Private placement rules and law in Belgium

Belgium has implemented AIFM Directive 2011 / 61 / EU (the “Directive”) into its law dated 19 April 2014 on AIF and their managers (the “Law”).

Pursuant to the Law, an AIFM must be registered / passported in Belgium before it markets AIF units in Belgian territory, regardless of whether the offer is made to professional or retail investors. Where an AIFM plans to market AIF units to retail investors as part of a public offer (see below – private placement / public offer), the AIFM shall also register the AIF with the Belgian regulator and have a prospectus approved.

Pursuant to the Law, the following offerings are not deemed to have a public character and do not require registration of the AIF or approval of a prospectus in Belgium (and therefore constitute a private placement of funds):

1.  offerings to professional investors only; and/or
2. offerings to fewer than 150 natural or legal persons, other than professional investors; and/or
3. offerings which need at least EUR 100,000 per investor and per security, other than collective investment funds with a variable number of participation rights; and/or
4. offerings which need at least EUR 250,000 per investor and per category of a collective investment funds with a variable number of participation rights; and/or
5. offerings where the amount of each unit of security (other than a security of a collective investment fund with a variable number of participation rights) is at least EUR 100,000; and/or
6. offerings where the global amount is less than EUR 100,000, calculated on an annual basis.

Reverse solicitation is not deemed to constitute a public offering of a fund interest in Belgian territory and, in such context the fund does not need to be registered or have a prospectus approved in Belgium.

Besides contractual and extra-contractual liability, there are also regulatory and criminal penalties.

These include:

1. Securities, debt instruments, warrants of ordinary companies; and Futures, swaps, forward rate agreements, equity swaps, and derivatives on raw material.
2. Under the EU Prospectus Regulation and Belgian prospectus law dated 11 July 2018, the following offerings do not require approval of a prospectus in Belgium (and therefore constitute a private placement of non-fund investments):
   1. offerings only addressed to qualified investors;
   2. offerings only addressed to 150 legal or natural persons other than qualified investors per EEA State;
   3. offerings requiring a counterparty of EUR 100,000 minimum per investor and per offer;
   4. offerings where the nominal value is EUR 100,000 minimum;
   5. offerings where the total amount is EUR 100,000 maximum;
   6. offerings in the EU for an amount below EUR 5,000,000 (in this case, an information note must be prepared and filed with the Belgian regulator for publication purposes only (no approval required)). 

As a consequence, any of the following offerings will fall under the private placement exemption:

1. offerings to qualified investors only;
2. offerings to natural or legal persons when the offer is addressed to fewer than 150 persons other than qualified investors, this per EEA State;
3. offerings where more than EUR 100,000 per investor and per distinct offer is required;
4. offerings where the unit value of the security is more than EUR 100,000;
5. offerings where the total investment is less than EUR 100,000;
6. offerings in the EU for an amount below EUR 5,000,000 provided that an information note is filed with the Belgian regulator. 

In Belgium, a qualified investor means:

1. Professional clients under MiFID;
2. Eligible counterparts under MiFID.