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17 DECEMBER 1998. - An Act to create a deposit and financial instruments protection fund and to reorganize deposit and financial instruments protection systems (1)

ALBERT II, King of the Belgians,
To all, present and to come, Hi.
The Chambers adopted and We sanction the following:
CHAPTER I. - Preliminary provisions
Article 1^er. This Act regulates a matter referred to in Article 78 of the Constitution.
Art. 2. This Act transposes Directive 97/9/EC of the European Parliament and the Council of 3 March 1997 on investor compensation systems.
CHAPTER II.
Fund for the Protection of Deposits and Financial Instruments
Art. 3. It is created, under the name "Fund for the Protection of Deposits and Financial Instruments", a shortened "FIF", a public institution with legal personality.
The purpose of this Fund is to establish or manage:
(a) one or more systems for the protection of deposits in accordance with articles 110 et seq. of the Act of 22 March 1993 relating to the status and control of credit institutions;
(b) one or more systems for the protection of financial instruments in accordance with sections 112 et seq. of the Secondary Markets Act of 6 April 1995, the status of investment companies and their control, intermediaries and investment advisors.
The Fund may group in a single system the systems provided for in paragraph 2.
Art. 4. The Fund's headquarters is located in Brussels or Brussels.
Art. 5. The Fund may endorse all commitments and conclude any conventions for the realization of its purpose.
He has the right to compromise and transfer.
The Fund ' s commitments under deposit protection systems and financial instruments can only be implemented within the available means of these systems.
Art. 6. The Fund is allocated a grant of five million francs. This allocation will be taken from the reserves of the Institute of Repayment and Guarantee returned to the State during the liquidation of the Institute.
Art. 7. The Fund is administered by a Joint Steering Committee:
1st of a President appointed by the King;
2° of five members appointed by the King;
3° of four members appointed by the King on a list of three candidates per warrant to be filled, presented by the professional association representing the credit institutions;
4° of two members appointed by the King, on a list of three candidates per warrant to be filled, presented by professional associations representing investment companies whose commitments are covered by the system(s) established or managed by the Fund.
Two alternates are appointed on the same terms for each of the categories of members referred to in paragraph 1^er, 2°, 3° and 4°.
Members and alternates are revocable by the King.
Mandates are renewable for six years.
A person designated by the Banking and Financial Commission shall, with an advisory vote, attend meetings of the Executive Committee.
Art. 8. Members of the Legislative Chambers, the European Parliament, the Parliaments of the Communities and Regions, the federal, regional and community governments, and members of the office of a member of the federal government or of a community or regional government may not serve as chair or member of the Steering Committee or as a reviser. These latter functions shall be terminated in full right when they are sworn in for the performance of the above-mentioned functions or perform such functions.
Art. 9. The deliberations of the Committee are taken by a majority of the members present. In the event of a vote-sharing, the president's vote is preponderant.
However, and without prejudice to other special majority cases provided for in the organizational regulation referred to in section 16, shall be taken only by a majority of at least three-quarters of the votes of the members present, the proceedings relating to:
1° to the principle and modalities of a dependant intervention of the deposit protection system and financial instruments and to prevent the failure of a credit institution or investment company whose commitments are covered by the system or systems established or managed by the Fund;
2° to the principle and modalities of the complementary contributions of participating institutions and companies made necessary by the insufficient availability of systems to deal with preventive intervention.
Art. 10. The Executive Committee may consent to its members or to agents of the Fund or to other persons delegations of authority for the execution of its decisions.
Art. 11. The Fund entrusts its current management to the National Bank of Belgium, subject to mutually agreed terms, with the approval of the Minister of Finance. It provides the Bank with compensation in relation to the costs of this management.
Art. 12. A government commissioner, appointed and revocable by the King, oversees the operations of the Fund. Its treatment is paid by the State and supported by the Fund.
The Commissioner of the Government shall, with an advisory voice, attend all the deliberations of the Executive Committee. He has the right to suspend his decisions. In such cases, the Minister of Finance shall report immediately to the Minister of Finance within eight days of the date of notice of the suspension, unless the Steering Committee shall invoke the emergency, in which case the period shall be reduced to 48 hours. The Minister of Finance may object to the execution of any measure that he considers to be contrary, either to the laws or to the statutes or to the interests of the State. If the Minister of Finance has not ruled within this period, the decisions suspended may be executed.
Paragraphs 1^er and 2 are not applicable to operations, deliberations and decisions relating to preventive interventions of the Fund. In the case of compensation interventions, the powers of the Commissioner of Government and the Minister of Finance relate to compliance with this Act, the Fund's organizational regulations and the protocols that the Fund would have concluded with respect to the above-mentioned interventions.
Art. 13. Except for cases where they are required to testify in criminal proceedings, members of the Fund's Executive Committee, Fund officers and any person who is required to cooperate in the management or control of the management of deposit protection systems and financial instruments may not disclose to any person or authority the confidential information that they hold because of their functions for the operation of these systems.
It is an exception to the prohibition under paragraph 1^er for communications of information to the Banking and Financial Commission and the management organizations of deposit protection systems or financial instruments of other States as part of the necessary collaboration with these organizations.
Similarly, the Fund for the Protection of Deposits and Financial Instruments, the National Bank of Belgium and the competent authorities for regulated markets may exchange confidential information relating to a credit institution or an investment company with a view to preventing the failure of such an institution or business. The recipients of the confidential information referred to in this paragraph shall be subject to the professional secrecy referred to in paragraphs 1^er and 2.
Offences under this section shall be punished by the penalties provided for in Article 458 of the Criminal Code.
The provisions of Book I of the Criminal Code, without exception of Chapter VII and Article 85, are applicable to offences under this section.
Art. 14. The Fund prepares annual results and results accounts. He also sends a summary of his situation to the Minister of Finance every quarter.
The control of the financial situation, annual accounts and regularity under this Act and the regulation of the organization, of the transactions to be found in the annual accounts shall be entrusted to a reviser, chosen from among the members of the Institute of Business Reviewers, appointed and revocable by the King.
Annual accounts shall be deposited in accordance with section 80, paragraph 1^ercoordinated laws on commercial companies. Article 80bis, paragraph 1^er, the same coordinated laws are applicable.
Art. 15. § 1^er. The Fund's principal receivables and accessories on a credit institution or on an investment company under the resources of deposit protection systems and financial instruments are privileged on the generality of the property of that institution or enterprise.
The privilege referred to in paragraph 1^er takes place immediately after those mentioned in Article 19 of the Law of 16 December 1851.
The preferential allocation created by section 19 in fine of the Act of 16 December 1851 is applicable to claims of the Fund referred to in paragraph 1^er this paragraph.
§ 2. Revenues and revenues from deposit protection systems and financial instruments do not constitute income under section 24 of the Income Tax Code 1992.
§ 3. Payments made by the Fund to creditors of a credit or investment company for the protection of deposits or for the protection of financial instruments result in subrogation of the Fund in the rights of such creditors.
When a creditor has been disinterested by the Fund only for part of its debt, it may, by derogation from section 1252 of the Civil Code, exercise its rights in respect of what remains due to it only at the same level with the Fund.
Art. 16. The Fund's organizational regulation is established by the Steering Committee and submitted to the King for approval.
Art. 17. The excess of revenues on the Fund's expenses is extended to the reserve or rescheduled. The organization regulations set the rules for the investment of the Fund's assets.
Art. 18. The Fund publishes an annual report on its activities.
CHAPTER III. - Amendments to the Act of 22 March 1993 on the Status and Control of Credit Institutions
Art. 19. In Article 24, § 7, of the Act of 22 March 1993 on the Status and Control of Credit Institutions, the following amendments are made:
1° in the first sentence of paragraph 2, the words "to the Deposit and Guarantee Institute" are replaced by the words "to any institution or person it determines";
2° in the second sentence of paragraph 2, the words "Institute of Discount and Guarantee" are replaced by the word "sequester";
3° in the third sentence of the Dutch text of paragraph 2, the word "Instituut" is replaced by the word "sekwester";
4° in the fifth sentence of the Dutch text of paragraph 2, the word "Instituut" is replaced by the word "sekwester";
5° in the ninth sentence of paragraph 2 above, the words "The Deposit and Guarantee Institute" are replaced by the words "The Sequester";
6° in paragraph 3, the words "the Institute of Discount and Guarantee" are replaced by the words "the sequester".
Art. 20. In section 110 of the Act, amended by the Act of 23 December 1994, and in sections 110bis to 110sexies of the Act, inserted by the Act of 23 December 1994, the words "the Institute of Discount and Guarantee" are replaced by the words "the Fund for the Protection of Deposits and Financial Instruments" and the words "the Institute" are replaced by the words "the Fund".
Art. 21. In article 110bis of the same law, inserted by the law of 23 December 1994, the words "Without in cases where bankruptcy has been declared, a request for judicial concordat or a stay of payment granted by a judicial decision" are replaced by the words "Without in cases where bankruptcy has been pronounced, or a procedure in judicial concordat has been introduced."
Art. 22. Section 110quinquies of the Act, inserted by the Act of 23 December 1994, is repealed.
CHAPTER IV. - Amendments to the Law of 6 April 1995 on secondary markets, the status of investment companies and their control, intermediaries and investment advisors
Art. 23. In Article 67, § 7, of the Law of 6 April 1995 on secondary markets, the status of investment companies and their control, to intermediaries and investment advisers, the following amendments are made:
1° in the first sentence of paragraph 2, the words "to the Deposit and Guarantee Institute" are replaced by the words "to any institution or person it determines";
2° in the second sentence of paragraph 2, the words "Institute of Discount and Guarantee" are replaced by the word "sequester";
3° in the third sentence of the Dutch text of paragraph 2, the word "Instituut" is replaced by the word "sekwester";
4° in the fifth sentence of the Dutch text of paragraph 2, the word "Instituut" is replaced by the word "sekwester";
5° in the ninth sentence of paragraph 2, the words "The Deposit and Guarantee Institute" are replaced by the words "The Sequester";
6° in paragraph 3, the words "the Institute of Discount and Guarantee" are replaced by the words "the sequester".
Art. 24. The title V of Book II of the Act is replaced by the title "Invest Protection Systems".
Art. 25. Section 112 of the Act, as amended by the Royal Decree of 22 December 1995 and the Act of 20 March 1996, is replaced by the following provision:
"Art. 112. Credit institutions established in Belgium as well as investment companies established in Belgium and determined by the King must participate in a collective system for the protection of financial instruments financed by them and to ensure, in the event of a failure of such an establishment or investment company, the reimbursement or compensation of certain categories of investors, which does not exceed a banking or financial activity, and, where appropriate, to allow such intervention Investor protection systems can be organized for certain categories of credit institutions or investment companies.
When they are not instituted by the State or by a public law body which depends on them, the investor protection systems must be approved by royal decree in accordance with the harmonized application to the different categories of credit institutions and investment companies, the rules of European law enacted in this matter.
Paragraph 1^er is not applicable to branches of credit institutions and investment companies under the law of another Member State of the European Community. It is not more applicable to branches of credit institutions or investment companies under the law of another State and whose commitments are covered by a system of investor protection of that State to a minimum equal to that resulting from the corresponding Belgian investor protection system.
The Fund for the Protection of Deposits and Financial Instruments is authorized to manage and operate investor protection systems.
Belgian investor protection systems can conclude with foreign agencies any collaborative agreements. "
Art. 26. Section 113 of the Act, as amended by the Act of 20 March 1996, is replaced by the following provision:
"Art. 113. § 1^er. Except in cases where bankruptcy has been pronounced, or a procedure in judicial concordat has been introduced, the Banking and Financial Commission makes decisions recognizing the failure of a Belgian legal investment company. The failure of Belgian credit institutions is observed by application of article 110bis of the Act of 22 March 1993 relating to the status and control of credit institutions.
The Fund shall provide the refund or compensation referred to in section 112, within three months, after the eligibility and amount of the investor's debt has been established. The Banking and Financial Commission may grant an extension not exceeding three months. It can only be decided in very exceptional circumstances and for specific cases of failure of a credit or investment company.
§ 2. Without prejudice to possible deductibles in accordance with European law, the investor protection systems instituted or managed by the Fund provide for the reimbursement of financial instruments held on behalf of investors or compensation on account of financial instruments whose establishment or undertaking is liable, up to a minimum of 20,000 euros, or the counter-value of that amount, regardless of the currency in which the financial instruments held or whose financial instruments are held or whose financial instruments The aforementioned amount of 20,000 euros is, until 31 December 1999, replaced by that of 15,000 euros.
Investor compensation includes, as opposed to amounts set out in paragraph 1^erthe reimbursement of deposits of funds held on behalf of investors pending assignment to the acquisition of financial instruments or pending restitution.
The King regulates the content of the information to be provided to investors by credit institutions and investment companies regarding the coverage of their assets resulting from the aforementioned systems. »
Art. 27. Section 114 of the Act is replaced by the following provision:
"Art. 114. The Fund for the Protection of Deposits and Financial Instruments shall take the necessary measures and arrangements to enable the branches of credit institutions and investment companies under the right of another Member State of the European Community to participate in the investor protection systems that it establishes or manages, with a view to supplementing, within the limits of these systems, the guarantees provided by the system to which the institution adheres in its State.
If the branch that used the faculty set out in paragraph 1^er fails to fulfil its obligations to the investor protection system in which it participates, the Fund, in collaboration with the Banking and Financial Commission, shall have the authority that has granted the approval to the credit institution or to the investment undertaking under the branch. In the absence of a correction of the situation, within twelve months, the Fund may, in the opinion of that authority, exclude the branch after a twelve-month notice. The long-term commitments prior to exclusion remain covered by the protection system until they are completed. Other assets held previously excluded remain covered for twelve months. Investors are informed by the branch, or, failing that, by the Banking and Financial Commission, of the termination of coverage. »
Art. 28. Section 115 of the Act, as amended by the Royal Decree of 22 December 1995, is replaced by the following provision:
"Art. 115. The King may, on the advice of the Banking and Financial Commission and the Fund for the Protection of Deposits and Financial Instruments, determine the method of assessment and calculation of the initial contribution to investor protection systems by credit institutions and investment companies that adhere to them for the first time and for which insufficient contributions are not made by a system to which they have previously adhered. "
Art. 29. Section 116 of the Act is replaced by the following provision:
Art. 116. Article 110sexies of the Act of 22 March 1993 relating to the status and control of credit institutions is applicable to interventions of investor protection systems with credit institutions and investment companies. »
CHAPTER V
Removal of the Institute of Discount and Guarantee
Art. 30. The Deposit and Guarantee Institute is removed. It is, without prejudice to Article 6, liquidated in accordance with Article 15 of Royal Decree No. 175 of 13 June 1935 establishing an Institute of Discount and Guarantee and the provisions of the statutes to which this article refers.
Art. 31. The legal missions of the Institute of Discount and Guarantee are transferred to the National Bank of Belgium.
Art. 32. The mission of the Deposit and Guarantee Institute relating to the institution or management of deposit protection systems is, however, transferred to the Deposit Protection Fund and the financial instruments referred to in section 3 of this Act.
The rights and obligations of the Deposit and Guarantee Institute relating to deposit protection systems are transferred to the Deposit Protection Fund and the Financial Instruments.
Art. 33. Without prejudice to section 30 of this Act, Royal Decree No. 175 of 13 June 1935 establishing an Institute of Discount and Guarantee, as amended by Royal Decree No. 67 of 30 November 1939, the Royal Decree of 24 September 1940, the laws of 7 November 1952 and 6 July 1964, interpreted by the law of 16 March 1982, and amended by the laws of 14 March 1983, 4 December 1991 and 23 January 1991,
CHAPTER VI. - Dissolution of the Fund for the Intervention of Scholarships
Art. 34. The Fund for the Intervention of Scholarships created by the Financial Operations and Financial Markets Act of 4 December 1990 is dissolved.
The King shall rule, if any, the mode of liquidation and shall set the closing date of the liquidation.
All rights and obligations of the Scholarships Response Fund are transferred to the Deposits and Financial Instruments Protection Fund.
Art. 35. The Financial Operations and Financial Markets Act of 4 December 1990 is repealed:
1° Article 60, § 1^er; however, the interventions made by the Fund for the Protection of Deposits and Financial Instruments as a result of the resumption of the Fund for the Intervention of Exchange Corporations and caused by failures of stock exchange companies that occurred prior to the entry into force of this provision, shall be carried out in accordance with the rules set out in the General Regulations of the said Fund for the Intervention of Exchange Corporations. Interventions caused by exchange agent failures occurring prior to 1^er January 1991 shall be carried out in accordance with the rules set out in the Regulations and the General Regulations of the Exchange Agent Guarantee Fund referred to in former section 71bis of Book 1^erTitle V of the Commercial Code;
2° Article 62, amended by the laws of 6 April 1995 and 20 March 1996; However, section 62 remains applicable to the interventions made by the Deposits and Financial Instruments Protection Fund as a result of the resumption of the commitments of the Exchange Corporations Response Fund and caused by failures of foreign exchange agents or stock exchange companies that occurred prior to the effective date of this section.
CHAPTER VII. - Amendment to the Act of 22 February 1998 establishing the organic status of the National Bank of Belgium
Art. 36. Article 26, § 1^er, 2°, of the Act of 22 February 1998 establishing the organic status of the National Bank of Belgium, the words "to the Fund for the Protection of Deposits and Financial Instruments" are added after the words "to the Fund of Rentes".
CHAPTER VIII. - Final provision
Art. 37. Chapters III to VI come into force on the date fixed by the King by royal decree deliberated in the Council of Ministers and no later than 1^er January 2000. The King may set separate dates for the coming into force of the above-mentioned chapters as well as the articles they contain.
Promulgate this law, order that it be clothed with the seal of the State and published by the Belgian Monitor.
Given in Brussels on 17 December 1998.
ALBERT
By the King:
Minister of Finance,
J.-J. VISEUR
Seal of the state seal:
Minister of Justice,
T. VAN PARYS
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Note
(1) Session 1997-1998.
House of Representatives.
Documents. - Bill, 1669, No. 1. - Amendments, 1669, No. 2. - Report, 1669, No. 3. - Text adopted by the Commission, 1669, No. 4. - Text adopted in plenary and transmitted to the Senate, 1669, No. 5.
Annales. - Meetings of 18 and 19 November 1998.
Session 1998-1999.
Senate.
Documents. - Project transmitted by the House of Representatives, 1-1161, No. 1.