(Moniteur belge/Belgisch Staatsblad(Belgian Official Gazette) 76 of 19 April 1993) (Errata Moniteur belge/Belgisch Staatsblad (Belgian Official Gazette) of 2 June 1993 and 4 June 1993)
Scope - Definitions - General provisions
CHAPTER I
Scope
Article 1
The objective of this Law is to regulate the establishment, activity and supervision of credit institutions operating in Belgium, in order to protect savings and ensure the smooth operation of the credit system. A "credit institution" shall mean a Belgian or foreign undertaking whose business is to receive deposits or other repayable funds from the public and to grant credit for its own account.
Article 2
The provisions of this Law shall not apply to:
1 the National Bank of Belgium, the " Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut" and the "Poste (Postcheque)/Post (Postcheque)" (Post Office (Post office giro institution));
2 companies carrying on capitalization activities governed by Royal Decree 43 of 15 December 1934 on the supervision of capitalization companies ("societes de capitalisation/kapitalisatieondernemingen") or by the Law of 9 July 1975 on the supervision of insurance companies.
CHAPTER 11
Definitions
1. For the purposes of this Law and its implementing decrees:
1 "Banking and Finance Commission" shall mean the institution established by Royal Decree 185 of 9 July 1935 on the supervision of banks and the rule sgoverning the issue of securities;
2 "supervision", "holding", "parent undertaking"' a nd "subsidiary" shall mean supervision, holding, parent undertaking and subsidiary as defined in the implementing decrees of Article 44, paragraph 3 of this Law;
3 " qualifying holding " shall mean a direct or indirect holding in an undertaking which represents 10 % or more of the capital or of the voting rights attaching to the securities issued by that company or which makes it possible to exerc ise a significant influence over the management policy of the undertaking in which a holding subsists; for the calculation of the voting rights, the voting rights attaching to the securities treated as shares pursuant to the Law of 2 March 1989 concerning the disclosure of large holdings in listed companies and regulating takeover bids shall be taken into account;
4 "own funds" shall mean own funds as defined in the implementing decrees of Article 43 of this Law;
5 "financial institution" shall mean an undertaking other than a credit institution the principal activity of which is to acquire holdings or to carry on one or more of the activities listed in 2 to 12 of Section 2 of this Article;
6 "branch" shall mean a place of business which forms a legally dependent part of a credit institution and which carries out directly all or some of the transactions inherent in the business of credit institutions; any number of places of business set up in the same Member State by a credit institution with headquarters in another Member State shall be regarded as a single branch;
2. The following activities shall be subject to mutual recognition as set out in Articles 34, 38 and 41 and Title III:
1) Acceptance of deposits and other repayable funds from the public.
2) Lending, including interalia consumer credit, mortgage credit, factoring with or without recourse, and financing of commercial transactions (including forfaiting).
3) Financial leasing.
4) Money transmission services.
5) Issuing and administering means of payment (e.g. credit cards, travellers' cheques and bankers' drafts).
6) Guarantees and commitments.
7) Trading for own account or for account of customers in:
a) money market instruments (cheques, bills, CDs, etc.);
b) foreign exchange;
c) financial futures and options;
d) exchange and interest rate instruments;
e) transferable securities.
8) Participation in share issues and the provision of services related to such issues.
9) Advice to undertakings on capital structure, industrial strategy and related questions and advice and services relating to mergers and the purchase of undertakings.
10) Money broking.
11) Portfolio management.
12) Safekeeping and administration of securities.
13) Credit reference services.
14) Safe custody services.
CHAPTER III
Soliciting repayable funds from the public
Article 4
Only credit institutions established in Belgium and credit institutions established pursuant to the law of another EC Member State and eligible under Articles 66 et seq. of this Law shall be authorized to solicit deposits or other funds repayable at sight, term or notice from the public in Belgium or accept such deposits or funds from the public in Belgium.
Paragraph 1 shall not apply to:
1 the National Bank of Belgium and the "Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut";
2 the "Poste (Postcheque)/Post (Postcheque)" (Post Office (Post offlce giro institution)) and the "Caisse des Depots et Consignations/Deposito- en Consignatiekas";
3 stockbroking firms governed by Article 50, Section1 of the Law of 4 December 1990 on financial transactions and financial markets, with regard to the deposits referred to in that Article;
4 companies referred to in Article 2, 2, with regard to the capitalization transactions referred to in that Article;
5 persons, companies and institutions which publicly offer securities evidencing the receipt of repayable funds governed by Title ll of Royal Decree185 of 9 July 1935, or which are exempted from the provisions of that Title in accordance with European law;
6 national associations of sickness benefit schemes governed by the Law of 6 August 1990 on sickness benefit schemes and national associations of sickness benefit schemes, with regard to the premarital savings schemes referred to in Article 7, Section 4 of the above-mentioned Law;
7 persons and companies publicly offering treasury notes in accordance with the Law of 22 July 1991.
Transfers of trade bills, by means of endorsement or otherwise, shall be treated in the same way as the transactions referred to in paragraph 1.
This Article shall apply to persons or companies operating on Belgian territory without credit institution status who solicit and collect repayable funds from the public from within Belgian territory but collect such funds outside Belgium.
Article 5
For the purposes of Articles 1, 4 and 6 of this Law, the King may establish criteria to determine the public character of the activities referred to in these Articles.
CHAPTER IV
Names of credit institutions
Article 6
In Belgium the following institutions alone shall be authorized to use the terms "credit institution", "bank", "banking" or "savings bank" publicly, in particular in their names, activities clauses, securities, documents and advertising:
1 credit institutions established in Belgium;
2 credit institutions governed by the law of another EC Member State operating in Belgium in accordance with Article 66;
3 representative offices referred to in Article 85.
However,
1 with regard to the terms " bank " and " banking", paragraph 1 shall not apply to the National Bank of Belgium, the " Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut" and banking institutions governed by international public law of which one or more EC Member States are members;
2 with regard to the terms " credit institution ", " bank " and "savings bank", paragraph 1 shall not apply to credit institutions established outside Belgium which are not authorized to carry on banking activities in Belgium and which publicly offer securities within the meaning of Title ll of Royal Decree 185 of 9 July 1935;
3 without prejudice to 2 and to the case of credit institutions governed by the law of another EC Member State whose name comprises these terms, the only credit institutions authorized to use the term "savings bank" shall be those included in the category "savings banks" referred to in Article 13, the "Caisse generale d'Epargne et de Retraite-Banque/Algemene Spaar- en Lijfrentekas-Bank", the "Caisse generale d'Epargne et de Retraite-Holding Algemene Spaar- en Lijfrentekas-Holding" and the "Caisse generale d'Epargne et de Retraite-Assurances/Algemene Spaar- en Lijfrentekas-Verzekering", and those communal savings banks which were in existence on 1 January 1932;
4 the "Caisse generale d'Epargne et de Retraite-HoldingAlgemene Spaar- en Lijfrentekas-Holding", the "Credit Communal-Holding/Gemeentekrediet-Holding" and the financial holding companies provided for in Article 49, Section 1, 2 and subject to the supervision referred to in that Article shall also be authorized to use the term "bancaire/bank" (bank) in the nomenclature "holding bancaire/bankholding" (bank holding company).
If there is any danger of confusion, the Banking and Finance Commission may require from foreign credit institutions authorized to use the terms referred to in paragraph 1 in Belgium that their name be accompanied by certain explanatory particulars.
Title 11
Credit Institutions governed by Belgian law
CHAPTER I
Authorization for taking up the business of credit institutions
SECTION I
Authorization
Article 7
Before commencing operations, a credit institution governed by Belgian law wishing to exercise its activities in Belgium must be duly authorized by the Banking and Finance Commission, irrespective of any other place where it may exercise its activities.
Article 8
Requests for authorization shall be accompanied by a programme of operations complying with the conditions laid down by the Banking and Finance Commission and setting out inter alia the type and the volume of the business proposed and the structural organization of the institution. Applicants shall provide all the information needed for their request to be examined.
Article 9
When the request for authorization emanates from a credit institution which is a subsidiary of a credit institution authorized in another Member State, or a subsidiary of the parent company of a credit institution authorized in another Member State, or controlled by the same persons, whether natural or legal, as those who control a credit institution authorized in another Member State, the Banking and Finance Commission will, before taking a decision, consult the competent authorities of the other Member States supervising the credit institutions which were granted authorization pursuant to their laws.
Article 10
The Banking and Finance Commission will grant authorization to the credit institutions meeting the conditions laid down in Section ll. The Banking and Finance Commission will give its decision on the application for authorization within three months of presentation of the required information and not later than nine months after receipt of the application.
Decisions regarding authorization will be communicated to the applicants within fifteen days by registered or recorded delivery letter.
Article 11
When granting authorization, the Banking and Finance Commission may, in the interest of sound and prudent management, impose certain conditions on the exercise of certain of the activities proposed.
Article 12
Applicants may appeal against the authorization decisions taken by the Banking and Finance Commission pursuant to Articles 10 and 11, or where the Commission has not reached a decision within the periods of time laid down in Article 10, paragraph 1. In the latter case the appeal will be dealt with as if the application had been rejected.
The appeal must be lodged within fifteen days of notification of the decision or of the expiry of the periods of time laid down in Article 10. It will be addressed to the Minister of Finance and notified to the Banking and Finance Commission by registered or recorded delivery letter.
The Minister of Finance will give his decision on the appeal within two months. The decision will be notified within eight days by registered or recorded delivery letter to the institution which lodged the appeal and to the Banking and Finance Commission. If the Minister of Finance has not reached a decision within the above period of time, the Banking and Finance Commission will automatically grant authorization not later than fifteen days after the applicant has confirmed the application.
Article 13
Each year, the Banking and Finance Commission will draw up a list of the credit institutions which have been granted authorization pursuant to this Title. This list, and any amendments which have been made to it during the year, will be published in the "Moniteur belge/Belgisch Staatsblad" (Belgian Official Gazette) and notified to the Commission of the European Communities.
The list of credit institutions governed by Belgian law comprises the following categories:
a) banks;
b) savings banks;
c) public credit institutions;
d) communal savings banks.
The list may comprise subcategories. The applicant indicates the category and the subcategory under which he wishes to be authorized. If an institution wishes to change to another category or subcategory, it may be so authorized, provided it complies with the conditions and the legal and regulatory consequences of this change.
Attached to the list are the names of the bank holding companies of public interest referred to in Article 191, 2 of the Law of 17 June 1991 and the financial holding companies governed by Belgian law defined in Article 49, Section1, 2.
Article 14
When the Commission of the European Communities is notified that authorization has been granted to a credit institution governed by Belgian law which is a subsidiary of one or more parent companies which are governed by the laws of one or more non-EC-Member States, the identity of this (these) parent company (companies) shall be given and, where appropriate, the financial structure of the group controlling the institution to which the authorization is granted shall be specified.
The Banking and Finance Commission will provide the Commission of the European Communities, at its request, with the same information when an application for authorization is made by a credit institution governed by Belgian law meeting the conditions of the preceding paragraph, in the circumstances described in Article 9, (3) and (4), paragraph 1 of European Council Directive 89/646/EEC of 15 December 1989.
In the circumstances described in Article 9, (4), paragraphs 2 to 4 of the same Council Directive, the Banking and Finance Commission will limit or suspend its decisions regarding applications for authorization of credit institutions governed by Belgian law referred to in paragraph 1, according to the rules and for the duration laid down by the Council or the Commission of the European Communities on the basis of these provisions.
SECTION II Authorization conditions SUBSECTION I Legal form Art. 15 Credit institutions governed by Belgian law shall be incorporated as any form of commercial company other than a private limited liability company formed by one person. SUBSECTION II Initial capital Art. 16 In order to be granted authorization a minimum capital of BFr 250 million shall be required. The capital shall be fully paid up for the minimum amount set out in paragraph 1. For existing institutions requesting authorization, the share premiums, reserves and results brought forward will be considered as capital. However, the capital as such shall always amount to at least BFr 100 million and be paid up to that amount. SUBSECTION III Shareholders or members Art. 17 The Banking and Finance Commission will not grant authorization before it has been informed of the identities of the natural or legal persons having a direct or indirect holding, whether or not conferring voting rights, of at least 5 % in the credit institution's capital, and of the amounts of capital or voting rights held by these persons. If a holding is held in concert or by mutual agreement by several persons, Article 2, ¤¤ 2 and 3, second sentence of the Law of 2 March 1989 concerning the disclosure of large holdings in listed companies and regulating takeover bids, and the measures implementing these Articles taken pursuant to the above-mentioned Law, shall apply. Article 2, ¤1 of the above-mentioned Law shall also apply. The Banking and Finance Commission will refuse authorization if, taking into account the need to ensure the sound and prudent management of a credit institution, it is not satisfied as to the suitability of the natural or legal persons referred to in paragraph 1. SUBSECTION IV Management Art. 18 A credit institution shall be effectively managed by at least two natural persons, who shall have the necessary professional repute and appropriate experience to carry out their functions. Art. 19 The persons referred to in Articles 1 to 3, 3bis, ¤ ¤ 1 and 3, and 3ter of Royal Decree 22 of 24 October 1934 prohibiting persons convicted of certain offences and bankrupts from carrying out certain functions, professions or activities and authorizing the Commercial Courts to impose such prohibitions, may not be responsible for the management or administration of a bank, nor may they represent companies carrying out such functions. Furthermore, the functions described in paragraph 1 may not be carried out by: 1” persons sentenced to less than three months' imprisonment or a fine for an offence provided for in the above-mentioned Royal Decree 22 of 24 October 1934; 2” persons convicted of an offence against: a) Articles 104 and 105 of this Law; b) Articles 42 to 45 of Royal Decree 185 0f 9 July 1935 on the supervision of banks and the rules governing the issue of securities; c) Articles 31 to 35 of the provisions regarding the supervision of private savings banks, as coordinated on 23 June 1967; d) Articles 13 to 16 of the Law of 10 June 1964 on the public raising of funds; e) Articles 100 to 112ter of Title V of Book I of the Commercial Code or Articles 75, 76, 78, 150, 175, 176, 213 and 214 of the Law of 4 December 1990 on financial transactions and financial markets; f) Article 4 of Royal Decree 41 of 15 December 1934 protecting savings by regulating instalment sales of prize bonds; g) Articles 18 to 23 of Royal Decree 43 of 15 December 1934 on the supervision of capitalization companies; h) Articles 200 to 209 of the Law on commercial companies, as coordinated on 30 November 1935; i) Articles 67 to 72 of Royal Decree 225 of 7 January 1936 regulating mortgage loans and organizing the supervision of mortgage loan companies or Article 34 of the Law of 4 August 1992 on mortgage loans; j) Articles 4 and 5 of Royal Decree 71 of 30 November 1939 regarding the peddling of securities and door-to-door sales of securities, merchandise and goods; k) Article 31 of Royal Decree 72 of 30 November 1939 regulating the stock exchanges and forward commodities markets, the profession of brokers and intermediaries working on these forward markets, and the non-enforceability of gambling debts; l) Article 29 of the Law of 9 July 1957 regulating hire purchase and the financing thereof, or Articles 101 and 102 of the Law of 12 June 1991 on consumer credit; m) Article 11 of Royal Decree 64 of 10 November 1967 regulating the status of holding companies; n) Articles 53 to 57 of the Law of 9 July 1975 on the supervision of insurance companies; o) Articles 11, 15, ¤ 4 and 18 of the Law of 2 March 1989 on the disclosure of large holdings in listed companies and regulating takeover bids; 3” persons convicted by non-Belgian courts of law of offences similar to those set out in 1” and 2”; Article 2 of the above mentioned Royal Decree 22 of 24 October 1934 shall apply in such circumstances. In respect of the persons referred to in 2” and, with regard to the convictions mentioned in 2”, of the persons referred to in paragraph 2, 3” of this Article, the Banking and Finance Commission may authorize derogations from the prohibitions referred to in paragraph 2. SUBSECTION V Organization Art. 20 A credit institution shall have a management structure, administrative and accounting procedures and internal control systems which are appropriate to the activities proposed. If the credit institution is part of a group, the group structure shall provide for adequate prudential supervision at both company and consolidated level. SUBSECTION Vl Head office Art. 21 The credit institution shall maintain its head office in Belgium SUBSECTION VII Deposit guarantee scheme Article 22 The credit institution shall participate in a collective deposit guarantee scheme in compliance with Article 110 of this Law. CHAPTER II Conditions governing the pursuit of the business of credit institutions SECTION I Minimum own funds Art. 23 ¤1. A credit institution's own funds may not fall below the minimum amount of capital required in accordance with Article 16, paragraphs 1 and 3. Cooperative companies may not redeem shares if, as a result of the redemption, the institution is no longer able to respect the own funds ratios established pursuant to Article 43. ¤ 2. If the own funds of the credit institutions already in existence on 1 January 1993 do not attain the minimum level prescribed in Article 16, paragraphs 1 and 3, on that date, the minimum amount required shall always be set at the highest level reached since 31 December 1989. However, 1” in the event of a change in the control of a credit institution, the own funds shall attain the level prescribed in Article 16, paragraph 1 within three months; 2” in the event of a merger between two or more credit institutions falling within the scope of ¤ 2, paragraph 1, first sentence, the total own funds of the institution resulting from the merger shall at the time of the merger attain the level prescribed in Article 16, paragraph 1. Under the conditions and for the period it establishes, the Banking and Finance Commission may authorize a lower level of own funds which may not, however, be less than the total own funds of the institutions before the merger. ¤ 3. If the own funds no longer attain the levels prescribed respectively by ¤ 1, ¤ 2, paragraph 1, or ¤ 2, paragraph 2, 2”, the Banking and Finance Commission may allow a limited period within which the level concerned must again be attained. SECTION II Changes affecting capital structure Art. 24 ¤ 1. Without prejudice to Article 17 of this Law and the Law of 2 March 1989 concerning the disclosure of large holdings in listed companies and regulating takeover bids, any natural or legal person who proposes to acquire securities or shares, whether or not conferring voting rights or representing capital, of a credit institution governed by Belgian law, in such a way that the proportion of the capital or of the voting rights directly or indirectly held would reach at least 5 %, shall first inform the Banking and Finance Commission of his intention and of the capital portion and the number of voting rights represented by his holding. Any natural or legal person who proposes to increase his holding in such a way that the proportion of the capital or of the voting rights held would reach or exceed a level of lO%, 15%, 20% and soon, by increments of 5 points, shall likewise inform the Banking and Finance Commission. Articles 1, ¤ 3, ¤ 4, paragraph 2, and 2 of the above-mentioned Law of 2 March 1989 and their implementing decrees shall apply. Within a month of this Law coming into force, any natural or legal person holding securities or shares meeting the criteria set out in paragraph 1 in a credit institution governed by Belgian law shall inform the Banking and Finance Commission in the manner set out in paragraphs 1 and 2. ~ 2. If the acquirer is a credit institution authorized in another EC Member State or a parent company of a credit institution or a natural or legal person controlling such a credit institution, and if, as a result of that acquisition, the institution in which the acquirer proposes to acquire a holding would become a subsidiary or subject to the control of that institution, that parent company or that natural or legal person, the Banking and Finance Commission will first consult with the supervisory authority referred to in Article 9 with regard to the acquirer's identity. ~ 3. The Banking and Finance Commission will have a maximum of three months from the date of the notification provided for in ~ 1, paragraph 1 to object to the proposed acquisition if, in view of the need to ensure sound and prudent management, it is not satisfied as to the suitability of the natural or legal person who made the notification. If it does not object to the plan, it may fix a maximum period for the implementation of the proposed acquisition. 4. Any natural or legal person holding shares in a credit institution representing 5 % or more of the capital or granting at least 5 % of the voting rights and who proposes to dispose, directly or indirectly, of all or part of these shares in such a way that his holding would fall below the thresholds referred to in ~ 1, paragraph 1 shall inform the Banking and Finance Commission at least one month beforehand of the size of the capital portion and the number of voting rights which will be disposed of and remain in his possession after the disposal respectively; insofar as the identity of the acquirer(s) is known to him, he shall inform the Banking and Finance Commission thereof. ~ 5. If the notification set out in ~ 1 is not given or if, despite the objection of the Banking and Finance Commission as provided for in ~ 3, a holding is acquired or increased, or if a holding is disposed of without the notification set out in ~ 4 being made, the President of the Commercial Court in whose jurisdiction the company has its registered office will order a temporary injunction and impose the measures provided for in Article 8, paragraph 1 of the above-mentioned Law of 2 March 1989. He may also overrule all or some of the decisions of any General Meeting which may have taken place in the above-mentioned cases. The legal proceedings will be initiated by a summons issued by the Banking and Finance Commission. Article 8, paragraphs 4 and 5 of the above-mentioned Law of 2 March 1989 shall apply. ~ 6. On becoming aware of them, credit institutions shall inform the Banking and Finance Commission of any acquisitions or disposals of their securities or shares that cause holdings to exceed or fall below one of the thresholds referred to in ~1, paragraph 1. They shall also, at least once a year, inform the Banking and Finance Commission of the names of shareholders and members directly or indirectly holding shares representing at least 5 % of the capital or conferring at least 5 % of the voting rights, and of the capital portion and the number of voting rights held. They shall also inform the Banking and Finance Commission of the number of shares and voting rights attaching to such shares the acquisition or disposal of which was declared to them in accordance with Article 5 of the above-mentioned Law of 2 March 1989 for the cases in which the notification to the Banking and Finance Commission is not prescribed by the articles of association. ~ 7. Where the Banking and Finance Commission has reason to believe that the influence exercised by natural or legal persons directly or indirectly holding shares in the capital of the credit institution representing at least 5 % of the capital or 5 % of the voting rights is likely to operate to the detriment of the sound and prudent management of the credit institution, it may, without prejudice to the other measures provided for by this Law: 1” suspend the exercise of the voting rights attaching to the shares held by the shareholders or members in question and, at the request of all interested parties, withdraw the measures ordered. Its decision is notified to the shareholders or members in question in the most appropriate way. Its decision is enforceable as soon as it has been notified. The Banking and Finance Commission may make its decision public; 2” order the above mentioned persons to dispose of the shares held within the period it establishes. If the shares are not disposed of within this period, the Banking and Finance Commission may order the sequestration of the shares at the " Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut". The sequestration is notified by the "Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut" to the company, which shall adapt its shareholders' registeraccordinglyandacceptthatthevotingrightsattachingtothesharesbeexclusivelyexercised bythe "Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut", even where no bearer shares are presented. The " Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut" acts to the benefit of the sound and prudent management of a credit institution and in the interest of the holder of the sequestered shares. It exercises all the rights attaching to the shares. The amounts collected as dividend or otherwise will be remitted to the above-mentioned holder. The above-mentioned holder's assent shall be required to subscribe to capital increases or other securities, whether or not conferring voting rights, to decide whether or not to pay stock dividends, to respond to takeover bids or exchange bids and to pay up the partly paid shares. The shares acquired pursuant to such transactions shall ipso jure be added to the above-mentioned sequestration. The sequestration charge will be set by the Banking and Finance Commission and paid by the above-mentioned holder. The " Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut" may deduct this charge from the payments made by the above-mentioned holder with a view to or consequent to the above-mentioned transactions. When voting rights, notwithstanding the suspension of their exercise in accordance with paragraph 1, 1”, have been exercised by the initial holder or by a person other than the " Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut" for the account of the holder after the period fixed in accordance with paragraph 1, 2” first sentence has expired, the Commercial Court in whose jurisdiction the company has its registered office may, at the Banking and Finance Commission's request, overrule all or part of the decisions of the General Meeting, if the quorums for attendance or for the majority needed for such decisions would not have been reached without the illegally exercised voting rights. Art. 25 The Banking and Finance Commission will notify the Commission of the European Communities whenever a direct or indirect holding is acquired in a credit institution governed by Belgian law by one or more natural or legal persons governed by the law of one or more non-EC-Member States in such a way that the credit institution would become their subsidiary. The identity of such natural or legal persons will be given and the amount of the holding and the financial structure of the group acquiring the holding will be specified in the notification. Whenever a plan to acquire a holding referred to in paragraph 1 is submitted to the Banking and Finance Commission in accordance with Article 24 in the circumstances described in Article 9, (3) and (4), paragraph 1 of Council Directive 89/646/EEC of 15 December 1989, the Banking and Finance Commission will provide the Commission of the European Communities, at its request, with the same notifications and information. The Banking and Finance Commission will limit or prohibit the acquisition of a holding in the circumstances described in Article 9, (4), paragraphs 2 to 4 of the above-mentioned Council Directive in the manner and for the duration laid down by the Council or Commission of the European Communities pursuant to these provisions. Where a holding is acquired or increased despite the measures taken by the Banking and Finance Commission in accordance with paragraph 4, Article 24, ~ 5 shall apply. SECTION 111 Management and managers Art. 26 The articles of association of credit institutions established as limited liability companies may authorize the Board of Directors to delegate all or some of the powers set out in Article 54, paragraph 1 of the Law on commercial companies to a Management Committee which exists within the Board, the members of which it nominates and dismisses and the remuneration of which it determines. This delegation of powers may not, however, extend to the definition of the general policy, or to the acts reserved for the Board of Directors by virtue of other provisions of the Law on commercial companies. Art. 27 ¤1. The directors, managers or managing directors of a credit institution and all persons who, in whatever name or capacity, participate in the institution's management and management policy, may neither act as director, manager, managing director orofficer, norparticipateinwhatevernameorcapacityinthemanagementorthemanagementpolicyofacommercialcompany, a civil company having a legal commercial form or a company having another Belgian or foreign legal form, nor participate in the policy of Belgian or foreign public institutions carrying on industrial, commercial or financial activities. If the functions referred to in paragraph 1 are carried out by companies, the prohibitions shall apply both to the companies and to the natural persons representing them. Paragraphs 1 and 2 shall not apply when a director's mandate is exercised without participation in the daily management of companies in which the credit institution has a direct or indirect holding, nor when director's mandates are exercised with or without participation in the daily management of credit institutions, financial institutions, stockbroking firms or insurance companies; if, in the first case, the holding is disposed of, the director's mandate may be exercised until it expires. ~ 2. If, pursuant to Article 26 or in application of the possibilities referred to in the Law on commercial companies, the policy of a company is entrusted to a Management Committee, ~1 shall not apply to: 1o members of the Board of Directors who are not members of the Management Committee; these members may, however, only exercise a director's mandate in a company in which the credit institution has a holding if they do not participate in the daily management, and if they are entrusted with this mandate in their capacity of representative of a company other than the credit institution; 2” the members of the Management Committee, the directors and other persons participating in the institution's daily management, with regard to director's mandates where they represent the institution in companies in which it has a direct or indirect holding; when the holding is disposed of, the director's mandate may be exercised until it expires; directors may not participate in the daily management of companies which are not credit institutions, financial institutions, stockbroking firms or insurance companies. 3. In individual cases, the Banking and Finance Commission may authorize derogations from the prohibitions of this Article under the conditions it establishes. ~ 4. The incompatibility rules applicable to the managers of public credit institutions shall continue to be governed by Article 202 of the Law of 17 June 1991 on the organization of the public credit sector and on the public sector's shareholdings in certain private financial companies. Credit institutions may only grant, directly or indirectly, borrowing facilities or guarantees to their directors or managers at the same conditions, for the same amounts and against the same security as those which apply to their customers. The borrowing facilities and guarantees directly or indirectly granted by such institutions to companies and institutions in which the directors or managers or their spouses personally own, directly or indirectly, a qualifying holding, must be notified to the Banking and Finance Commission in accordance with the periodicity and in the manner it lays down. If the transactions were not concluded at normal market conditions, the Banking and Finance Commission may demand that the conditions agreed upon be changed at the time the transactions became effective. If not, the managers who took the decision shall be jointly and severally liable for the difference borne by the institution. Art. 29 In the event of the bankruptcy of a credit institution, the managers or directors may not claim payment out of the institution's assets, in cash or otherwise, of annual fees or other forms of profit-sharing to which entitlement arose during the two years preceding the moment established by the Court as that when payments were suspended. Paragraph 1 shall not apply if the Court acknowledges that no serious and obvious mistakes by such persons have contributed to the bankruptcy. SECTION IV Mergers and transfers between credit institutions Art. 30 The authorization of the Banking and Finance Commission is required: 1” with regard to mergers between credit institutions or between such institutions and other financial institutions; 2” when all or part of the activities or the network are transferred between credit institutions or between credit institutions and other institutions which are active in the financial sector. The Banking and Finance Commission may only refuse authorization within three months after the notification of the project, for reasons relating to the sound and prudent management of the credit institution(s) concerned. If the Commission has not intervened within the above-mentioned period, the authorization is considered granted. Any complete or partial transfer of rights and obligations between credit institutions or between credit institutions and other financial institutions which result from transactions of the institutions or companies concerned and for which authorization was granted in accordance with Article 30 shall be enforceable against third parties as soon as the authorization of the Banking and Finance Commission has been published in the "Moniteur belge/Belgisch Staatsblad" (Belgian Official Gazette). SECTION V Shareholdings and participating interests Art. 32 ¤1. Credit institutions may have direct or indirect shareholdings, irrespective of their form, in one or more enterprises under the conditions and within the limits established by this Article. ¤2.ForthepurposesofthisArticle, "enterprises"shallmeancommercialcompanies,civilcompanieshavingalegalcommercial form, joint ownerships, economic interest groupings and European economic interest groupings. ¤ 3. Credit institutions may subscribe to or acquire shareholdings, otherwise than on the stock exchange, with a view to offering them for resale, and hold them for a maximum period of one year starting from the first subscription or acquisition. Credit institutions may, for the same period, have shareholdings in one or more joint ownerships established for the public issue of securities within the meaning of Article 26 of Royal Decree 185 of 9 July 1935. Likewise they may have, for a maximum period of two years, shareholdings in settlement of doubtful or unpaid debts. ¤ 4. Credit institutions may have shareholdings in: 1” Belgian or foreign credit institutions; 2” stockbroking firms established according to Belgian law and securities institutions established according to foreign law; 3” Belgian or foreign insurance companies; 4” other Belgian or foreign companies the principal activity of which consists in carrying out financial transactions or providing financial services falling within the activities of credit institutions as described in Article 3, ¤ 2, and in companies established with a view to holding the capital of such companies; 5” Belgian or foreign companies the principal activity of which consists in providing financial services ancillary to the activity of credit institutions. ¤ 5. Credit institutions may have shareholdings in cases other than those referred to in ¤¤ 3 and 4, provided that no single shareholding exceeds 10% and that the total amount of all shareholdings does not exceed 35 % of own funds. These limits may be increased by Royal Decree, after seeking the opinion of the Banking and Finance Commission, it being understood that a qualifying holding held by a credit institution may never exceed 15% of own funds and the total amount of all shareholdings may never exceed 60% of own funds. For the purposes of the limits per shareholding established in accordance with paragraph 1, shares issued by companies which, irrespective of their status and legal form, are regarded as constituting a single risk shall be considered one single shareholding; affiliated enterprises shall be regarded as constituting a single risk until evidence to the contrary is furnished. Without prejudice to paragraph 1, the following shareholdings shall be deducted in full from the own funds for the purposes of Articles 16, paragraph 3, 23 and 43: a) shareholdings in companies having a qualifying holding in credit institutions or the subsidiaries thereof; b) shareholdings in companies controlled by natural or legal persons having such qualifying holdings. ¤ 6. In special cases, the Banking and Finance Commission may authorize shareholdings to be held temporarily, notwithstanding the conditions and restrictions laid down in ¤ 5. If, as a result of authorizations granted in accordance with paragraph 1 and in cases other than those referred to in ¤¤ 3 and 4, a credit institution has a qualifying holding exceeding the percentage of own funds prescribed in ¤ 5, or if the total amount of such shareholdings exceeds the percentage of own funds prescribed in the same ¤ 5, the excess shall be deducted from the own funds for the purposes of the limits laid down in Articles 16, paragraph 3, 23 and 43. If both above-mentioned limits are exceeded, the highest excess shall be deducted from the own funds. ¤ 7. The decrees provided for in this Article shall be enacted after consultation with the credit institutions represented by their professional associations. ¤ 8. The provisions of this Article shall not prejudice the regulatory provisions laid down in application of Article 43. SECTION Vl Use of funds and securities Art. 33 Credit institutions may not use funds and securities deposited with them to exercise a direct or indirect influence on public opinion for their own benefit. This prohibition shall not apply to public advertising campaigns. SECTION Vll Opening branches abroad Art. 34 A credit institution wishing to establish a branch within the territory of another EC Member State in order to exercise all or part of the activities listed in Article 3, ¤ 2 and for which it was granted authorization in Belgium shall notify its intentions to the Banking and Finance Commission. This notification shall contain a programme of operations setting out inter alia the types of business proposed, the structural organization of the branch, the address for correspondence in the Member State concerned and the names of the managers of the branch. The Banking and Finance Commission may object to the establishment of such a branch, stating its reasons for doing so, if such establishment could impair the organization, financial position or supervision of the credit institution. The decision of the Banking and Finance Commission will be notified to the credit institution by registered or recorded delivery letter at the latest within six weeks of receipt of all the information referred to in paragraph 2. If the Commission fails to notify its decision within this period, it is deemed to have no objection to the establishment of the branch. The credit institution shall have the right to appeal against the decisions referred to in paragraph 3. The appeal shall be lodged within eight days after notification of the decision. It shall be addressed to the Minister of Finance and notified to the Banking and Finance Commission by registered or recorded delivery letter. The Minister will rule on the appeal within one month. His decision will be notified to the institution and the Banking and Finance Commission within eight days by registered or recorded delivery letter. If the Minister of Finance has not notified his decision within the above-mentioned period, the appeal shall be deemed to have been upheld. The Banking and Finance Commission will inform the Commission of the European Communities, giving the reasons therefor, of the number of cases in which it has definitely decided, pursuant to paragraphs 3 and 5 hereof, to object to the proposed opening of a branch in EC Member States, and according to the periodicity laid down by the Commission of the European Communities. This Article, with the exception of paragraph 6, shall apply to the opening of branches in non-EC-Member States, whatever activities they may propose to carry on. Art. 35 Where the host Member State of the branch is an EC Member State, the Banking and Finance Commission, if it has not objected to the establishment of the branch pursuant to Article 34, paragraph 3, or where its objection has been or should be considered overruled in accordance with Article 34, paragraph 5, will forward to the supervisory authorities of the credit institutions of the State concerned, within three months after having received all the information required pursuant to Article 34, paragraph 2, all such information received, as well as the credit institution's amount of own funds, its solvency ratio, the identity of its managers, and any terms and conditions of the deposit guarantee scheme which is intended to ensure the protection of depositors in the branch. Art. 36 Where the host Member State of the branch is a non-EC-Member State, the Banking and Finance Commission, after consultation with the supervisory-authorities of the credit institutions of that State, may establish the rules governing the opening and supervision of that branch, as well as the exchange of any other information with a view to complying with Articles 95 et seq. Art. 37 Any credit institution opening a branch abroad shall notify all changes in the information provided pursuant to Article 34, paragraph 2 to the Banking and Finance Commission at least one month before making the change. Article 34, paragraphs 3 to 5, shall apply should the case arise and Article 35 shall apply in the event of any change in the information referred to in Article 34, paragraph 2 or in the applicable deposit guarantee scheme. SECTION Vlll Free provision of banking services abroad Art. 38 If a credit institution wishes to exercise, within the territory of another EC Member State, all or part of the activities listed in Article 3, ¤ 2 for which authorization was granted in Belgium, but does not wish to establish a branch, it shall notify its intention to the Banking and Finance Commission and specify the activities proposed. Art. 39 In the case referred to in Article 38, the Banking and Finance Commission will, within one month of receipt of the notification, send the notification referred to in Article 38 to the supervisory authorities of the credit institutions of the State concerned. Art. 40 Article 38 shall apply to any activity carried on without the establishment of a branch, where the State concerned is a non-EC-Member State. In that case, the Banking and Finance Commission, after consultation with the supervisory authorities of the credit institutions of that State, may establish the rules governing the supervision of the activities, as well as any other exchange of information with a view to complying with Articles 95 et seq. SECnON IX Exercise of banking activities by specialized subsidiaries of credit institutions in another EC Member State Art. 41 Financial institutions governed by Belgian law which are direct or indirect subsidiaries of one or more credit institutions governed by Belgian law and which are authorized to carry on in Belgium the activities listed in point 2 et seq. of the list set out in Article 3, ~ 2, may, for the purpose of carrying on such activities, establish branches in other EC Member States according to the rules laid down in Articles 34, 35 and 37, or exercise their activities in such countries without establishing branches according to the rules laid down in Articles 38 and 39, provided they meet the following conditions: 1” the credit institutions which are the parent companies of these financial institutions must be authorized as credit institutions in accordance with this Title; 2” the financial institutions must actually carry on the activities within Belgium; 3” the credit institutions which are the parent companies of these financial institutions must hold at least 90% of the voting rights attaching to the shares of these financial institutions; 4” the pa.ent companies must satisfy the Banking and Finance Commission with regard to the sound and prudent management of the financial institutions; 5” the parent companies must declare, according to the rules adopted by the Banking and Finance Commission, that they jointly and severally guarantee the commitments entered into by the financial institutions; 6” the financial institutions must be effectively included in the consolidated supervision of the parent company, in accordance with Article 49, in particular for the calculation of the solvency ratio, for the control of large exposures and for purposes of the limitation of holdings provided for in Article 32. Before taking the decision referred to in Article 34, the Banking and Finance Commission will verify compliance with these conditions. For that purpose, it will supply a certificate of compliance which will form part of the notification referred to in Article 35. By way of derogation from Article 35, the Banking and Finance Commission will report the amount of own funds of the financial institution concerned and the consolidated solvency ratio of the credit institutions of which the financial institution is a subsidiary. If the financial institutions referred to in this Article cease to meet any of the above conditions, the Banking and Finance Commission will notify the competent supervisory authorities of the credit institutions of the Member States where such financial institutions are operating through a branch or by way of provision of services. Art. 42 The amount of own funds of the financial institutions referred to in Article 41 may not fall below the amount of own funds attained at the time of notification referred to in Article 41, paragraph 2, third sentence. Articles 20, 24, 46 to 49, 50 to 55, 57, ~1, paragraphs 1 and 2, 1” to 3”, and ~ 2 and 3, 58, 95 to 100, 101, paragraph 1, 102 to 105, fixing the penalties for offences against the foregoing provisions shall apply to such financial institutions. The financial institutions referred to in this Section will be listed in an Annex to the list of credit institutions referred to in Article 1 3. SECTION X Required ratios Art. 43 Without prejudice to the legal provisions concerning the regulatory measures applicable to credit institutions, which measures are based on monetary considerations, the Banking and Finance Commission may, for the purpose of supervising the solvency and liquidity of such institutions, issue requirements covering all credit institutions or categories of credit institution, after consultation with the National Bank of Belgium and with the approval of the Minister of Finance and the Minister of Economic Affairs, in order to determine the ratios to be observed: a) between all or some of their off-balance-sheet assets on the one hand, and all or some of their off-balance-sheet liabilities on the other; b) between their own funds on the one hand, and all or some of their off-balance-sheet assets and liabilities on the other; c) between their own funds on the one hand, and all or some of their off-balance-sheet assets and liabilities receivable from or due to the same counterparty or group of counterparties which are regarded as constituting a single risk on the other. The requirements referred to in paragraph 1 may also establish the limits applicable to certain items referred to in a) to c). The items referred to in a) to c) of paragraph 1 may be taken as a total amount, or as a variation in relation to a reference period, or both. Moreover, they may be taken per currency, per type, per category of counterparty, per maturity or per market. The requirements laid down in this Article will be issued after consultation with the credit institutions represented by their professional associations. In special cases, the Banking and Finance Commission may authorize derogations from these requirements. SECTION Xl Reporting requirements and accounting rules Art. 44 Credit institutions shall periodically submit a detailed statement to the National Bank of Belgium and to the Banking and Finance Commission. The statement shall be drawn up in accordance with the rules laid down in consultation with the National Bank of Belgium by the Banking and Finance Commission, which will also determine its frequency. Moreover, the Commission may order the regular transmission of any other figures or explanations which may be required to ascertain that the provisions of this Law or its implementing decrees or rules have been complied with. Credit institutions shall file their annual accounts with the National Bank of Belgium. The King will determine, after the Banking and Finance Commission and the National Bank of Belgium have given their opinion: 1” the rules according to which credit institutions are required to maintain accounting systems, carry out valuations of the inventory of their business and prepare the annual accounts; 2” the rules according to which credit institutions are required to prepare, supervise and publish their consolidated annual accounts, and prepare and publish their annual and supervisory reports with regard to such consolidated accounts. The Banking and Finance Commission may, for certain categories of credit institution or in special cases, authorize derogations from the decrees and rules referred to in paragraphs 1 and 3. The derogations authorized for certain categories of credit institution are granted after consultation with the National Bank of Belgi u m . The decrees and rules referred to in this Article will be issued after consultation with the credit institutions represented by their professional associations. Art. 45 The National Bank of Belgium will publish periodically and at least four times a year, a global statement of credit institutions according to the rules laid down by the Banking and Finance Commission after consultation with the National Bank and the credit institutions represented by their professional associations. This statement may be subdivided according to the categories of institution referred to in Article 13. CHAPTER 111 Supervision of credit institutions SECTION I Supervision by the Banking and Finance Commission Credit institutions are subject to supervision by the Banking and Finance Commission. The Banking and Finance Commission may request information to be provided on their financial position, their transactions, the manner in which they are organized and the way in which they operate. The Banking and Finance Commission may carry out on-the-spot inspections and take cognizance of and copy, on the spot, any information in the institution's possession in order to: 1” ascertain that the laws and regulations governing the status of credit institutions are complied with, and that the accounting system, the annual accounts, the statements and other information supplied by the institution reflect a true and fair view; 2” ascertain that the institution's management structure, administrative and accounting procedures and internal control systems are appropriate; 3” satisfy itself that the management policy of the institution is sound and prudent and that its position or transactions are not likely to operate to the detriment of its liquidity, profitability or solvency. The Banking and Finance Commission will not interfere in the relationship between a credit institution and a given customer unless required to do so for the purposes of supervising the institution. Art. 48 Provided it has informed the competent national supervisory authorities beforehand, the Banking and Finance Commission may carry out, at the premises of the branches of credit institutions governed by Belgian law which are established in another EC Member State, the inspections referred to in Article 46, paragraph 3, as well as any on-the-spot inspections necessary to collect or verify all information on the management policy and administration of the branch and any information which may facilitate the supervision of the credit institution, especially with regard to liquidity, solvency, deposit guarantee schemes, limitation of large exposures, administrative and accounting procedures and internal control systems. For the same purposes and after having informed the supervisory authorities referred to in paragraph 1, the Commission may appoint an auditor to carry out any such investigation as deemed necessary. The fees and any other expenses incurred by this auditor ~hall he horne by the institution. The Comm~ r~ lso ask the authorities concerned to c arrv o~ ny of the investigations and audits referred to in paragraph Art. 49 ~1. For the purposes of this Article, 1” ' exclusive or joint control" and "consortium" shall be defined with reference to the rules governing annual accounts and consolidated annual accounts issued for the implementation of Article 44, paragraph 3; 2'' "fin~incial holding company" shall mean a financial institution the subsidiary undertakings of which are either exclusively or mainly c re~it institutions or financial institutions, one at least of such subsidiaries being a credit institution. ¤ 2 If d credit institution is a parent company, it and its Belgian and foreign subsidiaries will be subject to supervision on a consolidated basis by the Banking and Finance Commission. Supervision on a consolidated basis will cover the financial position, the limits and conditions laid down in Article 32, the management policy, the organization and the internal control systems of the consolidated entity and the influence of the consolidated companies on other companies. The King may extend the supervision on a consolidated basis to other fields referred to in the EC Directives. The ratios and limits laid down in paragraphs 1 to 3 of Article 43 may be applied on the basis of the consolidated position of the credit institution and its subsidiaries. For the purposes of supervision on a consolidated basis, the credit institutions concerned shall submit a periodic consolidated financial return to the Banking and Finance Commission and to the National Bank of Belgium. After consultation with the National Bank of Belgium and the credit institutions represented by their professional associations, the Banking and Finance Commission will establish the rules for completing this return and for determining the consolidation scope, the consolidation methods and the frequency of the returns. The Banking and Finance Commission may, where appropriate for prudential supervision, require that companies which are not subsidiaries but in which the credit institution has a holding, or with which it has another capital link, be included in the consolidation . The Banking and Finance Commission may prescribe or require that the credit institutions concerned, their subsidiaries and other consolidated companies supply all information relevant for the exercise of supervision on a consolidated basis. In this regard, the Banking and Finance Commission may verify the information received at the premises of all consolidated companies or have such verifications carried out by auditors or, where appropriate, by foreign experts accredited by the Commission to that end, the costs to be borne by the credit institutions concerned. The Banking and Finance Commission may only carry out a verification, or have it carried out, at the premises of a company established in another EC Member State, after having informed the supervisory authorities of that Member State, and insofar as those authorities are not carrying out such a verification themselves or allowing an auditor or an expert to do so. The Banking and Finance Commission, the "Office de Controle des Assurances/Controledienst voor de Verzekeringen" and the "Caisse d'lntervention des societes de bourse/lnterventiefonds van de Beursvennootschappen" work in close cooperation. These institutions exchange such information on the management policy, the position and the transactions of the companies and institutions under their supervision as may be required for exercising supervision on a consolidated basis. The rules for cooperation and exchange of information are contained in an agreement to be approved by the Minister of Finance and the Minister of Economic Affairs. These rules are established in due consideration of the competence of each institution. Supervision on a consolidated basis does not imply that the Banking and Finance Commission supervises each consolidated company individually. Supervision on a consolidated basis does not affect supervision of the consolidated credit institutions on an individual company basis. Nevertheless, the impact of supervision at consolidated level may be taken into account when determining the scope of and procedures for supervision at company level or at sub-consolidated level of a credit institution which is a subsidiary of another credit institution. The King may determine under which conditions Belgian companies included in the consolidation of a foreign credit institution may be required to provide information to foreign authorities responsible for the supervision on a consolidated basis of the foreign credit institution, and under which conditions on-the-spot verification of the information provided may be carried out by the authorities themselves or by auditors or experts authorized by them to do so. The Banking and Finance Commission may, with the approval of the Minister of Finance, conclude bilateral agreements with the supervisory authorities of credit institutions of other EC Member States in order to allocate as efficiently as possible their respective responsibilities with regard to supervision at an individual company or consolidated level for credit institutions belonging to the same group. The Banking and Finance Commission informs the Commission of the European Communities of such agreements. ~ 3. A credit institution which forms a consortium with one or more companies shall be subject to supervision on a consolidated basis of all companies in the consortium and their subsidiaries. The provisions of ~ 2 shall apply. ~ 4. All credit institutions whose parent company is a Belgian or foreign financial holding company shall be subject to supervision on the basis of the financial holding company's consolidated financial position. This supervision covers the areas referred to in paragraphs 2 and 3 of ~ 2. The King may define, change and extend supervision procedures, indicating any other provisions of this Law which may apply to the financial holding companies. ~ 5. Companies which are neither credit institutions nor financial holding companies, and which control a credit institution and its subsidiaries singly or jointly with one or more other companies, shall submit to the Banking and Finance Commission and the competent foreign authorities all information and data deemed relevant for the exercise of supervision of the credit institutions controlled by these companies. The same obligation to provide information shall apply to companies which, although subsidiaries of a credit institution or a financial holding company, are not subject to supervision on a consolidated basis. Where the subsidiary concerned is itself a credit institution, the Banking and Finance Commission or the foreign authorities responsible for the supervision of that subsidiary may require that the parent credit institution or the parent financial holding company submit all information and data deemed relevant for the exercise of supervision of the subsidiary concerned. The King determines a) the conditions and procedures to comply with the obligations resulting from paragraphs 1 and 2 and with the on-the-spot verifications of the information and data referred to therein; b) without prejudice to Article 104, which of those sanctions set out in Title Vlll shall apply where companies provided for in paragraphs 1 and 2 fail to meet their obligations. ~ 6. Moreover, the King establishes rules for supervision on a consolidated basis in accordance with the provisions of Directive 92/30/EEC of 6 April 1992. ¤ 7. The Banking and Finance Commission may, in special cases, authorize derogation from the decrees and rules implementing this Article. SECTION 11 Auditing Art. 50 I or credit institutions governed by Belgian IdW, the function of statutory auditor referred to in the Law on commercial companies may only be entrusted to one or more auditors or audit firms accredited by the Banking and Finance Commission in accordance with Article 52. For credit institutions which are not required to have statutory auditors under the Law on commercial companies, the General Meeting shall appoint one or more auditors or audit firms accredited in the manner described in paragraph 1. They shall exercise the function and have the title of statutory auditor. The provisions of the Law on commercial companies with regard to the statutory auditors of limited liability companies shall apply to the appointment and the function of the statutory auditor in such cases. When applying the Law on commercial companies with regard to the preceding provisions, the General Meeting of members shall replace the General Meeting of shareholders in companies where no General Meeting of shareholders is required by law. The credit institutions may appoint substitute statutory auditors who exercise the function of statutory auditor in the event of long-term incapacity of the statutory auditor. The provisions of this Article and of Article 51 shall apply to these substitutes. The accredited statutory auditors appointed in accordance with this Article shall certifythe credit institution's consolidated annual accou nts. Art. 51 Accredited audit firms shall exercise the function of statutory auditor referred to in Article 50 via an accredited auditor appointed by them and in accordance with Article 33, ¤ 2 of the Law of 22 July 1953. The provisions of this Law and its implementing decrees with regard to the appointment, function, duties and prohibitions applicable to statutory auditors, and with regard to the sanctions, other than penal sanctions, applicable to auditors, shall apply to both the audit firms and to the accredited auditors representing them. An accredited audit firm may appoint a substitute representative from among its partners who meet the appointment conditions. Art. 52 The Banking and Finance Commission establishes the rules governing the accreditation of auditors and audit firms, with the approval of the Minister of Finance and the Minister of Economic Affairs. The rules governing accreditation are issued after consultation with the accredited auditors represented by their professional association. The "Institut des Reviseurs d'Entreprises/lnstituut der Bedrijfsrevisoren" will inform the Banking and Finance Commission, indicating its reasons for doing so, whenever a disciplinary procedure is instituted against an accredited auditor or an accredited audit firm for any omission in the exercise of his or its function within a credit institution, and whenever a disciplinary measure is taken against an accredited auditor or an accredited audit firm. Art. 53 The appointment of accredited statutory auditors and substitute accredited statutory auditors to credit institutions is subject to the prior approval of the Banking and Finance Commission. This approval shall be applied for by the management body proposing the appointment. Where an accredited audit firm is appointed, the approval applies to both the firm and its representative. The renewal of the mandate shall also be subject to approval. If, pursuant to the Law, the President of the Commercial Court or of the Court of Appeal nominates the statutory auditor, he will choose from a list of accredited auditors approved by the Banking and Finance Commission. Art. 54 The Banking and Finance Commission may at any time revoke the approval given to an accredited statutory auditor, a substitute accredited statutory auditor, an accredited audit firm or a representative or substitute representative in accordance with Article 53 detailing the reasons based on their legal status or on the exercise of their functions as an accredited auditor or an accredited audit firm as provided for in or pursuant to this Law. This revocation terminates the mandate of the statutory auditor. If an accredited statutory auditor resigns, the Banking and Finance Commission and the credit institution shall be informed in advance of the resignation and the reasons therefor. The accreditation rules will set out the procedure to be followed. I n the absence of a substitute accredited statutory auditor or a substitute representative of an accredited firm, the credit institution or the accredited audit firm shall provide a replacement within two months in compliance with Article 53. The proposal to revoke the mandate of an accredited statutory auditor of a credit institution, as foreseen by Article 64quater and 64quinquies of the Law on commercial companies, shall first be submitted to the Banking and Finance Commission for its opinion. This opinion is communicated to the General Meeting. Art. 55 The accredited statutory auditors shall collaborate with the Banking and Finance Commission in its supervision under their own personal responsibility and in accordance with this Article, their professional standards and the instructions of the Banking and Finance Commission. To this end, they shall: 1” ascertain that credit institutions have adopted such measures as may be required for their administrative and accounting organization and internal control systems to comply with the laws, decrees and regulations governing the legal status of credit institutions; 2” confirm to the Banking and Finance Commission that the periodic returns provided by the credit institutions at the end of the first six months and at the end of the financial period are complete, correct and drawn up according to the applicable ru les; 3” report periodically to the Banking and Finance Commission or, at its request, submit special reports on the credit institution's organization, activities and financial structure; 4” take the initiative to report to the Banking and Finance Commission where a) decisions, facts or developments have come to their attention which have or may have a significant influence on the credit institution's financial position, its administrative and accounting organization or internal control systems; b)decisionsorfactshavecometotheirattentionwhichmaybeinviolationoftheLawoncommercialcompanies,theinstitution's articles of association, this Law and its implementing decrees and regulations. The accredited statutory auditors shall transmit to the credit institution's management all reports sent to the Banking and Finance Commission in accordance with paragraph 1, 3”. These reports shall be subject to the conditions of professional secrecy indicated in Article 40 of Royal Decree 185 of 9 July 1935. They shall send the Commission a copy of any reports addressed to the credit institution's management which are relevant to the Commission's supervisory task. The accredited statutory auditors and the accredited audit firms may carry out on-the-spot verification and investigations in the context of their mandate at foreign branches of the credit institution to which they have been appointed. The Banking and Finance Commission may direct them, at the request of the National Bank of Belgium or the "Institut belgo-luxembourgeois du Change/Belgisch-Luxemburgs Instituut \~oor de Wissel", to certify that the information which credit institutions are required to disclose to the authorities is com~ te ( (1rrect and drawn up according to the applicable rules. CHAPTER IV Withdrawal of authorization and exceptional measures Art. 56 By registered or recorded delivery letter, the Banking and Finance Commission notifies its decision to withdraw authorization from credit institutions which have not commenced activities within twelve months of being authorized, which give up their authorization or which have ceased to carry on their activities. The institution may appeal to the Minister of Finance against a decision to withdraw authorization in the manner provided for in paragraph 1. The appeal shall be lodged within fifteen days of notification of the withdrawal and advised to the Banking and Finance Commission by registered or recorded delivery letter. The Minister of Finance will make a ruling on the appeal within two months. His ruling is notified to the institution and to the Banking and Finance Commission within eight days by registered or recorded delivery letter. If the Minister of Finance fails to make a ruling on the matter within the above-mentioned period, the appeal shall be deemed to have been upheld. Art. 57 ~1. If the Banking and Finance Commission finds that a credit institution is not operating in accordance with the provisions of this Law and its implementing decrees and regulations, that its management policy or its financial position is likely to prevent it from honouring its commitments or does not offer sufficient guarantees for its solvency, liquidity or profitability, or that its management structure, administrative and accounting procedures or internal control systems present serious deficiencies, it will determine the deadline within which the situation must be rectified. If the situation has not been rectified by the deadline, the Banking and Finance Commission may 1” appoint a special inspector. In this case, the special inspector's general or special authorization in writing shall be required for all acts and decisions of all decision-making bodies within the credit institution, including the General Meeting, and of all persons with managerial responsibilities; the Banking and Finance Commission may, however, limit the activities for which the special inspector's authorization is required. The special inspector may submit for decision any proposals which he deems useful to any decision-making body within the institution, including the General Meeting. Remuneration for the services of the special inspector is set by the Banking and Finance Commission and borne by the credit institution. Members of decision-making and management bodies and persons with managerial responsibilities who carry out acts or take decisions without the special inspector's authorization shall be jointly and severally liable for any subsequent damage suffered by the institution or by third parties. Once the Banking and Finance Commission has published the appointment of a special inspector in the "Moniteur belge/Belgisch Staatsblad" (Belgian Official Gazette) and specified the acts and decisions to be submitted to his authorization, all acts carried out and all decisions taken without the special inspector's authorization shall be null and void, unless ratified by him. All decisions taken by the General Meeting under the same conditions without the special inspector's authorization shall be null and void, unless ratified by him. The Banking and Finance Commission may appoint a substitute inspector. 2” suspend, for the period determined by the Commission, the direct or indirect exercise of all or part of a credit institution's activities or prohibit these activities altogether. Any members of decision-making and management bodies and persons with managerial responsibilities who carry out acts or take decisions in violation of a suspension measure shall be jointly and severally liable for any subsequent damage suffered by the institution or by third parties. Once the Banking and Finance Commission has published the suspension in the " Moniteur belge/Belgisch Staatsblad " (Belgian Official Gazette), all acts carried out and all decisions taken in disregard of this suspension shall be deemed null and void. The Banking and Finance Commission may also direct a credit institution to dispose of shareholdings which it owns, in accordance with Article 32, ¤¤ 4 and 5; Article 24, ¤ 7, 2” shall apply. 3” order the institution's managers or directors to be replaced within a period determined by the Commission and, failing which, replace the institution's decision-making or management bodies with one or more temporary managers or directors who will, individually or jointly where applicable, have the same powers as those replaced. The Banking and Finance Commission publishes its decision in the "Moniteur belge/Belgisch Staatsblad" (Belgian Official Gazette). The remuneration for the services of the temporary manager(s) or director(s) is set by the Banking and Finance Commission and borne by the credit institution. The Banking and Finance Commission may at any time replace the temporary manager(s) or director(s), either ex officio or at the request of a majority of shareholders or members, if they can show that the management policy no longer offers the necessary guarantees. 4'' revoke the authorization. ¤ 2. The decisions of the Banking and Finance Commission referred to in ¤1 will become effective, for the institution, from the date of notification to the institution by registered or recorded delivery letter, and, for third parties, from the date of publication in accordance with the provisions of ¤1. Credit institutions may appeal to the Minister of Finance against decisions taken in accordance with ¤1, 2”, 3” and 4”. An appeal may also be lodged against decisions taken in accordance with ¤1, 1”, once the Banking and Finance Commission has notified the institution of its intention to publish them. The appeal must be lodged within three working days of the date of notification. The Minister of Finance makes a ruling within 30 working days. If he fails to make a ruling within that period, the appeal shall be deemed to have been upheld. During the appeal process, the decision and its publication are suspended unless the Banking and Finance Commission, where savers may be exposed to serious risk, declares its decision has immediate effect even if an appeal is lodged. ¤ 3. ~ 1, paragraphs 1 and 2, 2” and ¤ 2 shall apply when the Banking and Finance Commission has knowledge that a credit institution has put into place a scheme designed to facilitate tax evasion by third parties. ¤ 4. ¤ 1. paragraphs 1 and 2, 2” and ¤ 2 shall apply to credit institutions which fail to comply with the rules applicable to securities transactions as set out in Articles 22 to 27 of the Law of 4 December 1990 on financial transactions and financial markets. ~ 5. ¤ 1, paragraph 1 and ¤ 2 shall not apply in the event of withdrawal ot the authorization of a credit institution which has been declared bankrupt. ¤ 6. At the request of any interested party the Commercial Court shall annul the acts and decisions in the manner provided for in ¤ 1, paragraph 2, 1” and 2o. Such actions shall be brought against the institution. If there are serious grounds for doing so, the interested party may apply for a temporary injunction to suspend the disputed acts or decisions. The injunction and the ruling to annul such acts or decisions are effective against all parties. Where the suspended or invalidated act or decision has been published, the injunction and the ruling to annul such acts and decisions are also published in the form of extracts from the ruling. Where the annulment of acts and decisions is likely to have an adverse effect on rights against the institution acquired in good faith by a third party, the Court may overrule the declaration as regards the rights concerned, subject to the interested parties' right to demand damages if applicable. Such actions may not be introduced after the expiry of a six-month period starting from the date on which the disputed acts or decisions become enforceable against the applicant, or on which he becomes aware of them. Where the Banking and Finance Commission is informed by the supervisory authorities of credit institutions of another EC Member State in whose territory, within the framework of provision of services, a credit institution governed by Belgian law has a branch or carries on any banking activities listed in Article 3, ¤ 2 that there have been violations of the legal, regulatory or administrative provisions adopted in that State pursuant to the provisions of Council Directive 89/646/EEC of 15 December 1989 and supervised by the above-mentioned authorities, the Commission will immediately take the corrective measures provided for in Article 57, ¤ 1. The Commission will communicate the nature of the measures to the authorities concerned. Article 57, ¤ 2 shall apply. The Banking and Finance Commission will notify forthwith its decisions taken in accordance with Articles 56 and 57 to the supervisory authorities of credit institutions of other EC Member States in whose territory, within the framework of provision of services, a credit institution governed by Belgian law has a branch or carries on any banking activities listed in Article 3, ¤ 2. It will keep the supervisory authorities informed of the status of appeals lodged against these decisions in accordance with Articles 56, paragraph 2 and 57, ¤ 2. Art. 60 Credit institutions whose authorization has been withdrawn or revoked pursuant to Articles 56 and 57 remain subject to this Law and its implementing decrees and regulations until such time as funds collected from the public have been reimbursed, unless the Banking and Finance Commission discharges them from specific requirements. This Article shall not apply where the authorization of a credit institution which has been declared bankrupt has been revoked. CHAPTER V Federations of credit institutions Art. 61 ¤ 1. This Article refers to credit institutions which carry on their activities under the following conditions: 1” they are permanently affiliated to a central organization subject to the provisions of Chapters 1 to 4 or 6 of this Title, with which central organization they form a federation pursuant to the affiliation rules approved by the Banking and Finance Commission; 2” the commitments of the affiliated institutions and the central organization are considered joint and several commitments; 3” the transactions and the organization of the affiliated institutions are subject to the uniform internal rules of the federation; 4" the central organization directly supervises the affiliated institutions and is empowered to direct them with regard to their management policy, transactions and organization. ~ 2. Without prejudice to the other provisions of this Title and of Titles V, Vl, Vlll and IX, the following provisions shall apply to the credit institutions referred to in ¤ 1: 1” authorization shall be granted after the central organization has informed the Banking and Finance Commission that the institution meets the affiliation conditions and the conditions referred to in ¤ 1 of this Article. The affiliated institutions must disclose their affiliation in their articles of association, shares, securities, documents, correspondence and advertising. The authorization shall lapse when the affiliation terminates in accordance with the rules applicable to the federation; the federation must inform the Banking and Finance Commission at least one month in advance and the Commission may order any measures deemed necessary to protect the rights of creditors. The authorizations granted need not be published in the list of credit i nstitutions; 2” the minimum amount of capital laid down by Article 16 is required on the basis of the overall financial position of the central organization and its affiliated institutions; 3” Article 18 shall not apply to the managers of affiliated institutions; 4” Article 23 shall be applied on the basis of the overall financial position of the central organization and its affiliated institutions; 5” Article 27 shall only apply to the persons who actually manage the affiliated institutions; 6” Article 28 shall be extended to affiliated institutions in respect of the granting of borrowing facilities and guarantees to directors and managers of the central organization; it shall not apply to the granting of borrowing facilities and guarantees by the central organization or another affiliated institution to managers of affiliated institutions who do not participate in their daily management, provided that such borrowing facilities and guarantees meet the conditions laid down in the rules applicable to the federation and approved by the Banking and Finance Commission; 7” Article 30 shall not apply to the federation's internal transactions; 8” Article 32 shall be applied on the basis of the overall financial position of the central organization and its affiliated institutions; 9” the regulations established pursuant to Article 43 shall be applied on the basis of the overall financial position of the central organization and its affiliated institutions; 10” without prejudice to the central organization's compliance with the relevant applicable provisions, paragraphs 1 and 2 of Article 44 and Article 45, setting out notification and publication requirements, shall be applied on the basis of the overall financial position of the central organization and the affiliated institutions; 11”bywayofderogationfromArticles46,56and57,thecentralorganizationshallbeanswerableforcompliancebytheaffiliated institutions with the provisions of this Title and its implementing provisions; it shall also be answerable for their policy, administrative and accounting organization, and internal control system; 12” section 2 of chapter 3 of this Title does not apply to each separate affiliated institution. The mandate and duties of the central organization's accredited statutory auditors shall be conducted by reference to the overall financial position and functioning of the federation. The statutory auditors may carry out such inspections as they consider necessary at the premises of the affiliated institutions. They will report to the decision-making bodies of the central organization. The affiliated institutions may neither grant borrowing facilities or guarantees to these accredited statutory auditors, nor grant them any remuneration or benefits; 13” the central organization's accredited statutory auditors shall have the same duties with regard to the federation's integrated periodic returns and annual accounts as with regard to the central organization's periodic returns and annual accounts; 14” by way of derogation from Article 64, ¤1 and Article 1470cties, ¤1 of the Law on commercial companies, affiliated institutions incorporated as cooperative companies, regardless of their size, need not appoint statutory auditors. If they do not appointanauditor,Articles64,¤2and1470cties,¤20ftheLawoncommercialcompaniesshallapply.Suchaffiliatedinstitutions are not required to file individual annual accounts as prescribed in Article 44, paragraph 2. However, the members of these affiliated institutions and all interested parties have the right to consult the most recent annual accounts at the premises of the affiliated institutions; 15” by way of derogation from Article 4, paragraph 2 of the Law on commercial companies, affiliated institutions incorporated as limited liability cooperative companies may be established by special public or private deed. The deeds amending the articles of association may also be special public or private deeds, regardless of the form of deed of incorporation. CHAPTER Vl Public credit institutions Without prejudice to the legal provisions and the articles of association regulating their organization, activity and administrative supervision, the following institutions are subject to this Law, within the limits laid down in Article 63: 1” the following public credit institutions: the "Credit communal-Banque/ Gemeentekrediet-Bank", the "Societe national de Credital'lndustrie/NationaleMaatschappijvoorKredietaandeNijverheid",the"CaissenationaledeCreditprofessionnel/Natio- nale Kas voor Beroepskrediet", the " Institut national de Credit agricole/Nationaal Instituut voor Landbouwkrediet" and the "C)ffice central de Credit hypothecaire/Centraal Bureau voor Hypothecair Krediet"; 2” any public credit institutions not referred to under 1” which may be established on the initiative of or with the support of the Belgian authorities. Art. 63 The following Articles shall apply to the public credit institutions referred to in Article 62: 1” Articles 7, 10, 11, 13; 2” Articles 15 to 26, 27, ¤ 4, 28, 30 to 42; 3” Article 43; if a public credit institution subject to the requirements referred to in Article 43 concludes a management agreement with the Belgian State as laid down in Articles 204 et seq. of the Law of 17 June 1991, the Minister of Finance will consult the Minister who concluded such agreement before approving the requirements under Article 43 insofar as they contain specific provisions applicable to the public credit institutions involved; 4” Articles 44 to 61; 5” Articles 85 to 94 and 102 to 110. CHAPTER Vll Communal savings banks Art. 64 The communal savings banks referred to in Article 124 of the new communal law and which were in existence on 1 January 1932 are subject to the following rules: 1" their activity must consist in collecting deposits other than sight deposits in Belgian francs and investing them with other credit institutions established in Belgium or in securities evidencing the receipt of repayable funds and issued or guaranteed by the State, the Communities, the Regions, international organizations of which Belgium is a member and credit institutions established in Belgium; 2” they must be incorporated in such a way that their own equity capital and management is kept strictly separate from the equity capital and management of the commune to which they belong; 3” they must be subject to Articles 13, 18 to 20, 23, ¤ 2, paragraphs 1 and 2 and ¤ 3, 27 to 31, 33, 43, 44, paragraphs 1, 2, 3, 1”, 4 and 5, 45, 46 and 47; 4” they must appoint an accredited statutory auditor or an accredited audit firm, pursuant to Article 52; Articles 50, paragraph 3, 51, 52, 53, 54, paragraphs 1 to 3 and 55 shall apply; 5” Articles 57, ¤¤1 to 4, 85 to 94, 102 to 110 shall apply. TlnE 111 The operation of branches and the provision of services in Belgium by credit institutions governed by the law of another EC Member State CHAPTER I Authorization for taking up the business of credit institutions A credit institution governed by the law of another EC Member State, and authorized pursuant to the law of that State to carry on any banking activities listed in Article 3, ¤ 2 in its home Member State, may carry on its activities by the establishment of a branch, provided that the Banking and Finance Commission has notified it of its registration as a branch of a European Community credit institution by registered or recorded delivery letter. Notification of registration shall be effected within a maximum of two months of submission of the information specified in the relevant European Community legislation by the supervisory authorities of the credit institutions of the home Member States. If notification is not forthcoming within this period, the credit institution may open the branch and carry on the above-mentioned activities after having informed the Banking and Finance Commission accordingly. The Banking and Finance Commission will publish a list of registered branches and all changes which have occurred during the year in the "Moniteur belge/Belgisch Staatsblad" (Belgian Official Gazette). Art. 66 A credit institution governed by the law of another EC Member State, and authorized pursuant to the law of that State to carry on any banking activities listed in Article 3, ¤ 2 in its home Member State, may carry on its activities in Belgium by way of the provision of services, provided that the Banking and Finance Commission has informed it that the supervisory authorities of the home Member State have communicated the activities listed in Article 3, ¤ 2 which it intends to carry on in Belgium. The Banking and Finance Commission will notify the institution concerned within three working days of receipt of communi- cation of the activities concerned. If notification is not forthcoming within this period, it may carry on the proposed activities after having informed the Banking and Finance Commission accordingly. The Banking and Finance Commission will publish a list of institutions which take deposits and other repayable funds from the public in Belgium and all changes which have occurred during the year in the "Moniteur belge/Belgisch Staatsblad" (Belgian Official Gazette!. Art. 67 When carrying on their activities in Belgium, the credit institutions referred to in Articles 65 and 66 shall mention their home Member State and, in the case referred to in Article 66, their registered office alongside their name. CHAPTER 11 Obligations and prohibitions Art. 68 The branches referred to in Article 65 shall be subject to the same obligations and prohibitions with regard to liquidity as credit institutions governed by Belgian law, within the limits laid down by the Banking and Finance Commission, after consultation with the National Bank of Belgium. Art. 69 These branches shall be subject to the laws and regulations on internal and external monetary policy which are applicable to credit institutions governed by Belgian law, without prejudice to the right of the authorities implementing or applying these provisions to impose special requirements which are adapted to the nature of these branches and their activities. Art. 70 The provisions of this Title shall not detract from the obligation incumbent upon credit institutions exercising the activities listed in Article 3, ¤ 2 to comply with the laws and regulations applicable in Belgium to such institutions and their transactions in the interest of the general good. The Banking and Finance Commission will inform the credit institutions referred to in Article 65 of the provisions which in its opinion protect the general good. The provisions of this Title shall not detract from the obligation to comply with the laws and regulations applicable in Belgium to activities other than those listed in Article 3, ¤ 2. CHAPTER 111 Reporting requirements and accounting rules The credit institutions referred to in Article 65 shall submit periodic returns for statistical purposes to the Banking and Finance Commission on the transactions they carry out in Belgium via branches established there, according to the format and frequency laid down by the Commission after consultation with the National Bank of Belgium. The Banking and Finance Commission may require the branches referred to in Article 65 to provide the same information both to it and to the National Bank of Belgium as is required from credit institutions governed by Belgian law, concerning aspects of the branches for which the Commission is competent, according to the format and frequency laid down by the Commission after consultation with the National Bank of Belgium. The branches referred to in Article 65 may also be obliged to provide the National Bank of Belgium and the "Institut belgo-luxembourgeois du Change/Belgisch-Luxemburgs Instituut voor de Wissel " with the same information as is required from credit institutions governed by Belgian law. Art. 72 The King will determine, after consultation with the Banking and Finance Commission and the National Bank of Belgium, the rules on the basis of which the branches referred to in Article 65 must: 1" maintain an accounting system and carry out valuations of the inventory of their business; 2” prepare their annual accounts; 3” prepare annual accounting information with regard to their operations. CHAPTER IV Supervision of branches Art. 73 ~ 1. The branches reterred to in Article 65 shall be subject to supervision by the Banking and Finance Commission with regard to the provisions of Articles 68, 70, 71 and 72, inasmuch as the matters referred to therein fall within the competence of the Banking and Finance Commission. Articles 46 and 47 shall apply accordingly. In order to assist the supervisory authorities of the credit institution's home Member State, the Banking and Finance Commission may, at their request, agree to carry out inspections at the premises of branches, inasmuch as they concern matters referred to in paragraph 1 and in Article 48, paragraph 1. Provided that the supervisory authorities of the credit institution's home Member State are immediately informed, the Banking and Finance Commission may in the event of emergency verify that the activities of the Belgian branch comply with the relevant applicable regulations and the principles of sound administrative and accounting procedures and adequate internal control. The costs of the inspections referred to in paragraph 2 shall be borne by the requesting authorities. ¤ 2. Foreign authorities in charge of the supervision of credit institutions which have established a branch in Belgium as referred to in Article 65 may themselves, or through the intermediary of experts appointed for that purpose, verify at the premises of branches, at their own expense, the information referred to in Article 48, paragraph 1, after having first informed the Banking and Finance Commission. Art. 74 ¤1. The managers of the branches referred to in Article 65 shall appoint one or more auditors or audit firms accredited by the Banking and Finance Commission, such appointment to be for a renewable term of office of three years. Articles 53 and 54, paragraphs 1 to 4, shall apply to these auditors and audit firms. The prior opinion of the Banking and Finance Commission is required before an accredited auditor or accredited audit firm is dismissed. ¤ 2. The accredited auditors or audit firms appointed in accordance with ¤1 shall collaborate with the Banking and Finance Commission in its supervision on their own personal responsibility and in accordance with this paragraph, their professional standards and the instructions of the Banking and Finance Commission. To this end: 1” they shall ascertain that the branches have adopted such measures as may be required for their administrative and accounting organization and internal control systems to comply with the laws, decrees and regulations applicable to branches pursuant to Articles 68, 69, 71 and 72; 2” they shall confirm to the Banking and Finance Commission that the periodic statistical returns referred to in Article 71, as provided to the Commission at the end of the first six months and at the end of the financial period, are complete, correct and drawn up according to the applicable rules, as is the other information which the Banking and Finance Commission requires branches to provide. They may be required by the Banking and Finance Commission, at the request of the National Bank of Belgium or of the " Institut belgo-luxembourgeois du Change/Belgisch-Luxemburgs Instituut voor de Wissel ", to confirm the information which the branches have provided to these authorities under Articles 69 and 71; 3" they shall report periodically to the Banking and Finance Commission or, at its request, submit special reports on the organization, activities and financial structure of the branches with reference to those aspects for which the Commission is competent; 4” they shall take the initiative to report to the Banking and Finance Commission with reference to those aspects for which the Commission is competent and within the framework of the collaboration with the head office's supervisory authorities, where a) decisions, facts or developments have come to their attention which have or may have a significant influence on the branch's financial position, administrative and accounting organization or internal control systems; b) decisions or facts have come to their attention which may be in violation of the provisions of this Law and of its implementing decrees and regulations or of other laws and regulations applicable to their activity in Belgium, insofar as the matters referred to in these provisions are the responsiblity of the Banking and Finance Commission; 5” they may be requested by the Banking and Finance Commission to submit a report on any violation of legislation protecting the general good applicable to branches notified by another Belgian authority. They shall transmit to the credit institution's managers all reports sent to the Banking and Finance Commission in accordance with paragraph 1, 3". These reports shall be subject to the conditions of professional secrecy provided for in Article 40 of Royal Decree 185 of 9 July 1935. They shall transmit to the Commission a copy of any reports sent to the managers and dealing with matters which are the responsibility of the Commission. In branches where a works council has been established in application of the Law of 20 September 1948 organizing economic activity, the accredited auditors and audit firms shall carry out the functions referred to in Article 1 5bis of this Law. Article 15quater, paragraph 2, sentences 1 and 3, and paragraph 3 of this Law shall apply. They may accept assignments from the supervisory authorities of the branch's home Member State to carry out inspections at the premises of these branches in order to assist such authorities in the matters referred to in Articles 48, paragraph 1 and 73, ¤1, provided the Banking and Finance Commission has been informed beforehand; the cost of such assignments shall be borne by the supervisory authorities of the home Member State. ¤ 3. The accredited auditors and audit firms shall certify the annual accounting information published pursuant to Article 72, 3”. CHAPTER V Exceptional measures Art. 75 ~ 1. Where the Banking and Finance Commission ascertains that a credit institution governed by the law of another EC Member State having a branch or providing services in Belgium is not complying with the laws and regulations applicable in Belgium in matters falling within the competence of the Commission, it will require the credit institution to take corrective action within the period it prescribes. If, at the end of that period, the institution concerned fails to do so, the Banking and Finance Commission will inform the supervisory authorities of the institution's home Member State accordingly. ~ 2. If the branch persists in violating the laws and regulations, the Banking and Finance Commission may take the measures provided for in Article 57, ¤ 1, paragraph 2, 1”, 2” and 3”, after informing the supervisory authorities referred to in ¤ 1. Article 57, ¤¤ 2 to 4 shall apply. If the credit institution having a branch or providing services in Belgium persists in violating the laws and regulations, the Banking and Finance Commission may prohibit this institution from initiating any further transactions within its territory, after informing the authorities referred to in ¤ 1 accordingly. It may limit the duration of this prohibition or revoke it. Article 57, ¤ 1, paragraph 2, 2o, and ¤ 2 shall apply to these decisions. The present paragraph shall also apply in the cases referred to in Article 57, ¤¤ 3 and 4. ~ 3. In emergencies where the periods prescribed in ¤¤1 and 2 cannot be observed, the Banking and Finance Commission may take any precautionary measures necessary to safeguard the interests of depositors and other customers of the branch. The Banking and Finance Commission will notify such measures to the Commission of the European Communities and the supervisory authorities of the institution's home Member State and of the host Member States of other branches as soon as possible. The Banking and Finance Commission will amend or abolish those measures when the Commission of the European Communities orders it to do so in due consideration of the relevant provisions of Community law. ¤ 4. The Banking and Finance Commission may, at the request of the competent authorities, apply ¤¤ 1 to 3 to any credit institution referred to in Article 65 or Article 66 which has committed acts in Belgium contrary to the laws and regulations referred to in Article 69 or to the laws and regulations applicable in the interest of the general good in matters other than those referred to in Articles 68 and 71, paragraphs 1 and 2. ¤ 5. The Banking and Finance Commission will inform the Commission of the European Communities, according to the periodicity it establishes, of the number and type of measures taken pursuant to ¤ 2. Art. 76 If acreditinstitution'sauthorizationiswithdrawnorrevokedbythesupervisoryauthoritiesofitshomeMemberState,theBanking and Finance Commission will order the institution's branch in Belgium to be closed, after having informed the home Member State's authorities. It may appoint a temporary custodian of the branch's assets, pending a decision on their allocation; this custodian will be authorized to take all precautionary measures to safeguard the creditors' interests. The Banking and Finance Commission may inform the supervisory authorities of a credit institution governed by the law of another EC Member State why it has reason to believe that the institution's Belgian branch is not in a position to offer the necessary guarantees of sound administrative or accounting organization or internal control. CHAPTER Vl The operation of branches and the provision of services in Belgium by specialized subsidiaries of credit institutions governed by the law of another EC Member State Art. 78 Financial institutions governed by the law of another EC Member State which, with regard to credit institutions governed by the law of that State and their supervisory authorities, meet the conditions laid down in Article 41, paragraph 1, may request the application of Chapters I to V of this Title. TlnE IV Branches in Belgium of credit institutions governed by the law of non-EC-Member States CHAPTER I Authorization ¤1. The following Articles shall apply: 1" Articles 7, 8, 10, 11 and 12: before deciding whether to authorize the branch, the Banking and Finance Commission will consult the supervisory authorities of the State where the credit institution has its registered office; 2” Article 13, paragraph 1: the branches referred to in this Title shall be entered in a separate category of the list; 3” Article 15: authorization may nevertheless be granted to branches of institutions which are incorporated otherwise than as commercial companies; 4” Article 16, paragraphs 1 and 2, replacing the words "initial capital" by "endowment capital"; the components of this endowment capital will be assessed by the Banking and Finance Commission; 5” Articles 17 to 20. Paragraph 1, 3” and 5” shall apply to the credit institution to which the branch belongs. ¤ 2. The Banking and Finance Commission may refuse to authorize branches of credit institutions governed by the law of a State which does not offer reciprocal market access under the same conditions to credit institutions governed by Belgian law. ¤ 3. The Banking and Finance Commission may refuse to grant authorization to a branch referred to in this Title where it is of the opinion that the protection of savers or the sound and pmdent management of the institution requires the company to be incorporated under Belgian law. CHAPTER ll Pursuit of the business of credit institutions Art. 80 ~1. The following Articles shall apply: 1” Article 23, ¤1, paragraph 1, ¤ 2, paragraph 1 and ¤ 3; 2” Article 27, ¤1, paragraph 1, with regard to the managers of the branch; 3” Articles 28, paragraph 1 and paragraph 2, sentences 1 and 2, 30 and 31; 4” Articles 33, 43 to 45. ¤ 2. The King will determine the obligations and rules for the publication of the annual accounting statements of the branches. CHAPTER lll Supervision Art. 81 Articles 46 and 47 shall apply. Art. 82 The management of the branches referred to in this Title must appoint one or more accredited auditors or accredited audit firms in accordance with Article 50. It may also appoint a substitute. When an audit firm is appointed, Article 51 shall likewise apply. Articles 53, 54, paragraphs 1 to 4, 55, paragraphs 1, 2 and 4, and 74, ¤1, paragraph 2, ¤ 2, paragraphs 3 and 4, and ¤ 3 shall apply. Art. 83 On the basis of the principle of reciprocity, the Banking and Finance Commission may, with the approval of the Minister of Finance and by way of agreements concluded with the supervisory authorities of the credit institution's home country and of other branches of this institution established outside Belgium, lay down the obligations and prohibitions applicable to the branch in Belgium, the contents of and the rules governing supervision, and the rules governing the collaboration and exchange of information with these authorities as provided for in Articles 97 to 101. These agreements may depart from the provisions of this Law, in order to establish rules and procedures which are better suited to the nature and range of activities of the credit institution and to its supervision. Subject to general supervision meeting the criteria laid down pursuant to this Law, these agreements may grant exemption from the application of certain provisions of this Law and its implementing decrees and regulations. The agreements provided for in this Article shall not incorporate provisions which result in the branches enjoying more favourable treatment than that accorded to branches established in Belgium of credit institutions governed by the law of another EC Member State. The agreement must contain a clause allowing termination by either party, subject to maximum 6 months' notice. The Banking and Finance Commission will publish the list and the essence of the agreements concluded pursuant to this Article in its annual report. CHAPTER IV Withdrawal of authorization, exceptional measures and penalty clauses Art. 84 Articles 56, 57 and 60 and Articles 102 to 109 shall apply. Representative offices, credit companies and intermediaries Art. 85 Credit institutions governed by the law of a foreign State which have not established a branch in Belgium, but which plan to open a representative office in due consideration of the restrictions laid down in Article 86 in order to promote their activities and to collect and distribute information, shall first register with the Banking and Finance Commission. Before effecting the registration, the Banking and Finance Commission will consult the supervisory authorities of the credit institution's home country. Art. 86 A representative office may not carry on banking activities; it may in particular under no circumstances interfere in the conclusion or the normal processing of financial transactions or financial services, except for those linked to its own operation. Art. 87 The Banking and Finance Commission may request any relevant information, carry out or have carried out on-the-spot inspections and take cognizance of all correspondence and documents with regard to the activities of representative offices registered in accordance with Article 85. The Banking and Finance Commission may revoke the registration of any representative office which fails to meet its obligations. Art. 88 Credit institutions governed by Belgian law which plan to establish a representative office within the territory of a foreign State shall notify their intention to the Banking and Finance Commission. If, under its home State legislation, the office is authorized to carry on activities falling outside the restrictions laid down by Articles 86 and 87, Articles 34 to 37 shall apply. The Banking and Finance Commission may request any information on the organization, activities and financial position of the office and verify it or have it verified. Article 48 shall apply. Art. 89 The King may, after consultation with the Banking and Finance Commission and the National Bank of Belgium, in the interest of sound administrative and accounting organization and internal control systems and for statistical and monetary policy purposes, lay down the rules applicable to natural or legal persons established in Belgium who habitually grant borrowing facilities or guarantees to their customers in Belgium. Paragraph 1 shall not apply to credit institutions subject to this Law, insurance companies subject to the Law of 9 July 1975, companies providing mortgage loans or consumer credit, the National Bank of Belgium, the " Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut" and the "Office national du Ducroire/Nationale Delcrederedienst". The King may require that the persons referred to in paragraph 1 register with a public authority designated by Him, determine which information must be provided to that authority, subject them to supervision rules and enforce upon them Articles 43 to 45 insofar as they affect the borrowing facilities and guarantees referred to in paragraph 1. The King may, in compliance with the international obligations of Belgium, extend the application of all or part of this Article to foreign natural or legal persons meeting the conditions laid down in paragraph 1. Art. 90 The King may, after consultation with the Banking and Finance Commission and the National Bank of Belgium, in the interest of sound administrative and accounting organization and internal control systems and for statistical and monetary policy purposes, lay down the rules applicable to natural or legal persons established in Belgium who habitually conclude in Belgium any transactions referred to in Article 3, ¤ 2 in the capacity of representative, broker or agent ("commissionnaire/com- missionair '') Article 89, paragraph 2 shall apply. Paragraph 1 of this Article shall apply neither to intermediaries operating on stock exchange markets and other markets of financial instruments as referred to in Articles 5 and 67 of the Law of 4 December 1990 on financial transactions and financial markets, nor to exchange and deposit brokers within the meaning of Article 196 of that Law. Article 89, paragraph 3 shall apply. The King may, in compliance with the international obligations of Belgium, extend the application of all or part of paragraphs 1 and 3 to natural or legal persons meeting the conditions laid down in paragraph 1. nnE vl Centralization of information with regard to exposure Art. 91 ¤ 1. Credit institutions established in Belgium shall report any exposure incurred or repurchased to the National Bank of Belgium, as soon as the total exposure to one individual customer or the amount of the drawdowns by this customer equals or exceeds BFr 1 million or an equivalent amount in a foreign currency or ECU. The King may 1” modify this amount; 2” determine, per category of exposure or customer, the amounts below which exposure need not be reported to the National Bank of Belgium; 3” determine the categories of exposure which need only be reported when payment is overdue by a certain period; 4” extend the obligation referred to in paragraph 1 to such categories of credit institution as He may determine, and to factoring companies. The following exposures need not be reported: 1” exposures to credit institutions; 2” exposures to the Belgian State, the " Fonds des Rentes/Rentenfonds" and the " Institut de Reescompte et de Garantie/Herdis- contering- en Waarborginstituut"; 3” exposures to the European Communities, the European Investment Bank, the European Bank for Reconstruction and Development, the International Monetary Fund and multilateral development banks defined in the seventh indent of Article 2, (1) of Council Directive 89/747/EEC of 18 December 1989; 4” exposures of which the registration at the National Bank of Belgium has been laid down in another law. ¤ 2. The King will determine the content and the rules of reporting, if necessary per type of institution and exposure. He may also request the National Bank of Belgium to: 1” define the instructions for the proper implementation of the reporting obligation referred to in ¤1; 2” agree, where appropriate, upon specific rules for reporting information with institutions whose circumstances so require. ¤ 3. The National Bank of Belgium will be remunerated, at a tariff which it will set, for processing returns not complying with the instructions referred to in ¤ 2, paragraph 2, 1”, and returns established according to the special rules provided for in ~ 2, paragraph 2, 2”. Art. 92 Upon request, and on the basis of its tariff, the National Bank of Belgium will disclose information received in accordance with Article 91 to: 1" customers, for exposures registered in their name; such customers may request inaccurate personal data to be corrected. Any such consultations and rectifications shall be free of charge; 2o credit institutions, for the assessment of the risk attaching to exposures granted or repurchased, or for outstanding borrowing applications. The King may extend the right of consultation to any financial institution which He may designate from among those referred to in Article 91, ¤1, paragraph 2, 4; 3” the Banking and Finance Commission. Articles 97, 98, paragraph 1 and 99, ¤1, paragraph 1, 1”, 2”, 3”, 4” and 7”, and paragraph 2 and ¤ 3 shall apply. 4” foreign credit registers ("centrales de risques/risicocentrales") under the conditions laid down in agreements with regard to exchange of information to be concluded by the National Bank of Belgium, insofar as the legislation applicable to such credit registers guarantees professional secrecy at a level at least equivalent to that resulting from paragraph 2 of this Article. Theinstitutionsreferredtoin2”aboveshalltakeappropriatemeasurestoguaranteetheconfidentialityoftheinformationreferred to in paragraph 1 and the exclusive use of this information for the objectives laid down by law. The King will determine 1” the content of and the rules governing the consultations and returns made pursuant to this Article; 2” the rules governing the rectification procedure referred to in paragraph 1, 1”. He may also request the National Bank of Belgium to define the relevant technical instructions. Art. 93 The National Bank of Belgium may ask the Banking and Finance Commission to disclose all information which it deems useful, to carry out investigations and inspections, and to peruse on the spot all accounting or other documents held by the institutions which fall under this Title pursuant to Article 91, ¤1, paragraph 1 and paragraph 2, 2”, in order to verify whether 1” the information reported to the National Bank of Belgium pursuant to this Title is true and fair; 2” the provisions of this Title have been complied with. Th~ Bankillg and Finance Commission will inform the National Bank of Belgium of the results of the investigations, verifications an(l in~.l)e(tions referred to in paragraph 1. The Bank will bear the expenses incurred by the Commission. Art. 94 The decrees to implement this Title will be enacted after consultation with the National Bank of Belgium, the Banking and Finance Commission and the institutions referred to in Article 91, ¤1, represented by their professional associations. TITLE Vll Professional secrecy and collaboration between authorities CHAPTER I Professional secrecy of the Banking and Finance Commission and exchange of information The exception laid down in Article 40, paragraph 1 in fine of Royal Decree 185 of 9 July 1935 on the supervision of banks and the rules governing the issue of securities as it affects the information which the Banking and Finance Commission may receive in the course of its duties under this Law shall only apply when the Commission is summoned to testify in court in criminal proceedings. Art. 96 Article 40, paragraph 1 of Royal Decree 185 of 9 July 1935 shall not impair: 1” the disclosure, in summary or collective form, of information with regard to credit institutions, in such a way that individual details pertaining to such institutions cannot be identified; 2” the transmission of confidential information in the course of legal proceedings in attempts to rescue credit institutions which have been declared bankrupt or are being compulsorily wound up; such transmission shall, however, be prohibited when it concerns information with regard to third parties participating in those attempts. Art. 97 By way of derogation from Article 40, paragraph 1 of Royal Decree 185 of 9 July 1935, the Banking and Finance Commission may: 1” exchange information with the supervisory authorities of credit institutions of other EC Member States, in accordance with the EC Directives applicable to credit institutions; 2” exchange, on the basis of reciprocity, information with the supervisory authorities of credit institutions of non-EC-Member States with which they have concluded cooperation agreements as referred to in Article 83, only if the authorities to which the information is disclosed are subject to guarantees of professional secrecy at least equivalent to those referred to in Article 40, paragraph 1 of Royal Decree 185 of 9 July 1935 and in this Chapter. Art. 98 The Banking and Finance Commission may disclose confidential information in the cases provided for in Article 97 only to the extent that it is certain that the authorities receiving the information will restrict its use to check the conditions governing the taking-up of the business of credit institutions or specialized subsidiaries of such institutions, to facilitate monitoring of such institutions or such subsidiaries on a non-consolidated or consolidated basis, to satisfy itself that all legal and regulatory conditions applicable to the exercise of their activity are complied with, to assess and apply administrative corrective measures or administrative or penal sanctions imposed on an institution, its managers or its shareholders, to assess and decide on measures to be taken by the relevant administrative authority with regard to decisions of the supervisory authorities, or to assess and decide on the conduct of court proceedings in the cases explicitly provided for in the EC Directives adopted in the field of credit institutions. The same restrictions will apply to the use by the Banking and Finance Commission of confidential information provided by the authorities referred to in Article 97, with regard to credit institutions, specialized subsidiaries of such institutions or companies falling under the same consolidated supervision as a credit institution. ¤ 1. By way of derogation from Article 40, paragraph 1 of Royal Decree 185 of 9 July 1 935, the Banking and Finance Commission may disclose confidential information on credit institutions to: 1 ” statutory auditors, approved auditors and other persons responsible for carrying out statutory audits of the accounts of Belgian or foreign credit institutions and other financial institutions, for the exercise of their functions; 2” the "Office de Controle des Assurances/Controledienst voor de Verzekeringen", for the purposes of their supervision of insurance companies on a consolidated and non-consolidated basis and of companies providing mortgage loans; 3” the "Caisse d'intervention des societes de bourse/lnterventiefonds van de beursvennootschappen", for the purposes of supervision of stockbroking firms on a consolidated and non-consolidated basis and for the purposes of the intervention system which it manages; 4” the Belgian authorities in charge of the supervision of financial markets, for the exercise of their function; 5” the bodies involved in the liquidation and bankruptcy of credit institutions; 6” Belgian and foreign institutions which administer deposit guarantee schemes, for the exercise of their function; 7” public authorities of EC Member States in charge of the supervision of foreign financial institutions listed in the categories enumerated in 2” to 4”; 8” the " Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut", for the exercise of its sequestration function referred to in Article 24, ¤ 7, 2” and Article 57, ¤1, paragraph 2, 2”, fourth sentence; 9” the " Institut des Reviseurs d'Entreprises/lnstituut der Bedrijfsrevisoren ", for the exercise of its legal supervisory and disciplinary functions with regard to accredited auditors and accredited audit firms for the exercise of their functions referred to in Articles 55, 74, ¤ 2 and 82; 10o the Ministry of Economic Affairs for the supervision of consumer credit. The Banking and Finance Commission may disclose the information laid down in paragraph 1 only insofar as the applicant uses it for the purposes referred to in paragraph 1 or in Article 96, 1”, and insofar as the applicants referred to in 2” to 4”, 6", 7o and 10” are subject to the same conditions of professional secrecy as those provided for in Article 40, paragraph 1 of Royal Decree 185 of 9 July 1935, taking into account Article 95. ~ 2. By way of derogation from Article 40, paragraph 1 of Royal Decree 185 of 9 July 1935, the Banking and Finance Commission may also disclose to central banks which do not supervise credit institutions individually such information as they may need to act as monetary authorities, insofar as the applicants are subject to the same conditions of professional secrecy as those provided for in the above-mentioned Article 40, paragraph 1, taking into account Article 95, and insofar as they only disclose the information to other central banks or monetary authorities within the same limits and under the same conditions laid down by ~ 2, or for the same purposes as those referred to in Article 96, 1”. ¤ 3. Except in the cases provided for in Article 96, 1”, the following applicants for information as listed in ~1, paragraph 1, shall be subject with regard thereto to the same conditions of professional secrecy as those laid down by Article 40, paragraph 1 of Royal Decree 185 of 9 July 1935, taking into account Article 95: 1” the "Office de Controle des Assurances/Controledienst voor de Verzekeringen"; 2” the "Caisse d'intervention des societes de bourse/lnterventiefonds van de beursvennootschappen"; 3” the bodies involved, in Belgium, in administrating the compositions proposed by and the bankruptcies of credit institutions; 4” the Belgian institutions which administer deposit guarantee schemes; 5” the Belgian authorities in charge of the supervision of financial markets; 6” the " Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut"; 7” the " Institut des Reviseurs d'Entreprises/lnstituut der Bedrijfsrevisoren "; 8” the department of the Ministry of Economic Affairs in charge of the supervision of consumer credit. ¤ 4. The Banking and Finance Commission may use confidential information disclosed to it in the course of its supervisory duties with regard to credit institutions, as well as the information disclosed by authorities and persons referred to in ¤1 of this Article, for the exercise of its legal functions with regard to the supervision of financial markets and institutions and intermediaries operating on these markets. Art. 100 Accredited auditors and accredited audit firms exercising the functions of accredited statutory auditors referred to in Articles 50 to 55, accredited auditors and accredited audit firms referred to in Articles 74, ¤ 1 and 82 and experts appointed in accordance with Articles 48, paragraph 2 and 49, ¤ 2, paragraph 6 shall be subject, for the exercise of the supervisory functions laid down in this Law, to Article 40, paragraph 1 of Royal Decree 185 of 9 July 1935. This Article shall not apply to the retu rns to be made pu rsuant to this Law to the Banki ng and Finance Commission by accredited statutory auditors, representatives of accredited audit firms, accredited auditors and experts referred to in paragraph 1. The exception laid down in the above-mentioned Article 40, paragraph 1 shall only apply, with regard to information held by the persons referred to in paragraph 1 for the exercise of their functions pursuant to this Law, when they are summoned to testify in court in criminal proceedings. CHAPTER ll Collaboration between authorities Without prejudice to Articles 97 to 99, the Banking and Finance Commission will collaborate with the supervisory authorities of credit institutions and their financial institution subsidiaries which are governed by the laws of foreign States in the supervision of their activities in Belgium, in accordance with the provisions of this Law, as well as in the supervision of institutions governed by Belgian law in those States. WithoutprejudicetotheobligationsresultingforBelgiumfrom EuropeanCommunitylaw,theBankingand FinanceCommission may,onthebasisofreciprocity,agreewiththesupervisoryauthoritiesofthoseStatesupontherulesgoverningthiscollaboration, upon the rules with regard to the obligations and prohibitions applicable to the business of credit institutions, upon the objective of and the rules governing the supervision of the credit institutions referred to in paragraph 1, through on-the-spot inspections or otherwise, as well as upon the rules governing the exchange of information laid down in Articles 97 to 99. Paragraph 2 shall apply to collaboration with the Belgian authorities, institutions and persons referred to in Article 99, ¤¤1 and 2. TlnE Vlll SANCTIONS CHAPTER I Administrative sanctions Art. 102 Without prejudice to other measures provided for in this Law, the Banking and Finance Commission may issue a public announcement that a Belgian or foreign credit institution has failed to comply with injunctions ordering it to comply with the provisions of this Law or its implementing decrees within the period laid down by the Banking and Finance Commission. Art. 103 Without prejudice to other measures provided for in this Law, the Banking and Finance Commission may lay down a period within which a credit institution governed by Belgian or foreign law and established in Belgium must: a) comply with specific provisions of this Law or its implementing decrees; or b) introduce the necessary changes to its management structure, administrative and accounting procedures, or internal control systems. The injunction referred to in paragraph 1, littera b) shall not apply to branches of credit institutions of other EC Member States. If the institution has still not taken corrective action by the expiry of the period, it shall be liable to an administrative fine imposed by the Banking and Finance Commission, after having been heard or at least duly summoned. The fine may be neither less than BFr 10,000 nor more than BFr 1 million per calendar day nor exceed BFr 50 million in total. The fine will be collected on behalf of the Treasury by the "Administration de la T.V.A., de l'Enregistrement et des Domaines/Bestuur van de B.T.W., Registratie en Domeinen" (Department of V.A.T., Registration and State Administered Properties) . CHAPTER ll Penal sanctions Art. 104 ¤ 1. The following persons shall be liable to a term of imprisonment of one month to one year and a fine ranging from BFr 50 to BFr 10,000 or to one of these penalties: 1” anyone who contravenes the provisions of Article 4 or who does not comply with the provisions of Article 6; 2” anyone who carries on the business of a credit institution within the meaning of Article 7 or in Title IV without this institution being authorized or its authorization being withdrawn or revoked; 3" anyone who knowingly fails to give the notifications provided for in Article 24, ¤¤1, 4 and 6, anyone who disregards the objection referred to in Article 24, ¤ 3, and anyone who in the cases provided for in Articles 24, ¤ 7 and 57, ¤1, paragraph 2, 2", fourth sentence fails to hand in his securities at the "Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut" in accordance wrth Article 24, ¤ 7, paragraph 1, 2” or disregards the suspension referred to in Article 24, ~ 7, paragraph 1, 1”; 4” any directors, managers or managing directors and all other persons referred to in Article 27 who disregard the provisions of this Article; 5” any directors, managers or managing directors who disregard Articles 28, 30, 32, 33, 49, ¤ 2, oara~rar)h 4. first sentence and paragraph 6, and ¤ 5, paragraphs 1 and 2, or Articles 85 to 88; 6” any directors, managers or managing directors of a credit institution which opens a branch abroad or provides services abroad without giving the notification provided for in Articles 34, 38 or 40, or which does not comply with Article 37; 7” any directors, managers or managing directors of a credit institution who disregard the decrees or regulations referred to in Articles 44, paragraph 1, second sentence, and paragraph 3, 49, ¤ 2, paragraph 4, second sentence and paragraph 10, ¤ 4, ¤ 5, paragraph 3, and ¤ 6, 72, 89 or 90; 8” any directors, managers or managing directors of a credit institution who fail to comply with Article 44, paragraph 1, first and third sentence and paragraph 2; 9” anyone who carries out acts or transactions without being authorized by the special inspector in the manner provided for in Article 57, ¤1, paragraph 2, 1”, or which conflict with a decision to suspend the activities taken in accordance with Article 57, ¤1, paragraph 2, 2”, and anyone who does not comply with the prohibition provided for in Article 75, ¤ 2, paragraph 2 or ~ 4, or with the protective measures provided for in Article 75, ¤ 3, or with the order laid down in Article 76; 10” anyone who knowingly accepts funds or securities which are held in contravention of Article 33; 11" anyone who in his capacity of statutory auditor, accredited auditor or independent expert has certified, approved or confirmed the accounts, annual accounts, balance sheets and income statements or consolidated accounts of companies or periodic statements or information when the provisions of this Law or its implementing decrees were not being complied with, either knowing that those provisions were not complied with or without doing what normally should have been done to ascertain that the provisions had been complied with; 12” anyone who impedes the inspections and verifications which are required to be carried out in his home country or abroad or who refuses to provide the information which he is required to provide pursuant to this Law or who knowingly provides incorrect or incomplete information; 13” anyone who has taken unauthorized cognizance of individual information transmitted to the National Bank of Belgium pursuant to Article 91, as well as anyone who has obtained information pursuant to Article 92, who has disclosed it or who has communicated it to unauthorized persons; 14” any directors and managers who fail to comply with the provisions of Articles 50, paragraphs 1 and 2, and 74, ¤1, paragraph 1. ~ 2. Any offence against the prohibition of Article 19 shall be liable to a term of imprisonment of three months to 2 years and a fine of BFr 1,000 to BFr 10,000. ¤ 3. Any directors, managers or managing directors who fail to comply with the provisions of the implementing regulations of Article 43 shall be liable to a term of imprisonment of 8 days to 3 months and a fine ranging from BFr 50 to BFr 10,000 or to one of these penalties. Art. 105 Any offence against Articles 95 to 100 shall be liable to the sentences provided for in Article 458 of the Penal Code. Art. 106 The provisions of Book I of the Penal Code, including Chapter Vll and Article 85, are applicable to the offences referred tc in this Chapter. Art. 107 Credit institutions, financial institutions and companies shall be legally responsible for any fines which may be imposed on their directors, managers, managing directors or representatives in application of the provisions of this Chapter. Art. 108 Any investigations into an offence against this Law or legislation referred to in Article 19 initiated against directors, managers, managing directors, representatives or accredited statutory auditors of credit institutions or financial institutions and any investigations into an offence against this Law initiated against any other natural or legal person shall be notified to the Banking and Finance Commission by the judicial or administrative authority before whom the case was brought. All penal actions on the ground of the offences referred to in paragraph 1 will be notified to the Banking and Finance Commission by the Public Prosecutor. Art. 109 The Banking and Finance Commission is empowered to intervene at any stage of the proceedings in the criminal court before which an offence against this Law has been brought, without being required to establish that any damage was sustained. Such intervention takes place according to the rules applicable to a plaintiff seeking compensation. TlnE IX Deposit guarantee schemes Art. 110 Credit institutions established in Belgium shall participate in a collective deposit guarantee scheme which is financed by them and which aims to indemnify those depositors and holders of bonds and bank savings certificates in Belgian francs who do not carry on banking or financial activities in the event of default by an institution, and, if necessary, to enable action to be taken to prevent such a default. Special deposit guarantee schemes may be established for certain categories of credit institution. When not established either by the State or a State governmental authority, the deposit guarantee schemes must be authorized by Royal Decree in compliance with the harmonized application of the relevant provisions of European law to the various categories of credit institution. Paragraph 1 shall apply neither to branches of credit institutions governed by the law of an EC Member State, nor to branches of credit institutions governed by the law of another State whose deposit guarantee scheme would cover the branch's commitments at least to the same extent as the corresponding Belgian deposit guarantee scheme. The "Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut" is authorized to manage and administer the deposit guarantee schemes. Authorities which manage the Belgian deposit guarantee schemes may conclude collaboration agreements with foreign bodies. When public credit institutions referred to in Article 62, 1” join deposit guarantee schemes in which other credit institutions governed by Belgian law participate, the amount of the guarantee laid down in Article 248, ¤ 4 of the Law of 17 June 1991 on the organization of the public credit sector and on the public sector's shareholdings in certain private financial companies shall, after deduction of the amount referred to in Article 47 of the Royal Decree of 29 September 1993 amending the aforesaid Law of 17 June 1991, be divided among the schemes to which the public credit institutions adhere, in proportion to the commitments as at 1 January of each year, which form the basis for calculating its contributions to the schemes to which it adheres. The guarantee thus calculated shall only apply in the event of a qualifying default by the public credit institutions participating in the deposit guarantee scheme concerned and before the other resources of the deposit guarantee scheme concerned are drawn on. TlnE X Amending provisions CHAPTER I Changes affecting Royal Decree 185 of 9 July 1935 on the supervision of banks and the rules governing the issue of securities Art. 111 The title of Royal Decree 185 of 9 July 1935 on the supervision of banks and the rules governing the issue of securities shall be modified as follows: "Royal Decree 185 of 9 July 1935 on the Banking and Finance Commission". Article 35, paragraph 1 of Royal Decree 185 shall be replaced by the following provision: "A 'Commissie voor het Bank- en Financiewezen/Commission bancaire et financiere/Kommission fur das Bank- ~m8 Finanzwesen' is created." (In English "Banking and Finance Commission"). Art. 113 Article 36 of Royal Decree 185 shall be replaced by the following provision: "The operating expenses of the Banking and Finance Commission will be borne by the undertakings which are subject to its supervision or the transactions of which are subject to its supervision, within the limits and as laid down by Royal Decree. The National Bank of Belgium will advance operating expenses in the manner agreed upon between itself and the State after consultation with the Banking and Finance Commission. The Banking and Finance Commission may request the "Administration de la T.V.A., de l'Enregistrement et des Domaines/Be- stuur van de B.T.W., Registratie en Domeinen " (Department of V.A.T., Registration and State Administered Properties) to collect unpaid contributions." Art. 114 Article 37 of Royal Decree 185 shall be supplemented by the following provisions: "When the Chairman retires from office, he may not, for a period of three years, exercise any function in an undertaking which is subject to the permanent supervision of the Banking and Finance Commission. The delegation of powers by the Commission to the Chairman and the relevant conditions shall be governed by the organization rules referred to in Article 35, paragraph 2." Art. 115 Article 38 of Royal Decree 185, worded as follows, shall be reintroduced: "Article38.-lnordertoverifywhetheratransactionoranactivityfallswithinthescopeofthelawsand regulationstheapplication of which is subject to its supervision, the Banking and Finance Commission may require the persons who carry out the transaction or conduct the activity to provide all necessary information. The person or undertaking concerned shall submit the information required within the time limit and in the form determined by the Commission. The Banking and Finance Commission may verify or have verified the accuracy of the information submitted by reference to the books and documents of the parties concerned. The following persons shall be liable to the penalties provided for in Article 204 of the Law on commercial companies: 1” anyone who refuses to provide the information required pursuant to paragraphs 1 and 2 within the time limit imposed, or who knowingly provides incomplete or incorrect information, or who impedes the verifications referred to in paragraph 3; 2” anyone who claims or otherwise manages to convey the belief that the transactions which he carries out or proposes to carry out are conducted according to the conditions laid down in the laws or regulations whose application and observance is supervised by the Banking and Finance Commission, in the knowledge that those laws and regulations are not applicable to him or have not been complied with. The provisions of Book I of the Penal Code, including Chapter Vll and Article 85, are applicable to the offences punishable under paragraph 4." Article 116 Article 38bis, worded as follows, shall be introduced into Royal Decree 185: "Article 38bis. - Without prejudice to Article 327, ~ 5 of the Income Tax Code-1992, the Banking and Finance Commission will not be competent to deal with fiscal matters." Art. 117 Article 39 of Royal Decree 185 shall be replaced by the following provision: "Article 39. - All notifications to be carried out by registered or recorded delivery letter by the Banking and Finance Commissio,, and by the Minister of Finance pursuant to the laws and regulations whose application and observance is supervised by the Banking and Finance Commission may be served by writ." Art. 118 Article 40 of Royal Decree 185 shall be replaced by the following provision: "Article 40. - The members of the Banking and Finance Commission and its staff members shall be subject to professional secrecy and may not divulge to any person or authority confidential information which they may receive in the course of their duties, except when they are summoned to testify in court proceedings. Exceptions shall be made to paragraph 1: 1” when such disclosure is provided for or authorized by or by virtue of the laws governing the functions of the Banking and Finance Commission; 2” when the Banking and Finance Commission informs the judicial authorities of offences against the provisions of the laws governing its functions or against Royal Decree 22 of 24 October 1934 prohibiting persons convicted of certain offences and bankrupts from carrying out certain functions, professions or activities and authorizing the Commercial Court to impose such a prohibition. Any offences against this Article shall be punishable by the penalties provided for in Article 458 of the Penal Code. The provisions of Book I of the Penal Code, including Chapter Vll and Article 85, shall be applicable to the offences referred to in this Article." Article 40bis, worded as follows, shall be introduced into Royal Decree 185: "Article40bis.-~1.BywayofderogationfromArticle40,paragraphltheBankingandFinanceCommissionwillbeauthorized: 1”todiscloseall information required byauthoritiesofotherECMemberStateshavingpowerssimilartothoseoftheCommission, in the cases provided for in the European Directives governing matters falling under a) Title ll of this Decree; b) the Law of 2 March 1989 concerning the disclosure of large holdings in listed companies and regulating takeover bids; c) the Law of 4 December 1990 on financial transactions and financial markets; 2”todisclose,onthebasisofreciprocity,informationonmatterswhicharenotcoveredbyEuropeanDirectivestothesupervisory authorities of other EC Member States having powers similar to those of the Commission in matters referred to in 1”, or to the supervisory authorities of non-EC-Member States, where it has concluded collaboration agreements as referred to in ¤ 8 with the competent authorities of those States on condition that the authority receiving the information is subject to professional secrecy regulations which are at least equivalent to those prescribed by Article 40, paragraph 1. ~ 2. The Banking and Fi nance Com m ission may only disclose confidential information in the cases mentioned i n ~ 1 on condition that the authorities referred to in ¤1 only use the information received for the purposes provided for in or resulting from the laws governing the matters mentioned in ~1 or to verify whether a transaction or an activity is provided for in or results from the laws governing those matters. The same restriction shall apply to the use, by the Banking and Finance Commission, of confidential information which it receive~ from the supervisory authorities referred to in ~1. ¤3.BywayofderogationfromArticle40,paragraph1and¤2OfthisArticle,theBankingandFinanceCommissionmaydisclose confidential information on persons or transactions concerning matters referred to in ¤ 1: 1” to the "Caisse d'lntervention des societes de bourse/lnterventiefonds van de beursvennootschappen", for the supervision on a consolidated or non-consolidated basis of such undertakings and for the operation of the intervention system managed by the Fund, and to similar foreign authorities for the same purposes; 2” to the Belgian supervisory authorities for financial markets, in the course of their duties; 3” to public supervisory authorities of other EC Member States for the supervision of foreign financial institutions or transactions comparable to those referred to in ¤1; 4” to the "Commissaires du Gouvernement aupres des Bourses de valeurs mobilieres/Regeringscommissarissen bij de Effectenbeurzen" (Stock Exchange Commissioners) and the "Conseils de discipline des Societes de bourse de valeurs mobilieres Tuchtraden van de effectenbeursvennootschappen " (disciplinary councils of stockbroking firms), in the course of their duties; 5” the ~' Office de controle des Assurances/Controledienst voor de Verzekeringen " for the supervision of insurance companies on a consolidated or non-consolidated basis. The Banking and Finance Commission may only disclose information which may be disclosed under paragraph 1 if it is satisfied that the recipient will use the information exclusively for the purposes for which it is intended and that the recipient is subject to professional secrecy regulations equivalent to those prescribed by Article 40, paragraph 1, with due consideration to ¤ 6 of this Article. ¤ 4. The following recipients of information referred to in ¤ 3, paragraph 1 shall, with regard to such information, be subject to the professional secrecy regulations provided for in Article 40, paragraph 1, with due consideration to ¤ 6 of this Article: 1” the ~'Caisse d'lntervention des Societes de Bourse/lnterventiefonds van de beursvennootschappen"; 2” the Belgian supervisory authorities for financial markets; 3” the "Commissaires du Gouvernement/Regeringscommissarissen" (Government Commissioners) and the "Conseils de discipline Tuchtraden " (disciplinary councils), referred to in ¤ 3, paragraph 1, 4”; 4” the "Office de controle des Assurances/Controledienst voor de Verzekeringen". ¤ 5. The Banking and Finance Commission may use the confidential information referred to in Article 40, paragraph 1 and the information from authorities and persons referred to in ¤ 3 of this Article for the exercise of its various powers in respect of those matters referred to in ~1. Article 27, paragraph 2 of the Law of 22 July 1953 establishing an " Institut des Reviseurs d'Entreprises/lnstituut der Bedrijfsrevisor- en " shall not apply to information to be disclosed by statutory auditors and auditors to the Banking and Finance Commission pursuant to the legislation referred to in ¤1 or pursuant to Royal Decree 64 of 10 November 1967 laying down the rules governing holding companies. ¤ 6. The restriction provided for in Article 40, paragraph 1 shall only apply with regard to information obtained by the Banking and Finance Commission in the course of its duties pursuant to the legislation referred to in ¤ 1, paragraph 1, 1”, if the Banking and Finance Commission is summoned to testify in criminal court proceedings when this restriction is provided for in the Directives referred to in said provision. ¤ 7. Without prejudice to Article 40, paragraph 1 and ¤¤1 to 5 of this Article, the Banking and Finance Commission will collaborate with the authorities of other States having powers similar to those of the Commission. Paragraph 1 shall apply to collaboration with Belgian authorities, institutions and persons referred to in ~ 3. ¤ 8. Without prejudice to Belgium's obligations arising out of European law, the Banking and Finance Commission may, after having sought the approval of the Minister of Finance, agree with the supervisory authorities of other States referred to in ¤ 7, on the basis of reciprocity, upon rules for collaboration and exchange of information with those authorities referred to in ~¤ 1 to 7. The agreements may depart from the provisions of the legislation referred to in ¤ 1 in order to establish procedures which are more appropriate to the manner of collaboration and exchange of information. The agreements must contain a termination clause with a maximum of six months' notice. The Banking and Finance Commission will publish the list and the content of the agreements concluded pursuant to this paragraph in its annual report." Art. 120 Article 66 of Royal Decree 185 shall be replaced by the following provision: "Article 66. - Our Minister of Justice, Our Minister of Finance and Our Minister of Economic Affairs are each charged with their respective duties and responsibilities in the execution of this Decree." Articles 35, 36, 37, 38, 38bis, 39, 40, 40bis, 41 and 66 of Royal Decree 185, as amended by this Law, shall be renumbered 1, 2, 3, 4, 5, 6, 7, 8, 8bis and 9 respectively. Art. 122 [...] Art. 123 [...] Art. 124 [...] Art. 125 [...] Art. 126 [...] Art. 127 [...] Art. 128 [...] Art. 129 [...] Art. 130 [...] Art. 131 [...] Art. 132 [...] Art. 133 [ ] Art. 134 [ ] Art. 135 [ ] Art. 136 [...] Art. 137 [ ] Art. 138 [...] Art. 139 [...] Art. 140 [...] Art. 141 [...] Art. 142 [...] Art. 143 [...] nTLE Xl Transitional Provisions Art. 144 Credit institutions which, on the date on which this Law comes into force, were included in the list of banks referred to in Article 2 of Royal Decree 185 of 9 July 1935, in the list of private savings banks referred to in Article 5 of the provisions relating to private savings banks as coordinated on 23 June 1967, or in the list referred to in Article 2 of the Law of 10 June 1964, public credit institutions listed in Article 62, 1” of this Law, credit associations accredited by the "Caisse nationale de Credit professionnel/Nationale Kas voor Beroepskrediet", "caisses de creditlkredietkassen" accredited by the " Institut national de Credit agricole/Nationaal Instituut voor Landbouwkrediet" and communal savings banks shall be authorized de jure for the purposes of this Law. Except for the communal savings banks, credit institutions governed by Belgian law and referred to in paragraph 1 shall inform the Banking and Finance Commission, within a month of this Law coming into force, of the category listed in Article 13, paragraph 2 under which they wish to be registered. By way of derogation from paragraphs 1 and 2, the branches of credit institutions governed by the law of another EC Member State and which, on the date on which this Law comes into force, were included on one of the lists referred to in paragraph 1, shall be registered de jure on the list referred to in Article 65, paragraph 3. Representative offices of foreign credit institutions existing in Belgium on the date on which this Law comes into force, shall be registered de jure in accordance with Article 85, paragraph 1. By way of derogation from Article 27, the managers or directors of credit institutions established on 1 January 1992 as unlimited liability companies and all persons who, under whatever name and in whatever capacity, take part in the daily management of such institutions may be appointed non-executive directors of companies in which the institution has no equity participation. Art. 146 By way of derogation from Article 32, ¤ 5 and without prejudice to ¤¤ 3 and 4 of that Article, credit institutions established as unlimited liability companies which owned shareholdings on 1 January 1992, may own shares insofar as no individual qualifying holding exceeds 15 % of own funds and the total amount of qualifying holdings does not exceed 60 % of own funds. Paragraphs 2 and 3 of Article 32, ~ 5 and Article 49, ~ 2, paragraph 3 shall apply. For the first application of Article 52 after this Law comes into force, the consultation provided for in that Article shall be the consultation with the auditors who are accredited in accordance with Article 21 of Royal Decree 185 of 9 July 1935. ~ 1. Auditors who are accredited in accordance with Article 21 of Royal Decree 185 of 9 July 1 935 on the supervision of banks and the rules governing the issue of securities shall remain in function with the credit institutions to which they were appointed by the Banking and Finance Commission: 1" for credit institutions governed by Belgian law, until the first AGM after 31 December 1995; 2” for branches of foreign credit institutions, until the end of the third month following the closure of the first financial period after 31 December 1995. During that period the accredited auditors referred to in paragraph 1 shall exercise the function of statutory auditor or auditor appointed pursuant to this Law for the purpose of collaboration with the Banking and Finance Commission in its prudential supervision. When appointed as an accredited statutory auditor or accredited auditor, they shall exercise those functions accordingly. The Banking and Finance Commission may, however, terminate their function as accredited auditor at any time in the interests of the prudential supervision of the credit institution. Without prejudice to the duties of a statutory auditor, the accredited auditors referred to in paragraph 1 may request to address the Board of Directors or the Board of Administration, the Management Committee or, where there are no such bodies, the body actually in charge of management, the general meeting of shareholders or members and the works council, if one exists. The remuneration of the accredited auditors referred to in ~ 1 shall be determined and paid by the Banking and Finance Commission and borne by the credit institution according to the rules laid down by Royal Decree. This paragraph shall cease to apply to accredited auditors who, personally or as representatives of audit firms accredited after this Law comes into force, are appointed as statutory auditors accredited in accordance with Article 50 or as auditors designated by virtue of Articles 74 to 82. ¤ 2. Non-accredited auditors or audit firms which exercise the function of statutory auditor or auditor with a credit institution on the date on which this Law comes into force shall complete their mandate. Where such auditors or audit firms are already or are subsequently accredited, they shall perform the duties laid down in this Law with regard to collaboration with the Banking and Finance Commission in its prudential supervision jointly with the accredited auditors referred to in ¤ 1. Credit institutions governed by Belgian law which, before the date on which this Law comes into force, carried on any of the banking activities referred to in Article 3, ~ 2 in one or more EC Member States by way of provision of services shall be exempted from the application of Article 38 for those categories of activity and for the States concerned. Credit institutions of an EC Member State which, before the date on which this Law comes into force, carried on any of the banking activities referred to in Article 3, ¤ 2 in Belgium by way of provision of services shall be exempted from the application of Article 66 for those categories of activity. Art. 150 The authorizations and derogations granted on the basis of legislation applicable to credit i nstitutions by the Banking and Finance Commission before this Law comes into force shall continue to apply, except when they are revoked pursuant to this Law. The rules governing accreditation and disciplinary procedure laid down by the Banking and Finance Commission on 6 September 1983 shall continue to apply: 1” to accredited auditors referred to in Article 146, ~ 1, until the expiry of their mandate as provided for in this provision; 2” to all accredited auditors until the date on which the rules governing the accreditation of auditors and audit firms as provided for in Article 52 come into force. Art. 151 [...] Art. 152 [...] TlnE Xll Repealing provisions Art. 153 The following provisions are repealed: 1” the following provisions of Royal Decree 185 of 9 July 1935 on the supervision of banks and the rules governing the issue of securities, as amended by Royal Decree 262 of 26 March 1936, the Royal Decree of 22 October 1937, Royal Decree 67 of 30 November 1939, the Decree-Laws of 6 October 1944 and 23 December 1946, the Laws of 16 June 1947, 11 March 1948,14March1962,2April1962and3May1967,RoyalDecree43Of9October1967andtheLawsof30June1978,8Augu 1980, 21 February 1985, 17 July 1985, 9 March 1989, 12 July 1989, 4 December 1990 and 18 July 1991: a) the provisions under Title l; b) the titles of Titles lll, IV, V and Vl; c) 1” to 7” of Article 42; d) Articles 39bis, 43, 44, 45, 61, 64 and 65; 2” Articles 1 to 18 of the Law of 10 June 1964 on the public raising of funds, as amended by Royal Decree 63 of 10 November 1967 and the Laws of 30 June 1975, 8 August 1980, 17 July 1985, 4 December 1990, 22 July 1991 and 4 August 1992; 3” the provisions governing the supervision of private savings banks, coordinated on 23 June 1 967, as amended by Royal Decree 57 of 10 November 1967 and the Laws of 30 June 1975, 8 August 1980, 21 February 1985, 17 July 1985, 4 December 199Q 18 July 1991, 28 July 1992 and 4 August 1992; 4” Articles 69 to 74 of the Law of 30 June 1975 on the legal status of banks, private savings banks and certain other finan intermediaries, as amended by the Laws of 8 August 1980, 1 July 1983 and 4 December 1990; 5” Article 18 of the Law of 5 August 1978 on economic and budgetary reforms. TlnE Xlll Various provisions CHAPTER I Adaptations to European Community law Art. 154 ~ 1. The King may, by means of a decree taken after deliberation in the Council of Ministers, adapt the provisions of this Law to Belgium's obligations arising out of international agreements or treaties, insofar as they do not relate to matters which the Constitution reserves for the legislator. ~ 2. The draft Royal Decrees referred to in ¤ 1 shall be submitted to the legislation department of the Council of State for its opinion . The opinion shall be published together with the Report to the King and the Royal Decree concerned. ~ 3. The Royal Decrees implementing ¤ 1 will be repealed if they have not been confirmed by means of a Law within a year of their publication in the "Moniteur belge/Belgisch Staatsblad" (Belgian Official Gazette). Art. 155 [ ] Art. 156 [...] CHAPTER IV Netting between credit institutions Art. 157 ~ 1. Agreements on bilateral or multilateral netting and explicit close-out agreements intended to enable netting between credit institutions or between credit institutions and establishments in charge of the clearing or settlement of payments or financial transactions may, in the event of bankruptcy or other circumstances whereby creditors are ranked pari passu, be enforceable against creditors, provided that the receivable and payable to be netted were part of the same estate at the time of bankruptcy or of pan passu ranking, irrespective of their maturity, their substance or their currency in which they are denominated. If the agreements referred to in the first paragraph were concluded after the date on which payments were suspended as determined by the Court, or within the ten days prior to that date, they may not be enforceable against the creditors if they relate to debts previously contracted but not yet due. Forthepurposeofthisparagraph,theNationalBankofBelgiumandthe"lnstitutdeReescompteetdeGarantie/Herdiscontering- en Waarborginstituut" are treated in the same way as credit institutions. ~ 2. Without prejudice to the provisions of ¤ 1 and of Articles 445 to 449 of the Commercial Code, the payments, transactions and acts carried out by and payments made to a credit institution on the day it was adjudicated bankrupt are valid if they predate the adjudication order or if they were carried out without knowledge of the credit institution's failure. For the purpose of this paragraph, the establishments in charge of the clearing or settlement between credit institutions of payments or financial transactions shall be treated in the same way as credit institutions. ¤ 3. The King may, for the transactions and payments which He determines, extend the application of this Article to other categories of financial institution. TlnE XIV Entry into force Art. 158 This Law comes into force on the day of its publication in the "Moniteur belge/Belgisch Staatsblad" (Belgian C)fficial Gazette). However, 1” Articies 22 and 110 shall come into force on the date to be fixed by Royal Decree; 2” Articles 111 and 121 shall come into force on the day on which the Code on financial transactions and financial markets referred to in Article 225 of the Law of 4 December 1990 on financial transactions and financial markets comes into force; 3” [...]; 4” [...]; 5” [...] Explanatory notes on the Law of 22 March 1993 on the legal status and supervision of credit institutions I. Major Objectives of the Law The major objective of the Law of 22 March 1993 was to transpose two European Directives into Belgian law: - Council Directive 89/646/EEC of 15 December 1989 (the Second Banking Directive); - Council Directive 92/30/EEC of 6 April 1992 (the Directive on the Supervision of Credit Institutions on a Consolidated Basis). Most of its provisions came into force on 19 April 1993. Two other important objectives were: - to develop a uniform legal status for all categories of credit institution; - to adapt where necessary the legal status and the supervisory system of credit institutions. The Law also takes account of the increasing internationalization of banking and banking structures (particularly in respect of foreign branches and subsidiaries). The Law enables the Banking and Finance Commission to exercise proper supervision of the risks attached to foreign activities, in particular via close collaboration with foreign supervisory authorities. These explanatory notes discuss the major changes arising out of the Law of 22 March 1993. For the sake of clarity, a distinction should be made between: 1. the changes affecting credit institutions governed by Belgian law; 2. the changes affecting credit institutions governed by the law of another EC Member State; 3. the changes affecting credit institutions governed by the law of a third country. A further objective of the Law of 22 March was to adapt the regu lation govern i ng the fu nctioning of the National Bank of Belgium to certain provisions of the Treaty on European Union. Since such adaptation is not the concern of the Banking and Finance Commission, it will not be discussed in these explanatory notes. Il. Major Changes affecting Credit Institutions governed by Belgian Law 1. Introduction of a Uniform Legal Status Previously Despite increasing despecialization, credit institutions still fell into one of four categories. Their legal status was laid down in several texts which exhibited a number of differences: - banks: Title I of Royal Decree 185 of 9 July 1935; - private savings banks: the provisions coordinated by Royal Decree of 23 June 1967; - institutions governed by Chapter I of the Law of 10 June 1964; - public credit institutions the supervision of which wac governed hv the Law of 17 June 1991 organizing the public credit sector. Now - All private credit institutions (banks, private savings banks and institutions previously governed by the Law of 10 June 1964) are subject to the same provisions. In principle, these provisions also apply to public credit institutions (the two remaining commu nal savings banks ' are su bject to specific ru les), whose statutory status conti nues to be governed by the above-mentioned Law of 17 June 1991. - However, the Law still retains four categories of credit institution: „ banks; „ savings banks; „ public credit institutions; „ communal savings banks. - Within a month of the Law of 22 March 1993 coming into force, the credit institutions were required to inform the Banking and Finance Commission of the category under which they wished to be registered. - Only those credit institutions having opted to be registered as " savings b.lllks'' may describe themselves as such. This is the only remaining specific aspect of the legal statuc of private savings nank~ whi(-h still applies. ~ The "Caisse d'epargne communale de Nivelles" and the "Caisse d'epargne communale de Tournai". 2. Changes affecting Conditions for Authorization a) Initial Capital Previously - Banks: fully paid-up capital of at least BFr 50 million. - Private savings banks: fully paid-up capital of BFr 25 or BFr 10 million (depending on their legal form). - Institutions governed by the Law of l0 June 1964: fully paid-up capital of BFr 25 million. - In line with the Second Banking Directive requirement (an initial capital of at least ECU 5 million), the Law of 22 March 1993 requires any credit institution established in the future to have fully paid-up initial capital of BFr 250 million. b) Shareholders Previously The Banking and Finance Commission was of the opinion that it was implicitly entitled to reject the registration of a new cr dit institution in cases where the institution's major shareholders were likely to operate to the detriment of the sound and prud nt management of the institution. Pursuant to the Second Banking Directive, the Law of 22 March 1993 explicitly empowers the Banking and Finance Commiss on to refuse to authorize a new credit institution if, in view of the need to ensure sound and prudent management of the cr it institution, it has reason to doubt the suitability of a shareholder with a holding of at least 5 % in its capital. c) Organization The Law of 22 March 1993 explicitly provides for three conditions for authorization, which were only implicit in the pa : - the credit institution must have a management structure, administrative and accounting procedures, and internal cont I mechanisms which are appropriate to the proposed activities; - if the credit institution is part of a group, the group structure must provide for adequate prudential supervision at both compa Y' and consolidated level; - the credit institution must maintain its head office in Belgium. d) Deposit Guarantee Schemes The Law of 22 March 1993 retains the obligation of the Law of 17 June 1991 for all credit institutions established in Belgiu to participate in a deposit guarantee scheme. The enactment of this obligation has been postponed pending the adoption the relevant draft European Directive. In practice, however, all banks and savings banks already participate in a deposit guara scheme. 3. Changes affecting the Conditions for Exercising Banking Activities a) Shareholders Previous/y The "Agreement on the Autonomy of Bank Management" concluded between the Banking and Finance Commission an l most banks and private savings banks stipulates that shareholders with a significant equity participation in a credit institutio . must support its stability and autonomy. In this context the shareholders concerned must disclose the size of their shareholdin and all changes thereto both to the credit institution itself and to the Banking and Finance Commission. Now The ~ Agreement on the Autonomy of Bank Management " remains unchanged. Furthermore, pursuant to the Second Banking Directive, the Law of 22 March 1993 provides for the supervision of major shareholders (defined as shareholders holding 5% of the capital or voting rights). As with the regulations laid down in the Law of 2 March 1989 concerning the disclosure d large shareholdings in listed companies and regulating takeover bids, the Banking and Finance Commission must be informed of the structure of the major holdings of the credit institution and of any changes in that structure. The Banking and Finance Commission may refuse to allow a significant shareholding to be acquired or increased if, in view of the need to ensure sound and prudent management of the credit institution, it has reason to doubt the suitability of t existing or prospective shareholder. The Banking and Finance Commission can also take action against an existing significant shareholder who is operating to the detriment of sound and prudent management (by suspending the exercise of the voting rights attaching to the shares or, if the shareholder fails to dispose of the shares when so instructed, by ordering the sequestration of the shares at the " Institut de Reescompte et de Garantie/Herdiscontering- en Waarborginstituut"). b) Shareholdings Previously Following the 1934-1935 reform (separating banking and industrial activities), the banks incorporated as "societes de capitaux/kapitaalvennootschappen" were no longer allowed in principle (subject to certain dispensations) to acquire shareholdings or equity participations in companies not carrying out banking activities. It was not until 1990 that a Royal Decree was issued permiKing such banks to acquire shares for investment purposes within strict limits (up to 5% of the voting rights of any one company and up to 5% of the bank's own funds; the portfolio may not exceed 35% ~of the bank's own funds). Now The fundamental prohibition with regard to the possession of shareholdings was converted by the Law of 22 March 1993 into an authorization under the conditions and within the limits established by the Law. As in the past, credit institutions are not subject to restrictions on shareholdings if the shares are acquired: - with a view to offering them for resale (the maximum holding period is one year); - in settlement of a doubtful or unpaid debt (the maximum holding period is two years); - in credit institutions, securities houses, insurance companies, other financial companies and companies providing services ancillary to the activity of credit institutions. Credit institutions incorporated as " societes de capitaux/kapitaalvennootschappen " may have shareholdings, provided that no single shareholding exceeds 10% and that the total amount of all shareholdings does not exceed 35% of own funds. These limits may be increased by Royal Decree to the limits authorized by the Second Banking Directive. The limits laid down by this Directive only apply to qualifying holdings (i.e. holdings representing at least 10% of the capital or voting rights of the company concerned). The limits are as follows: a qualifying holding may not exceed 15% of own funds, and total shareholdings may not exceed 60% of own funds. c) Opening Branches and Providing Services Abroad Previously There were no formal rules with regard to opening branches or providing banking services abroad. However, the Banking and Finance Commission's supervision also included credit institutions' activities abroad. A distinction must be made between opening a branch abroad and providing banking services abroad: - A credit institution wishing to establish a branch abroad, whether in another EC Member State or a third country, is required to notify its intention to the Banking and Finance Commission. The Commission may oppose such establishment where it could impair the organization, financial position or supervision of the credit institution. If the Commission does not oppose establishment and the host country of the branch is an EC Member State, the Commission will communicate all relevant information to the host country's supervisory authorities. If the branch of the Belgian credit institution meets the conditions laid down in the Second Banking Directive, it may qualify under the mutual recognition system (see section lll). - Where a Belgian credit institution plans to provide its services within the territory of another EC Member State under application of the mutual recognition system (see section lll), the Law of 22 March 1993 confines itself to introducing the notification procedure laid down in the Second Banking Directive. 4. Supervision of Credit Institutions a) Supervision by the Banking and Finance Commission The major change concerns supervision on a consolidated basis. Previously, banking legislation already included the obligation to prepare and publish consolidated annual accounts and to respect regulatory ratios (in particular with regard to own funds and the limitation of risk concentration) on the basis of the consolidated situation of the institution and its subsidiaries. The Council subsequently adopted the Directive on the Supervision of Credit Institutions on a Consolidated Basis. The Law of 22 March 1993 establishes the legal framework enabling the introduction of this Directive into Belgian law by Royal Decree In particular, the Law provides that, whenever the parent company is a "financial holding company" (a financial institution the subsidiary undertakings of which are either exclusively or mainly credit institutions or financial institutions, one at least of such subsidiaries being a credit institution), the supervision on a consolidated basis must be conducted at financial holding company level. Moreover, the Law imposes upon the '~ mixed-activity holding company" (a parent undertaking, other than a financial holding company or a credit institution, the subsidiaries of which include at least one credit insti~u~ion) the obligation to disclose to the Banking and Finance Commission and the competent foreign authorities the (as yet un~l)e( itied information which is deemed useful within the framework of supervision on a consolidated basis. b) Auditing Previous/y Since the Law of 8 August 1980 came into force, the auditing system has been based on the distinction between the functions of approved auditor and statutory auditor. The approved auditors were appointed and remunerated by the Banking and Finance Commission with which they collaborated directly within the framework of prudential supervision. The statutory auditors were appointed and remunerated by the company where they carried out the mandates set out in company law. The Law of 22 March 1993 abolishes the distinction between the functions of approved auditor and statutory auditor. Henceforth, audits will be carried out by the auditor(s) as referred to in company law, it being understood that the function may only be entrusted to one or more members of the Belgian " Institut des Reviseurs d'Entreprise/lnstituut der Bedrijfsrevisoren" or, an innovation, to one or more auditing firms accredited by the Banking and Finance Commission. Moreover, the appointment, by a credit institution, of an accredited auditor or a firm of accredited auditors as auditor requires prior authorization of the Banking and Finance Commission. This reform goes hand in hand with the development of direct on-the-spot inspections by the Banking and Finance Commission, which affects the function of the accredited auditor as set out in the Law of 22 March 1993. It will, therefore, no longer be the accredited auditor but the Commission which monitors the solvency, liquidity and profitability of the credit institution. The implementation of the new auditing arrangements will be preceded by a transitional period during which the auditors accredited under the previous arrangements will in normal circumstances complete their mandate with the credit institution to which they were appointed by the Banking and Finance Commission until the first AGM following 31 December 1995. c) Exceptional Measures The Law of 22 March 1993 specifies and extends the range of measures open to the Banking and Finance Commission in case of serious default by a credit institution: - when the Commission has appointed a special inspector and the management bodies of the credit institution act without his authorization, the members of those bodies are jointly and severally liable for any subsequent damage suffered by the institution or by third parties; - the Commission may also issue a public announcement of the appointment of a special inspector or the suspension of all or part of a credit institution's activities; in such a case, all acts carried out without the special inspector's authorization or in violation of a suspension measure will be deemed null and void; - the Commission may direct a credit institution to dispose of some of its shareholdings; - finally, the Commission may order the managers to be replaced and, if this is not done within the period determined the Commission, replace the management bodies by one or more temporary managers who will have the same powers those replaced. 111. Changes affecting Credit Institutions of Another EC Member State Previously The former banking legislation did not distinguish between branches of credit institutions from EC Member States and branches of credit institutions from third countries. A branch of a foreign credit institution (including branches from EC Member States) was considered an autonomous entity which could only exercise its activities in Belgium after being registered on the list of banks. This meant that the Banking and Finance Commission had to ascertain that there was an endowment capital in Belgium, that the managers had the necessary professional repute and suffficient experience and that the branch had a suitable administrative structure. There was no provision for the possibility of an EC credit institution soliciting funds from the public within the framework of the free provision of services, in other words without being established in Belgium. The Law of 22 March 1993 introduces into Belgian law the Second Banking Directive provisions with regard to free establishment and free provision of services on the basis of the principle of " home country control " and " mutual recognition ". This means that the prudential supervision of the activities carried on by a credit institution via a branch, or within the framework of free provision of services in another Member State, is the responsibility of the home Member State authorities. In principle, the host Member State supervisory authorities are no longer responsible for supervision except for a limited number of aspects, in particular liquidity. The host Member State authorities are responsible for the enforcement of monetary policy. The Law distinguishes between the branches of EC credit institutions and the provision of services by such institutions. i) Branches in Belgium of EC Credit Institutions A credit institution governed by the law of an EC Member State and authorized by virtue of its national law to carry on banking activities in its home Member State may carry on its activities via a branch established in Belgium without having to obtain the Banking and Finance Commission's authorization and without having to provide endowment capital in Belgium. As soon as the Banking and Finance Commission receives the information specified in the Second Banking Directive from the home Member State supervisory authorities, showing that they have no reason to doubt either the adequacy of the branch's administrative structure or its impact on the financial position of the credit institution as a whole, it will register the branch. The prudential supervision of registered branches will not be carried out by the Banking and Finance Commission but by the home Member State supervisory authorities. These authorities may carry out on-the-spot inspections of the Belgian branch. The Banking and Finance Commission will confine its supervision of the branch to those aspects for which it is responsible, in particular liquidity and compliance with the rules governing periodic reporting and accounting which continue to apply to branches. To this end the Commission is assisted by an accredited auditor or a firm of accredited auditors. As is the case with national credit institutions, branches of EC credit institutions must appoint an accredited auditor or an accredited auditing firm having obtained the Banking and Finance Commission's approval and whose functions will be restricted to matters for which the Commission continues to be responsible. ii) Provision of Services in Belgium by EC Credit Institutions EC credit institutions may take deposits or carry on any other banking activity in Belgium by way of the free provision of services, in other words without being established in Belgium. They are merely required to notify their home Member State supervisory authorities, who will in turn notify the Banking and Finance Commission. iii) Specialized Subsidiaries of EC Credit Institutions The above-mentioned rules with regard to the establishment and the free provision of services apply not only to EC credit institutions but also to their specialized subsidiaries, provided certain conditions are met (inter alia, the credit institution concerned must jointly and severally guarantee the commitments of its subsidiary). IV. Changes affecting Credit Institutions of Third Countries The Law of 22 March 1993 leaves the legal status of credit institutions of third countries which have established a branch in Belgium essentially unchanged. Such branches are still considered autonomous entities subject to rules largely identical to the ones applicable to Belgian credit institutions. As in the past, the Banking and Finance Commission will continue to supervise the activities of such branches in Belgium. V. Collaboration with other Supervisory Authorities The development of banking activities (especially since the advent of financial conglomerates and the establishment of branches and subsidiaries abroad) requires close cooperation with other Belgian or foreign supervisory authorities. The Law of 22 March 1993 removed those professional secrecy requirements which prevented this cooperation. As a result, the agreement concluded in 1992 between the Banking and Finance Commission and the Insurance Supervisory Body2 with regard to the coordination of their respective supervisory tasks can now become fully effective. The Law of 22 March 1993 also enables the Banking and Finance Commission to conclude agreements with the supervisory authorities of other EC Member States in order to put the cooperation referred to in the Second Banking Directive into practice. In fact, even before the Law was adopted the Commission had already commenced negotiations with the supervisory authorities of other EC Member States in charge of the supervision of credit institutions with branches in Belgium. Now that the Law has come into force the formal bilateral cooperation agreements will be signed in the near future. Finally,theLawstipulatesthattheBankingandFinanceCommission,afterhavingobtainedtheconsentoftheMinisterofFinance, may conclude agreements with the supervisory authorities of third countries about how best to organize the supervision of branches in their respective countries with(-ul du~)lication of effort. ' The ~ Office de Controle des Assurances/Controledienst voor de Verzekeringen~h