Regulatory Alerts2026-04-24
Report on Inspection of the Board's Follow-up on Costs and Returns in the Investment Company Danske Invest Index
The Danish Financial Supervisory Authority conducted a November 2025 thematic inspection of Danske Invest Index and issued a compliance order after determining that the board’s annual cost analysis fails to benchmark individual portfolio management and distribution expenses against comparable funds. The regulator mandates that the investment company establish a comprehensive assessment framework for these costs, explicitly documenting the methodology in its governance procedures to ensure continuous board oversight. This directive requires the board to systematically compare fund expenses with market peers to adequately safeguard investor interests and fulfill statutory fiduciary duties.
Inspection Report 24-04-2026 On 17 November 2025, the Danish Financial Supervisory Authority conducted a thematic inspection of the investment company Danske Invest Index. The purpose of the inspection was to examine whether the board conducts adequate follow-up on returns and costs in the underlying funds, with a view to ensuring that investors' interests are adequately safeguarded. The inspection was conducted in accordance with Section 163(1) of the Act on Investment Companies and the like, and was carried out as part of a thematic inspection in which the same area was examined in three different investment companies.
Summary and Risk Assessment
The board of an investment company must act independently and solely in the interest of the company [1]. Safeguarding investors' interests requires that the board of the investment company continuously addresses the fund's costs and compares them with the cost levels of comparable funds.
The investment company prepares an annual cost analysis for the board as part of ongoing reporting. However, the analysis does not include a comparison of the individual costs for portfolio management and distribution with those of comparable funds.
The investment company has therefore been issued an order to ensure that the board has a comprehensive basis for assessment, and that this is reflected in the governance documents for cost follow-up.
[1] cf. Section 47(1) of the Act on Investment Companies and the like.
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