Digital markets, funding and payment servicesi Crowdfunding
Various types of crowdfunding platforms exist on the Belgian market:
- platforms through which the public makes a donation for a project or enterprise;
- platforms through which the public deposits money in order to receive a non-financial compensation (reward-based crowdfunding);
- platforms through which the public invests in a project or enterprise through a loan (loan-based crowdfunding, also referred to as crowd-lending); and
- platforms through which the public invests in a project or enterprise through a contribution in capital in consideration for a participation in any profit (equity-based crowdfunding).
Crowd-lending and equity-based crowdfunding are regulated in Belgium by the Belgian Act of 18 December 2016 'on the recognition and definition of crowdfunding and containing various provisions on finance' (the Crowdfunding Act).
The Crowdfunding Act sets out the licensing and operating requirements for alternative funding platforms as well as the conduct of business rules that apply to the providers of alternative funding services. An alternative funding service, dubbed by the FSMA as 'the financial form of crowdfunding', is defined in Article 4(1) of the Crowdfunding Act as:
the service consisting of commercialising investment instruments, through a website or any other electronic means, issued by entrepreneur-issuers, starter funds or funding vehicles in the framework of an offering, public or otherwise, without the provision of an investment service regarding these investment instruments, with the exception of, as applicable, the following services: (i) provision of investment advice and (ii) receiving and transmitting orders.
Each individual or legal entity that professionally provides alternative funding services within the territory of Belgium is deemed an alternative funding platform pursuant to Article 4(2) of the Crowdfunding Act (unless such individual or legal entity is a regulated undertaking).
As regards peer-to-peer lending, the Belgian regulatory framework currently does not explicitly authorise direct lending by consumers to consumers (since individuals are not allowed to make a public call to borrow money).ii Payment services
The offering of payment services is a regulated activity in Belgium under the Belgian Act of 11 March 2018 'on the legal status and the supervision of payment institutions and electronic money institutions, the access to the undertaking of payment service provider and to the activity of issuing electronic money, and the access to payment systems' (the Payment Institutions Act), which implements PSD II. The Payment Institutions Act regulates the following payment services:
- services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account;
- services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account;
- execution of payment transactions, including transfers of funds on a payment account with the user's payment service provider or with another payment service provider (execution of direct debits, payment transactions through a payment instrument and credit transfers, including permanent payment orders);
- execution of payment transactions where the funds are covered by a credit line for a payment service user (execution of direct debits, payment transactions through a payment instrument and credit transfers, including permanent payment orders);
- issuing of payment instruments and acquiring of payment transactions;
- money remittance;
- payment initiation services; and
- account information services.
The exemptions as outlined under PSD II also apply in Belgium. The exemptions that are regularly invoked in the fintech sphere are:
- the limited network exemption;
- the commercial agent exemption; and
- the technical service provider exemption.
Following the implementation of PSD II, banks are required to provide third parties (such as payment initiation or account aggregation providers) access to a customer's account data, upon the latter's request. The main reason is to facilitate these new business models that depend heavily on access to such data.