Reporting obligations for (mixed) financial holding companies under Belgian law following supervisory regime changes

NBB_2022_30 – 22 November 2022 Communication – Page 1/4 boulevard de Berlaimont 14 – 1000 Brussels Phone: +32 2 221 38 12 Company number: 0203.201.340 RPM (Trade Register) Brussels www.nbb.be Communication Brussels, 22 November 2022 Reference: NBB_2022_30 Contact persons:
Pieter-Jan Janssens and Nicolas Strypstein
Phone +32 2 221 20 23 / +32 2 221 44 74 pieterjan.janssens@nbb.be / nicolas.strypstein@nbb.be Reporting expected from (mixed) financial holding companies governed by Belgian law following the modification of their supervisory regime in the Banking Law Scope Financial holding companies and mixed financial holding companies governed by Belgian law and their accredited statutory auditors. Summary/Objectives The purpose of this communication is to inform financial holding companies and mixed financial holding companies governed by Belgian law, as well as their accredited statutory auditors, of their reporting obligations following the modification of their supervisory regime provided for in the Banking Law. Dear Madam, Dear Sir, Financial holding companies and mixed financial holding companies governed by Belgian law have been subject to prudential supervision for several years. Following the transposition of CRD V 1 into Belgian law 2 , Articles 212/1 et seq. of the Banking Law 3 now provide for an approval requirement for the parent (mixed) financial holding companies governed by Belgian law referred to in the said Article 212/1 4. The Banking Law also provides for the possibility of exemption 1 Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, as amended by Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019 amending Directive 2013/36/EU as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures. 2 Law of 11 July 2021 transposing Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019, Directive (EU) 2019/879 of the European Parliament and of the Council of 20 May 2019, Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019, Directive (EU) 2019/2177 of the European Parliament and of the Council of 18 December 2019, Directive (EU) 2021/338 of the European Parliament and of the Council of 16 February 2021, and containing various provisions. 3 Law of 25 April 2014 on the legal status and supervision of credit institutions. 4 This means Belgian parent financial holding companies, Belgian parent mixed financial holding companies, Belgian parent financial holding companies in the EEA and Belgian parent mixed financial holding companies in “‘ BanqueNationaleBank DE BEGIQUE VAN BELGIË Eurosystem

NBB_2022_30 – 22 November 2022 Communication – Page 2/4 from this requirement if certain conditions are met. In such a case, an entity must be designated to be responsible for the group and report in place of the exempted (mixed) financial holding company. This designated entity may also be a (mixed) financial holding company, subject to certain conditions. This communication specifies the reporting expected from (mixed) financial holding companies following the entry into force of the new legal provisions. It also clarifies the reporting to be submitted by the accredited statutory auditors of these (mixed) financial holding companies.

1. Approval and exemption regime
   Belgian parent financial holding companies, Belgian parent mixed financial holding companies, Belgian parent financial holding companies in the European Economic Area (EEA) and Belgian parent mixed financial holding companies in the EEA are now required to obtain approval.This approval is conditional on the adequacy of the group’s organisation on a consolidated or, where applicable, sub-consolidated basis 5. The purpose of the approval requirement is to ensure that the financial holding company or mixed financial holding company responsible for the group or sub-group has the necessary means to be held directly responsible for ensuring compliance of the group and its entities with the applicable legal and regulatory provisions on a consolidated or sub-consolidated basis. Subject to the fulfilment of certain strict conditions, mainly related to non-interference in the conduct of business of subsidiaries which are credit or financial institutions, a financial holding company or mixed financial holding company may be exempted from the approval requirement. In that case, a subsidiary credit institution or an approved intermediate (mixed) financial holding company 6 should be designated on a permanent basis as the entity responsible for ensuring compliance on a consolidated basis with the obligations of the group and its entities. This designated entity should have the necessary means to do so.
2. Reporting expected from (mixed) financial holding companies
   A distinction must be made between quantitative and qualitative reporting. The above-mentioned exemption regime only applies to the qualitative reporting expected by the supervisory authority (the National Bank of Belgium or the European Central Bank).
   2.1. Quantitative reporting
   The quantitative reports A.1 to A.10 included in Annex 1 must be submitted for all (mixed) financial holding companies, whether they are approved or exempted. This means in practice that there can be no derogation from the submission of any of these quantitative reports. However, where an entity has been designated as the entity responsible for a group or sub-group 7, this entity responsible for the group may be charged with submitting quantitative reports on behalf of the exempted (mixed) financial holding companies belonging to the group or sub-group. the EEA. Paragraph 2 of Article 212/1 of the Banking law relates to intermediate financial holding companies and provides that financial holding companies governed by Belgian law and mixed financial holding companies governed by Belgian law which are not referred to in paragraph 1 are required to obtain approval where the provisions of this law or of Regulation No 575/2013 are applicable on a sub-consolidated basis. 5 The conditions for approval under Article 212/5 of the Banking Law are closely linked with compliance with the governance rules referred to in Article 168 (for conditions 1° and 2°) and 212 (for conditions 3° and 4°) of the said law. The same applies in the event of the designation of an institution to replace the exempted (mixed) financial holding company pursuant to Article 212/2, § 1, 3° or in the event of the application of Article 212/7, § 1, second paragraph, 4°. 6 As this financial holding company is the head of a sub-group and there is a sub-consolidation obligation. 7 This may be a parent credit institution governed by Belgian law (Article 164, § 2, 2°), a designated credit institution governed by Belgian law (Article 164, § 1, 6°) or an approved or designated (mixed) financial holding company governed by Belgian law (Article 164, § 1, 5° and 7°).

NBB_2022_30 – 22 November 2022 Communication – Page 3/4
2.2. Qualitative reporting
A distinction must be made between the qualitative reporting expected from individual (mixed) financial holding companies due to their prudential status as (mixed) financial holding companies, and the reporting expected at group or sub-group level.
2.2.1. Qualitative reporting on an individual basis
The requirements applicable to all financial holding companies and mixed financial holding companies governed by Belgian law on an individual basis are set out in Article 212 of the Banking Law. These are mainly requirements related to governance (supervision of the shareholding, assessment of the suitability of managers, etc. 8). It should be noted that the reporting related to these requirements on an individual basis must be submitted by all (mixed) financial holding companies governed by Belgian law, regardless of whether they are approved, exempted or not subject to the approval requirement.
2.2.2. Qualitative reporting at group or sub-group level
With regard to qualitative reporting at group or sub-group level, the supervisory authority allows reports of the same nature (e.g. governance memoranda or reports of senior management on internal control) to be merged into a single report, provided that the scope of (sub-)consolidation is clearly defined. In concrete terms, this means that (mixed) financial holding companies exempted by the Bank/ECB pursuant to
Article 212/2 of the Banking Law are not required to submit the reports B.7 to B.11 included in Annex 1,
provided that these reports have been submitted by the designated entity responsible for the group.
3. Reporting expected from accredited statutory auditors
All approved (mixed) financial holding companies must appoint an accredited statutory auditor. This requirement does not apply to exempted (mixed) financial holding companies.
Annex 2 specifies the reporting expected from the accredited statutory auditors of approved (mixed)
financial holding companies. This annex also distinguishes between quantitative and qualitative reporting. It should be noted that the report on the signal function is included in both categories, as it can address both quantitative and qualitative concerns). The accredited statutory auditor of an approved financial holding company or a financial holding company designated as the entity responsible for the group must ensure that his reports cover the entire scope of consolidation of the relevant group and, if applicable, sub-group. This means that the quantitative reporting must be submitted in separate reports, whereas the data of the qualitative reporting can be merged into a single report, provided that the scope of (sub-)consolidation is clearly defined.
4. Reporting channels
The reports referred to in this communication must be submitted via the OneGate application or the NBB Supervision portal 9 . The institutions concerned and their accredited statutory auditors are urged to take the necessary (organisational) measures to comply with this new regime and with the requirements for the (technical) reporting to the NBB (or to the ECB, as appropriate). This implies that the exempted entity has to delegate access rights to the designated entity and to the designated entity's external auditor(s) both in the NBB Supervision Portal and in OneGate. In practice, for the NBB Supervision Portal (https://supervision.nbb.be), please refer to the instructions in the FAQ (https://www.nbb.be/fr/faq-portail-supervision) and more particularly to the section "Comment puis￾je inviter un nouvel utilisateur sur le portail Supervision / " Hoe kan ik een nieuwe gebruiker uitnodigen voor het Supervision-portaal?". 8 See chapter 5 of the Governance manual for the banking sector annexed to Communication NBB_2022_23. 9 For more information on the NBB Supervision portal, please refer to Communication NBB_2022_14 of 28 June 2022.

NBB_2022_30 – 22 November 2022 Communication – Page 4/4 For OneGate (Domain MBS, REV), please refer to the FAQ (https://www.nbb.be/en/statistics/onegate￾declarations/contact-helpdesk-onegate) and in particular to the section "Third Party Declarers". For all technical questions and problems related to the applications' functionalities, please contact helpdesk.supervision@nbb.be for the NBB Supervision portal and access.onegate@nbb.be for OneGate. /!\ It is important to use the same login for both the NBB Supervision portal and the OneGate application, as your access rights to the reports (= declarations) of your institution are configured on OneGate and then shared between these two applications. Otherwise, you will not see your institution's reports and documents on the NBB Supervision portal (see section “Comment se connecter au portail ?” / “Hoe inloggen op het portaal”?).
5. Entry into force
This communication applies with immediate effect. As such, the reports listed in Annexes 1 and 2 must be submitted from 1 January 2023 for the year 2022. It replaces the eCorporate circular 2009_21 as regards only the reporting expected from financial holding companies and mixed financial holding companies. This communication is sent to all financial holding companies and mixed financial holding companies under Belgian law and - for information - to all credit institutions under Belgian law. It is also addressed to all accredited statutory auditors and audit firms for the financial sector. Yours faithfully, Pierre Wunsch Governor Annexes: 2