Royal Decree of 29 February 2024 implementing the Law of 23 November 2023 on the Guarantee Fund for Financial Services

FEDERAL PUBLIC SERVICE FINANCES [C - 2024/002197] 29 FEBRUARY 2024. — Royal Decree implementing the Law of 23 November 2023 concerning the Guarantee Fund for Financial Services

REPORT TO THE KING

Sire,

The decree that we have the honour to submit for the signature of Your Majesty is taken in execution of the Guarantee Fund Law, in particular Articles 15, § 3, 19, § 7, 20, second paragraph and 31, § 2, last paragraph.

COMMENTARY ON THE ARTICLES

Chapter 1 - Definitions

Article 1

This article aims to define the term "Guarantee Fund Law" appearing in the different sections of the Royal Decree.

Chapter 2 - Implementation of Article 15, § 3 of the Guarantee Fund Law

Article 2

This article derives directly from the revised guidelines of the European Banking Authority (hereinafter "EBA") EBA/GL/2023/02 on the methods for calculating contributions to deposit guarantee schemes under Directive 2014/49/EU, repealing and replacing guidelines EBA/GL/2015/10 (hereinafter "revised EBA/GL/2023/02 guidelines").

Chapter 3 - Regular review of the calculation method for periodic contributions and implementation of Article 19, § 7 of the Guarantee Fund Law

Article 3

This article derives directly from the revised EBA/GL/2023/02 guidelines.

Articles 4 to 11

The formulas for calculating periodic contributions and adjusting the intervals for determining the individual risk score (IRS) are modified to align with the revised EBA/GL/2023/02 guidelines.

Chapter 4 - Implementation of Article 20, second paragraph, of the Guarantee Fund Law

Section 1. - Definitions

Article 12

This article defines the terms frequently used in the context of Chapter 4 of this Royal Decree, relating to payment commitments.

The definitions of the terms "payment commitment agreement" and "amount of the payment commitment" are taken from the guidelines of the European Banking Authority (EBA) on payment commitments under Directive 2014/49/EU on deposit guarantee schemes (hereinafter "the EBA/GL/2015/09 guidelines").

The definitions contained in the Law on the Guarantee Fund also apply to this Royal Decree.

The application of this chapter is limited to the members referred to in Article 6 of the Law on the Guarantee Fund.

Section 2. - Procedures for paying a part of the periodic contribution in the form of an irrevocable payment commitment

Article 13

This Royal Decree imposes no obligation on the Guarantee Fund to accept payment commitments. A member, as referred to in Article 6 of the Guarantee Fund Law, has no enforceable right to demand payment of its contribution in the form of a payment commitment.

Only if the Guarantee Fund exercises its power to accept payment commitments must it determine appropriate criteria to which financial collateral must comply, in accordance with paragraph 19 of the EBA/GL/2015/09 guidelines. These appropriate criteria are linked to Article 14 of the Royal Decree and the requirement that financial collateral must consist of low-risk assets and must not be encumbered by third-party rights.

Communication to members of the appropriate criteria is done electronically, before the opening of the application period, as referred to in Article 15 of the Royal Decree, so that a member knows the criteria to which its application must comply.

Subsection 1. Minimum eligibility criteria for financial collateral

Article 14

This article determines the minimum eligibility criteria for financial collateral, drawing directly from the EBA/GL/2015/09 guidelines (see paragraphs 19 to 22).

Subsection 2. Application

Article 15

This article describes the procedure for submitting an application. The mode of communication is governed by Article 53 of the Law on the Guarantee Fund for Financial Services.

Article 16

This article calls for no specific comment.

Subsection 3. Evaluation of the application

Article 17

This article calls for no specific comment.

Article 18

The purpose of this article is to list the grounds for refusal resulting from the criteria set out in Article 13, § 1, Article 14 and Article 15, § 1 of this Decree and Article 20 of the Guarantee Fund Law.

Article 20 of the Guarantee Fund Law limits the amount of the payment commitment. It may not exceed 30% of the total amount of available financial resources of the Guarantee Fund. This requirement constitutes one of the grounds for refusing a member's request to provide part of its periodic contribution in the form of a payment commitment agreement.

Article 19

This article calls for no specific comment.

Subsection 4. Payment commitment agreement

Article 20

Payment commitments are only authorized if a separate payment commitment agreement is concluded between the Guarantee Fund and the member (see EBA/GL/2015/09 guidelines, paragraph 10).

Article 21

This article determines the content of the payment commitment agreement and transposes paragraph 11 of the EBA/GL/2015/09 guidelines.

Subsection 5. Real security agreements

Article 22

This article determines the content of the real security agreement and transposes paragraphs 13 to 15 of the EBA/GL/2015/09 guidelines.

Point 1 calls for no specific comment.

2°: "Cases agreed with the Guarantee Fund" refers to all conditions determined by the Guarantee Fund, which are already listed in the Law on the Guarantee Fund, as well as other conditions that may be determined by the Guarantee Fund.

Points 3 to 14 call for no specific comment.

Chapter 5 - Implementation of Article 31, § 2, last paragraph, of the Guarantee Fund Law

Section 1. – Application for participation

Article 23

This article provides that the entity wishing to participate in the Guarantee Fund, to complement the guarantees provided by the investor protection scheme, cash component, to which it is affiliated in its home Member State, must, for this purpose, submit an application to the Guarantee Fund.

It also determines the minimum information that the entity must provide to the Guarantee Fund so that it can evaluate the application.

The entity must be able to provide a description of the extent and scope of the investor protection scheme, cash component, of the country of origin.

By "extent" is meant the amount of reimbursements and by "scope" is meant the claims that are eligible for reimbursement and the persons who can benefit from the investor protection scheme, cash component. The scope may vary from one Member State to another because the directive (Directive 97/9/EC of the European Parliament and of the Council of 3 March 1997 on investor compensation schemes) is a minimum harmonization.

The entity must provide a detailed description of the differences between the investor protection scheme, cash component, of the home Member State and the Belgian investor protection scheme, cash component.

Section 2. – Evaluation of the application for participation

Article 24

This article calls for no specific comment.

Article 25

The entity wishing to participate in the Guarantee Fund, to complement the guarantees provided by the investor protection scheme, cash component, may do so if a number of cumulative conditions are met.

The potential risks associated with the first condition are assessed by the Guarantee Fund.

The entity and the competent authority of the investor protection scheme of the home Member State must demonstrate that there are sufficient guarantees that it will comply with the obligations arising from its participation in the Belgian investor protection scheme, cash component.

The third condition is that it has been sufficiently demonstrated that the stability of the financial sector and the protection of investors would not be threatened by participation in the Guarantee Fund, to complement the guarantees provided by the investor protection scheme, cash component.

An agreement must be concluded between the Guarantee Fund and the investor protection scheme of the home Member State of the entity. This is an agreement in which the parties agree on the terms of their cooperation. This cooperation agreement must define the legal and operational aspects of its implementation.

Article 26

This article calls for no specific comment.

Section 3. – Rights and obligations during participation

Article 27

To avoid that a member, shortly after acceptance of its participation in the Guarantee Fund, no longer meets the conditions, a transitional period of six months is established.

Section 4. – End of participation

Article 28

This article partially transposes Article 7, paragraph 2, of Directive 97/9/EC.

The notice period is intended to protect the investor. During these 12 months, the investor must be informed of the end of the entity's participation.

Article 29

This article establishes the procedure for voluntary withdrawal by the entity of its participation.

The notice period is designed to protect the investor. During these 12 months, the investor may be informed of the end of the entity's participation.

Article 30

This article partially transposes Article 7, paragraph 2, of Directive 97/9/EC.

Article 31

This article transposes the last sentence of Article 7, paragraph 2, of Directive 97/9/EC and defines the manner in which an entity must inform its clients of the end of participation.

I have the honour to be, Sire, of Your Majesty, the very respectful and very faithful servant, The Minister of Finance, V. VAN PETEGHEM

COUNCIL OF STATE legislation section Second chamber

The request for advice introduced on 19 February 2024 by the Vice-Prime Minister and Minister of Finance, in charge of the Coordination of the fight against fraud and the National Lottery, on a draft royal decree 'implementing the Law of 23 November 2023 on the Guarantee Fund for Financial Services', bearing number 75.666/2 of the register of the legislation section of the Council of State, was struck from the register on 20 February 2024, in accordance with Article 84, § 5, of the laws 'on the Council of State', coordinated on 12 January 1973.

29 FEBRUARY 2024. — Royal Decree implementing the Law of 23 November 2023 concerning the Guarantee Fund for Financial Services

PHILIP, King of the Belgians,

To all who are now and hereafter shall be, Greetings.

Having regard to the Constitution, Article 108;

Having regard to the Law of 23 November 2023 concerning the Guarantee Fund for Financial Services, Article 15, § 3, Article 19, § 7, Article 20, second paragraph and Article 31, § 2, last paragraph;

Having regard to the unanimous advice of the National Bank of Belgium, given on 9 January 2024;

Having regard to the advice of the Financial Inspection, given on 7 December 2023;

Having regard to the agreement of the State Secretary for Budget of 28 January 2024;

Having regard to the request for advice within 30 days submitted on 19 February 2024 to the Council of State, applying Article 84, § 1, first paragraph, 2°, of the laws on the Council of State, coordinated on 12 January 1973;

Having regard to the advice 75666/2 of the Council of State, given on 20 February 2024, applying Article 84, § 5, of the laws on the Council of State, coordinated on 12 January 1973;

On the proposal of the Minister of Finance,

We have decided and decide:

CHAPTER 1. — Definitions

Article 1. For the purposes of this Royal Decree, the following shall be understood:

1° Guarantee Fund Law: Law of 23 November 2023 concerning the Guarantee Fund for Financial Services.

CHAPTER 2. — Implementation of Article 15, § 3 of the Guarantee Fund Law

Art. 2. If a member is able to communicate the exact amount or a fixed maximum possible amount of guaranteed deposits, relating to funds on joint client accounts, the Guarantee Fund will take these amounts into account. In other cases where there is uncertainty about the eligibility and coverage of a specific individual deposit, the Guarantee Fund will assume that the deposit is fully covered.

CHAPTER 3. — Regular review of the calculation method for periodic contributions and implementation