Belgian Government and FSMA prepare for Brexit
28 February 2019
The Belgian government and financial services regulator are preparing for Brexit. This has recently resulted in the submission to the Belgian Parliament of a draft law providing a framework to take certain contingency measures notably in the financial sector. The FSMA in turn has issued a communication setting out the regime that will apply to UK investment firms post-Brexit and addressing the impact of Brexit on the continuity of contracts entered into by UK investment firms prior to Brexit. Both the draft law and the communication assume a no-deal Brexit.
3. Key Aspects of the Draft Brexit Law
3.1 Additional rules for third country investment firms
3.2 Additional rules for third country regulated markets and multilateral and organised trading facilities
3.3 Measures concerning continuity of contracts and legacy books
4. Key Aspects of the Brexit Communication
4.1 Assumptions underlying the Brexit Communication
- a “hard Brexit”;
- no equivalence decision with respect to the UK on the basis of article 47 of the Markets in Financial Instruments Regulation (MiFIR); and
- no changes in applicable Belgian and European laws.
4.2 Regime applicable to UK investment firms post-Brexit
- Establishment of a branch in Belgium(6): this requires the prior authorisation by the competent Belgian regulator (i.e. the FSMA or the National Bank of Belgium, as applicable); or
- Cross-border provision of investment services and investment activities without establishment in Belgium(7): this is subject to the following three conditions:
- the UK firm is effectively providing the relevant services or activities in the UK;he UK firm is effectively providing the relevant services or activities in the UK;
- the services and activities are addressed solely at the following types of “qualifying professional investors”:
- MiFID II eligible counterparties;
- “per se” professional clients within the meaning of MiFID II (i.e. not non-professional clients who request to be treated as professional clients); and
- UK nationals habitually resident in Belgium (subject to the additional condition that the investment firm is subject to equivalent supervision in the UK for the relevant investment service or activity (the Condition of Equivalence)); and
- there is a similar possibility for Belgian investment firms to access the UK market (the Condition of Mutuality).