the royal decree of 14 November 2003 relating to life insurance activity (NL/FR); and
- the royal decree of 12 November 2012 relating to certain public undertakings for collective investment (NL/FR).
Entry into force
The Royal Decree will enter into force on 12 June 2015. Please note that the Royal Decree provides for transitional measures with regard to advertising in respect of which the distribution started before such date.