Act on Financial Advisors, Investment Advisors and Mortgage Intermediaries

Act on Investment Advisors and Mortgage Intermediaries 1)

Hereby is promulgated the Act on Investment Advisors and Mortgage Intermediaries, cf. Act Consolidation No. 1095 of 21 October 2024, with the amendments resulting from Section 14 of Act No. 1666 of 30 December 2024, Sections 11, items 1-16 and 20-32, of Act No. 1668 of 30 December 2024, and Section 9 of Act No. 712 of 20 June 2025.

The amendments resulting from Section 11, items 17-19, of Act No. 1668 of 30 December 2024 on the amendment of the Companies Act, the Financial Statements Act, the Act on Business Promotion, the Act on Financial Business, and various other laws (Amendment of certain laws and provisions in the area of the Ministry of Business Affairs as a result of task relinquishment), are not incorporated into this Act Consolidation, as the amendments were subsequently repealed, cf. Section 21 of Act No. 712 of 20 June 2025 on the amendment of the Act on Financial Business, the Act on Alternative Investment Fund Managers etc., the Act on Investment Funds etc., the Money Laundering Act, and various other laws (Handling of crypto exposures, preparation of ESG transition plans, new documentation requirements for institutions' management structure, allocation of responsibility and reporting lines, clearer rules for permission for credit institutions from countries outside the EU/EEA (third countries), new supervisory power for the Danish Financial Supervisory Authority to approve significant acquisitions of shareholdings in other companies, criminalization of the disclosure regulation, modernization of the rules in the AIFMD II directive, strengthening of rules on combating national and international money laundering, and establishment of a common European access point (ESAP) for the submission of a number of published information etc.).

Chapter 1 Scope of Application and Definitions of the Act

Section 1. This Act applies to companies that, as part of their professional main or secondary occupation, provide intermediation of mortgage credit agreements to consumers, cf. however subsection 3. The Act further applies to companies that exercise investment advice and activities covered by Annex 1, Section A, items 1 and 5, of the Act on Securities Dealerships and Investment Services and Activities, regarding financial instruments covered by Annex 2, items 1 and 3, of the Act on Securities Dealerships and Investment Services and Activities.

Subsection 2. Advice according to subsection 1 may only be exercised by companies that have obtained permission as investment advisors or mortgage intermediaries pursuant to Section 3.

Subsection 3. The Act does not apply to:

1. Advice on mortgage credit agreements to the company's own employees or to employees in a parent company, subsidiary, or another subsidiary of the parent company.
2. Occasional or ancillary advice on mortgage credit agreements in connection with the exercise of other business activities, if this business activity is regulated by law or the profession is otherwise regulated by conduct rules.
3. Advice that credit institutions, mortgage credit institutions, securities dealerships, investment management companies, and insurance companies provide regarding mortgage credit agreements.
4. Advice on insurance provided by an insurance intermediary, cf. the Act on Insurance Intermediation.
5. Investment advice provided by collective investment schemes regulated by the Act on Investment Funds etc. and the Act on Alternative Investment Fund Managers etc., and by investment institutions or pension funds, as well as by depositaries and managers of such institutions.
6. Investment advice provided by the managing company in an insurance administration company.

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

1. Mortgage Intermediary: A company that, as part of its professional main or secondary occupation, presents or offers mortgage credit agreements to consumers, concludes such agreements with a consumer on behalf of a credit provider, or assists a consumer with advice, administration, or other preparatory work prior to the conclusion of a mortgage credit agreement.
2. Investment Advisor: A company that exercises investment advice regarding financial instruments covered by Annex 2, items 1 and 3, of the Act on Securities Dealerships and Investment Services and Activities.
3. Investment Advice: Personal recommendations to a customer, either upon request or on the investment advisor's own initiative, regarding one or more transactions in connection with financial instruments.
4. Mortgage Credit Agreement: An agreement under which a credit provider grants or undertakes to grant a consumer credit secured by a mortgage or by another equivalent security or another right attached to residential real estate, or credit agreements that form the basis for the acquisition or preservation of ownership rights to land plots for existing or planned buildings.
5. Advice: Personal recommendations to a consumer regarding one or more transactions in connection with mortgage credit agreements. As far as mortgage credit agreements are concerned, the recommendations must be independent of the provision of the mortgage credit agreement and the activities provided by a mortgage intermediary.
6. Investment Products: Instruments, cf. Annex 2, items 1 and 3, of the Act on Securities Dealerships and Investment Services and Activities, deposits in credit institutions where a return depends on the development of one or more underlying assets, guaranteed certificates, share certificates, and mortgage bonds.
7. Consumer: A person who, in connection with advice covered by this Act, primarily acts outside their profession.

Chapter 2 Permission to Conduct Business as an Investment Advisor and Mortgage Intermediary

Section 3. A company that provides advice on or intermediation of mortgage credit agreements must have the permission of the Danish Financial Supervisory Authority as a mortgage intermediary. A company that exercises investment advice must have the permission of the Danish Financial Supervisory Authority as an investment advisor.

Subsection 2. An investment advisor may additionally receive and forward orders regarding one or more financial instruments covered by Annex 2, items 1 and 3, of the Act on Securities Dealerships and Investment Services and Activities, to a securities dealer, as well as to a credit institution or a mortgage credit institution with permission as a securities dealer.

Subsection 3. The Danish Financial Supervisory Authority grants permission as an investment advisor or mortgage intermediary when the following conditions are met, cf. however subsection 4:

1. The company has its head office and domicile in Denmark, cf. however subsection 5. Mortgage intermediaries that do not have a statutory domicile are deemed to have their head office in the member state where the company actually exercises its main business.
2. The company has business procedures in all significant areas of activity, including a procedure for handling conflicts of interest, cf. Section 8.
3. The company's board of directors and executive management, the owner, if the company is operated as a sole proprietorship, or the person or persons responsible for the management of the company, if the company is operated as a legal person without a board of directors or executive management, meet the requirements in Section 4.
4. The company has liability insurance or another equivalent guarantee against claims for damages.
5. The company documents, if it receives entrusted funds from consumers, that a special account has been established for the deposit of entrusted funds, and that the company has established security for these funds. A mortgage intermediary that does not receive entrusted funds must declare this to the Danish Financial Supervisory Authority.

Subsection 4. Companies that exercise investment advice must additionally meet the following conditions for the Danish Financial Supervisory Authority to grant permission, cf. subsection 3:

1. The criteria in Section 61 a, subsection 1, of the Act on Financial Business, when companies are owners of a qualifying holding, cf. Section 5, subsection 3, of the Act on Financial Business.
2. There must be no narrow connections, cf. Section 10, item 16, of the Act on Securities Dealerships and Investment Services and Activities, between the applicant and other companies and persons that could hinder the performance of the Danish Financial Supervisory Authority's tasks.
3. The legislation in a country outside the European Union, with which the Union has not entered into cooperation in the financial area, regarding a company or a person with whom the applicant has narrow connections, cf. Section 10, item 16, of the Act on Securities Dealerships and Investment Services and Activities, must not be able to hinder the performance of the Danish Financial Supervisory Authority's tasks.
4. The conditions in Chapter 2 a.

Subsection 5. The Danish Financial Supervisory Authority may, regardless of subsection 3, grant permission as an investment advisor when the company has a similar permission in another country within the European Union or in a country with which the Union has entered into an agreement in the financial area. These companies must be notified and registered with the Danish Financial Supervisory Authority before the company can commence operations.

Subsection 6. An application for permission according to subsection 1 must contain the information necessary for the Danish Financial Supervisory Authority to assess whether the conditions in subsection 3 are met, including a description of the activities the company intends to exercise.

Subsection 7. An application for permission according to subsection 1 must be submitted via the Danish Financial Supervisory Authority's self-service solution attached with the necessary information, cf. subsection 6. If an application exceptionally cannot be submitted via the self-service solution, the application attached with the necessary information must be submitted electronically to the Danish Financial Supervisory Authority using the Danish Financial Supervisory Authority's notification form.

Subsection 8. The Minister for Business Affairs sets more detailed rules regarding the liability insurance mentioned in subsection 3, item 4, and the security for entrusted funds mentioned in subsection 3, item 5.

Section 4. A member of the board of directors or executive management of an investment advisor or a mortgage intermediary, or an owner of an investment advisor or mortgage intermediary that is a sole proprietorship,

1. must have sufficient knowledge, professional competence, and experience to be able to perform the office or position,
2. must have a sufficiently good reputation and be able to demonstrate honesty, integrity, and sufficient independence in the performance of the office or position,
3. must not be subject to criminal liability for violation of the Penal Code, financial legislation, or other relevant legislation, if the violation entails a risk that the person cannot perform their office or position in a satisfactory manner,
4. must not have filed a petition for or be under restructuring proceedings, bankruptcy, or debt settlement, and
5. must not have exhibited such behavior that there is reason to assume that the person will not perform the office or position in a satisfactory manner.

Subsection 2. When a person assumes an office as a board member or a position as a director in a financial advisor, an investment advisor, or a mortgage intermediary, the Danish Financial Supervisory Authority ensures that the person meets the suitability and honesty requirements in subsection 1. The Danish Financial Supervisory Authority makes a decision on whether the person can hold the office or position in the company in question. The first and second sentences apply correspondingly to the owner of a financial advisor, an investment advisor, or a mortgage intermediary that is a sole proprietorship.

Subsection 3. If the Danish Financial Supervisory Authority assesses that the person does not meet the requirements in subsection 1, items 2-5, the duration of the decision must be stated in the decision.

Subsection 4. The Danish Financial Supervisory Authority may in special cases, where the Danish Financial Supervisory Authority assesses that a person does not have sufficient professional prerequisites or experience in relation to the position as a member of the executive management, to which the person is assessed, make a decision that the person may hold the position under more precisely determined conditions.

Subsection 5. A member of the board of directors or executive management of an investment advisor or a mortgage intermediary, or the owner of an investment advisor or mortgage intermediary that is a sole proprietorship, must inform the Danish Financial Supervisory Authority of matters mentioned in subsection 1 in connection with their entry into the company's management or, for an investment advisor or mortgage intermediary that is a sole proprietorship, in connection with an application for permission, cf. Section 3, subsection 1. Notification must also be given to the Danish Financial Supervisory Authority if changes subsequently occur in the matters mentioned in subsection 1, items 2-5.

Subsection 6. Subsections 1-5 apply correspondingly to the person or persons responsible for the management of the investment advisor or mortgage intermediary, if the investment advisor or mortgage intermediary is operated as a legal person without a board of directors or executive management.

Section 4 a. The Danish Financial Supervisory Authority establishes and maintains a public register of investment advisors and mortgage intermediaries. The register must be available online and kept continuously updated.

Subsection 2. The register, cf. subsection 1, must contain the following information:

1. Names of persons in the management of the investment advisor company and names of persons in the management of the mortgage intermediary responsible for the intermediation business.
2. Information on which other countries within the European Union or countries with which the Union has entered into an agreement in the financial area, other than Denmark, mortgage intermediation is provided in.
3. Information on whether the mortgage intermediary is bound or not.

Section 5. An investment advisor or a mortgage intermediary is, in addition to the cases covered by Section 4, subsection 5, obliged to notify the Danish Financial Supervisory Authority as soon as possible if changes occur in relation to the information that the Danish Financial Supervisory Authority has received and relied upon when granting permission as an investment advisor or mortgage intermediary. An investment advisor must additionally notify the Danish Financial Supervisory Authority as soon as possible of changes in qualifying holdings, cf. Section 5, subsection 3, of the Act on Financial Business, for the purpose of the Danish Financial Supervisory Authority's assessment of whether the criteria in Section 61 a, subsection 1, of the Act on Financial Business are met.

Subsection 2. Companies covered by this Act must report the company's turnover, number of customers, number of employees with customer contact, and number of concluded customer agreements to the Danish Financial Supervisory Authority once a year.

Subsection 3. The Minister for Business Affairs sets more detailed rules regarding the reporting according to subsection 2.

Chapter 2 a Special Requirements for Investment Advisors

Section 5 a. The board of directors of an investment advisor is responsible for establishing and supervising the implementation of management arrangements that ensure effective and prudent management, including that the investment advisor has

1. a clear organizational structure with a well-defined, transparent, and consistent allocation of responsibilities,
2. procedures for the separation of functions in connection with the handling and prevention of conflicts of interest,
3. a policy regarding the services, activities, products, and transactions that the investment advisor offers or delivers in accordance with the company's risk appetite and the characteristics and needs that characterize the investment advisor's customers, and
4. the necessary resources to carry out the investment advisor's business, including that the personnel have the necessary professional competence, knowledge, and expertise, and that the company's resources are used purposefully.

Subsection 2. The board of directors must have access to the information and documents necessary to supervise decision-making at the management level.

Subsection 3. Subsections 1 and 2 apply correspondingly to the highest management body when an investment advisor is operated as a legal person without a board of directors.

Subsection 4. Subsection 1 applies correspondingly to the owner when an investment advisor is operated as a sole proprietorship.

Section 5 b. The board of directors of an investment advisor must ensure that the members of the board have sufficient collective knowledge, professional competence, and experience to be able to understand the investment advisor's activities and the risks associated with them.

Subsection 2. Subsection 1 applies correspondingly to the highest management body when an investment advisor is operated as a legal person without a board of directors.

Subsection 3. Subsection 1 does not apply to an investment advisor that is a sole proprietorship.

Section 5 c. A member of the board of directors or executive management of an investment advisor or the owner, when an investment advisor is a sole proprietorship, must allocate sufficient time to perform the office or position at the respective investment advisor.

Subsection 2. Subsection 1 applies to the person or persons responsible for the management, when the investment advisor is operated as a legal person without a board of directors or executive management.

Section 5 d. An investment advisor must allocate the personnel and financial resources necessary to ensure sufficient opportunities for introductory and further training courses for members of the board of directors and executive management or the owner of an investment advisor that is a sole proprietorship.

Subsection 2. The investment advisor must allocate the personnel and financial resources necessary to ensure sufficient opportunities for introductory and further training courses for members of the highest management body and the daily management, when the investment advisor is operated as a legal person without a board of directors or executive management.

Chapter 3 Competence Requirements

Section 6. An investment advisor or mortgage intermediary must ensure that the company's employees who provide advice on investment products or mortgage credit agreements have sufficient competence to provide sound advice.

Subsection 2. The Minister for Business Affairs sets more detailed rules regarding competence requirements for employees at a financial advisor, an investment advisor, or a mortgage intermediary, cf. subsection 1.

Chapter 4 Good Conduct, Conflicts of Interest etc.

Section 7. An investment advisor or mortgage intermediary must conduct business in accordance with honest business practices and good practice within the business area.

Subsection 2. The Minister for Business Affairs sets more detailed rules regarding honest business practices and good practice for investment advisors and mortgage intermediaries.

Subsection 3. The Minister for Business Affairs sets more detailed rules regarding price and risk information for mortgage credit agreements.

Subsection 4. The Danish Financial Supervisory Authority may, after negotiation with representatives of consumers and the relevant financial industry organizations, develop and publish guidelines for honest business practices and good practice in specifically specified areas, which may be considered significant, particularly from the perspective of consumers.

Subsection 5. The Minister for Business Affairs sets more detailed rules regarding investment advisors' documentation and storage of documentation in connection with investment advice.

Subsection 6. The Danish Financial Supervisory Authority may set more detailed rules regarding the measures that an investment advisor and a mortgage intermediary must take to have effective procedures for the development and distribution of products and services.

Section 7 a. Mortgage intermediaries must ensure that the remuneration of the company's employees does not conflict with the company's obligations under Section 7, subsections 1 and 2.

Subsection 2. Mortgage intermediaries must ensure that the company prepares a remuneration policy that is consistent with and promotes sound and effective risk management. The remuneration policy must be consistent with the company's business strategy, objectives, values, and long-term interests. The remuneration policy must not encourage risk-taking that is contrary to the company's risk profile.

Subsection 3. The remuneration policy must contain measures to avoid conflicts of interest and ensure that the remuneration of employees is not dependent on the number or proportion of approved applications or other forms of sales targets.

Subsection 4. For persons in employment relationships covered by a collective agreement, subsections 1 and 3 only apply to remuneration agreements if the remuneration agreements are not set in the collective agreement.

Section 7 b. An investment advisor must have a remuneration policy that promotes fair treatment of customers and prevents conflicts of interest, for employees who provide investment advice and receive and forward orders to a securities dealer. The investment advisor must additionally ensure that the remuneration of employees does not conflict with the investment advisor's obligation to act in the best interests of customers, including obligations under Section 7, subsection 1, and rules issued pursuant to Section 7, subsection 2, cf. however subsection 2.

Subsection 2. Subsection 1 does not apply to matters covered by a collective agreement.

Section 8. An investment advisor and a mortgage intermediary must have a business procedure for handling conflicts of interest that could harm consumers' interests in the relationship between consumers and the company. The company must assess at least once a year whether the business procedure functions as intended and remedy any deficiencies.

Subsection 2. The business procedure, cf. subsection 1, must be published and available on the company's website. If the company does not have a website, documentation thereof must be provided upon request.

Section 9. An investment advisor and a mortgage intermediary may only use the term independent or equivalent terms that give the impression that the company provides independent advice if it meets the following conditions:

1. The company must not receive commission or other remuneration from companies that offer or intermediate investment products or mortgage credit agreements, unless the full commission is passed on to the customer without unjustified delay.
2. The company must not have narrow connections, cf. Section 5, subsection 1, item 17, of the Act on Financial Business, Section 10, item 16, of the Act on Securities Dealerships and Investment Services and Activities, and Section 9, subsection 1, item 14, of the Act on Insurance Business, to a credit institution, mortgage credit institution, securities dealership, investment management company, insurance company, or other company that offers or intermediates financial products or mortgage credit agreements.
3. The company takes a sufficient number of financial products on the market into consideration in its advice, including mortgage credit agreements.

Section 10. If an investment advisor or mortgage intermediary is not independent, cf. Section 9, this must appear on the company's website. If applicable, the company must provide information on the size of or the basis for calculating any commission or other remuneration. If the company does not have a website, documentation thereof must be provided upon request.

Chapter 4 a Reporting of Violations

Section 10 a. If an employee or former employee and an investment advisor or mortgage intermediary enter into an agreement containing a confidentiality clause, it must appear from the agreement that the employee or former employee is not barred from reporting information about violations or potential violations of financial regulation to public authorities.

Subsection 2. Regardless of subsection 1, the a