The FSMA publishes its 2014 annual report

Press release

The Financial Services and Markets Authority (FSMA) has published its annual report for 2014. The presentation of the annual report focused particularly on the results of the inspections and mystery shopping campaigns carried out, the supervision of savings, investment and insurance products, and the initiatives taken in the area of financial education.

The 2014 annual report provides explanations concerning the FSMA's activities within each of its six fields of competence. These six fields are: supervision of information disseminated by companies, product supervision, supervision of compliance with conduct of business rules, supervision of market operators, credit providers and intermediaries, supervision of supplementary pensions, and financial education.

During the presentation of the annual report, five domains were discussed in particular:

1.    Inspections

  • On-site inspections.  In 2014 and early 2015 the FSMA conducted inspections on the topic of 'duty of care'. In the process, it examined whether banks and other regulated companies act in the best interests of their clients when they provide investment advice and execute orders. During the inspections, FSMA staff members not only went to head offices to examine procedures, but they also visited local branches to verify compliance with the rules in practice. The inspections regarding duty of care have to date covered 88 per cent [1] of the sector.
  • 106 orders. In the course of this inspection cycle, the FSMA noted that improvements could be made in compliance with the rules regarding duty of care. The FSMA identified 210 shortcomings. Of these, 106 have led to the issuing of an order, through which the FSMA enjoins the company concerned to adjust its working method. The weak points concerned, among other things, the testing of the client's knowledge and experience and the use of investor profiles. The FSMA published on its website a summary note on its findings and recommendations regarding duty of care. The companies concerned drew up action plans for adjusting their working methods. The implementation of these plans will be followed up by mystery shopping, among other approaches.
  • Best execution. In 2015, attention will continue to be devoted to the topic of duty of care. In addition, the FSMA will begin a new inspection cycle on the topic of 'best execution'. This topic concerns the question of whether all reasonable measures have been taken when executing an order to ensure the best possible outcome (for instance, as regards price, fees, speed, etc.) for the client.   

2.    Mystery shopping

  • Legal powers. The FSMA has been given the legal power to engage in mystery shopping. In the technique known as mystery shopping, members of the FSMA's staff or third parties appointed by the FSMA to this end make observations at regulated companies without revealing that they are acting on behalf of the FSMA.
  • Pilot project. In 2014, the FSMA called upon an external service provider to conduct a pilot project. In the course of this project, 201 mystery shopping visits were made to five banks. In each case, one of two possible scenarios (risk-averse/risk-seeking investor) was tested. The conclusions of this assignment were in line with the observations made in the course of the inspections at those same banks. The pilot project enabled the FSMA to test the methodology used and the consistency of the information gathered against the observations made during its inspections.
  • Action plan for 2015-2016. The action plan comprises two aspects. On the one hand, the FSMA will carry out mystery shopping at institutions where no inspection has so far been conducted. The information obtained in this way will be used as input for future inspections that may be held at those institutions. On the other hand, the FSMA will use mystery shopping to determine the extent to which the action plans drawn up by institutions where it has already conducted an inspection have had an effect in practice. In 2015 and 2016, more than 200 mystery shopping visits respectively are planned.

3.    Financial products

  • Product screening. The moratorium on the distribution of particularly complex structured products introduced in 2011 has led to a substantial reduction in the complexity of structured products. In 2014, the FSMA screened 118 structured products with new characteristics: 46 of them were deemed to be too complex and were not brought to market. In addition, the FSMA handled 1,466 dossiers concerning advertising of UCIs; 210 dossiers and 199 key investor information documents for regulated savings accounts; and 315 dossiers on advertising for 'notes'.
  • Insurance sector review. The FSMA conducted sector reviews relating to specific types of insurance products. The reviews concerned financial reporting on class 23 insurance products; on the information which insurers provide regarding the segmentation criteria used; and on theft, guarantee and trip cancellation insurance. These reviews led in each case to the remedying of a number of identified shortcomings. In 2015, the FSMA will engage in a sectoral review relating to fire insurance.  

4.    Financial education

  • Schools. In 2014, the FSMA launched a pilot project with 25 schools from both the Dutch-speaking and the French-speaking systems. In the course of the pilot project, educational material was tested in class. Based on feedback from the teachers involved, the material was adjusted and expanded. In the 2015-2016 school year, this material will be made more widely available.
  • At the end of January 2013, the FSMA launched its financial educational programme via the website This website offers neutral, reliable and practical information on money-related topics. The site has since been visited more than 1.7 million times. 14 per cent of Belgians are familiar with

5.    Consumer and mortgage credit

  • The FSMA has been given new powers to issue authorizations and to register credit providers and intermediaries in consumer and mortgage credit. There are estimated to be more than 20,000 such intermediaries who will have to register with or obtain authorization from the FSMA.
  • The FSMA has developed a new online registration tool for the purpose, which the parties concerned can access from the FSMA website. 

The annual report is available on the website of the FSMA (in full in French and Dutch). A printed copy of the report can also be requested via the website using the order form.

[1]    Measured on the basis of the number of retail clients.