The Belgian Act of 25 April 2014 on the legal status and the supervision of the independent financial planners and regarding the rendering of advice on financial planning by regulated entities and on the modification of the Belgian Companies Code and the law of 2 August 2002 regarding the supervision of the financial sector and financial services (the “Act on Financial Planning”) was published in the Belgian Official Journal today.
The complete text of the Act on Financial Planning can be found here.
The Act on Financial Planning introduces a new regulatory framework for independent financial planners and regulates the rendering of advice on financial planning. It is applicable to natural or legal persons of which the ordinary professional activity consists of the rendering, on Belgian territory, of advice on financial planning to non-professional clients, even supplementary or additionally.
Certain persons and entities are excluded from the scope of application of the Act on Financial Planning. These include persons who render advice on financial planning to professional clients only, the European and national central banks, persons who render advice on financial planning exclusively for the account of one family, legal persons that render advice on financial planning for the account of affiliated enterprises and persons who render advice on financial planning in the context of another professional activity (for example lawyers, notaries, accountants, auditors and tax advisors), provided that the Act on Financial Planning and the deontological code of such professional activity do not oppose against such cumulation.
The term “advice on financial planning” shall be taken to mean advice on the optimization, particularly in respect of structuring, of planning in time, protection, legal organisation or transfer of the assets of a client, pursuant to the needs and objectives that such client specifies. The provision of investment services* as well as the rendering of any advice on transactions in particular financial products are explicitly excluded from the definition of advice on financial planning.
The Act on Financial Planning introduces a new category of financial service provider which was up to now unregulated, as a result of which advice on financial planning can only be rendered either by persons licensed as independent financial planner, or -by operation of law- by a regulated entity amongst which credit institutions, investment firms, insurance undertakings, institutions for occupational retirement provision, insurance intermediaries, intermediaries in banking and investment services, management companies and AIFMs).
The Act on Financial Planning lays down rules regarding, inter alia, authorization, licencing requirements, operating conditions and independence for independent financial planners. It is important to note in this respect that an independent financial planner is amongst other things prohibited from providing investment advice, nor any other advice on transactions in particular financial products. Furthermore, the Act provides for conduct of business rules for independent financial planners and regulated entities when rendering advice on financial planning.
The Act on Financial Planning will enter into force on 1 November 2014.
For the sake of completeness, it is important to note that the related Act amending Articles 121 and 122 of the Act regarding the supervision of the financial sector and the financial services was also published in the Belgian Official Journal today. This Act enters into force as per 1 November 2014 and can be found here.
It is expected that a package of related acts, among which the Belgian Act on Alternative Investment Fund Managers (implementing amongst others the Alternative Investment Fund Managers Directive 2011/61/EU), will be published shortly. A client newsflash setting out the main implications will be sent out as soon as possible after publication of such act.
* “Investments services and activities” have been defined as follows in Article 46, 1° of the Law of 6 April 1995 on the legal status and the supervision of investment firms (NL / FR):
“Every service or activity which relates to financial instruments and is listed below:
1. The reception and transmission of orders in respect of one or more financial instruments, including putting two or more investors in contact with each other, as a result of which a transaction may be concluded;
2. The execution of orders on behalf of clients;
3. Dealing on own account;
4. Portfolio management;
5. Investment advice;
6. Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;
7. Placing of financial instruments without a firm commitment basis;
8. Operation of Multilateral Trading Facilities.”
