The Financial Services and Markets Authority (FSMA) publishes a new circular (Dutch – French) on the compliance function on its website. This is a joint circular by the FSMA and the National Bank of Belgium (NBB).
Both the FSMA and the NBB are responsible for supervising that the appropriate compliance function is present within Belgian financial institutions. With respect to the FSMA, an approval for compliance officers has been introduced in order to supervise compliance by financial institutions with the rules of conduct.
Both supervisory authorities have drawn up a joint circular describing the principles that this compliance function must satisfy. In particular, a number of principles have been developed concerning the place of the compliance function within these institutions, the organization thereof, and its specific tasks. The overriding principle is that this function must be independent and be able to report to the institution’s senior management and management boards.
For the FSMA, the compliance function is central to the supervision of compliance with the rules of conduct for the protection of the financial consumer. In the course of 2012, it has therefore subjected the heads of compliance to an approval whereby their specific knowledge and experience of these rules of conduct was assessed. The lists of approved compliance officers have been published on the website.
The FSMA also implements the guidelines of the European Securities and Markets Authority (ESMA) on the compliance function on the one hand, and on the suitability test on the other hand.
The guidelines on the compliance function (Dutch – French) confirm the central role that this function plays in supervising compliance with the rules of conduct. The guidelines on the suitability test (Dutch – French)cover various aspects of the current obligation of financial institutions to collect the required information from clients when offering portfolio management services or investment advice, so as to enable these financial institutions to recommend investment services and financial instruments or to provide portfolio management services that are suitable for these clients. The aim of this mandatory suitability test is the protection of the financial consumer.
The guidelines are a European legal instrument which ESMA can use to address the competent authorities or financial market participants with a view to introducing consistent, efficient, and effective supervisory practices within the European System of Financial Supervisors (ESFS) and ensuring common, uniform and consistent application of European Union law.
Source: FSMA
