Introduction of the banking oath in Belgium
On January 15, the law introducing the banking oath and ethical rules in the banking sector was published in the Belgian Official Gazette. It was supplemented on January 28 by a Royal Decree published on February 8. The new provisions will come into force in two stages, being on January 15, 2025 and on July 15, 2026.
The above-mentioned law, supplemented by the Royal Decree, introduces a disciplinary regime into the Belgian legal system, along with a compulsory banking oath, for certain managers and staff of credit institutions and banking and investment services agents.
Why?
The aim is to bolster public confidence in the banking sector. The value of such regime has been highlighted on several occasions in the past, notably by the parliamentary commission of inquiry charged with examining the causes of the Optima bank collapse. It follows a first attempt, never put into effect, to introduce a partially self-regulatory disciplinary system by the law of April 22, 2019. This type of regime already exists, for example, in the Netherlands.
Who?
The obligation to take an oath and respect ethical rules does not apply to all employees in the banking sector.
The entities concerned are credit institutions governed by Belgian law, by the law of another Member State or by the law of a third country having an establishment (branch or tied agent) on Belgian territory, as well as banking and investment services agents acting in the name and on behalf of the latter.
Within these "covered entities", only "banking service providers" are covered by these two obligations, namely :
- persons subject to ongoing fit & proper requirements;
- senior managers;
- banking and investment services agents registered with FSMA as natural persons; and
- any other person who is directly involved in banking activities or provides banking services on Belgian territory.
What?
The law introduces two main obligations:
- Clear ethical rules based on the concepts of honesty, integrity, competence and professionalism, as well as the obligation to act in the interests of customers and to treat them fairly;
- The obligation for the persons concerned to take an oath and undertake to respect the aforementioned ethical rules.
In support of these two new categories of obligations, the law grants FSMA the power to impose disciplinary sanctions (warning, reprimand and professional ban) when it finds that the person concerned has failed to comply with the aforementioned ethical rules. A central register of disciplinary sanctions and professional bans has also been set up.
In addition, any person who considers that ethical rules have not been followed can lodge a complaint with the FSMA. The FSMA has yet to specify in a regulation the rules and procedures for the receipt, admissibility and handling of complaints.
The FSMA has published a FAQ on the practical implementation of the banking oath: https://www.fsma.be/fr/faq/questions-et-reponses-faq-relatives-au-serment-bancaire-et-au-regime-disciplinaire-des.
The disciplinary actions of the FSMA will not prejudice to the prudential supervisory powers of the ECB and the NBB, in particular concerning fit and proper requirements
When?
The new system comes into effect in two stages:
- The above-mentioned obligations will come into force for persons subject to fit & proper assessment and senior managers in credit institutions on January 15, 2025;
- in a second phase, from July 15, 2026, the aforementioned obligations are extended to fit & proper persons and executives working for banking and investment services agents, to banking and investment services agents who are natural persons, and to persons working for credit institutions or banking and investment services agents who are directly involved in banking activities or provide banking services on Belgian territory.
The content of this article is intended to provide general observations on the subject. Please do not hesitate to contact us if you require further information.
