Distribution of certain derivative financial instruments to retail clients: a prospective ban?
20/01/2016

On 8 January 2016, the Financial Services and Markets Authority (“FSMA”) initiated a consultation on a draft regulation governing the distribution of certain derivative financial instruments to retail clients. The FSMA, which has over the years been pointing out the particularly risky nature of these derivatives, noted that a great deal of these instruments were being distributed to retail clients in Belgium by means of dedicated electronic trading platforms. In that respect, the draft regulation sets up a proper groundwork and aims at tackling the issue by pursuing two main cumulative objectives.

Firstly, the FSMA seeks to prohibit the marketing of a series of over-the-counter (“OTC”) derivative instruments to retail investors. The instruments affected will fall into one of the following categories:

  • their maturity is less than 14 days;
  • their underlying asset is a currency;
  • their underlying asset is a non-mainstream asset (e.g. artwork, wine, commodity, precious metal), with the exception of gold; and
  • they have a leverage ratio that is greater than five (exact leverage ratio yet to be confirmed).

Given the above, instruments such as binary options, contracts for difference and rolling spot forex transactions will clearly be in the spotlight.

Secondly, the FSMA is taking action to mitigate all kinds of distribution techniques seen as aggressive or inappropriate towards retail clients in respect of OTC derivative instruments. This means that marketing could be banned if at least one of the following practices is undertaken:

  • establishing individual unsolicited communications with clients or prospects;
  • repeatedly soliciting clients or prospects, irrespective of the form of long-distance communication used;
  • using call centres for contacts with clients or prospects;
  • rewarding clients for introducing new clients or recommending any instruments or related services;
  • rewarding clients (except where they can withdraw an equivalent amount in cash without further conditions) or offering any benefit that is conditionally linked to certain transactions;
  • using inadequate methods of remuneration (on a pro rata basis linked to investments, gains or losses generated by the client); and
  • accepting credit cards for payment.

The regulation will enter into force upon finalization of the provisions by the FSMA and subsequent approval by royal decree. All sector players are invited to submit their responses in writing by 25 January 2016 at the latest.

Zie ook : CMS Belgium ( Mr. BenoĆ®t Vandervelde ,  Mr. Romain Rolland )

Mr. BenoƮt Vandervelde Mr. BenoƮt Vandervelde
Associate Partner
benoit.vandervelde@cms-db.com
Mr. Romain Rolland Mr. Romain Rolland
Junior Associate
romain.rolland@cms-db.com

Click here to see the ad(s)
Alle artikels Financieel recht

Laatste artikels Financieel recht

PSDII: migration to SCA by 31 December 2020
25/11/2019

On 16 October 2019, the European Banking Authority (EBA) issued an Opinion concerning one of the most important features o...

Read more

Europe pushes companies one step further towards sustainable investments
21/10/2019

The European Commission has underlined the importance for companies to publish sufficient, reliable and comparable sustain...

Europe pushes companies one step further towards sustainable investments Read more

De fiscale regularisatie - meer dan ooit een optie!
16/10/2019

Meer dan een hot item in de media zijn de verhalen rond fiscaal besmet vermogen, te weten inkomsten of kapitalen die in he...

Read more

Schenken van aandelen via het aanpassen van het UBO-register: kan dat?
08/10/2019

De vierde antiwitwasrichtlijn (Richtlijn (EU) 2015/849) voerde voor elke lidstaat van de Europese Unie de verplichting tot...

Schenken van aandelen via het aanpassen van het UBO-register: kan dat? Read more

Laatste artikels van Mr. BenoƮt Vandervelde

IDD in Belgium: new professional knowledge requirements in the insurance sector
22/07/2019

Following the implementation of the Insurance Distribution Directive in Belgium, a new Royal Decree dated 18 June 2019, im...

Read more

TVA et fonds dā€™investissement : le "statu quo" confirmĆ©
13/05/2015

Par sa décision publiée le 30 mars 2015 (décision TVA n° E.T. 127.885 dd 30.03.2015), l'administr...

Read more

New developments on precise information in insider trading
17/04/2015

The Court of Justice of the European Union (Court) rendered on 11 March 2015 a judgment on the definition of precise infor...

Read more

Hervorming van het pandrecht op roerende goederen
01/04/2014

In de komende maanden zal een nieuwe wettelijke regeling met betrekking tot het pandrecht op roerende goederen in voege tr...

Read more

Laatste artikels van Mr. Romain Rolland

Distribution of certain derivative financial instruments to retail clients: a prospective ban?
09/02/2016

On 8 January 2016, the Financial Services and Markets Authority (“FSMA”) initiated a consultation on a draft r...

Read more

LexGO Network