Updated registration conditions for Belgian financial intermediaries
Royal Decree of 12 December 2021 on the harmonisation of various royal decrees on intermediation in the financial services and insurance sector (the Royal Decree) introduces various changes to the regulatory conditions applicable to financial and insurance intermediaries.
The Royal Decree aligns the registration conditions for intermediaries in different industries, ie the banking and investment services industry, the credit services industry, and the insurance and reinsurance industry by:
- repealing the procedure on collective registrations;
- changing the content of the registration file;
- introducing certain exemptions from professional knowledge requirements;
- introducing the category of insurance trainee-subagent;
- amending professional knowledge requirements for persons in contact with the public (PCPs); and
- strengthening continuous training requirements.
The legislator announced that it may propose additional amendments in a second phase of this harmonisation initiative and that, currently, an act introducing amendments to various laws is pending.
Finally, the FSMA issued a Newsletter on 11 January 2022 clarifying its new supervisory expectations for the intermediaries concerned. The FSMA announced that it will publish new guidance on continuous training requirements and on insurance intermediaries registered as trainee-subagents.
1. Intermediaries in banking and investment services
1.1 Content of the registration file
The registration file of intermediaries in banking and investment services must now also contain information on the person(s) responsible for AML/CFT compliance and, for brokers, the information on the regulated undertakings with whom the intermediary (intends to) cooperate(s). In addition, intermediaries in banking and investment services must complete the registration file with the identification of the effective leaders who have de facto responsibility over the regulated activities. Finally, the file must contain evidence of the required professional knowledge for each of these effective leaders.
1.2 Professional knowledge and experience requirements
In addition to existing professional knowledge requirements, intermediaries, managers and PCPs must now have theoretical knowledge of the legislation on conduct of business rules, data protection, money laundering and market abuse. However, the requirements do no longer include knowledge of business management.
For PCPs, the legislator introduces experience requirements. PCPs are now required to have at least six months of relevant experience in banking and investment services. It is possible to obtain the experience as a “trainee-PCP” while working with an intermediary.
The intermediaries should monitor continuous training requirements on an annual basis. Regulated positions must follow 15 hours of training per year.
2. Credit grantors and credit intermediaries
2.1 Content of the registration file
For credit grantors, the registration file should now also contain the identification of the person(s) responsible for AML/CFT compliance.
2.2 Professional knowledge and experience requirements
The legislator introduces an exemption from the requirement for regulated positions of credit intermediaries to take a FSMA recognised theoretical exam. People having obtained a master degree or a specialised bachelor degree benefit from an exemption from the examination requirement.
PCPs can now obtain their professional experience during the performance of the regulated activity as a “trainee-PCP” under the supervision of a PCP who meets all professional requirements.
Credit intermediaries must complete three hours of training each year.
3. Insurance and reinsurance intermediaries
3.1 Professional knowledge and experience requirements
It is now possible to carry out activity of (re)insurance distribution as a “trainee-subagent.”
A trainee-subagent can commence its activities without having the required experience of six months. The trainee-subagent, as well as the persons responsible for distribution and the effective leaders employed by that intermediary, can gain the required practical experience under the supervision of a (re)insurance broker or agent while already performing regulated activities.
Unlike “trainee-PCPs,” the trainee-subagent (and the persons responsible for distribution as well as the effective leaders employed by the subagent) must obtain the required professional knowledge before the commencement of the training (ie FSMA exam, equivalent master or specialised bachelor).
According to the report to the King of the Royal Decree, this modification goes hand in hand with the proposed strengthening of the legal responsibility of (re)insurance agents and brokers working with subagents. The legislator reveals its intention to explicitly include the legal duty to monitor the activities of subagents in the registration conditions of (re)insurance brokers and agents. If adopted, the FSMA could enforce the relevant insurance legislation against the supervising broker or agent in case of breach of IDD rules of conduct and AML obligations by the subagent under its supervision.
Entry into force
The Royal Decree entered into force on 1 January 2022.
All registered intermediaries must comply with the provisions of the Royal Decree by, at the latest, on 31 March 2022.
Transitional provisions apply to the professional knowledge requirements: any person who is currently registered and therefore has the required professional knowledge does not have to prove their professional knowledge again under the new rules.