In 2016, the “High Level Expert Group on the Future of the Belgian Financial Sector” recommended the establishment of a new Code of Conduct for Belgian bankers and the legal obligation for bankers to take an oath. More than seven years have passed since the publication of that report. There was an attempt in 2019 to put this recommendation into action but it failed. Could that change soon? Yes.
Our Finance Minister is working on a new legislative proposal which could be voted on before the summer recess. The details of that new proposal are yet to be published but we understand that the key building blocks of that new proposal would include:
- A Code of Conduct: This Code of Conduct would be prepared by the FSMA (with the involvement of the NBB and Febelfin) and formally adopted by the Belgian Government (instead of self-regulation as was initially contemplated in the 2019 proposal). It is important to note that this Code of Conduct would not apply to the banks but to their staff (i.e. the bankers);
- An oath: Bankers would be asked to formally take an oath and, by doing so, confirm their commitment to comply with the Code of Conduct;
- A set of disciplinary measures: The FSMA would be entrusted with a power to sanction non-compliance by bankers with the Code of Conduct. Sanctions that the FSMA could impose on bankers would range from warnings to a professional ban.
In terms of scope, we understand this regime would apply to client-facing staff as well as to the entire internal control chain. To ensure a level playing field we would expect this regime to apply to staff of Belgian banks but also Belgian branches of EU and non-EU banks. This potentially represents thousands of people working for the Belgian banking industry. The identification of those individuals is likely to be a challenging exercise in itself.
The date of entry into force of that new regime is not yet known. In light of the potentially very high number of individuals impacted, we can only hope that this regime, if adopted by Parliament, will be implemented in stages to avoid creating chaos in the Belgian banking market.
While the first legal initiative in 2019 – mirroring to a certain extent the Dutch system – contained many flaws and would have been very difficult to operate in practice, we hope the new regime will address those flaws and that, as a result, 2024 could be the year of the Banker’s oath in Belgium.
For further information, please contact:
Etienne Dessy, Partner, Linklaters
etienne.dessy@linklaters.com
