Regulatory Alerts2016-05-02
Principle of Free Choice of Broker - Linkage Between Banking and Real Estate Brokerage Services
The Norwegian Financial Supervisory Authority issued Circular 7/2016 to prohibit financial institutions from linking the granting of loans or other banking services to the use of a specific real estate brokerage firm. Banks are required to ensure that any recommendation of a brokerage service is not perceived as a condition for obtaining financing and must provide explicit, documented information if they recommend their own affiliated brokerage. Furthermore, the circular bans incentive payments to bank employees for securing brokerage contracts to prevent conflicts of interest and ensure adherence to good business practice.
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