With respect to financial services, the draft ‘hard’ Brexit law is essentially a delegation of powers to the federal government. That being said, it gives an idea in which direction Belgium will be going with respect to granting certain transitional relief to financial services companies, such as credit institutions, investment firms, payment institutions, fund managers and certain credit providers and credit intermediaries.
The draft law:
- Confirms the access of UK investment firms to Belgium if the services they offer are limited to eligible counterparties and professional clients (as such terms are defined in MiFID directive 2014/65/EU); such access is currently subject to certain conditions, one of which is to notify the competent Belgian regulator (FSMA) and to obtain its authorisation, and the draft bill delegates powers to the government to take further measures to protect the investor’s interests;
- Delegates powers to the federal government to take measures in relation to access to third country regulated markets, multilateral trading facilities (MTF’s) and organised trading facilities (OTF’s) operating in Belgium; and
- Delegates powers to the federal government to take transitional relief measures in relation to agreements entered into between UK financial services firms and clients in Belgium. In its communication of 21 February 2019, the FSMA has also expressed its concerns with respect to existing agreements between UK financial services providers and their Belgian clients in a ‘no-deal’ Brexit scenario (without giving explicit guidance for the time being).
These intended delegations of powers by the Parliament show that Belgium is preparing to provide some transitional relief for regulated markets, MTF’s and OTF’s and in respect of existing agreements between UK financial services providers and their clients in Belgium. Much will depend on how the federal government will use those regulatory powers.
For more information, please see the finance section of our ‘Brexit & Belgium: Are you ready?’ page.