FSMA proposes three legislative changes for listed companies

Legal Eubdate
5 July 2023

The FSMA published its 2022 annual report on 23 June 2023. On that occasion, Jean-Paul Servais, chair of the FSMA, presented a webinar that focused on the FSMA’s plans for the future.

The following three ideas are particularly relevant for listed companies.

At least three independent directors

The FSMA wishes to strengthen the position of independent directors, who play an important role, e.g. in the context of related-party transactions. Under the Belgian Corporate Governance Code 2020, listed companies should have at least three independent directors. The FSMA would like this soft law recommendation to become hard law. In addition, the FSMA is of the view that, when proposing the appointment of new independent directors, the board of directors should explicitly confirm that there are no reasons to doubt the independence of the directors or, if there are, explain why it believes that the directors are nevertheless independent.

Shareholder approval for significant asset transfers

Unlike in other jurisdictions, Belgian company law does not require any intervention of the shareholders for an asset transfer.

The FSMA proposes to introduce a system of approval by (or at least consultation of) the shareholders of listed companies for any significant transfer of assets. If the transfer relates to more than 3/4 of the total assets, it should be approved by the general meeting of shareholders. The transfer should be not submitted for review by the FSMA. To avoid bypassing the rule, the value of transfers over a period of 12 months should be aggregated.

Professional ban for convicted directors of listed companies

People who are convicted of certain types of criminal offences cannot serve as directors of credit institutions and other regulated institutions. The FSMA proposes to have this professional ban applicable to directors of listed companies as well.

The ban would be effective for 20 years in the event of a conviction for an imprisonment of more than 12 months or 10 years for a conviction for an imprisonment of less than 12 months, a fine or a suspended sentence, in each case for any the offences referred to in article 20 of the Banking Act

The FSMA has submitted a legislative proposal to the Belgian government with a view to implementing all three proposals.