The Belgium Financial Services and Markets Authority has published an agreed settlement with Banque Degroof Petercam over breaches of MiFID conduct rules linked to employee profit-sharing plans. The settlement requires the bank to pay EUR 1 million and provides for publication of the settlement with names on the FSMA website. The case covers the bank’s role in EuroStoxx-linked plans and plans linked to listed shares of the employer between January 2018 and October 2023. According to the FSMA, the bank has since remedied all of the matters identified as breaches. In the Listed Company Plans, employees could issue mirror options and sell them to the bank, including to cover tax due when stock options were allocated. The FSMA considers that service to have been an investment service subject to MiFID rules, and found that the bank failed to disclose certain costs and charges arising from value adjustments used in setting the sale price between January 2018 and February 2023. It also found a conflict of interest because the bank acted as counterparty while determining pricing parameters, and said the bank did not ensure that a parameter intended to cover its credit risk was fair and free from conflict bias, nor did it maintain an effective conflicts policy. In the EuroStoxx Plans, the bank’s digital platform also amounted to an investment service, but the appropriateness test for options was inadequate because it relied only on employees’ self-assessment. The FSMA noted that it had already accepted a settlement with the bank in 2020 over shortcomings, including some analogous to the present breaches, in another activity. Under the settlement, Banque Degroof Petercam also committed to respond to requests from employees who sold mirror options under the Listed Company Plans during the relevant period. On request, it will provide information on the value of the mirror options sold and the overall adjustment applied by the bank.

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