On 15 January 2024, the Act amending the banking oath and disciplinary regime was published in the Belgian State Gazette. The aim of this Act is to give a central place to the interests of customers, and to strengthen public confidence in the financial sector, notably through the individual responsibility of employees working in the banking sector.
Banking service providers will henceforth be subject to two main obligations: they must take the banking oath and they must comply with specific disciplinary rules, under penalty of disciplinary sanctions.
The new regime will come into force on 15 January 2025 for certain banking sector employees, and on 15 July 2026 for others.
While the “individual rules of conduct” were already been set out in a Royal Decree, the concrete details of the oath-taking procedure had yet to be adopted in a regulation issued by the Financial Services and Markets Authority (FSMA), which will be responsible for overseeing and monitoring the new system.
The FSMA regulation, approved by Royal Decree, has just been published in the Belgian State Gazette. The oath must be taken within 6 months from the date the regime comes into effect, either at the FSMA or at credit institutions.
Numerous HR issues
The FSMA (or, in the case of “fit & proper” credit institutions, the BNB) will be able to impose disciplinary sanctions on banking service providers who fail to comply with the rules of conduct. These may take the form of a warning, a reprimand or a professional ban.
Disciplinary sanctions imposed by the FSMA will be notified to the person concerned (and to the institution in the case of a professional ban).
This, of course, raises a number of questions from an HR point of view: what impact do FSMA disciplinary sanctions have on the employment relationship? Can the employer demand to be informed of disciplinary procedures? Will an employee that is a subject of concern for the FSMA be able to invoke the subordination relationship, or even his civil immunity as an employee? What impact will a professional ban have on the employment contract? Can an employee be held individually liable by a customer of the bank or branch for failure to comply with the rules of conduct? Etc.
It can be useful to anticipate these HR questions that will inevitably arise. Our specialist lawyers are at your disposal, and a dedicated webinar will be held later this year.
Who is concerned?
The new banking oath and banking deontology applies to “banking service providers” active in Belgium within the following entities: on the one hand, Belgian or foreign credit institutions established in Belgium; on the other, banking and investment service agents acting in the name and on behalf of such credit institutions.
The concept of “banking service providers” covers four categories of persons:
- persons who, within a covered entity, must at all times have the necessary professional repute and expertise to perform their duties (“fit & proper” requirements);
- senior managers, i.e., natural persons who assume de facto responsibility for or exercise control over persons referred to in point 4;
- banking and investment services agents registered as natural persons; and
- persons who are directly involved in banking activities or provide banking services on the Belgian territory (e.g., offering all types of accounts, granting credit, providing investment services, etc.). Persons directly involved in the exercise or provision of banking activities and services fall into this category, i.e., those in direct contact with the public for the exercise of such activities and services (employees working in so-called front-office departments are thus to be considered banking service providers).
Rules of conduct
The individual rules of conduct to which service providers are subject are based on three founding principles: banking service providers are required at all times to act (i) honestly and with integrity; (ii) competently and professionally; and (iii) with due regard for the interests of customers and treating them fairly. These rules place a central emphasis on the concepts of honesty, integrity, competence and professionalism, as well as on the interests of customers and their fair treatment. The FSMA, which can be contacted via a complaints channel, will be responsible for verifying this and, if necessary, sanctioning employees individually.
Entry into force
The new system will apply to “fit & proper” individuals and senior managers in credit institutions from 15 January 2025. Other banking service providers will be affected by this obligations from 15 July 2026.
Oath-taking procedures
The FSMA regulation, approved by Royal Decree published on 20 June 2024, specifies the rules and conditions for the taking of the oath.
Banking service providers in office when the law amending the oath and the banking disciplinary system comes into force must take the oath within 6 months (from the date of entry into force, or, afterwards, from the date they take office).
For persons subject to “fit & proper” requirements under Belgian law or the law of another EEA Member State, the oath-taking will take place at the FSMA. It will be conducted before the President of the FSMA (or in his absence, before the Vice-President of the FSMA or two members of its executive committee).
FSMA will organise at least 3 oath-taking sessions per quarter. It will communicate in due time on its website the dates and registration procedures for the oath-taking sessions.
Other categories of banking service providers will take the oath at the credit institution on behalf of which they act. This oath-taking will take place before a person in charge of the effective management of this credit institution. The organisational conditions for the oath-taking must be defined by the institutions, ensuring that deadlines are met.
The FSMA regulation also specifies the rules and conditions related to the reception, admissibility, and processing of complaints against an employee who has taken the oath.
Action point
Persons subject to “fit & proper” requirements and senior managers working in credit institutions will have to take the oath within 6 months following 15 January 2025 (the date on which the disciplinary regime comes into force for them) or within 6 months following their entry into service.
Other banking service providers will be required to take the oath within 6 months following 15 July 2026 (the date the disciplinary regime comes into effect for them) or within 6 months following their entry into service.
It may be useful to anticipate the HR issues that will inevitably arise – our specialist lawyers are at your disposal. Also, look out for our dedicated webinar to be held later this year.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.