Articles

New Belgian Banking Act published in Belgian Official Journal

New Belgian Banking Act published in Belgian Official Journal

New Belgian Banking Act published in Belgian Official Journal

07.05.2014 BE law

The Act of 25 April 2014 on the legal status and supervision of credit institutions (the Banking Act) was published in the Belgian Official Journal today.  

The complete text of the Banking Act can be found here.  

Overview

The Banking Act replaces the Act of 22 March 1993 on the legal status and supervision of credit institutions. The Banking Act lays down new rules, inter alia, on the supervision, resolution, and structure of banking activities. Most of its provisions enter into force starting today, but Article 422 postpones the entry into force of some major provisions (with regard to the “single supervisory mechanism” and the resolution of credit institutions, among others).

The Banking Act implements and also, in part, anticipates key EU legislative developments including:

  • Regulation (EU) 1024/2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (the “GTM Regulation”);
  • The Capital Requirements Directive IV (Directive 2013/36/EU, the “CRD IV”) and the Capital Requirements Regulation (Regulation (EU) No. 575/2013, the “CRR”); and
  • The Directive establishing a framework for the recovery and resolution of credit institutions adopted by the Council of the European Union on 6 May 2014 (the “BRR Directive”).

The Banking Act thus aims to reinforce the financial solidity of Belgian credit institutions by way of, inter alia, strengthening own funds, imposing stricter liquidity requirements and limits on distributions. It also puts a lot of emphasis on the solid and efficient organisation of credit institutions and hereto introduces a dual governance structure at management level, specialised committees within the board (audit committee, risk committee, remuneration committee and nomination committee), independent control functions, and strict remuneration policies (including limits on the amount of compensation, the form and timing for vesting and payment of variable remuneration, as well as reduction and claw-back mechanics).

The Banking Act also introduces a prohibition in principle of proprietary trading as from 1 January 2015. However, some proprietary trading activities are excluded from the prohibition mentioned in Article 119 of the Banking Act. Permitted proprietary trading activities (including market-making, hedging, treasury management, and long-term investments) are capped, and these type of activities must comply with strict requirements on reporting, internal governance, and risk-management.

The new Banking Act is accompanied by the following complementary legislation, also published in the Belgian Official Journal today (7 May 2014):

  • The Act of 25 April 2014 on various provisions (the “Financial Omnibus Act”). This Financial Omnibus Act amends various other legislation after the introduction of the Banking Act;
  • The amended Organic Law of 22 February 1998 on the National Bank of Belgium (the “Organic Law on the NBB”). This Organic Law on the NBB designates the National Bank of Belgium as Resolution Authority charged with the power to decide on the resolution of a credit institutions and the power to apply the appropriate resolution measures; and
  • The Act establishing the mechanisms of a macroprudential policy and clarifying the specific tasks of the National Bank of Belgium within the framework of its mission to contribute to the stability of the financial system (the “Act on Macroprudential Policy”).

Related news

21.03.2019 NL law
15 aspects of Brexit you did not know

Short Reads - A Brexit without a deal, or with a deal that does not cover all relevant aspects, is still a potential scenario. We have highlighted a number of unexpected legal consequences of Brexit in such a no deal or incomplete deal scenario.

Read more

13.03.2019 NL law
Financial Services Disputes in the Netherlands

Articles - What are the most common causes of actions taken by or against financial institutions and service providers in Dutch jurisdiction? Who has a right of action in financial services disputes? Does it make a difference if the customer is an individual or a commercial entity? Is there a specialist court or specialist judges for financial services litigation? Roderik Vrolijk and Daphne Rijkers provide answers to these and other questions about financial services disputes in the Netherlands.

Read more

22.02.2019 BE law
Lost your passport - How a hard Brexit will affect UK financial institutions’ access to the Belgian financial market

Articles - FSMA gives local guidance - Belgian legislature prepares contingency measures The UK is due to leave the European Union on 29 March 2019. Unless specific arrangements granting the UK at least a temporary status quo will be adopted before 29 March 2019, the UK financial industry will be considered third-country entities and will therefore be seriously restricted in carrying on their activities in the EEA, including Belgium.

Read more

12.03.2019 LU law
Entry into force of the RBE Regulation and update

Articles - The Grand-Ducal Regulation of 15 February 2019 on the registration, payment of administrative fees and access to information recorded in the register of beneficial owners (the “RBE Regulation”) entered into force on 1 March 2019 and depicts the practical aspects of the Law of 13 January 2019 establishing a beneficial owner register (the “RBE Law”). Another document, the LBR Circular 19/01 (the “Circular”) issued by the Luxembourg Business Registers on 25 February 2019  further describes the new register of beneficial owners (the “RBE”) with the aim of helping users. 

Read more

Our website uses cookies: third party analytics cookies to best adapt our website to your needs & cookies to enable social media functionalities. For more information on the use of cookies, please check our Privacy and Cookie Policy. Please note that you can change your cookie opt-ins at any time via your browser settings.

Privacy – en cookieverklaring