Art Galleries, auction houses and art dealers (“service provider”) are companies aimed at making profits through art sales. The rules of the Code of Economic Law (“CEL”) is applicable to those companies. Article VI.2 CEL provides that information must be furnished in a clear and comprehensive manner. Often, it will be the service provider who has to furnish this information which indicates that he has to act actively. It presupposes that the service provider comunicates the information without the consumer haveing to ask for it. Article VI.2 CEL sums up the subject-matter of the information requirements (prize, identity, size, modalities, …).
It is a fact that even if it is not the most important purchase consideration, each sale will also be determined by the possibility to make a profit. That possibility is sufficient to submit each sale to the rules governing investment contracts. Essential in that debate will be the role of the service provider and the extent to which the aesthetic component will be unbundled from the investment component. Art offered for sale to consumers who merely wants to enjoy it in their home environment shall not be considered an investment. On the other hand, if an art lover purchzses art trhough a financing or leases art and the service provider uses investment language in its marketing materials, the securities laws will apply. That legislation can be subdivided in two major information duties. One. If the offer has a public character and certain thresholds are exceeded, the services provider will have to publish a prospectus or an information memorandum. Those duties will primarily apply to grouped offers of artworks in a high-end gallery or auction context. Two. If the offer for sale is private (i.e. addressed to less than 150 investors), the advisertisement rules will apply that the FSMA set up for commercialisation of financial products.