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Belgium Introduces Stricter Rules for Crowdfunding Service Providers

The Belgian Financial Services and Markets Authority (FSMA) has introduced new regulations for crowdfunding service providers (CFSPs) operating in Belgium or offering their services to Belgian investors.

Authorization Requirements

Under the new rules, CFSPs must be authorized by the FSMA before providing any crowdfunding services. To obtain authorization, CFSPs must meet certain licensing requirements, including:

  • Incorporation and capital requirements
  • Adherence to rules of conduct such as:
    • Conflicts of interest reporting
    • Recording obligations

Investor Information Sheets

The new regulations also require CFSPs to provide prospective investors with a key investment information sheet drawn up by the project owner for each crowdfunding offer. The CFSP must ensure that the information sheet is:

  • Correct
  • Clear
  • Complete

Language Restrictions

CFSPs are prohibited from marketing their services to prospective investors or project owners in any language other than one of the official Belgian languages (Dutch, French, or German) or English.

EU Passporting Rights

The new regulations introduce EU passporting rights for CFSPs that are authorized by the FSMA. This means that they can provide crowdfunding services in other European Economic Area member states without setting up a permanent establishment or branch, provided they:

  • Inform the FSMA of their activities
  • Share certain information

Invoice Trading

In Belgium, factoring is not a regulated activity, but it is subject to specific rules and regulations. Factoring involves the transfer of ownership of accounts receivable from one party to another in exchange for immediate payment.

There are two types of factoring:

  • Non-recourse factoring, where credit protection is part of the factoring agreement
  • With recourse factoring, where the credit risk on the debtors remains with the seller

Payment Services

Belgium has implemented the Payment Services Directive 2 (PSD2), which requires firms that provide payment initiation services or account information services in or from Belgium to register as payment institutions.

Under PSD2, payment service providers are required to:

  • Allow customers to grant third-party access to their accounts
  • Share certain information with those third-parties

Insurance Products

In Belgium, fintech companies that sell or market insurance products must be licensed by the FSMA. Insurance intermediaries must also comply with conduct of business rules, including:

  • Suitability assessments
  • Inducements

Credit References

Belgium has two credit information registers:

  • The Central Credit Information Register (CICR)
  • The Central Corporate Credit Register (CCCR)

The CICR records information on consumer credits and mortgage loans, while the CCCR records information on credits granted to legal persons and natural persons in connection with their business activity.

Financial institutions are required to report certain credit data to these registers, which can be consulted by:

  • Regulated financial institutions
  • Debtors
  • Other central credit offices abroad