The transfer of outstanding receivables is generally authorised in Belgium without the need to obtain any specific local licence. However, there are exceptions for certain specific types of receivables, such as receivables arising from consumer credit agreements or public procurements.
Pursuant to Belgian consumer credit law (Book VII of the Belgian Code of Economic Law, Art. VII.102), Belgian consumer credit receivables may only be purchased by the following regulated entities:
- Entities authorised to grant consumer credits under Book VII of the Belgian Code of Economic Law and registered as consumer credit lenders with the Ministry of Economic Affairs;
- The National Bank of Belgium;
- The Belgian Deposit and Financial Instrument Protection Fund;
- Credit insurers;
- Entities authorised to collect debts vis-à-vis consumers and registered as “debt collectors” with the Ministry of Economic Affairs under the law of 20 December 2002 on the collection of debts vis-à-vis consumers; and
- Securitisation vehicles embraced by the law of 3 August 2012 on securitisation vehicles.
Where the assignment of such consumer credit receivables is carried out with a non-eligible purchaser, the consequences are severe: the purchaser forfeits its right of claim in respect of the assigned receivables against the debtor, whereas the latter is given the right to pay back its outstanding debt to the seller for an amount capped at the borrowed amount.
In light of the above, the following question was raised with the regulator (Belgian Economic Affairs Ministry): can a foreign securitisation vehicle be regarded as an eligible purchaser of Belgian consumer credit receivables under Belgian consumer credit law?
The regulator’s unprecedented response came in a formal but unpublished answer. The regulator concludes that the actual wording of the Belgian law on consumer credit only includes so-called Belgian “institutional securitisation vehicles” as regulated under related Belgian law of 3 August 2012 and duly registered as such with the Belgian Finance Ministry.
As a result, this precludes the recognition of eligibility of any foreign securitisation vehicles with similar status or under similar prudential supervision in their home country. Even though the position of the Belgian regulator may be criticised from an EU law point of view (and, in particular, as regards the principles governing EU free movement of capital) and contradicts the growing recognition of the right for securitisation and investment funds to operate on a pan-European basis, the current recommendation is not to use foreign securitisation vehicles to securitise Belgian consumer credit receivables.