Order on the Calculation of the Institution-Specific Countercyclical Capital Buffer Rate, Maximum Distribution Amounts, and the Content of a Capital Conservation Plan for Certain Financial Undertakings¹)

Pursuant to Section 125 a, subsection 8, Section 125 b, subsection 10, Section 125 c, subsection 5, and Section 373, subsection 4, of the Act on Financial Business, cf. Act No. 650 of 9 June 2025, the following is prescribed:

Scope and Definitions

Section 1. This Order applies to credit institutions and mortgage credit institutions, subject to subsection 2.

Subsection 2. Sections 6 and 7, however, apply only to globally systemically important financial institutions (G-SIFIs).

Section 2. In this Order, the following definitions apply:

1. The Undertaking: Credit institutions and mortgage credit institutions.

2. Relevant Credit Exposure: A credit exposure in exposure classes other than the exposure classes mentioned in Article 112, points (a)–(f), of Regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions and investment firms, where the exposure is covered by the following:
   a) The capital requirements for credit risk under Part Three, Title II, of Regulation (EU) No 575/2013. b) The exposure is in the trading book, capital requirements for specific risk under Part Three, Title IV, Chapter 2, of Regulation (EU) No 575/2013, or increased default and migration risk under Part Three, Title IV, Chapter 5, of Regulation (EU) No 575/2013. c) If the exposure is a securitisation, the capital requirements under Part Three, Title II, Chapter 5, of Regulation (EU) No 575/2013.

3. The Undertaking’s Preliminary Profit: The undertaking’s interim result before tax, provided this is positive or zero.

4. The Undertaking’s Year-End Profit: The undertaking’s annual result before tax, provided this is positive or zero.

Calculation of the Institution-Specific Countercyclical Capital Buffer Rate

Section 3. The undertaking shall calculate its institution-specific countercyclical capital buffer rate as a weighted average of the countercyclical buffer rates applicable in the countries where the undertaking has relevant credit exposures. The undertaking shall use the total capital requirement for credit risks relating to the relevant credit exposures in the relevant countries, divided by the total capital requirement for credit risks relating to all relevant credit exposures, cf. subsections 2 and 3, to weight the average of the countercyclical buffer rates.

Subsection 2. The undertaking shall calculate the total capital requirement for credit risks, cf. subsection 1, in accordance with Part Three, Titles II and IV, of Regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions and investment firms.

Subsection 3. The geographical location of a relevant credit exposure is determined in accordance with Commission Delegated Regulation (EU) No 1152/2014 of 4 June 2014 supplementing Directive 2013/36/EU of the European Parliament and of the Council as regards regulatory technical standards on the identification of the geographical location of relevant credit exposures for the purpose of calculating institution-specific countercyclical capital buffer rates.

(Note: The source text contains a duplicate subsection numbering error here, repeating Subsection 2 and 3 content or referencing them incorrectly. The translation follows the logical flow of the provided text.)

Subsection 2. The total capital requirement for credit risks cf. subsection 1, shall be calculated in accordance with Part Three, Titles II and IV, of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms.

Subsection 3. The geographical location of a relevant credit exposure is determined in accordance with Commission Delegated Regulation (EU) No 1152/2014 of 4 June 2014 supplementing Directive 2013/36/EU of the European Parliament and of the Council as regards regulatory technical standards on the identification of the geographical location of relevant credit exposures for the purpose of calculating institution-specific countercyclical capital buffer rates.

Maximum Distribution Amount

Section 4. The maximum distribution amount is calculated by multiplying the amount resulting from subsection 3 by the factor set in accordance with subsection 4.

Subsection 2. A maximum distribution amount calculated pursuant to subsection 1 is reduced if the undertaking has carried out one or more of the following actions:

1. Made a distribution relating to Common Equity Tier 1 capital, cf. Section 125 b, subsection 7, of the Act on Financial Business.
2. Incurred obligations to pay variable remuneration or estimated pension benefits, or paid variable remuneration, if the obligation to pay was incurred at a time when the undertaking did not meet the combined buffer requirement.
3. Made payments relating to hybrid Tier 1 instruments.

Subsection 3. The amount to be multiplied in accordance with subsection 1 shall consist of the sum of items 1 and 2 minus item 3.

1. The undertaking’s preliminary profit, which does not form part of Common Equity Tier 1 capital in accordance with Article 26, subsection 2, of Regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions, and which has arisen since the latest decision on distribution of profit, or any of the actions referred to in subsection 2.
2. The undertaking’s year-end profit, which does not form part of Common Equity Tier 1 capital in accordance with Article 26, subsection 2, of Regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions, and which has arisen since the latest decision on distribution of profit, or any of the actions referred to in subsection 2.
3. The amount of tax the undertaking would have to pay if the items referred to in items 1 and 2 of this subsection were transferred to the undertaking’s Common Equity Tier 1 capital in accordance with Article 26, subsection 2, of Regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions.

Subsection 4. The factor to be multiplied in accordance with subsection 1 is determined based on the size of the Common Equity Tier 1 capital maintained by the undertaking, which is not used to meet the capital requirement under Article 92, subsection 1, point (c), of Regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions, as well as any solvency add-ons to this requirement pursuant to Section 124 of the Act on Financial Business, which are not set to take into account the risk of excessive leverage. The factor is:

1. 0%, if the Common Equity Tier 1 capital is in the first quartile of the combined buffer requirement, cf. subsection 5.
2. 20%, if the Common Equity Tier 1 capital is in the second quartile of the combined buffer requirement, cf. subsection 5.
3. 40%, if the Common Equity Tier 1 capital is in the third quartile of the combined buffer requirement, cf. subsection 5.
4. 60%, if the Common Equity Tier 1 capital is in the fourth quartile of the combined buffer requirement, cf. subsection 5.

Subsection 5. The lower and upper limits for the quartiles of the combined buffer requirement are calculated in accordance with Annex 1.

Section 5. An undertaking’s notification of the maximum distribution amount shall be submitted to the Danish Financial Supervisory Authority immediately, cf. Section 125 b, subsection 4, of the Act on Financial Business. However, the notification must be submitted no later than together with the capital conservation plan, cf. Section 125 c, subsection 1, of the Act on Financial Business.

Maximum Leverage-Related Distribution Amount

Section 6. The maximum leverage-related distribution amount is calculated by multiplying the amount resulting from subsection 3 by the factor set in accordance with subsection 4.

Subsection 2. A maximum leverage-related distribution amount calculated pursuant to subsection 1 is reduced if the undertaking has carried out one or more of the following actions:

1. Made a distribution relating to Common Equity Tier 1 capital, cf. Section 125 b, subsection 7, of the Act on Financial Business.
2. Incurred obligations to pay variable remuneration or estimated pension benefits, or paid variable remuneration, if the obligation to pay was incurred at a time when the undertaking did not meet the combined buffer requirement.
3. Made payments relating to hybrid Tier 1 instruments.

Subsection 3. The amount to be multiplied in accordance with subsection 1 shall consist of the sum of items 1 and 2 minus item 3.

1. The undertaking’s preliminary profit, which does not form part of Common Equity Tier 1 capital in accordance with Article 26, subsection 2, of Regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions, and which has arisen since the latest decision on distribution of profit, or any of the actions referred to in subsection 2.
2. The undertaking’s year-end profit, which does not form part of Common Equity Tier 1 capital in accordance with Article 26, subsection 2, of Regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions, and which has arisen since the latest decision on distribution of profit, or any of the actions referred to in subsection 2.
3. The amount of tax the undertaking would have to pay if the items referred to in items 1 and 2 of this subsection were transferred to the undertaking’s Common Equity Tier 1 capital in accordance with Article 26, subsection 2, of Regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions.

Subsection 4. The factor to be multiplied in accordance with subsection 1 is determined based on the size of the Tier 1 capital maintained by the undertaking, which is not used to meet the capital requirement under Article 92, subsection 1, point (d), of Regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions, as well as Common Equity Tier 1 capital, and any solvency add-ons to this requirement pursuant to Section 124 of the Act on Financial Business, which are set to take into account the risk of excessive leverage. The factor is:

1. 0%, if the Tier 1 capital is in the first quartile of the leverage ratio buffer requirement, cf. subsection 5.
2. 20%, if the Tier 1 capital is in the second quartile of the leverage ratio buffer requirement, cf. subsection 5.
3. 40%, if the Tier 1 capital is in the third quartile of the leverage ratio buffer requirement, cf. subsection 5.
4. 60%, if the Tier 1 capital is in the fourth quartile of the leverage ratio buffer requirement, cf. subsection 5.

Subsection 5. The lower and upper limits for the quartiles of the leverage ratio buffer requirement are calculated in accordance with Annex 2.

Section 7. An undertaking’s notification of the maximum leverage-related distribution amount shall be submitted to the Danish Financial Supervisory Authority immediately, cf. Section 125 b, subsection 4, of the Act on Financial Business. However, the notification must be submitted no later than together with the capital conservation plan, cf. Section 125 c, subsection 1, of the Act on Financial Business.

Capital Conservation Plan

Section 8. The capital conservation plan, which must be prepared and submitted to the Danish Financial Supervisory Authority, must contain at least:

1. Estimates of income and expenses and an estimate of the development in balance sheet items,
2. Measures to increase the undertaking’s Common Equity Tier 1 capital ratio, Tier 1 capital ratio, Additional Tier 1 capital ratio, or leverage ratio, cf. Article 92, subsection 1, of Regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions,
3. A plan and timeframe for increasing the capital base with the aim of fully meeting the combined buffer requirement or the leverage ratio buffer requirement, and
4. A plan for the distribution of profit and any other actions referred to in Section 4, subsection 2, and Section 6, subsection 2. The plan must run at least until the end of the financial year.

Subsection 2. The Danish Financial Supervisory Authority may order the undertaking, within a specified deadline, to submit other information that the Danish Financial Supervisory Authority deems necessary to assess the capital conservation plan.

Subsection 3. The capital conservation plan must be approved by the undertaking’s board of directors.

Subsection 4. The capital conservation plan must be updated and submitted to the Danish Financial Supervisory Authority for renewed approval if the undertaking finds that there is a significant risk that the undertaking cannot meet the plan and timeframe for increasing the capital base, cf. subsection 1, item 3.

Penalties

Section 9. Violation of the provisions of Section 3, subsections 1 and 2, Section 5, Section 7, and Section 8, subsections 1 and 3, is punishable by fine.

Subsection 2. Companies and other legal entities may be subject to criminal liability under the rules of Chapter 5 of the Criminal Code.

Entry into Force

Section 10. This Order enters into force on 1 January 2026.

Subsection 2. Order No. 2144 of 22 December on the calculation of the institution-specific countercyclical buffer rate, the maximum distribution amounts, and the content of a capital conservation plan for certain financial undertakings is repealed.

Danish Financial Supervisory Authority, 20 August 2025

Louise Caroline Mogensen
/ Bettina Høstrup

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¹) The Order contains provisions implementing parts of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, OJ 2013, No L 176, p. 338, and parts of Directive 2019/878/EU of the European Parliament and of the Council of 20 May 2019 amending Directive 2013/36/EU as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers, and capital conservation measures, OJ 2019, No L 150, p. 253, and parts of Directive 2024/1619 of the European Parliament and of the Council of 31 May 2024 amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks, OJ L of 19 June 2024.

Act Series A 2025 Published on 26 August 2025 20 August 2025. No. 1051. Ministry of Industry, Business and Financial Affairs, Danish Financial Supervisory Authority, Ref. No. 24-014793 CQ003304

Annex 1

Method for calculating the lower and upper limits for the quartiles of the combined buffer requirement

1. Lower quartile limit = Combined buffer requirement * (Qn - 1) / 4
2. Upper quartile limit = Combined buffer requirement * Qn / 4

Qn indicates the ordinal number of the relevant quartile.

Annex 2

Method for calculating the lower and upper limits for the quartiles of the leverage ratio buffer requirement

1. Lower quartile limit = Leverage ratio buffer requirement * (Qn - 1) / 4
2. Upper quartile limit = Leverage ratio buffer requirement * Qn / 4

Qn indicates the ordinal number of the relevant quartile.