Book VI of the Code of Economic Law Impact on the financial sector Jules Stuyck and Tom Van Dyck 24 June 2014 Brussels • London - www.liedekerke.com How can we assist you? « […] impressed by the level of attention we receive – we feel that we get red carpet treatment » Chambers 2014 Know-how: Newsletters and training Negotiations: With the authorities Advice: Documents and procedures Litigation: Winning your case Brussels • London - www.liedekerke.com Jan Vincent Lindemans Partner [email protected] +32 2 551 15 58 Jules Stuyck Partner [email protected] +32 2 551 15 58 Tom Van Dyck Partner [email protected] +32 2 551 15 51 (direct) +32 491 34 07 82 (mobile) 2 Structure Making sense of the new rules Introduction of a new key definition (…) (…) Results in an important legal shift (…) (…) And which must be linked to other legislation Focus on two important developments Unfair contract terms Off-premises contracts Some conclusions Brussels • London - www.liedekerke.com Making sense of the new rules Introduction of a new key definition (1/5) Book VI of the Code of Economic Law reiterates most of the Law of 6 April 2010 without significant changes It also transposes Consumer Rights Directive 2011/83/EU Alongside the transposition a limited number of areas are revisited and modified « In de mate dat een onderscheiden behandeling tussen financiële diensten — waarop de bepalingen van de WMPC altijd van toepassing zijn geweest — en financiële instrumenten geen enkel nut heeft, moet deze worden verlaten […] » Explanatory Memorandum, p. 6 Brussels • London - www.liedekerke.com 4 Making sense of the new rules Introduction of a new key definition (2/5) Key is the introduction of a new definition of « financial service » Art. I.8.18° « financiële dienst: iedere dienst van bancaire aard of op het gebied van kredietverstrekking, verzekering, individuele pensioenen, beleggingen en betalingen » « service financier: tout service ayant trait à la banque, au crédit, à l'assurance, aux retraites individuelles, aux investissements et aux paiements» Critical remark by the State Council (can financial instruments be considered a financial service, taking into account the definition of « service » in art. I.1.5° Code of Economic Law?) Brussels • London - www.liedekerke.com 5 Making sense of the new rules Introduction of a new key definition (3/5) The definition of art. I.8.18° includes Art. 4, §1, 10° Law of 16 June 2006 « Financial instruments » (art. 2, 1° of the Law of 2 August 2002) « Securities » (art. 2, 31° of the Law of 2 August 2002) « Financial products » (art. 2, 39° Law of 2 August 2002) « Investment instruments » (art. 4 Law of 16 June 2006) « Voor de toepassing van deze wet wordt onder ‘beleggingsinstrumenten’ verstaan : […] alle andere instrumenten die het mogelijk maken een financiële belegging uit te voeren, ongeacht de onderliggende activa » Brussels • London - www.liedekerke.com 6 Making sense of the new rules Introduction of a new key definition (4/5) Art. I.8.18° Code of Economic Law Art. 2, 40° Law of 2 August 2002 « financiële dienst: iedere dienst van bancaire aard of op het gebied van kredietverstrekking, verzekering, individuele pensioenen, beleggingen en betalingen » « financiële diensten : diensten die verband houden met een of meerdere financiële producten » Art. 2, 39° Law of 2 August 2002 « financiële producten : spaar-, beleggings-, of verzekeringsproducten » Brussels • London - www.liedekerke.com 7 Making sense of the new rules Introduction of a new key definition (5/5) Let’s consider some examples (…) Would the securities issued by a French issuer that are passported under the Law of 16 June 2006 to Belgium fall within the scope of art. I.8.18°? Brussels • London - www.liedekerke.com 8 Making sense of the new rules Introduction of a new key definition (5/5) Let’s consider some examples (…) Would the securities issued by a French issuer that are Falls within passported under scope thethe Law of 16 June 2006 to Belgium fall within the scope of art. I.8.18°? Brussels • London - www.liedekerke.com 9 Making sense of the new rules Introduction of a new key definition (5/5) Let’s consider some examples (…) Would the securities issued by a French issuer that are passported under the Law of 16 June 2006 to Belgium fall within the scope of art. I.8.18°? Would the fact that the securities of this French issuer are being offered in Belgium on the basis of a private placement change the analysis? Brussels • London - www.liedekerke.com 10 Making sense of the new rules Introduction of a new key definition (5/5) Let’s consider some examples (…) Would the securities issued by a French issuer that are passported under the Law of 16 June 2006 to Belgium fall within the scope of art. I.8.18°? Would the fact that the securities of this French issuer Falls within are being the scope offered in Belgium on the basis of a private placement change the analysis? Brussels • London - www.liedekerke.com 11 Making sense of the new rules Introduction of a new key definition (5/5) Let’s consider some examples (…) Would the securities issued by a French issuer that are passported under the Law of 16 June 2006 to Belgium fall within the scope of art. I.8.18°? Would the fact that the securities of this French issuer are being offered in Belgium on the basis of a private placement change the analysis? Brussels • London - www.liedekerke.com Would the fact that this would not concern a corporate issuer but securities marketed under the AIFMD Law of 19 April 2014 change the analysis? 12 Making sense of the new rules Introduction of a new key definition (5/5) Let’s consider some examples (…) Would the securities issued by a French issuer that are passported under the Law of 16 June 2006 to Belgium fall within the scope of art. I.8.18°? Would the fact that the securities of this French issuer are being offered in Belgium on the basis of a private placement change the analysis? Brussels • London - www.liedekerke.com Would the fact that this would not concern a corporate issuer Falls within but securities the scope marketed under the AIFMD Law of 19 April 2014 change the analysis? 13 Structure Making sense of the new rules Introduction of a new key definition (…) (…) Results in an important legal shift (…) (…) And which must be linked to other legislation Focus on two important developments Unfair contract terms Off-premises contracts Some conclusions Brussels • London - www.liedekerke.com Making sense of the new rules (…) Results in a major legislative shift (1/5) This results in an important legislative shift The Royal Decree of 5 December 2000 (which declared applicable certain provisions) is abolished (…) (…) and replaced by the Royal Decree of 23 March 2014 (which delares inapplicable certain provisions) « De Koning zal dus gemachtigd zijn om, aan de ene kant, striktere regels aan te nemen inzake financiële diensten en, aan de andere kant, andere regels vast te stellen, desgevallend soepeler maar beter aangepast aan bepaalde van die diensten of aan een categorie ervan. Hij zou dus ook de toepassing kunnen uitsluiten van sommige bepalingen die onaangepast zijn voor financiële diensten. […] » Explanatory Memorandum, p. 21 Brussels • London - www.liedekerke.com 15 Making sense of the new rules (…) Results in a major legislative shift (2/5) Exclusion n. 1 Art. VI.3, §2 Code of Economic Law « Elke onderneming die aan de consument homogene diensten aanbiedt, duidt de prijs hiervan schriftelijk, leesbaar, goed zichtbaar en ondubbelzinnig aan » Art. VI.3,§2 is not applicable to the price of investment instruments that are sold or offered for subscription, if the price is not pre-determined Quid financial products other than investment instruments? Quid public exchange offers of investment instruments? Brussels • London - www.liedekerke.com 16 Making sense of the new rules (…) Results in a major legislative shift (3/5) Art. VI.5 is not applicable to financial products expressed in a currency other than the EUR (except the related fees and costs) Quid a private placement document that is distributed to high net worth individuals? « Financial products » are more limited than « financial services » in the Code of Economic Law: only savings, investment and insurance products Exclusion n. 2 Art. VI.5 Code of Economic Law « De prijzen voor consumenten zijn minstens in euro vermeld » Brussels • London - www.liedekerke.com 17 Making sense of the new rules (…) Results in a major legislative shift (4/5) Exclusion n. 3 Art. VI.18 Code of Economic Law « Een onderneming mag ten aanzien van de consument slechts overgaan tot de aankondiging van een prijsvermindering ten opzichte van de prijs die zij voorheen toepaste voor hetzelfde product, wanneer de nieuwe prijs lager is dan de referentieprijs […] » Art. VI.18 and VI.19 are not applicable to the sale or offer to subscribe (to a consumer) of investment instruments the price of which fluctuates on the financial market that the company cannot influence Brussels • London - www.liedekerke.com 18 Making sense of the new rules (…) Results in a major legislative shift (5/5) Certain clauses are deemed not to be unfair (See further below) Exclusion n. 4 Art. VI.83 Code of Economic Law Brussels • London - www.liedekerke.com 19 Structure Making sense of the new rules Introduction of a new key definition (…) (…) Results in an important legal shift (…) (…) And which must be linked to other legislation Focus on two important developments Unfair contract terms Off-premises contracts Some conclusions Brussels • London - www.liedekerke.com Making sense of the new rules (…) Which must be linked to other legislation (1/5) As a general rule the Code of Economic Law applies cumulatively with specific financial legislation, and in case of a conflict « lex specialis derogat generali » Important qualifications depending on whether the matter is harmonized (See next slide) Report to the King, RD of 23 March 2014 « Net zoals in andere sectoren, vormt de reglementering inzake marktpraktijken zo de lex generalis waarvan de sectorale regels kunnen afwijken bij toepassing van het principe "lex specialis generali derogat" (waarbij de lex specialis hier de financiële regelgeving is) » Brussels • London - www.liedekerke.com 21 Making sense of the new rules (…) Which must be linked to other legislation (2/5) Is a provision of the Code of Economic Law (…) Is a provision of a specific financial legislation (…) Consequence Scenario 1 Not harmonized Not harmonized Cumulative application (lex specialis derogat generali) Scenario 2 Not harmonized Minimum harmonization Scenario 3 Not harmonized Full harmonization Scenario 4 Minimum harmonization Not harmonized Scenario 5 Minimum harmonization Minimum harmonization Scenario 6 Minimum harmonization Full harmonization Scenario 7 Full harmonization Not harmonized Scenario 8 Full harmonization Minimum harmonization Scenario 9 Full harmonization Full harmonization Brussels • London - www.liedekerke.com Any deviating rules of the Code will not be applicable Any rules beyond the minimum harmonization cannot be contrary to full harmonization Cumulative application unless specified in the Directive 22 Making sense of the new rules (…) Which must be linked to other legislation (2/5) Is a provision of the Code of Economic Law (…) Is a provision of a specific financial legislation (…) Consequence Scenario 1 Not harmonized Not harmonized Cumulative application (lex specialis derogat generali) Scenario 2 Not harmonized Minimum harmonization ? Scenario 3 Not harmonized Full harmonization Any deviating rules of the Code will not be applicable Scenario 4 Minimum harmonization Not harmonized ? Scenario 5 Minimum harmonization Minimum harmonization ? Scenario 6 Minimum harmonization Full harmonization Any rules beyond the minimum harmonization cannot be contrary to full harmonization Scenario 7 Full harmonization Not harmonized ? Scenario 8 Full harmonization Minimum harmonization ? Scenario 9 Full harmonization Full harmonization Cumulative application unless specified in the Directive 23 Brussels • London - www.liedekerke.com Is a provision of the Code Is a provision of a specific Consequence of Economic Law (…) financial legislation (…)the(Tentative answers in bold) Making sense of new rules Scenario 1 (…) Which must be linked Not harmonized Not harmonized to other legislation Cumulative application (lex(1/3) specialis derogat generali) Scenario 2 Not harmonized Minimum harmonization Cumulative application may not be contrary to min. harmonization Scenario 3 Not harmonized Full harmonization Any deviating rules of the Code will not be applicable Scenario 4 Minimum harmonization Not harmonized Cumulative application may not be contrary to min. harmonization Scenario 5 Minimum harmonization Minimum harmonization Cumulative application may not be contrary to min. harmonization Scenario 6 Minimum harmonization Full harmonization Any rules beyond the minimum harmonization cannot be contrary to full harmonization Scenario 7 Full harmonization Not harmonized Any deviating rules of the specific law will not be applicable Scenario 8 Full harmonization Minimum harmonization Any rules beyond the minimum harmonization cannot be contrary to full harmonization Scenario 9 Full harmonization Full harmonization Cumulative application unless specified in the Directive Brussels • London - www.liedekerke.com 24 Making sense of the new rules (…) Which must be linked to other legislation (4/5) Examples The application of the Code of Economic Law to the language of a prospectus: Scenario 3 The application of the rules on misleading advertizements in the Code to MiFID advertizements: Scenario 6 The application of the rules on distance selling to an public offer with distance selling: Scenario 9 Brussels • London - www.liedekerke.com Report to the King, RD of 23 March 2014 « De aanname van dit koninklijk besluit ontheft niet van deze oefening om geval per geval de toepasselijke norm na te gaan […] » 25 Making sense of the new rules (…) Which must be linked to other legislation (5/5) But, as you (unfortunately) know, the legal reality is even more complex as there are different layers of specific financial legislation Impact of the Transversal Royal Decree Impact of product intervention such as the moratorium Impact of circulars such as FSMA Circular 2013-13 FSMA Circular 2013-13, para 85 « De publiciteitsregels bedoeld in deze circulaire […] en de publiciteitsregels in artikel 8 van het KB van 3 juni 2007 […] moeten beiden gerespecteerd worden in publicitair materiaal m.b.t. ICB's. Doch, indien de regels van elkaar zouden afwijken, is de strengste regel van toepassing » Brussels • London - www.liedekerke.com 26 Structure Making sense of the new rules Introduction of a new key definition (…) (…) Results in an important legal shift (…) (…) And which must be linked to other legislation Focus on two important developments Unfair contract terms Off-premises contracts Some conclusions Brussels • London - www.liedekerke.com Focus on two important developments Unfair contract terms (1/3) Unfair contract terms provisions become applicable to financial instruments Art. I.8.22° Defined in art. I.8.22° Assessment criteria in art. VI.82 Black list in art. VI.83 « elk beding of elke voorwaarde in een overeenkomst tussen een onderneming en een consument die, alleen of in samenhang met een of meer andere bedingen of voorwaarden, een kennelijk onevenwicht schept tussen de rechten en plichten van de partijen ten nadele van de consument » Brussels • London - www.liedekerke.com 28 Focus on two important developments Unfair contract terms (2/3) The Royal Decree of 23 March 2014 provides for three exclusions (…) Clauses that allow for unilateral termination, without notice, of an agreement with indefinite term that relates to investment instruments do not violate art. VI.83.11° if there is a valid reason and if the company notifies the consumer immediately Clauses that would fall within art. VI.83, 2°, 3°, 5° or 11° are nonetheless exempt if the price is dependent on the fluctuations on the financial market that the company does not influence Clauses that would fall within art. VI.83, 3° are deemed not unfair if they intend to determine the price of products on the moment of delivery, provided that it concerns the purchase or sale of cash Brussels • London - www.liedekerke.com 29 Focus on two important developments Unfair contract terms (3/3) (…) Nonetheless, many questions remain. For instance Can AIF investment agreements (eg. VC/PE) run contrary to art. VI.83.1°? Can a foreign law prospectus that entails the right for the issuer to change certain essential conditions run contrary to art. VI.83.4°? Art. VI.83.1° « te voorzien in een onherroepelijke verbintenis van de consument terwijl de uitvoering van de prestaties van de onderneming onderworpen is aan een voorwaarde waarvan de verwezenlijking uitsluitend afhankelijk is van haar wil » Brussels • London - www.liedekerke.com 30 Structure Making sense of the new rules Introduction of a new key definition (…) (…) Results in an important legal shift (…) (…) And which must be linked to other legislation Focus on two important developments Unfair contract terms Off-premises contracts Some conclusions Brussels • London - www.liedekerke.com Focus on two important developments Off-premises contracts (1/4) The new rules on off-premises contracts implement Directive 2011/83/EU However, Preamble (32) states that « this Directive should not apply to contracts in those areas » Preamble (32) Directive 2011/83/EU « The existing Union legislation, inter alia, relating to consumer financial services […] contains numerous rules on consumer protection. For this reason, this Directive should not apply to contracts in those areas. With regard to financial services, Member States should be encouraged to draw inspiration from existing Union legislation in that area when legislating in areas not regulated at Union level, in such a way that a level playing field for all consumers and all contracts relating to financial services is ensured. » Brussels • London - www.liedekerke.com 32 Focus on two important developments Off-premises contracts (2/4) Art. I.8.31° The new rules on off-premises « 31° contracts buiten verkoopruimten gesloten overeenkomst: iedere overeenkomst tussen de onderneming en de consument: implement a) die wordt gesloten in gelijktijdige fysieke aanwezigheid van de onderneming en de Directive consument op een andere plaats dan de verkoopruimten van de onderneming; of 2011/83/EU b) waarvoor een aanbod werd gedaan door de consument onder dezelfde omstandigheden als bedoeld onder a); of However, c) die gesloten wordt in de verkoopruimten van de onderneming of met behulp van Preamble (32) een techniek voor communicatie op afstand, onmiddellijk nadat de consument states that « this persoonlijk en individueel is aangesproken op een plaats die niet de verkoopruimte van Directive should de onderneming is, in gelijktijdige fysieke aanwezigheid van de onderneming en de not apply to consument; of contracts in those d) die gesloten wordt tijdens een excursie die door de onderneming is georganiseerd areas » met als doel of effect de promotie en de verkoop van goederen of diensten aan de consument » Brussels • London - www.liedekerke.com 33 Focus on two important developments Off-premises contracts (3/4) Art. VI.64 lists the pre-contractual information to be provided to the consumer – But it is not clear how this should be applied when proposing financial products « off-site » Meaning of art. VI.64.17° or art. VI.64.18°? How is this to be applied in combination with art. 3, §1 of the Transversal Royal Decree? « [O]n paper or, if the consumer agrees, another form of durable medium » (art. VI.65, §1) Can this be done through the general conditions? Brussels • London - www.liedekerke.com 34 Focus on two important developments Off-premises contracts (4/4) What is the delineation with other rules and legislation? Rules on distance selling? « Service » information requirements (MiFID): Scenario 3? « Product » information requirements (Prospectus): Scenario 3? Report to the King, RD of 23 March 2014 « Wanneer de regels van financieel recht de omzetting vormen van richtlijnen van "maximale harmonisatie" (door bijvoorbeeld de richtlijn 2003/71/EG […]), zullen de eventueel afwijkende regels inzake marktpraktijken die geen omzetting vormen van een Europese richtlijn, buiten toepassing moeten worden gelaten » Brussels • London - www.liedekerke.com 35 Structure Making sense of the new rules Introduction of a new key definition (…) (…) Results in an important legal shift (…) (…) And which must be linked to other legislation Focus on two important developments Unfair contract terms Off-premises contracts Some conclusions Brussels • London - www.liedekerke.com Some conclusions The 2014 tsunami increases compliance risks Particularly complex laws Unintended consequences Practical difficulties How to best (better) deal with this? Holistic view Risk-based approach Checks with counsel and FSMA Brussels • London - www.liedekerke.com 37 How can we assist you? « […] impressed by the level of attention we receive – we feel that we get red carpet treatment » Chambers 2014 Know-how: Newsletters and training Negotiations: With the authorities Advice: Documents and procedures Litigation: Winning your case Brussels • London - www.liedekerke.com Jan Vincent Lindemans Partner [email protected] +32 2 551 15 58 Jules Stuyck Partner [email protected] +32 2 551 15 58 Tom Van Dyck Partner [email protected] +32 2 551 15 51 (direct) +32 491 34 07 82 (mobile) 38
© Copyright 2024 ExpyDoc
