Order on Authorization for Alternative Investment Fund Managers to Market Shares in Alternative Investment Funds from a Third Country in Denmark¹)

Pursuant to Section 110, Section 130, paragraph 5, and Section 190, paragraph 5, of the Act on Alternative Investment Fund Managers and others, cf. Statutory Order No. 1047 of 14 October 2019, the following is prescribed:

Scope of Application

Section 1. This Order applies to the following companies seeking authorization to market shares in alternative investment funds with a registered home state in a third country to professional investors in Denmark:

1. Alternative investment fund managers with a registered home state in Denmark.

2. Alternative investment fund managers with a registered home state in another country within the European Union or a country with which the Union has concluded an agreement in the financial area, which have received authorization to manage alternative investment funds in accordance with rules implementing Directive 2011/61/EU of 8 June 2011 on alternative investment fund managers.

3. Alternative investment fund managers with a registered home state in a third country.

Definitions

Section 2. In this Order, the following terms are understood as:

1. Alternative Investment Fund: An entity as defined in a) Section 3, paragraph 1, no. 1, of the Act on Alternative Investment Fund Managers and others, and rules issued pursuant to Section 3, paragraph 8, of the Act on Alternative Investment Fund Managers and others, or b) rules implementing Art. 4, paragraph 1, point (a), of Directive 2011/61/EU of 8 June 2011 on alternative investment fund managers.

2. Retail Investor: An investor as defined in Section 3, paragraph 1, no. 42, of the Act on Alternative Investment Fund Managers and others.

3. Alternative Investment Fund Manager: An entity as defined in Section 3, paragraph 1, no. 3, of the Act on Alternative Investment Fund Managers and others.

4. Professional Investor: An investor as defined in Section 3, paragraph 1, no. 39, of the Act on Alternative Investment Fund Managers and others.

5. Third Country: A country as defined in Section 3, paragraph 1, no. 34, of the Act on Alternative Investment Fund Managers and others.

6. Manager’s Home Country: The country where the manager has its registered home state.

7. Alternative Investment Fund’s Home Country: The country where the alternative investment fund has its registered home state.

Application

Section 3. An alternative investment fund manager wishing to market shares in an alternative investment fund with a registered home state in a third country to professional investors in Denmark must apply for authorization to the Danish Financial Supervisory Authority (Finanstilsynet).

Section 4. An application for authorization to market alternative investment funds from a third country in Denmark must contain the following:

1. A business plan with clear identification of the alternative investment fund the manager wishes to market, and information on which country the alternative investment fund has registered its home state.

2. Fund regulations, articles of association, or other founding documents for the alternative investment fund.

3. The information available to investors regarding the alternative investment fund, pursuant to Section 62 of the Act on Alternative Investment Fund Managers and others, e.g., a prospectus or similar document.

4. Information on the measures taken to prevent shares in the alternative investment fund from being marketed to retail investors, including whether the alternative investment fund uses independent entities to provide investment services in connection with the marketing of the fund.

5. A declaration from the supervisory authorities of the alternative investment fund’s home country or from a lawyer from the alternative investment fund’s home country stating that the home country is prepared to grant corresponding Danish alternative investment funds access to market their shares in that country.

6. Name and address of the alternative investment fund’s depositary, or name and address of the entity or entities appointed pursuant to Section 8.

7. The latest annual report, unless the alternative investment fund has not yet operated for a full accounting period. If the alternative investment fund has not operated for a full accounting period, the application must contain the latest half-year report, if the company prepares a half-year report.

8. The Danish Financial Supervisory Authority’s application form for authorization to market alternative investment funds with a registered home state in a third country, indicating the following information: a) Name and address of both the alternative investment fund and the manager. b) Names of the compartments and share classes covered by the application. c) Whether and, if so, to what extent the alternative investment fund may address the public in the manager’s and the alternative investment fund’s home country. d) The measures the manager intends to implement in this country to ensure investors’ right to receive dividends and redeem shares. e) The information the alternative investment fund is obliged to provide to its investors according to the home country’s rules, including the information the alternative investment fund must provide if it ceases to market itself in this country. f) Where the master fund is established, if one of the alternative investment funds is a feeder fund.

9. Any other documents the alternative investment fund is obliged to publish in its home country.

Paragraph 2. If the manager has a registered home state in a country within the European Union or a country with which the Union has concluded an agreement in the financial area, the application must, in addition to the documents mentioned in paragraph 1, contain the following:

1. Documentation proving that the manager has authorization to manage alternative investment funds under rules implementing Directive 2011/61/EU of 8 June 2011 on alternative investment fund managers.

2. Documentation from the supervisory authority in the alternative investment fund’s home country stating that the alternative investment fund is covered by the cooperation agreement concluded between the Danish Financial Supervisory Authority and the authorities in the home country of the alternative investment fund, cf. Section 109, paragraph 1, no. 3, of the Act on Alternative Investment Fund Managers and others.

Paragraph 3. If the manager has a registered home state in a third country, the application must, in addition to the documents mentioned in paragraph 1, contain the following:

1. Documentation from the supervisory authority in the manager’s home country stating that the manager and the alternative investment fund are covered by the cooperation agreement concluded between the Danish Financial Supervisory Authority and the authorities in the manager’s home country, cf. Section 130, paragraph 3, of the Act on Alternative Investment Fund Managers and others, if the manager and the alternative investment fund have registered home states in the same third country.

2. Documentation from the supervisory authority in the manager’s and the alternative investment fund’s home country stating that the manager and the alternative investment fund are covered by the cooperation agreement between the Danish Financial Supervisory Authority and the authorities in the manager’s and the alternative investment fund’s home country, cf. Section 130, paragraph 3, of the Act on Alternative Investment Fund Managers and others, if the manager and the alternative investment fund have registered home states in two different third countries.

Section 5. The documents mentioned in Section 4, paragraph 1, nos. 2, 7, and 9, must be certified by persons who are authorized in writing to act on behalf of the alternative investment fund. The documents mentioned in Section 4, paragraph 1, no. 5, Section 4, paragraph 2, and Section 4, paragraph 3, must be signed by the person who issued the document.

Paragraph 2. The documents and information mentioned in Section 4 must be drafted in either Danish or English.

Section 6. Within three months after the submission of a complete application for authorization, the Danish Financial Supervisory Authority will notify the manager whether the authorization has been granted or not.

Paragraph 2. The Danish Financial Supervisory Authority may extend the deadline by up to three months if the Authority deems it necessary due to the special circumstances of the case and after notifying the manager thereof.

Paragraph 3. The manager may only market shares in the alternative investment fund to professional investors in Denmark after the manager has received the Danish Financial Supervisory Authority’s authorization.

Section 7. In a subsequent application for authorization to market additional compartments in an alternative investment fund that already has authorization to be marketed in Denmark, the manager must submit the information and documents mentioned in Section 4, paragraph 1, nos. 2-3 and 6-8.

Paragraph 2. In a subsequent application for authorization to market additional share classes in compartments where marketing authorization has already been granted, the manager must submit a digital document indicating which compartments the share classes belong to, as well as names and any ISIN codes for the compartments and share classes covered by the application.

Section 8. An alternative investment fund manager with a registered home state in a third country must ensure that one or more entities, which must be different from the manager itself, are appointed to perform the tasks covered by Section 50, Section 51, paragraph 1, and Section 52 of the Act on Alternative Investment Fund Managers and others.

Changes

Section 9. An alternative investment fund manager must notify the Danish Financial Supervisory Authority of planned, significant changes to the circumstances on which the authorization to market shares to professional investors was based.

Paragraph 2. The Danish Financial Supervisory Authority must approve changes covered by paragraph 1 before they are implemented.

Paragraph 3. If the Danish Financial Supervisory Authority does not approve the changes covered by the notification in paragraph 1, the Authority must notify the manager thereof within 1 month after receipt of the notification. The Danish Financial Supervisory Authority may extend this deadline by up to 1 month if necessary due to the special circumstances of the case. In such a case, the Authority must notify the manager of any postponement of the deadline within 1 month after the Danish Financial Supervisory Authority has received the notification pursuant to paragraph 1.

Paragraph 4. Following the Danish Financial Supervisory Authority’s notification to the manager pursuant to paragraph 3, the Authority may impose restrictions regarding the changes the manager has planned.

Paragraph 5. The manager may implement the changes if the Danish Financial Supervisory Authority does not object to the changes before the expiry of the deadlines mentioned in paragraph 3.

Section 10. An alternative investment fund manager must notify the Danish Financial Supervisory Authority of significant unforeseen changes. The notification must be made immediately after the change occurs.

Paragraph 2. The Danish Financial Supervisory Authority must approve changes covered by paragraph 1.

Paragraph 3. If the Danish Financial Supervisory Authority does not approve the changes covered by the notification in paragraph 1, the Authority must notify the manager thereof within 1 month after receipt of the notification. The Danish Financial Supervisory Authority may extend this deadline by up to 1 month if necessary due to the special circumstances of the case. In such a case, the Authority must notify the manager of any postponement of the deadline within 1 month after the Danish Financial Supervisory Authority has received the notification pursuant to paragraph 1.

Paragraph 4. Following the Danish Financial Supervisory Authority’s notification to the manager pursuant to paragraph 3, the Authority may impose restrictions regarding the changes the manager has implemented.

Paragraph 5. The manager may maintain the changes if the Danish Financial Supervisory Authority does not object to the changes before the expiry of the deadlines mentioned in paragraph 3.

Publication of Information

Section 11. An alternative investment fund manager must publish in Denmark the documents and information that the alternative investment fund is continuously obliged to publish in the fund’s home country. The publication must be made in the same manner as in the home country.

Paragraph 2. The manager must publish documents and information in Denmark, regardless of whether the home country’s supervisory authority publishes the relevant information or documents in the home country.

Paragraph 3. It must be stated in the prospectus or similar documents where the publication takes place.

Cessation of Marketing of Shares

Section 12. The Danish Financial Supervisory Authority may order an alternative investment fund manager with a registered home state in a third country to cease marketing shares in the fund or compartments thereof in Denmark in the following cases:

2. The manager’s measures to ensure investors’ right to receive dividends and redeem shares are insufficient.

3. Access for corresponding Danish alternative investment funds to market in that country is withdrawn.

4. The possibility of cooperation with the supervisory authorities of the manager’s and the alternative investment fund’s home country, cf. Section 130, paragraph 3, of the Act on Alternative Investment Fund Managers and others, is withdrawn.

5. The manager commits a gross or repeated violation of the rules in this Order or other Danish legislation.

6. The manager’s authorization to manage the alternative investment fund is revoked or otherwise ceases.

7. The manager has not paid fees in a timely manner, cf. Section 361, paragraph 7, of the Act on Financial Business.

Paragraph 2. If the Danish Financial Supervisory Authority orders an alternative investment fund manager with a registered home state in a third country to cease marketing the alternative investment fund or compartments thereof in Denmark, the manager must notify all Danish investors in the fund or compartment thereof thereof.

Paragraph 3. The manager must inform the Danish Financial Supervisory Authority of how the manager implements the measures to secure investors’ right to receive dividends and redeem shares, as mentioned in Section 4, paragraph 1, no. 8, point (d).

Paragraph 4. Notification to the Danish Financial Supervisory Authority pursuant to paragraph 3 and to investors pursuant to paragraph 2 must be made no later than 14 days after the Danish Financial Supervisory Authority’s order is communicated to the manager.

Section 13. When an alternative investment fund manager decides to cease marketing the alternative investment fund or compartments thereof in Denmark, the manager must notify all Danish investors in the fund or compartment thereof thereof.

Paragraph 2. The manager must inform the Danish Financial Supervisory Authority of the time of cessation and how the manager implements the measures to secure investors’ right to receive dividends and redeem shares, as mentioned in Section 4, paragraph 1, no. 8, point (d).

Paragraph 3. Notification to the Danish Financial Supervisory Authority pursuant to paragraph 2 and to investors pursuant to paragraph 1 must be made no later than 14 days after the decision is made.

Penalties

Section 14. An alternative investment fund manager may be punished with a fine for violation of Section 3, Section 8, Section 9, paragraph 1, Section 10, paragraph 1, Section 11, Section 13, and Section 14.

Paragraph 2. Companies and other legal persons may be subject to criminal liability according to the rules in Chapter 5 of the Criminal Code.

Entry into Force

Section 15. This Order enters into force on 1 January 2021.

Paragraph 2. Statutory Order No. 798 of 26 June 2014 on authorization for alternative investment fund managers to market alternative investment funds from a third country in Denmark is repealed.

Transitional Provision

Section 16. Managers who have received authorization to market shares in alternative investment funds with a registered home state in a third country to professional investors in Denmark before 1 January 2021, may continue to market these alternative investment funds in Denmark based on the previously granted marketing authorization.

Danish Financial Supervisory Authority, 19 October 2020

Jesper Berg / Sean Hove

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¹) The Order implements parts of Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on alternative investment fund managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010, OJ EU 2011, No L 174, p. 1.

Statutory Journal A 2020 Published on 24 October 2020 19 October 2020. No. 1504. Ministry of Industry, Business and Financial Affairs, Danish Financial Supervisory Authority, Case No. 142-0019 CQ001397