Fitness and Propriety Statement: Practice and Trends May 2026

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Financial companies have a special significance for the economy, and it is crucial for financial stability that they are led by persons with the necessary knowledge, experience, and integrity. Therefore, legislation places special requirements on fitness and propriety for members of the executive board, board of directors, and key persons in financial companies. The purpose of these requirements is to ensure sound management and maintain trust in the financial sector. Companies are responsible for selecting management that meets the requirements, while Finanstilsynet oversees that individual management members meet the fitness and propriety requirements.

Members of the board of directors, executive board, and key persons must have sufficient knowledge, professional competence, and experience from relevant roles and positions so that they are fit to perform the specific position, cf. Section 64(1)(1) of the Financial Business Act and Section 105(1)(1) of the Insurance Business Act. Fitness assessments are conducted from a holistic approach, where Finanstilsynet conducts a concrete assessment of knowledge, experience, and competences in relation to the position and company in question. Finanstilsynet includes in the assessment, among other things, the company's business model and size, the candidate's education, experience from the financial sector or related areas, relevant competences from other professions, authorities, or organizations, and management experience.

Finanstilsynet must publish a statement on its practice for fitness assessments at least once a year, cf. Section 64(1)(1) in conjunction with Section 354e(6) of the Financial Business Act and Section 105(1)(1) in conjunction with Section 291(2) of the Insurance Business Act. The requirement for a statement on Finanstilsynet's practice for fitness assessments has been in effect since July 1, 2023. The statement must contain the practice for fitness assessments of candidates for various positions in companies in the financial sector. The statement focuses on cases from the past year where Finanstilsynet has approved persons to hold specific positions, but may also include criteria that Finanstilsynet has emphasized in negative fitness decisions, if deemed relevant for companies and candidates. All examples in this year's statement are from 2025.

The purpose of the statement is to create transparency and give companies better insight into Finanstilsynet's expectations regarding the knowledge, experience, and competences of management members and key persons. The statement should contribute to a greater understanding of concrete assessments and the considerations Finanstilsynet emphasizes. Insight into practice can highlight which competences and experiences are relevant in fitness assessments and thereby support the recruitment basis for management positions in the sector. All fitness assessments are concrete and position-specific. The statement therefore does not establish absolute criteria, and it will often be difficult to compare decisions directly. The review of decisions is therefore not representative of the full picture, as the need for anonymization must be weighed against the need for concrete information.

The statement covers only the practice for assessing fitness.

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Examples from Practice

The following examples illustrate how Finanstilsynet has concretely assessed fitness for candidates where there was doubt about meeting the requirements, or where the assessment required a special balancing. The examples are anonymized and selected to show central principles and trends.

Example 1: Managing Director in a Payment Institution – Internal Training and Broad Experience

A candidate for an executive board position was assessed as fit based on a combination of prior internal CEO training, which had strengthened the candidate's experience with central areas, including credit processes, risk management, and compliance, as well as the candidate's previous experience with management and business development. Finanstilsynet emphasized that the candidate had worked closely with the previous director for a period of six months and thereby gained in-depth knowledge of the company's business model, risk profile, and internal policies. Additionally, the candidate had 10 years of experience in sales, strategy, and compliance from both a financial company and other industries, which was assessed as relevant supplementary competences. The company's other management had experience in law, business development, and investment. Finanstilsynet assessed that the applicant's competences in sales, strategy, and compliance were independently relevant and supplemented the management's overall competences.

Example 2: Director in a Small Currency Exchange Company – Proportionality and Further Education

Finanstilsynet assessed that the applicant met the fitness requirements for the position of director in the company. The applicant had been employed in the company for a two-year period in various managerial roles, where the applicant was, among other things, responsible for five departments and 26 employees. During this period, the applicant gained experience in management, operations, and compliance, including in close cooperation with the money laundering compliance officer. The applicant was, among other things, responsible for ensuring employees' understanding and compliance with the company's guidelines on money laundering, including conducting training sessions and ongoing follow-up on risks and deviations. Finanstilsynet placed particular emphasis on the fact that the applicant had gained an in-depth knowledge of the company during the period and assessed that the applicant had acquired sufficient financial and operational competences to run the company soundly. Furthermore, Finanstilsynet emphasized that the applicant had gained both theoretical and practical understanding of money laundering risks and handling thereof by, among other things, continuously completing further education in the AML field, and that the applicant had documented completion of relevant courses on the company's internal rules and procedures regarding money laundering. Additionally, it was considered significant that the applicant, through previous employment at a credit institution for a period of 1.5 years, had gained practical experience with customer due diligence procedures, transaction monitoring, and advising customers on the requirements of the Money Laundering Act. Finanstilsynet emphasized the proportionality between the company's size and complexity and thus the requirements that could be placed on a director in such a smaller company, which had a simple and limited business model and low operational complexity.

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Conditional Approvals

Finanstilsynet has the possibility in fitness cases to grant a conditional approval of a candidate in special cases, so that the person can assume a position under specifically stipulated conditions. This possibility is reserved for cases where Finanstilsynet assesses that a candidate does not fully meet the professional prerequisites or experience required for the position as a member of the executive board or key person, cf. Section 64(4) and Section 64c(5)-(7) of the Financial Business Act as well as Section 105(4) and Section 127(1)-(6) of the Insurance Business Act. The company must always apply for full approval, after which Finanstilsynet assesses whether there is grounds in the concrete situation to grant a conditional approval.

Finanstilsynet can grant two types of conditional approvals: Either the candidate can be approved with conditions to be fulfilled after assumption of the position, e.g., through education or temporary measures, or with conditions to be fulfilled before assumption of the position, e.g., by the candidate gaining experience in a specific area before taking over full responsibility.

Conditional approvals are used to address minor competence or experience gaps, and are only granted if concrete, measurable, and time-limited conditions can be stipulated. The period for fulfillment of the conditions should as a starting point not exceed 18 months. When the period expires, the company must report whether the conditions have been met, and Finanstilsynet subsequently verifies whether they are met, but does not conduct a new fitness assessment. If the conditions are met, the approval is equated with a traditional unconditional fitness approval, cf. Section 64(1)(1) of the Financial Business Act and Section 105(1)(1) of the Insurance Business Act. This means that the company does not need to apply for renewed approval.

Finanstilsynet's possibility to grant a conditional approval follows from Section 64(4) and Section 64c(5)-(7) of the Financial Business Act as well as Section 105(4) and Section 127(1)-(6) of the Insurance Business Act.

Example 3: Money Laundering Compliance Officer in a Credit Institution – Specialized Experience and Project Management

A candidate with a legal education background and four years of experience from the consulting industry was assessed as fit as a money laundering compliance officer. The candidate had experience with drafting governance documents, risk assessments, money laundering policies, transaction monitoring, sanctions and PEP screening, as well as KYC processes. Emphasis was placed on experience with independent projects and the ability to ensure high professional standards and clear communication. The candidate had also assisted the company with KYC, EDD, and drafting risk assessments and money laundering policies, as well as experience in professional management without personnel responsibility. Finanstilsynet assessed that this experience matched the concrete requirements and responsibilities of the position, and that the candidate had acquired sufficient knowledge, professional competence, and experience to be able to handle the overall responsibility for the AML area.

Example 4: Risk Officer in a Credit Institution – Internal Training and Sector Experience

A candidate with relevant higher education, an MBA, and certified courses was assessed as fit as a risk officer. The candidate had been responsible for risk management tasks for the past two years and had been undergoing training from the company's previous risk officer. Additionally, the candidate had previously been employed at the company for several years, during which the candidate gained in-depth knowledge of the company's business model, risk areas, and special circumstances. Finanstilsynet emphasized that the candidate had management experience from previous managerial positions and participated in relevant network activities in the sector. The assessment was supported by a positive impression after Finanstilsynet's inspection, where it was noted that the risk management area had been strengthened since the candidate's assumption of the position.

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Example 5: Managing Director in a Credit Institution – Condition on Training and Retention of Key Employees

A candidate with a solid and relevant educational background and extensive high-level management experience from a larger company in the same sector was conditionally approved as managing director with conditions to be fulfilled after assumption of the position. Finanstilsynet placed particular emphasis in the assessment of the candidate that the candidate had not previously been a member of the executive board and only had limited knowledge of the company's specific business model and regulatory framework. The approval was therefore conditional on the candidate completing a structured training program on the company's central matters within three months from assumption of the position, as well as on several executive board members remaining in the company for at least 12 months to ensure necessary consultation and knowledge transfer.

Example 6: Managing Director in an Insurance Company – Condition on Competence Building

Finanstilsynet assessed a candidate for the position of managing director as fit, provided that a targeted training program was completed. The candidate had extensive experience from the same industry with a focus on sales, management, and organizational development, as well as relevant education and teaching experience from the Danish Insurance Academy. It was noted that the candidate had collaborated with compliance officers and chief financial officers and gained insight into legal and financial matters, but lacked sufficient competences in certain specific core areas that were central to the company's business model. Finanstilsynet therefore granted a conditional approval with a requirement that the candidate complete a training program covering the necessary competence areas within 12 months after assumption of the position, and that during the period there was support from the board of directors, the former managing director, and a new chief financial officer.

Example 7: Managing Director in an Insurance Company – Condition on Course Program

A candidate for the position of managing director was assessed as fit, provided that a targeted competence program was completed. The candidate had many years of broad experience from the industry, including management roles in both Danish and international companies, as well as leadership experience from an industry association. Additionally, the candidate had relevant education and leadership courses, and experience with several of the company's core areas. Finanstilsynet assessed that the candidate lacked concrete experience with a central and complex core area for the company. Finanstilsynet therefore made the approval conditional on the candidate completing a course program of at least three days' duration at a specific educational institution within six months after assumption of the position. The assessment included that the company had an experienced and active board of directors, which ensured access to relevant support and consultation during the competence building. Finanstilsynet assessed overall that the candidate – assuming completion of the course program and with the organizational support – would acquire the necessary knowledge, competence, and experience to perform the position of managing director.

Example 8: Credit Officer in a Credit Institution – Condition on Strengthening Management Competences

A candidate with a relevant higher education, leadership courses, and five years of experience in the credit area was conditionally approved as credit officer. Finanstilsynet assessed that the candidate had one year of real management experience and approximately one year of experience with professional management responsibility through project management, which, despite the candidate's relevant education and experience in the credit area, was not in itself sufficient. The approval was therefore conditional on the candidate completing a 12-month program after assumption of the position focused on strengthening management competences, among other things through additional leadership education and an internal mentoring scheme. The company had established a structure where the candidate received support from another experienced management member during the period after joining.

Example 9: Money Laundering Compliance Officer – Condition on Training Program and Internal Consultation

A candidate with a master's degree in law, experience from the legal industry, and from a public authority was conditionally approved as a money laundering compliance officer. The candidate had worked with money laundering rules, customer due diligence procedures, transaction monitoring, drafting policies, and training in money laundering legislation, but Finanstilsynet assessed that the candidate lacked practical experience with money laundering work in a financial company. The approval was conditional on the candidate completing a relevant training program with certification within 18 months after assumption of the position, and simultaneously having access to consultation from both external advisors and internal resources, including the former money laundering and compliance officer, for a period of at least 12 months. The company's simple business model also entered into Finanstilsynet's assessment.

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Example 10: Key Person for Risk Management Function in an Insurance Company – Condition on Course Program

A candidate with a master's degree in law, project and leadership courses, and many years of experience from the financial sector was conditionally approved as a key person for the risk management function. Finanstilsynet assessed that the candidate lacked sufficient analytical understanding within the risk management area and insight into the market risk area. The approval was conditional on the candidate completing a course program within 12 months after assumption of the position, focusing on portfolio theory, value at risk, stress testing, backtesting, interest rate risk, and relevant key figures. Finanstilsynet assessed that the company had internal resources with the necessary competences that the candidate could rely on during the competence building, and the presence of these resources meant that the candidate thereby met the competence requirement.