BELGIUM Law and Practice Contributed by: Joan Carette, Philippe De Prez and Thomas Derval, Simont Braun
ties (Loans and forms of credit offered by CIs or other lenders to enterprises other than SMEs). 6.7 Rules of Payment for Order Flow There is no Belgian specificity in payment for order flow. ESMA has stressed the fact that MiFID II limits the possibility for brokers to receive any remuneration, discount or non-monetary ben - efit for routing client orders to execution ven - ues, resulting in a clear onus on firms to ensure that the execution quality achievable at a venue is the driver for sending client orders to such a venue, and not any payment for order flow. Due to a lack of any further specific guidelines on the matter from the FSMA, it can be anticipated that the FSMA will follow ESMA’s position and take a rather reluctant stance regarding payment for order flow out of consideration for best execu - tion policies. In the absence of any specific regulation, pay - ment for order flow would be assessed in the light of inducement requirements, which prevent regulated entities from paying or receiving ben - efits from third parties unless: • it enhances the quality of the service; • it does not affect the general duty of acting honestly, fairly, professionally and in the cli - ent’s best interest; and Regulation (EU) 596/2014 of 16 April 2014 on market abuse (MAR) and the various Implement - ing and Delegated Regulations in this respect are directly applicable in Belgium. The Belgian legal framework on principles regarding market integrity and market abuse governing trading is further complemented by Article 25 and Sections 8 and 9 of Chapter II of the Financial Supervision Law, which lays down the competencies of the • the client is adequately informed. 6.8 Market Integrity Principles
FSMA as the supervisor in this respect, and the applicable sanctions. In addition, in its Circular of 18 May 2016, the FSMA provides practical instructions, accompanying the ESMA guide - lines to the MAR. Title VI of MiCA also contains specific rules on market abuse. Under the applicable rules, market manipula - tion, insider dealing and unlawful disclosure of non-public information are considered forms of market abuse which are subject to administra - tive and/or criminal sanctions. 7. High-Frequency and Algorithmic Trading 7.1 Creation and Usage Regulations Regulated firms engaged in algorithmic trad - ing should have adequate and effective internal controls in place, appropriate to their business activity, to ensure that trading systems cannot be used for any purpose contrary to MAR. Alter - natively, they should have a connected trading venue, to ensure that their trading systems are resilient, have sufficient capacity, are subject to appropriate trading thresholds and limits, and to prevent erroneous orders from being sent or otherwise operated in such a way that they could lead or contribute to the creation of a disorderly market. With DORA’s application, financial institutions using such technologies are required to have a robust ICT risk management framework in place, including effective arrangements to deal with business continuity, testing, internal controls and potential ICT service provider management framework. In general, the FSMA is wary of algorithmic and high-frequency trading entities and there is no
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