Royal Decree Approving the National Bank of Belgium Regulation of 9 November 2021 on the Exercise of External Functions by Leaders and Heads of Independent Control Functions of Regulated Enterprises

FEDERAL PUBLIC SERVICE FINANCES [C − 2022/30948] 8 FEBRUARY 2022. — Royal Decree approving the regulation of 9 November 2021 of the National Bank of Belgium regarding the exercise of external functions by leaders and persons responsible for an independent control function of regulated enterprises and repealing the regulation of 6 December 2011 regarding the exercise of external functions by leaders of regulated enterprises

PHILIPPE, King of the Belgians, To all, present and to come, Greetings.

Having regard to the Law of 22 February 1998 fixing the organic statute of the National Bank of Belgium, Articles 12bis, § 2 and 36/26/1; Having regard to the Law of 13 March 2016 on the status and supervision of insurance or reinsurance undertakings, Articles 82, § 1 and 83; Having regard to the Law of 25 April 2014 on the status and supervision of credit institutions and investment firms, Articles 61, § 1, 62, 212, 335, § 1, 3°, 525, 573, 574 and 575; Having regard to the Royal Decree of 26 September 2005 on the status of liquidation bodies and bodies assimilated to liquidation bodies, Article 15;

Considering that this Decree is exempt from a regulatory impact analysis pursuant to Article 8 of the Law of 15 December 2013 containing various provisions on administrative simplification, as it concerns self-regulatory provisions; On the proposal of the Minister of Finance,

We have decided and decide:

Article 1. The regulation of the National Bank of Belgium of 9 November 2021 regarding the exercise of external functions by leaders and persons responsible for an independent control function of regulated enterprises and repealing the regulation of 6 December 2011 regarding the exercise of external functions by leaders of regulated enterprises, annexed to this Decree, is approved.

Art. 2. The Minister responsible for Finance is charged with the execution of this Decree. Given in Brussels, 8 February 2022.

PHILIPPE By the King: The Minister of Finance, V. VAN PETEGHEM

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FEDERAL PUBLIC SERVICE FINANCES [C − 2022/30949] Regulation of the National Bank of Belgium of 9 November 2021 regarding the exercise of external functions by leaders and persons responsible for an independent control function of regulated enterprises and repealing the regulation of 6 December 2011 regarding the exercise of external functions by leaders of regulated enterprises

The National Bank of Belgium, Having regard to the Law of 22 February 1998 fixing the organic statute of the National Bank of Belgium, Articles 12bis, § 2 and 36/26/1; Having regard to the Law of 13 March 2016 on the status and supervision of insurance or reinsurance undertakings, Articles 82, § 1 and 83; Having regard to the Law of 25 April 2014 on the status and supervision of credit institutions and investment firms, Articles 61, § 1, 62, 212, 335, § 1, 3°, 525, 573, 574 and 575; Having regard to the Royal Decree of 26 September 2005 on the status of liquidation bodies and bodies assimilated to liquidation bodies, Article 15,

Decides:

Article 1. For the application of this Regulation, the following terms are defined:

1° “Law of 22 February 1998”: the Law of 22 February 1998 fixing the organic statute of the National Bank of Belgium; 2° “Law of 13 March 2016”: the Law of 13 March 2016 on the status and supervision of insurance or reinsurance undertakings; 3° “Law of 25 April 2014”: the Law of 25 April 2014 on the status and supervision of credit institutions and investment firms; 4° “Royal Decree of 26 September 2005”: the Royal Decree of 26 September 2005 on the status of liquidation bodies and bodies assimilated to liquidation bodies; 5° “Bank”: the National Bank of Belgium; 6° “internal rules”: the internal rules referred to in: a) Article 83, § 3 of the Law of 13 March 2016; b) Article 62, § 3 of the Law of 25 April 2014; c) Article 15, § 2 of the Royal Decree of 26 September 2005; 7° “establishment”: an enterprise that is: a) an insurance or reinsurance undertaking as referred to in Article 17 of the Law of 13 March 2016; b) a branch within the meaning of Article 15, 33° of the Law of 13 March 2016, of an insurance or reinsurance undertaking subject to the law of a State that is not a member of the European Economic Area; c) a credit institution or an investment firm within the meaning of Article 1, § 3, first or second paragraph of the Law of 25 April 2014; d) a branch within the meaning of Article 3, 64° of the Law of 25 April 2014, of a credit institution or an investment firm subject to the law of a State that is not a member of the European Economic Area; e) a body supporting a central securities depository, as referred to in Article 36/26/1, §§ 4 and 5 of the Law of 22 February 1998; f) a depositary bank within the meaning of Article 36/26/1, § 5 of the Law of 22 February 1998; g) a body supporting a central securities depository operating in Belgium as a branch of a foreign body, as referred to in Article 36 of the Royal Decree of 26 September 2005; h) a financial holding company under Belgian law as referred to in Article 212 of the Law of 25 April 2014; i) an insurance holding company under Belgian law as referred to in Article 443 of the Law of 13 March 2016; j) a mixed financial holding company under Belgian law as referred to in Article 212 of the Law of 25 April 2014 and Article 443 of the Law of 13 March 2016; 8° “company”: any legal person in which an effective leader or a director of an establishment exercises an external function; 9° “director”: a member of the statutory administrative body of the establishment; 10° “management committee”: a management committee established pursuant to: a) Articles 24, 25 or 503 of the Law of 25 April 2014; b) Articles 45 or 46 of the Law of 13 March 2016; 11° “effective leader”: a person participating in the effective management of the establishment, namely: a) when a management committee has been established, a member of the management committee and any other person at a hierarchical level immediately below, insofar as that person can exercise a direct and decisive influence on the management of all or part of the activities of the establishment, including the leaders of foreign branches; b) when no such committee has been established, the persons who can exercise a direct and decisive influence on the management of all or part of the activities of the establishment; 12° “person responsible for an independent control function”: any person responsible for an independent function as referred to in: a) Article 35, § 1 of the Law of 25 April 2014, as applicable to investment firms pursuant to Article 509 of the same Law; b) Article 54, § 1 of the Law of 13 March 2016; c) Article 10, § 3, second, third and fourth paragraphs of the Royal Decree of 26 September 2005; 13° “external function”: any function exercised outside the establishment as referred to in: a) Article 62, § 2 of the Law of 25 April 2014, as applicable to investment firms pursuant to Article 525 of the same Law; b) Article 83, § 2 of the Law of 13 March 2016; c) Article 15, § 1 of the Royal Decree of 26 September 2005; 14° “close links”: a situation as referred to in: a) Article 3, 27° of the Law of 25 April 2014; b) Article 15, 41° of the Law of 13 March 2016.

Art. 2. The internal rules are adopted by the statutory administrative body of the establishment and are communicated to the Bank. The statutory administrative body periodically checks whether the rules it has established still align with the situation of the establishment.

Art. 3. The internal rules determine that for the exercise of an external function by an effective leader or a person responsible for an independent control function, authorization is required from the management committee and, when no such committee has been established or when it concerns an external function exercised in a listed company or by a non-executive director, authorization from the statutory administrative body. In the latter case, the statutory administrative body decides on the proposal of the effective leadership or, where applicable, the management committee. Where applicable, the internal rules determine the conditions and limitations to which that authorization is subject.

The authorization may only be granted on the basis of a file containing the necessary information allowing the Bank to assess the impact of the exercise of the external function on the situation of the person concerned with regard to the internal rules on conflicts of interest and on their availability to exercise their function within the establishment, taking into account, where applicable, the limitations referred to in: 1° Article 62, §§ 5 to 7 of the Law of 25 April 2014; 2° Article 83, §§ 5 and 6 of the Law of 13 March 2016; 3° Article 15, § 3, second and third paragraphs of the Royal Decree of 26 September 2005.

The aforementioned information includes the following: 1° conflicts of interest that the exercise of the external functions could give rise to with regard to the function of the person concerned within the establishment; 2° the number of days per month that the person concerned will spend on each of their functions, regardless of whether it concerns the external functions referred to in Article 2, 13° or another function exercised notably under an employment contract; and 3° the manner in which the establishment can verify that that time is effectively spent on the function within the establishment.

The aforementioned information relates, where applicable, both to the functions exercised within the group of the establishment and to those exercised outside it.

The body that granted the authorization for the exercise of an external function is notified in advance of all significant changes in the information included in the file referred to in the second paragraph.

If such a change concerns the exercise of a specific external function for which the person concerned cannot obtain authorization under the internal rules, the establishment ensures that that person takes the necessary measures to comply with those rules.

This Article does not, however, apply to the external functions referred to in: 1° Article 62, § 4 of the Law of 25 April 2014; 2° Article 83, § 4 of the Law of 13 March 2016; 3° Article 15, § 3, first paragraph of the Royal Decree of 26 September 2005.

Art. 4. To prevent conflicts of interest and risks associated with the exercise of an external function by a director, an effective leader or a person responsible for an independent control function in a company as referred to in Article 62, § 2 of the Law of 25 April 2014, Article 83, § 2 of the Law of 13 March 2016 or Article 15, § 1 of the Royal Decree of 26 September 2005, with which the establishment has no close links, the internal rules provide at least that: 1° the establishment may only provide services to that company under normal market conditions; and 2° the effective leader, director or, where applicable, person responsible for an independent control function concerned, must refrain from interfering, within the establishment and the company, in deliberations, voting and advice relating to a relationship between the establishment and that company, or from influencing in any way, at any stage and at any level, the decision-making process regarding a discussion of an existing or future relationship between the establishment and that company, notably by participating in meetings or providing advice related thereto.

Art. 5. When a director, an effective leader or a person responsible for an independent control function exercises an external function in a company listed in Belgium or abroad, the internal rules include the obligations and prohibitions resulting from the statutory framework on market abuse.

The authorization may only be granted on the basis of a file containing the information elements allowing the Bank to assess the impact of the exercise of the external function on the situation of the person concerned with regard to the internal rules applicable in matters of conflicts of interest and on their availability to exercise their function within the establishment, taking into account, where applicable, the limitations set out in: 1° Article 62, §§ 5 to 7 of the Law of 25 April 2014; 2° Article 83, §§ 5 and 6 of the Law of 13 March 2016; 3° Article 15, § 3, paragraphs 2 and 3 of the Royal Decree of 26 September 2005.

The aforementioned information specifies: 1° the situations of conflicts of interest that the exercise of the external functions could generate with regard to the function of the person concerned within the establishment; 2° the number of days per month that the person concerned will devote to each of their functions, whether they are the external functions referred to in Article 2, 13° or any other function exercised notably under an employment contract; and 3° the manner in which the establishment can ensure the effectiveness of the time devoted to it.

The aforementioned information also relates, where applicable, to functions exercised within the group of the establishment as well as those exercised outside said group.

The body that granted the authorization to exercise an external function is informed in advance of all significant modifications relating to the information elements of the file referred to in paragraph 2.

In cases where the aforementioned modification concerns the exercise of a specific external function that cannot be authorized to the person concerned under the internal rules, the establishment ensures that this person takes the necessary arrangements to comply with said rules.

This Article does not, however, apply to the external functions referred to in: 1° Article 62, § 4 of the Law of 25 April 2014; 2° Article 83, § 4 of the Law of 13 March 2016; 3° Article 15, § 3, first paragraph of the Royal Decree of 26 September 2005.