With respect to financial services, the ‘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 Brexit 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 Brexit law 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).
- Delegates power to the government to provide for a transitional period for such entities that, as a result of Brexit, lose their European passport and have not yet obtained the authorisation to exercise their activities or provide their services in Belgium as from 1 January 2021.These entities may continue to provide their services in Belgium provided that (i) they are duly authorised in the UK for the activities they perform or services they provide, (ii) they only intend to provide these services in Belgium to non-consumers, and (iii) these services can only be provided in Belgium after the relevant entities have submitted an application for the required license or registration with the competent Belgian regulator. This transitional period will be no longer than 12 months.
These intended delegations of powers by the Parliament show that Belgium has prepared 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. However, to date no such delegations have been exercised by the federal government.