Directive of Financial Deontology (Belgia)
Recommendation for the Francophone and Germanophone medias Related to the operations of insiders, the manipulation of the market, investment recommendations and to conflicts of interest
The representatives of the French speaking media, journalists and the direction of the media, through their representative commissions (hereafter referred to as the representatives of the French speaking media) have approved the following recommendation related to the operations of insiders, the manipulation of the market, investment recommendations and conflicts of interest (hereafter referred to as the Recommendation).
The text of the present Recommendation was established in application of:
- the law of August 2, 2002 related to the surveillance of the financial sector and financial services (hereafter referred to as „the Law”);
- Directive 2003/6/CE of the European Parliament and of the Council of January 28, 2003 related to the operations of insiders and to the manipulation of the market (abuse of the market);
- Directive 2003/125/CE of the European Commission on December 22 2003 in execution of Directive 2003/6/CE of the European Parliament and of the Council concerning the fair presentation of the investment recommendations and the mention of the conflicts of interest, transposed by the AR on March 5 2006.
The representatives of the French speaking media estimate it useful and necessary to state in the present Recommendation a certain number of rules for behaviour and to clarify the basic principles and the practices of control related to the operations of insiders, the manipulation of the market, the investment recommendations and the conflicts of interest that need to be taken into account by journalists. The dispositions of the law of August 2 2002, described below under the heading „General dispositions”, are the legal dispositions concerning all journalists. The present Recommendation explains their content but does not replace them. On the other hand, the European Commission in its Directive 2003/125/CE, described below under the heading „Particular dispositions”, has planned for the necessary article of autoregulation. The rules prescribed in this framework by the representatives of the French speaking media will then replace the dispositions of the European Directive.
The representatives of the French speaking media hereby make the choice of autoregulation and see that the application of Directive 2003/125/CE does not violate the freedom of the press, guaranteed by Article 10 of the European Convention of Civil Rights, or the secrecy of journalistic sources guaranteed by the law of April 7 2005 concerning the protection of journalistic sources. In this framework, the present Recommendation and the dispositions of autoregulation included in it acknowledge explicitly the journalistic freedom and are the guarantors of free information in reciprocal respect of the interest of the press and of the public opinion on one hand, and of the financial market on the other.
Editors and journalists together see that the information gathered in the framework of their informative mission will not lead to the disorganisation of the financial market or to obtaining any personal advantage. Such an advantage prohibited by the law may result from the operations of insiders related to financial instruments, manipulation of the market and confusion of interests or from the possibility given to others to commit such offences.
The present Recommendation is applied to any physical or moral person, who on a regular or professional basis collects or diffuses financial or economic information by the intermediary of any means of mass communication (the Journalist).
The starting point of the present Recommendation is the principle of precaution defined in the Declaration of the duties and rights of the Journalist (1971) and the Code of principles of journalism (1982). In general, a journalist acts with caution. Every journalist treating the financial market must know that he is in a vulnerable position. This causes the necessity to formulate some basic principles and rules of conduct.
These behaviour rules and basic principles can be summarised as follows:
- Journalists cannot use the financial information they are aware of, in their own interest or in the interest of their close environment, before its publication. They cannot communicate this information to outsiders unless this is part of their normal informative mission. Journalists must refrain from any form of confusion of interests and insider trading.
- Journalists refrain from any form of manipulating the market.
- These principles are developed further in the Recommendation concerning financial journalism detailed below. This Directive must act as an express reference point and guide the representatives of the French speaking media when addressing questions and complaints in the matter. The Recommendation includes a paragraph which applies to all journalists and a paragraph concerning only journalists making investment recommendations. Journalists making financial information inclined to have some influence on financial instruments or those issuing them must learn and respect these principles. In addition, the journalists making investment recommendations must learn and respect the principles applying to them.
The direction of the media, the editors in chief and sub-editors as well as journalists have the particular responsibility to see that the principles of this Recommendation are respected.
GENERAL DISPOSITIONS OF APPLICATION FOR ALL JOURNALISTS
1. Operations of insiders 
In the exercise of his work, profession or function as well as on the basis of his work, profession or function, a journalist may have access to financial and/or economic information that he knows or should reasonably know to be privileged or under embargo.
It is forbidden to journalists to engage in commerce or to place any deed related to financial instruments such as actions, funds, obligations and others, on the basis of such information, from the moment that the journalist becomes aware of the contents of the privileged information and/or of the information under embargo, until the moment that the information in question is diffused to the audience.
1.2.1. Information is privileged when it:
(i) has not yet been disseminated to the audience
Before being able to estimate that the information has been absorbed by the audience, one must take into account a reasonable waiting time. In the framework of the present Recommendation, „divulged to the audience” takes account of the time that passes till after the radio and/or the TV emission, the publication of a newspaper or the electronic publication.
(ii) is correct
Even if rumours and suppositions could not be considered as privileged information, the certainty of information is not obligatory for qualifying it as privileged and precise. Information on events or facts that will probably or eventually take place can be precise and therefore privileged.
(iii) is directly or indirectly linked to a financial instrument or the emitter of one.
Under the designation of financial instrument are included, notably, actions, options, obligations or other securities as they are defined in Article 2, 1° of the law of August 2 2002 on control of the financial sector and services.
Concerning the supplier of a financial instrument, the internal information of enterprises (an imminent fusion, changes in management, etc.) as well as the external information of enterprises (related to a competitor, etc.) is considered as privileged. The regulated or scientific development of a political nature that takes place in the sphere of activity of the supplier concerned may in consequence fall in the field of this disposition, given that it (or its evaluation) may influence easily the perspectives of the emitter and/or of the financial instrument.
(iv) at the moment of exposure, has or could have notable influence on the course of a financial instrument or of a related financial instrument (as defined in Article 2, 2° of the law).
1.2.2. In the matter of financial information, by „information under embargo” we understand: the press releases sent to the media during stock exchange hours and for which the media is asked, by the supplier, to wait for the lifting of the embargo – which is generally after the stock exchange hours – before publishing them, or the press releases that are placed expressly under embargo by their emitter.
1.3 Forbidden operations
It is forbidden to any Journalist (in the country or abroad) to use (or to try to use) privileged information and/or information under embargo
(a) by proceeding to buying or selling financial instruments related to previously received information or similar financial instruments;
It is not of great importance whether these operations are performed directly or indirectly, for one’s own account or for that of a third person.
(b) by giving assignments to outsiders or by advising to buy or to sell the financial instruments related to the information received previously or related financial instruments;
(c) by communicating to outsiders (orally or by writing) the privileged information and/or information under embargo;
Those not considered as outsiders are the journalists who are aware of information under embargo in the framework of the normal exercise of their work, profession or function, and the „insiders” who are known to be aware of information under embargo.
The journalist is obliged to exercise a certain discretion regarding information previously obtained, unless it is communicated in the framework of the normal exercise of his work, profession or function.
By „the normal exercise of his work, profession or function” we understand the normal exercise of the journalist’s mission to inform.
(d) by using in any way previously obtained information before it is made public.
The journalist must assure himself that the aforementioned actions are equally forbidden to those to whom he communicates privileged information or information under embargo, including his or her companion, children, other members of the family, relatives and friends, etc. (an unlimited list).
2. Manipulation of the market 
The Journalist refrains from any sort of manipulation of the market.
2.2. The manipulation of the markets
By „the manipulation of the market” the Law understands notably:
(i) diffusing wrong or misleading indications (that give or may give wrong or misleading signals) related to supply, demand, the course of a financial instrument, as well as
(ii) any artificial or abnormal influence on the activities of the market, on the course and/or the volume of transaction of a financial instrument or the index level of the market, including the influence of using fictitious constructions or any form of falsehood or deception or
(iii) the participation in and the recommendation to participate to the aforementioned forbidden actions.
2.3. Forbidden actions
The journalist is to refrain in a general manner from any form of manipulation of the markets as it is described in the Law.
The Journalist sees to, in particular, refraining from the following forbidden actions (whether or not they are committed with others):
a. placing deeds knowingly, executing transactions, placing orders or closing accords that:
(i) whether using deceptive methods or not,
- give or may give wrong or misleading signals regarding supply, demand or the course of one or several financial instruments;
- maintain the course of one or several financial instruments at an abnormal or artificial level (unless it seems plausible that the reasons are legitimate and that the transactions or the orders in question correspond normal practices on the market concerned as they are recognized by the Financial Commission); and/or
(ii) influence or may influence, in an abnormal or artificial manner, using a deceptive method, the activities of the market, the course and the volume of transaction of a financial instrument or the index level of the market
b. diffusing knowingly information or rumours which give or may give wrong or misleading signals regarding financial instruments when the Journalist knew or should have known that the information was wrong or incorrect. In the case of a journalist acting in the framework of his profession, this diffusion of information must be evaluated taking into account the regulations applicable to his profession, unless he takes advantage, directly or indirectly, or profits from the diffusion of the information in question.
c. knowingly buying or renouncing or advising an outsider to buy or renounce a financial instrument when the journalist knows, directly or indirectly, what will appear or be diffused about the financial instrument or the emitter of the financial instrument; a single article, a press release or an emission (as a piece of advice, an analysis, an interview, a reportage, etc.) that could have influence on the activity of the market, the index of the market, the course or the volume of the transaction of the financial instrument in question.
It is equally forbidden to the journalist to try to adopt the aforementioned behaviour, as well as participating in it or inciting or causing outsiders to participate in it.
The offences against the dispositions under 1 (insiders’ offences) and 2 may, if needed, be punished with penal and administrative sanctions.
SPECIAL DISPOSITIONS APPLICABLE TO JOURNALISTS WHO GIVE INVESTMENT RECOMMENDATIONS
Certain journalists make investment recommendations in the framework of normal exercise of their work, profession or function. They find themselves in the field of application of this chapter.
3.2. Investment recommendations
Investment recommendations are the articles and the journalistic contributions that recommend in an explicit manner buying or selling (or keeping) a specific financial instrument, of what one can deduce the advise to buy or to sell (or to keep) the financial instrument in question, and what constitute the actual object of an article, of a publication or an emission.
The dispositions of this chapter are only applicable to the journalists who recommend directly and explicitly a strategy of investment and/or investment decisions specifically aimed at an audience and concerning one or several financial instruments.
The journalists who deliver only general information on the sources of financial instruments, on the financial instruments themselves and/or on the development of the market are not in the field of application of this chapter.
It is necessary to distinguish between the journalists who themselves make investment recommendations and those who diffuse investment recommendations emitted by others.
3.3. Journalists who make investment recommendations
3.3.1. Dissemination and modification of investment recommendations
The dissemination of a recommendation does not take place only when a journalist emits for the first time such a counsel but also when a journalist diffuses the investment strategy of someone else after having modified it to a point to be able to contradict.
The journalist making investment recommendations takes all the necessary care in order to distinguish actual facts from interpretations, estimations, counsel, prognostics, projections and indicative courses and all other forms of information that are not related to facts.
Every journalist (and/or editor) who makes investment recommendations sees that the audience can learn his identity and/or that of the editor.
The Journalist (and/or the editor) contradicting the investment recommendations emitted by others (such as changing a recommendation to by to a recommendation sell) sees that this modification is mentioned clearly enough.
3.3.2. Conflict of interest concerning an investment recommendation
A journalist who emits an investment recommendation may, among other things, find himself in a situation of conflict of interest.
The journalist who finds himself in a situation of conflict of interests should convey this immediately to his editor.
The journalist who finds himself in a situation of conflict of interests refrains from giving, writing or publishing investment recommendations – or informing the audience in any manner – unless he explicitly makes known to the audience his interests in his investment recommendation.
Notably, there is a conflict of interest if:
- the journalist has a real financial interest in one or several financial instruments that constitute the subject of an investment recommendation emitted by him;
The existence of a real financial interest depends on the actual situation and must be examined in a concrete manner every time. What, in some cases, may be a real financial interest is not that in other cases.
- the journalist has a real conflict of interest regarding the emitter to which the counsel in placement is linked ;
- there are notable mutual participations between the journalist or a legal person to whom he is linked, on one hand, and the emitter related to the counsel in placement, on the other;
By „a legal person to whom he is linked”, we understand a legal person with whom the journalist retains a notable involvement.
There is a notable mutual participation if (i) the journalist or a legal person to whom he is linked possesses more than 5% of the total of the capital placed of the emitter in question or if (ii) the emitter possesses more than 5% of the capital placed of the Journalist or the legal person to whom he is linked .
- The journalist or a legal person to whom he is linked has an agreement with the emitter concerning the diffusion of the investment recommendation.
3.4 Journalists who diffuse investment recommendations given by others
The journalist (and/or the editor) who diffuses an investment recommendation sees that the audience can learn his identity and/or that of the editor. He should mention the source and, if necessary and possible, where the source may be found.
The journalist (and/or the editor) who limits himself to the diffusion of the synthesis of an existing investment recommendation, without modifying it and without any personal approach and/or a recommendation of his own, sees that the synthesis is clear and not misleading.
The Journalist (and/or the editor) who modifies significantly an investment recommendation emitted by a third party, without contradicting the strategy of placement, must clearly mention this.
 The definition of „journalist” can be found in the Recommendation R (2000) 7 of the Council of Europe of March 8 2000.
 The operations of insiders are generally regulated by the articles 25, §1, 1° and 40 and according to the Law of August 2 2002 regarding the control of the financial sector and services (the Law). The law of August 2 2002 in effect applies to the journalists as well.
 The manipulation of the market is essentially regulated by the articles 25§1, 2° and 39§1 and the following according to the Law.
 Definition of the article 6 of the European Directive 2003/125/CE