A general introduction to the banking regulatory regime in Belgium

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Introduction

The most noteworthy event in the Belgian banking sector in 2022 was the publication by the National Bank of Belgium (NBB) of a new governance manual for the banking sector and a new manual on the assessment of suitability (fit and proper) setting out the NBB's expectations in terms of governance of Belgian credit institutions and suitability of their managers. These two manuals supplement and further elaborate on the requirements set out in the Banking Act.²

The Banking Act aims to integrate into Belgian law the three pillars of the EU Banking Union: the Single Supervisory Mechanism (SSM), the Single Resolution Mechanism and the common deposit guarantee schemes.

To this end, the Banking Act transposes into Belgian law several EU directives and regulations (as amended from time to time), including the Capital Requirements Directive of 26 June 2013 (CRD IV),³ the Financial Conglomerates Directive of 16 December 2002,⁴ the Bank Recovery and Resolution Directive of 15 May 2014 (BRRD),⁵ the Directive of 16 April 2014 on Deposit Guarantee Schemes⁶ and specific requirements of the second Markets in Financial Instruments Directive (MiFID II).⁷

Other relevant events in the area of banking regulation in 2022 included the issuance of several communications and circulars by the NBB, including communications on the NBB's expectations on climate-related and environmental risks and on the reporting requirements applicable to Belgian financial holding companies (FHCs), as well as the further implementation of the basic banking service for businesses.

The regulatory regime applicable to banks

Pursuant to the Banking Act, only the following types of entities may collect deposits of cash or other repayable funds from the public or offer such services to the public in Belgium: Belgian credit institutions (i.e., Belgian entities registered as credit institutions with the NBB), including Belgian subsidiaries of foreign credit institutions; credit institutions established in the European Economic Area (EEA) and holding an EEA passport (i.e., EEA credit institutions operating in Belgium either through a branch or pursuant to the principle of freedom to provide services); and branches of non-EEA credit institutions established in Belgium that are registered with the NBB.

An institution will be deemed to take deposits from the public in Belgium or to offer to do so if, to collect cash deposits or other repayable funds, it engages in any type of marketing activity (newspaper, radio or television advertising, standard documents addressed to potential clients, telephone or internet contact, etc.) targeting more than 50 persons; makes direct or indirect use of one or more intermediaries; or directly solicits or has solicited on its behalf more than 50 persons.

Subject to several specific exceptions, only the above-mentioned types of institutions can refer to themselves as a credit institution or bank in their corporate name and purpose, their securities and other instruments or documents they issue, and in any marketing materials. Furthermore, these institutions may provide investment services (as defined in MiFID II) in Belgium without having to obtain a separate licence.

With the exception of certain types of loans for which separate registration is required (mainly consumer credit and mortgages), lending is not a regulated activity in Belgium and may, therefore, be conducted without a licence.