Financial markets and investor protection (MiFID)
In the context of financial markets and investor protection, KBC Group Compliance has issued a number of rules designed to protect investors when investment services are offered. They are based on the relevant European directives such as MiFID and the Market Abuse Directive. The following initiatives have been taken in this respect.
MiFID – Duty of Care:
The framework for giving advice on financial instruments to our Belgian clients has been improved and we have used inspections to fine-tune the collection of client information, redraft the risk profile questionnaire and introduce a questionnaire to assess clients’ knowledge of specific risks associated with our products. We have also improved our advisers’ knowledge of MiFID. These action plans are designed to ensure that we look at our clients’ needs first, so as to offer them the best financial instruments in keeping with our client-centric strategy.
Following the adoption of MiFID rules for insurance in Belgium, we have introduced a series of measures at KBC Insurance with respect to insurance products. These measures are similar to those taken at KBC Bank and include the collection of client information (risk profile), providing information to clients, introducing a conflict-of-interests policy and first-line controls, training staff and implementing rules regarding duty of care.
First- and second-line controls:
We have further enhanced our first-line controls in the various businesses (focusing in particular on following up branches in the event of breaches). Based on these controls, Compliance has started to set up second-line controls to check both the design and the effectiveness of the first-line controls.
Personal transactions and market abuse:
Employees are regularly made aware of issues on which they could have inside and confidential information or for which they might have a conflict of interests. Ongoing controls are in place to monitor these obligations and to check possible breaches. More generally, Group Compliance checks transactions in listed financial instruments that could be considered as potentially suspicious because, say, they were executed before an event (profit warning, takeover, etc.). The relevant authorities are notified of any such transactions when detected.