Financial Crime World

Fintech Regulations in Belgium: A Comprehensive Guide

Introduction

Belgium has a well-established regulatory framework for fintech and financial services. This article provides an overview of the key regulations and requirements that apply to crowdfunding, invoice trading, payment services, open banking, insurance products, and credit references.

Crowdfunding Regulations

  • Registration with FSMA: Crowdfunding service providers (CFSPs) must register with the Financial Services and Markets Authority (FSMA), which is responsible for supervising them.
  • Regulation Applicability: The regulation applies to CFSPs that offer crowdfunding services to consumers or small and medium-sized enterprises.

Invoice Trading in Belgium

  • Factoring Contracts: Factoring in Belgium involves the transfer of ownership of accounts receivable from one party (the seller) to another (the buyer). A distinction is made between ’non-recourse’ and ‘with recourse’ factoring based on who bears the credit risk on the debtors.
  • Regulatory Oversight: Invoice trading activities can be done on a stand-alone basis or through factoring contracts that allow the client to manage the receivables on behalf of the factor.

Payment Services Regulations

  • Registration with NBB: Firms that provide payment initiation services or account information services must register as a payment institution with the National Bank of Belgium (NBB).
  • PSD2 Implementation: The Act of 11 March 2018 implemented the PSD2 into Belgian law, requiring financial institutions to allow access to their customers’ account information for free to third-party payment service providers with the customer’s consent.

Open Banking Requirements

  • Customer Consent: Financial institutions holding ‘payment accounts’ are required to allow access to their customers’ account information for free to third-party payment service providers with the customer’s consent.
  • PSD2 Implementation: The PSD2 implementation requires financial institutions to provide APIs that enable secure and standardized data sharing.

Insurance Product Regulations

  • Regulatory Oversight: Fintech companies that sell or market insurance products in Belgium must be regulated by obtaining a license from the FSMA before starting activities as an intermediary, agent, or sub-agent.
  • Conduct of Business Rules: They also need to comply with ongoing requirements and follow conduct of business rules similar to those in the MiFID.

Credit Reference Regulations

  • Mandatory Participation: The NBB operates two credit information registers - the CICR and the Central Corporate Credit Register (CCCR). Participation is mandatory for certain financial institutions, including regulated lenders.
  • Reporting Requirements: Regulated lenders must report information on credits granted to legal persons or natural persons in connection with their business activity.