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Regulatory Environment in Belgium for Financial Services

The regulatory environment in Belgium regarding robo-advisers, online lenders, and other financial services can be complex. Here’s a summary of the key aspects:

Robo-Advisers

Regulatory Framework

  • Robo-advisers are considered investment services providers and must comply with MiFID II regulations.
  • They must ensure best execution of customer trades, and the investment services provider remains responsible for executing orders.

Business Models

There are three types of robo-adviser business models:

  • Regulated Investment Services Provider: The robo-adviser is a licensed investment services provider and directly provides investment advice.
  • Unregulated Technical Tool Provided by a Licensed Entity: A licensed entity provides the technical tool for the robo-adviser, while the robo-adviser itself is not licensed as an investment services provider.
  • Outsourcing to a Regulated Robo-Adviser: The robo-adviser outsources its investment advice to a regulated robo-adviser or another entity that has the necessary licenses.

Online Lenders

Differences in Regulation

There are four legal regimes applicable to loans/credit in Belgium:

  • Mortgage Credit for Consumers: Mortgage credit offered to consumers by licensed lenders is regulated under Book VII of the Code of Economic Law.
  • Consumer Credit: Consumer credit offered to consumers by licensed lenders or indirect peer-to-peer consumer lending platforms is also regulated under Book VII of the Code of Economic Law.
  • Peer-to-Peer Lending between Consumers: Peer-to-peer lending between consumers is not regulated and subject to general contract law.
  • SME Credit: SME credit offered by licensed lenders or crowdlending platforms is less regulated, with specific rules for pre-contractual information and early reimbursements.

Crowdfunding

Crowdfunding platforms are regulated under the Law of 18 December 2016 on crowdfunding and the EU Regulation 2020/1503.

Conclusion

The regulatory environment in Belgium for financial services can be complex. Online lenders must comply with specific regulations, including those related to pre-contractual information, security interests, and maximum interest rates. Robo-advisers must ensure best execution of customer trades and comply with MiFID II regulations.