FINANCIAL SERVICES AND MARKETS AUTHORITY

Transcription

1 FINANCIAL SERVICES AND MARKETS AUTHORITY

2 PREFACE

3 I would like to introduce the Financial Services and Markets Authority (FSMA) to you. The FSMA, along with the National Bank of Belgium (NBB), is entrusted with the supervision of the Belgian financial sector. The Belgian Parliament has conferred several powers on the FSMA enabling it to undertake actions with a view to promoting consumer protection and the integrity of the financial markets. This brochure sets out what the FSMA stands for, what it does and how it carries out its tasks. Jean-Paul Servais, Chairman

4 MISSION

5 As a supervisory authority, the FSMA strives to ensure the honest and equitable treatment of financial consumers. It aims at the fair and orderly operation and the transparency of the financial markets by seeing to it that companies that raise financing on those markets provide correct and complete information. It promotes proper provision of financial services by verifying that financial institutions comply with the applicable rules of conduct, by supervising financial products, financial service providers and supplementary pensions, and by contributing to improving the financial education of consumers. In this way, the FSMA seeks to ensure that the financial system deserves the trust of its users.

6 WHAT IS THE FSMA?

7 The FSMA was established on 1 April 2011; its full official name is the Financial Services and Markets Authority. The FSMA s status is that of an autonomous public institution. This means that it was established by law and that it carries out independently the tasks in the general interest entrusted to it by Parliament. The members of the FSMA s governing bodies are appointed by Royal Decree for a period of six years. The FSMA staff have the status of (private sector) employees. The FSMA, alongside the National Bank of Belgium (NBB), supervises the Belgian financial sector. The FSMA s competences fall within the following six domains: surveillance of the financial markets and supervision of the financial information disseminated by companies, supervision of compliance with conduct of business rules, product supervision, supervision of financial service providers and intermediaries, supervision of supplementary pensions, and contribution to improving financial education. These competences are set out in greater detail below.

8 WHAT ARE THE FSMA S TASKS? The FSMA has six principal tasks.

9 SURVEILLANCE OF FINANCIAL MARKETS AND SUPERVISION OF COMPANY INFORMATION The FSMA is responsible for the surveillance of the financial markets and for supervising the financial information disseminated by companies. This means principally that it verifies that the information disseminated by listed companies is complete, gives a faithful image of the company and is made available in a timely manner. In addition, the FSMA ensures that all shareholders of a listed company are treated equally. Moreover, it supervises the information disclosed by unlisted companies if the latter issue securities to the public. Finally, the FSMA sees to the smooth functioning of the financial markets while also supervising market infrastructures such as Euronext Brussels. Specifically: The FSMA ensures that financial information disclosed by listed companies is available to everyone at the same time. In the case of a takeover bid, the FSMA verifies compliance with the rules that guarantee equal treatment of all shareholders are complied with. Where a company offers securities to the public in Belgium, the FSMA gives prior approval to the prospectus and related advertisements, or determines whether the prospectus has been approved in another country. The FSMA can intervene in various ways if a company fails to comply with the rules (e.g. by publishing a warning, suspending the listing of a share, imposing a fine, etc.). The FSMA can investigate possible cases of insider dealing or market manipulation, and may impose sanctions.

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11 PRODUCT SUPERVISION Supervision of financial products is intended to ensure that the products offered to consumers are comprehensible, useful, present an acceptable level of risk for investors and comply with the relevant laws and regulations. It should also ensure that consumers have a clear overview of the costs associated with the products. The FSMA takes initiatives to make financial products simpler and more comprehensible. Product supervision is exercised in two ways: by supervising the quality of the information and advertising material concerning the financial products offered, and by supervising compliance with the regulations governing the products themselves. Specifically: The FSMA has launched a moratorium on the distribution of particularly complex structured products to retail clients in Belgium. The moratorium is one of the initiatives taken by the FSMA to simplify financial products and render them more understandable. The FSMA approves advertising materials and info sheets relating to regulated savings accounts and other savings and investment products. The FSMA has imposed a ban on distributing several categories of financial products based on non-mainstream assets to retail clients in Belgium. This ban applies, among other things, to traded life policies (life settlements) and derivative products based on a virtual currency. The FSMA has launched a risk label which assigns savings and investment products to one of five possible risk classes. The label is included on advertisements for products that are distributed to retail clients in Belgium.

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13 RULES OF CONDUCT The FSMA sees to it that financial institutions comply with the rules of conduct. These rules are intended to ensure that the institutions treat their clients fairly, equitably and professionally. The rules apply to all financial institutions that offer products in Belgium, including banks, insurance companies, insurance intermediaries and investment firms. Financial institutions must have an appropriate organization and the requisite procedures in place to be able to guarantee that consumers of financial services and products are treated with due care and attention. This means, among other things, the provision of correct information, an appropriate management of potential conflicts of interest and best execution of clients instructions. In addition, financial institutions may only sell those products that fit the clients risk profile. Specifically: The FSMA ensures that clients do not fall victim to practices whereby a financial institution sells them a product that does not fit their risk profile or investment goals. The FSMA sees to it that the interests of a financial institution do not prevail over those of its clients. The FSMA s central inspection team carries out on-site inspections to ensure that the rules of conduct are complied with. If any breaches, weaknesses or omissions are observed in the course of an inspection, the FSMA ensures that those observations are adequately addressed.

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15 FINANCIAL SERVICE PROVIDERS AND INTERMEDIARIES The FSMA is responsible for supervising a wide range of financial service providers. These include: intermediaries in banking and investment services as well as insurance and reinsurance intermediaries (agents and brokers); mortgage and consumer credit providers and intermediaries in mortgage and consumer credit 1 ; management companies of undertakings for collective investment; portfolio management and investment advice companies; currency exchange offices (bureaux de change); financial planners. 1 As from 1 July 2015 Specifically: All intermediaries must be registered with the FSMA before they may begin to carry out their activities. The register published by the FSMA on its website lists all registered intermediaries. If someone wishes to become an agent or broker in order to sell banking or insurance products, the FSMA checks whether that person has sufficient training and is fit and proper for this activity. Management companies of undertakings for collective investment and portfolio management and investment advice companies must hold an authorization from the FSMA. If the FSMA determines that someone is offering financial services without the requisite authorization, it publishes a warning to this effect and brings it to the attention of the judicial authorities. The FSMA monitors on an ongoing basis whether an authorized institution fulfils the authorization and business operation requirements provided for by law.

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17 FINANCIAL EDUCATION The FSMA has been tasked with contributing to the financial education of savers and investors. Improved financial knowledge on the part of consumers can help restore their confidence in the financial system. The FSMA has set up a special service responsible for this task and has prepared and implemented an action plan to this end. Specifically: The financial education programme is structured around three components: The website: a portal, continuously being devel oped, the aim of which is to provide neutral, reliable and practical information about various topics to do with money. The site also provides quizzes and tools for use by consumers, such as the savings account simulator. Information campaigns are regularly conducted with a view to making the site more widely known. Teaching: in collaboration with the competent authorities in the relevant areas, the FSMA helps support schools in offering financial education by providing pedagogical materials for use by students and teachers. Sharing good practices: the FSMA seeks to develop collaboration among the different Belgian and international actors that have an interest in financial education.

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19 PENSIONS The FSMA is responsible for supervising supplementary pensions that employees and the self-employed build up through their professional activities (known as second-pillar pensions ). The FSMA supervises compliance with the social legislation relating to second-pillar pensions, and also oversees the financial health of institutions for occupational retirement provision, which manage supplementary pension plans. Specifically: The FSMA handles complaints from members and beneficiaries relating to their supplementary pension rights. If an institution for occupational retirement provision experiences a shortfall, the FSMA can require it to develop a recovery or consolidation plan in order to ensure that the shortfall is made up as soon as possible.

20 WHAT TYPES OF ACTION DOES THE FSMA TAKE? The FSMA can take a wide range of possible actions in the course of carrying out its supervisory tasks. An overview: Contact point, information provision and dialogue The FSMA is a contact point where financial consumers as well as companies, institutions and persons under its supervision can turn for information and explanations of the rules in force. Circulars, communications, recommendations and moratoria These are instruments which the FSMA can use to explain and interpret legislation. They enable the FSMA to indicate how it will apply the rules, so that the actors concerned know precisely how to implement the legislation. Corrective measures The FSMA can impose a variety of corrective measures. For instance, where the FSMA determines that some information is missing from a prospectus, it can require the undertaking or issuer to publish a correction. If that is not done, the FSMA itself may publish the additional information. It may also require changes to be made, if necessary, to advertising materials for various financial products. Inspections The FSMA can ask the undertakings under its supervision to provide the necessary documentation and information, and can conduct on-site inspections in order to verify compliance with all the rules. It can also conduct anonymous inspections regarding certain matters (mystery shopping). Warnings Financial service providers who wish to offer their services in

21 Belgium must first register with or receive authorization from the competent supervisory authority. If a financial service provider offers services without such registration or authorization, the FSMA publishes a warning to advise the public. This information is also reported to the judicial authorities. Suspension The FSMA ensures that price-sensitive information concerning listed companies is available to everyone at the same time. If this is not the case, then the FSMA may decide to suspend trading in the shares until the information has been made available to everyone. Administrative measures If the FSMA determines that a financial service provider no longer fulfils the conditions for registration or authorization, it may take administrative measures. The most severe measure is striking the intermediary from the register or revoking its authorization. If that happens, it may no longer carry out its activities. Administrative sanctions (fines and penalties) The FSMA may impose fines or penalties for infringements of financial legislation. It is not only actors in the financial sector that fail to keep the rules that may be sanctioned. Companies or individuals who, for example, infringe the rules on market abuse may also be required to pay a fine. There is a specific procedure to follow for imposing administrative fines. This procedure may also lead to an agreed settlement.

22 HOW IS THE FSMA ORGANIZED? Management Committee (from left to right): Henk Becquaert, Member Jean-Paul Servais, Chairman Annemie Rombouts, Deputy Chairman Gregory Demal, Member

23 Status The members of the FSMA s governing bodies are appointed by Royal Decree for a period of six years. The FSMA staff have the status of (private sector) employees. Supervisory Board The Supervisory Board oversees the operations and financing of the FSMA. The Board also advises on priorities and on the implementation of the FSMA s supervisory policy. Chairman of the Management Committee The Chairman of the Management Committee is the head of the FSMA. He represents the FSMA before third parties and before the law. Management Committee The Management Committee is responsible for the administration and management of the FSMA and determines its policy orientations. All decisions and measures necessary to carry out the FSMA s supervisory mandate are taken in this body. All decisions of the Management Committee are collegial in nature. Each member of the Management Committee is responsible for overseeing specific services, as indicated on the organization chart (see next page). Sanctions Committee The Sanctions Committee is an independent body that determines the imposition of administrative sanctions. It consists of ten members: six magistrates and four others who may not be members of the FSMA s staff or of its Management Committee.

24 Management Committee General and legal studies, Organization, Communication, Financial education and International relations Jean-Paul SERVAIS, Chairman Policy, legal services and international relations External and internal communication Financial education Strategy and Organization Operational supervision of the markets and market operators Annemie ROMBOUTS, Deputy Chairman Supervision of company information and surveillance of financial markets Supervision of market operators Human resources Operational supervision of products and pensions Henk BECQUAERT, Member Transversal supervision of financial products Supervision of pensions IT & Infrastructure Operational supervision of intermediaries and conduct of business rules and Central inspection team Gregory DEMAL, Member Supervision of lenders and intermediaries Supervision of conduct of business rules and Central inspection team Management control Investigations officer Enforcement Internal auditor Internal audit

25 WHAT ARE THE FSMA S VALUES? Authority and decisiveness As a supervisor, the FSMA must exude authority and decisiveness. It does so by carrying out its tasks efficiently, consistently and professionally. The FSMA acts decisively in order to enforce the rules. Reliability and integrity In order for its actions to be effective, the FSMA must itself fulfil its mandate with care and honesty. For this reason, the FSMA has a team of highly qualified specialists, and makes integrity and ethics the watchword for itself as well as its employees. Independence The FSMA is an autonomous public institution, and the members of its Management Committee are appointed by Royal Decree for a period of six years. The FSMA applies the existing rules independently, without outside influence. Transparency and accountability While respecting its obligation of professional secrecy, the FSMA communicates as transparently as possible about its decisions and activities, and provides justification for them. It does so, among other things, by means of its annual report and its website.

26 HOW DOES THE FSMA REPORT ON ITS ACTIVITIES?

27 The FSMA reports regularly on its activities and decisions. It does so by means of its annual report and also maintains a website that is regularly updated ( The Chairman of the Management Committee or the Management Committee as a whole may be heard by the competent committees of the Chamber of Representatives and the Senate. Individual decisions taken by the FSMA may be appealed before the administrative or judicial courts, as applicable.

28 THE FSMA S PLACE IN THE WORLD

29 The development of the European single market and the internationalization of the financial markets means that financial regulations are increasingly set at European or international level. International cooperation and collaboration between supervisors have likewise gained in importance. The FSMA is a member of the European Securities and Markets Authority (ESMA) and of the European Insurance and Occupational Pensions Authority (EIOPA). Each of these authorities contributes, in its own sector, to common supervisory standards and coherent supervisory practices. The FSMA is an active member of many working groups within ESMA and EIOPA tasked with preparing policy initiatives. This activity makes it possible to prepare Belgian supervision in a timely manner for new developments. The FSMA also chairs ESMA s Investor Protection and Inter media ries Standing Committee (IPISC), which plays a key role in consumer protection. The FSMA takes part in the work of the European Systemic Risk Board (ESRB), which is chaired by the president of the European Central Bank. The ESRB is responsible for analyzing all risks that could threaten the financial stability of the European Union. In addition, the FSMA is represented on the international bodies that coordinate supervision at a global level, such as the International Organization of Securities Commissions (IOSCO) and the International Organization of Pension Supervisors (IOPS). The FSMA is member of the Executive Board of IOSCO and also chairs its Audit Committee and its European Regional Committee. Finally, the FSMA has signed numerous bilateral and multilateral collaboration agreements with fellow supervisory authorities. The FSMA also sits on a number of supervisory colleges that coordinate the supervision of companies and market infrastructures.

30 WHERE CAN I MAKE A COMPLAINT? If you have a complaint about a financial service, you can submit it at no cost to the ombudsman for the sector in question. The FSMA itself handles complaints regarding supplementary pensions. The FSMA may also take note of complaints about other financial services, but it does not have the power to intervene in relations between individual clients and a financial institution. Mediation between a financial institution and a client is handled by other specialized institutions. An overview of these institutions and their specific roles can be found on the FSMA website ( Consumers of financial products can also contact the FSMA using the form provided for the purpose on its website.

31 HOW CAN I CONTACT THE FSMA? Rue du Congrès / Congresstraat Brussels Contact information: Telephone: +32 (0) Fax: +32 (0) info@fsma.be Legal responsibility for this publication: J.-P. Servais, Rue du Congrès / Congresstraat Brussels Photography: Michel Wiegandt Layout: Gramma nv, Antwerp Printing: Goekint Graphics, Ostende Disclaimer: This document is intended to provide a concise and readable introduction to the work of the FSMA and cannot be regarded as a legally binding publication.

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