2. Qualities required of significant shareholders

Contents

Statutory and regulatory framework

  1. Brokerage Supervision Act: Articles 6, 14, 45 to 54, 83 and 227
  2. NBB circulars:
  3. International reference documents:
    • Joint Guidelines of the EBA, EIOPA and ESMA of 5 May 2017 on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector

2.1 Prudential expectations

2:1 From a prudential point of view, it is essential that significant shareholder(s) have the qualities necessary to ensure that they exercise their influence to promote sound and prudent management and development of the business on a going concern basis. They should also take into account the prudential expectations in terms of governance that are incumbent on investment firms.

2:2 This prudential requirement is a prerequisite for obtaining a licence and continues to apply to the firm during the exercise of its activities. It is reflected in particular in the mandatory prudential assessment of the qualities of natural or legal persons that decide to acquire or significantly increase a qualifying holding in the firm’s capital.

2:3 Shareholders with a qualifying holding (“qualifying shareholders”), as well as the firm itself upon learning of such a holding, should notify the NBB of any change (an increase or reduction that causes certain thresholds to be crossed) in the firm’s capital structure.

2:4 The firm should provide the NBB with all relevant information on its qualifying shareholders of which it is aware and which could have an influence on the prudential assessment of these shareholders. This obligation also applies to the shareholders concerned.

2.2 Suitability assessment

2:5 The prudential assessment criteria, both in the context of the licence application process and afterwards, are explained in the Joint Guidelines of the EBA, EIOPA and ESMA on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector. Existing and potential shareholders should read this document in conjunction with Communication NBB_2017_22. The rules applicable to stockbroking firms are specified in Circular NBB_2017_23.

2.3 Family/partners’ charter

2:6 Family-owned stockbroking firms or those whose shareholder structure consists of a limited number of partners are recommended to draw up a charter governing relations between the family members or partners, on the one hand, and the stockbroking firm, on the other hand, as regards sound governance, corporate vision, financial objectives, the oversight of management, career paths, remuneration, etc.

2.4 Prohibition on granting loans, credit or guarantees to acquire shares

2:7 No loans, credit or guarantees may be granted, directly or indirectly, to persons to enable them to directly or indirectly acquire or subscribe to shares or other securities that confer a right to dividends of the firm or a closely connected company or that confer the right to acquire such securities. This type of transaction, whereby the repayment or cancellation of the resulting obligation depends to a certain extent on the distribution of dividends by the firm, undermines the loss-absorbing capacity of the capital thus financed.