The Financial Services and Markets Authority FSMA) has introduced mandatory approval for compliance officers. This means that compliance officers who are responsible within financial institutions for ensuring the institution’s compliance with conduct of business rules must henceforth fulfil a certain number of conditions as regards knowledge, experience and training.
'The FSMA is tasked with supervising compliance with conduct of business rules that are intended to ensure that financial institutions act in the interests of their customers in an honest, fair and professional manner. Approved compliance officers are an important contact for the FSMA within the financial institutions in carrying out its supervisory mandate, and hence the importance of introducing criteria for approval’, says Jean-Paul Servais, chairman of the FSMA.
Compliance officers must investigate whether their financial institutions follow the ethical rules and in particular the conduct of business rules in an effective and suitable manner. Compliance officers thus constitute an important guarantee of proper treatment of consumers and are a key link in the FSMA's supervision of compliance with conduct of business rules.
In order to ensure that compliance officers have the requisite knowledge, experience and training with regard to the applicable rules of conduct, the FSMA has issued a Regulation (published in French and Dutch) introducing a mandatory approval process. Anyone wishing to obtain the FSMA's approval as a compliance officer must henceforth fulfil a number of criteria, namely:
– have a Master's degree or equivalent experience;
– pass an exam that tests one’s knowledge of the conduct of business rules;
– be fit and proper;
– be covered by a legal protection insurance policy.
In addition, the FSMA Regulation also provides that approved compliance officers must participate regularly in continuing education. Mandatory approval is required only of heads of the compliance function within a financial institution, who report directly to the institution's senior management. Compliance officers who already held the position before 1 April 2011 do not need to pass an exam, but they must meet the other criteria for approval.
The FSMA Regulation on the approval of compliance officers has been enacted in the Royal Decree of 12 March 2012, published on 26 March 2012. The FSMA will contact all financial institutions to request that they submit an approval application for their compliance officers.