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Belgium Introduces New Regulations for Crowdfunding Service Providers

The Belgian Financial Services and Markets Authority (FSMA) has introduced new regulations for crowdfunding service providers (CFSPs), aimed at enhancing transparency, investor protection, and market stability.

Obtaining Authorization

Under the new rules, CFSPs must obtain authorization from the FSMA before providing crowdfunding services in Belgium or on a cross-border basis. To qualify for an authorization, CFSPs must meet certain licensing requirements, including:

  • Incorporation and capital requirements
  • Rules of conduct, such as:
    • Conflicts of interest
    • Reporting
    • Recording obligations

Key Investment Information Sheet (KIS)

The regulations require CFSPs to provide prospective investors with a KIS drawn up by the project owner for each crowdfunding offer. The KIS must be:

  • Correct
  • Clear
  • Complete
  • Ensuring that investors have access to essential information about the project or business being financed

Marketing and Cross-Border Services

CFSPs can market their services in the same language as the KIS, which may be one of the official Belgian languages (Dutch, French, or German) or English. The regulations also permit CFSPs to provide crowdfunding services on a cross-border basis within the European Economic Area (EEA), subject to certain information-sharing requirements with the FSMA.

Specific Regulations

Factoring and Invoice Trading

Belgium has specific regulations for factoring and invoice trading, which are defined as:

  • Factoring: the activity of transferring ownership of accounts receivable
  • Invoice trading: the transfer of the right to claim payment from a third party

Both activities are subject to certain rules and requirements, including:

  • Disclosure obligations
  • Reporting requirements

Payment Services

Belgium has implemented the Payment Services Directive (PSD2), which regulates payment services provided by payment institutions. These institutions must register with the FSMA if they provide payment initiation or account information services in Belgium.

Open Banking

The PSD2 has also introduced open banking regulations, requiring financial institutions to allow third-party payment service providers to access customer account information, subject to consent.

Insurance Products

Fintech companies selling or marketing insurance products in Belgium must obtain a license from the FSMA. Insurance intermediaries must demonstrate sufficient professional knowledge and experience and comply with ongoing requirements.

Credit References

Belgium has two credit information registers:

  • Central Credit Register (CICR): records consumer credit information
  • Central Corporate Credit Register (CCCR): records information on credits granted to legal persons and natural persons in connection with their business activity

Financial institutions must participate in these registers and report certain credit data.

Conclusion

The new regulations aim to promote transparency, investor protection, and market stability in the Belgian crowdfunding and fintech sectors. CFSPs and other financial institutions must comply with the new rules to ensure continued authorization and registration.