Key takeaways
The following are our key takeaways regarding the new banker's oath and deontological regime:
- Directors and certain bank employees will have to take an oath according to which they commit to complying with certain deontological conduct rules
- These deontological conduct rules are yet to be established by royal decree
- The Belgian Financial Services and Markets Authority (FSMA) is the competent disciplinary authority to enforce the new rules
- A new central register of disciplinary sanctions and professional bans will be established by the FSMA
- Banks must require any candidate for an in-scope position to provide them with an attestation confirming that they are not subject to a professional ban
The date of the entry into force of the new rules is still to be determined by royal decree. It is possible that the rules will be implemented in a phased manner, whereby directors and in-scope bank employees will have to take the oath from 2025 onwards.
What is it about?
The new law introducing a banker's oath and deontological regime for the banking sector was published in the Belgian Official Gazette on 15 January 2024 and applies to credit institutions and agents in banking and investment services.
The banker's oath requires directors and certain bank employees to make an individual declaration, by which they undertake to respect, in the exercise of their professional activities, some important deontological conduct rules.
These deontological conduct rules are based on the following three basic principles, according to which in-scope bank employees must always act:
- Honesty and integrity
- Competence and professionalism
- Consideration of the interests of clients and treating them fairly
These individual conduct rules have not yet been established and will be adopted in the future by royal decree.
Who needs to take the oath?
The following persons need to take the oath:
- "Fit and proper persons": This refers to persons who are subject to regulatory "fit and proper" requirements. For banks, these are the directors, senior managers, and the persons responsible for an independent control function. For non-EEA banks with a Belgian branch, these are the branch managers. For agents in banking and investment services, these are the senior managers.
- Responsible managers: This refers to all natural persons who assume responsibility for or who exercise control over the persons described in the fourth bullet point below.
- Agents in banking and investment services who are natural persons.
- Persons who take part directly, on Belgian territory, in the exercise of banking activities or provide banking services. "Banking activities" and "banking services" are activities that a bank may exercise under its European passport, such as accepting deposits, lending, or the provision of payment or investment services. This category includes all front office employees. It also includes certain back office employees, insofar they are involved in the exercise of banking activities or the provision of banking services, such as persons who play a role in concluding a loan agreement or who take an investment decision within the framework of portfolio management.
The rules for taking the banker's oath will be defined in a regulation of the FSMA. That regulation will also determine the maximum period within which directors and bank employees will have to take the oath — either from the date of entry into force of the new rules for directors and bank employees already active on that date, or from the date on which directors and bank employees take up employment with a bank. Directors and bank employees will have to take the oath each time they join another bank.
Who doesn't need to take the oath?
Not all bank employees need to take the oath. Back office employees who are not involved in the exercise of banking activities or provide banking services do not need to take the oath. These include members of IT and legal departments, and those responsible for handling complaints or debt recovery.
Banks must make their own assessment as to which persons are required to take the oath and must provide the FSMA with a list.
What disciplinary sanctions can be imposed?
The following disciplinary sanctions may be imposed if a director or employee violates an individual conduct rule or fails to take the oath:
- A warning (waarschuwing/avertissement)
- A reprimand (berisping/blâme)
- A professional ban of up to three years (beroepsverbod/interdiction professionnelle)
The reprimand is more serious than a warning and will be imposed on more serious infringements. A warning and a reprimand may be accompanied by the obligation to follow certain training courses.
The professional ban may cover all or certain activities of the director or employee concerned. For example, the professional ban may be limited to the activities of a responsible manager. The director or employee must inform the bank where it carries out its activities if a professional ban has been imposed on it.
Who can impose disciplinary sanctions?
The FSMA is the competent authority to impose disciplinary sanctions. The FSMA must respect the rights of defense of the person concerned, and it must abide by the general principles of good administration.
A disciplinary procedure is initiated if there are serious indications of violation of the individual conduct rules or of the obligation to take the oath. These indications may be identified during the investigation of a complaint or in the exercise of the FSMA's other statutory duties. However, the FSMA will not specifically and systematically monitor compliance with the rules.
In the event of a complaint against a "fit and proper person" (e.g., a director of a bank), the FSMA may not impose a sanction but must transfer the complaint to the National Bank of Belgium, the European Central Bank or, as the case may be, to the foreign prudential supervisory authority, so that the prudential authorities can exercise their prerogatives in this respect. These prudential authorities could, for example, disqualify such a person for "fit and proper" purposes and may prohibit them from exercising functions within a bank. A breach of the deontological rules could accordingly impact a person's fitness and propriety for prudential purposes.
The FSMA publishes anonymously on its website the disciplinary sanctions it imposes. These sanctions are entered in a central register of disciplinary sanctions and professional bans. Persons aspiring to work at a bank may obtain from the FSMA proof that they are not subject to a professional ban.
An appeal against a sanction decision of the FSMA can be lodged with the Belgian Council of State (Conseil d'Etat/Raad van State).
What do banks need to do?
Banks must do the following:
- List all in-scope directors and employees and provide that list to the FSMA. This list must specify the category concerned and the date on which each person took the oath. Updates to the list must be reported to the FSMA.
- Require any candidate for an in-scope position to provide them with an attestation confirming that they are not subject to a professional ban.
The FSMA may impose administrative sanctions if a bank fails to comply with these requirements.
Do the rules apply to foreign banks active in Belgium?
The rules apply not only to Belgian banks, but also to EEA and non-EEA banks that are active in Belgium through a branch, and to agents in banking and investment services acting in the name and on behalf of these banks. Only persons who are active on Belgian territory are targeted.
The rules do not apply to EEA banks active in Belgium under the free provision of services.
When do the rules enter into force?
The date of entry into force of the new rules will be set by royal decree, and it is possible that the rules will be implemented in a phased manner.
The date of entry into force is currently scheduled for 15 January 2025 for "fit and proper persons" and responsible managers. For all other in-scope employees, entry into force is scheduled for 15 July 2026. An FSMA regulation will set out the deadlines for directors and bank employees to take the oath following the rules' entry into force.
The individual conduct rules will apply to directors and in-scope bank employees as from the entry into force of the new rules, independently of the taking of the oath.
