The Financial Services and Markets Authority is the main agency for financial regulation in Belgium. As a supervisory body, FSMA works to provide an unbiased and transparent financial market. Furthermore, it ensures that all financial consumers are treated fairly.
In addition to that, the Financial Services and Markets Authority makes sure that the companies involved provide complete and correct information. It is crucial for keeping the financial markets in order.
Moreover, setting financial laws and ensuring their compliance is a part of FSMA’s duty as well. It supervises financial products, supplementary pensions, and financial service providers and works to educate financial consumers.
FSMA mission
FSMA aims to establish a strong and reliable financial market system in Belgium. Furthermore, the regulatory body aspires to contribute to the national and economic welfare of the country.
To achieve this goal, FSMA works to reduce risks to provide a safe environment for its clients. In addition, the purpose is to gain the trust of the users.
The Financial Services and Markets Authority understands that effective financial regulation is imperative for a country’s national well-being. Hence, its mission is to make such sustainable financial markets equally beneficial for both the consumer and the depositor.
History of FSMA
FSMA, which stands for Financial Service and Market Authority, was formed on 1 April 2001. It is the successor of the Banking, Finance, and Insurance Commission (CBFA).
It works as an independent public institution. FSMA was established by law. The parliament has entrusted it to perform tasks that conform to the general interest of the public.
The Royal Decree selects the members of the governing bodies of the FSMA. They serve for six years. FSMA’s staff has the status of a private sector employee.
The FSMA and National Bank of Belgium (NBB) are responsible for supervising the Belgian financial sector.
FSMA regulated entities
The Financial Services and Markets Authority regulates the following Belgium entities to ensure an impartial financial system:
- Credit Institutions
- Investment Firm
- Insurance Company
- Real estate Investment Company
- Listed Company
- Institutions for Occupational Retirement Provision (IORP)
- Independent financial planners
- Management Companies of UCITS/AIF
- Central Securities Depository (CSD)
- Currency Exchange Office
- Crowdfunding platforms
- Statutory Auditor
- Intermediaries
FSMA roles and responsibilities
As Belgium’s prime financial regulatory body, FSMA has significant control over credit institutions, insurance companies, investment firms, etc. Its main task is to ensure that all financial institutions are abiding by the national and international financial legislation.
FSMA is also responsible for forming the new financial legislation following the Belgium government. Thus, it performs the leading role in the provision of a stable financial market.
FSMA draws up plans and policies for the legislative framework to cater for both parties equally. On top of that, it is also responsible for keeping a check on crimes and scams.
FSMA has six basic tasks.
- Supervising financial markets and listed companies
- Product supervision
- Rules of conduct
- Financial service providers and intermediaries
- Financial education
- Pensions
Supervising financial markets and listed companies
FSMA is responsible for supervising financial markets and listed companies. It manages the information provided by the companies listed on the stock market. In addition, it checks if the company information is complete and timely.
The main goal is to uphold the integrity of the financial market.
Product Supervision
Financial products require supervision too. FSMA makes sure the products offered to the clients are useful and understandable. It works to make the products simpler.
Product supervision is carried out in two ways. Firstly, supervision of the quality of the information and advertising material for the financial products. Secondly, supervision of the compliance with the regulations governing the products themselves.
Rules of conduct
FSMA makes certain that all financial institutions follow the rules of conduct. These rules guarantee that institutions will treat all clients equally and professionally.
All financial institutions that offer products in Belgium are required to get authorisation from the National Bank of Belgium.
The rules should make sure that the clients’ interest is kept above that of the financial institution.
The institutions shall only sell the products that fit the client’s risk-bearing. The rules strictly ensure no such products are sold that don’t match the client’s risk profile.
Financial services providers and intermediaries
FSMA regulates multiple financial service providers that are directly in contact with the clients, such as:
- Currency exchange offices
- Intermediaries in banking and investment services
- Management companies of undertakings for collective investment
- portfolio management and investment advice companies
- Mortgage companies
- Insurance intermediaries
It is yet to be decided if FSMA will be responsible for the supervision of financial planners, institutions that provide customer credits, and intermediaries that provide mortgage loans.
Financial education
FSMA financially educates savers and investors. This is crucial for the prosperity of the financial markets of Belgium. Furthermore, savers and investors equipped with knowledge can build better relations with their financial institutions.
Resultantly, they can avoid buying products that don’t meet their profile.
Pensions
The Financial Services and Markets Authority (FSMA) supervises the pensions that employees earn through their professional activities.
It registers the complaints filed from members and beneficiaries regarding their additional pension rights.
If an institution responsible for providing retirement faces a setback, FSMA will devise a plan to overcome the problem.
Considerable shareholding
FSMA requires the shareholders to inform the regulatory body regarding their holdings when their stakes rise and fall from a set threshold.
The starting threshold for notifying the FSMA in Belgium is 5%.
International position
FSMA is a part of many international regulatory organisations, such as the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA).
FSMA works with the European Systemic Risk Board (ESRB) as well.
Moreover, FSMA is a member of the International Organization of Securities Commission (IOSC) and the International Organization of Pension Supervision (IOPS).
Bottom line
FSMA is an efficient regulatory body that supervises all the financial markets in Belgium. The aim is to regulate the financial sector and devise a framework that goes in line with the country’s law.
FSMA works for the implementation of the law as well. The ones not complying with the rules may get punished. These rules are set for the prevention of abuse and crime.
The primary goal is to protect the customer and provide them with a seamless experience. This eventually leads the financial markets towards prosperity. Any country with a flourishing financial market has a greater chance of a healthy economy.
