Order on Certain Tax-Favored Savings Forms in Credit Institutions

Order on Certain Tax-Favored Savings Forms in Credit Institutions

Pursuant to Section 50, Paragraph 4, and Section 373, Paragraph 4, of the Act on Financial Business, cf. Act Consolidation No. 2497 of 15 December 2021, the following is enacted:

Scope of Application Section 1. This Order applies to the following savings forms established in a credit institution here in the country or in a branch here in the country of a foreign credit institution, which has been granted permission in a country within the European Union or a country with which the Union has concluded an agreement in the financial sector:

1. Rate pension and old-age savings.
2. Capital pension.
3. Child savings established pursuant to the Order on child savings accounts.
4. Self-pension established before 2 June 1998.

Paragraph 2. The Order does not apply to foreign pension schemes approved by SKAT pursuant to Section 15 C of the Act on the Taxation of Pension Schemes, etc.

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

1. Capital share: Share in joint-stock companies (shares), limited liability companies (partnership shares), and other companies' equity, cf. Section 5, Paragraph 4, of the Act on Financial Business.
2. Unlisted capital share: A capital share that is not admitted to trading on a regulated market and is not traded on a multilateral trading facility. Savings bank certificates for guarantee capital and cooperative bank certificates for cooperative capital are not treated as unlisted capital shares in this Order.
3. Pool: An agreement or a series of identical agreements (pool agreement) between a credit institution and a customer or a number of customers, whereby the customer or customers deposit funds in the credit institution, and these funds are credited with returns, positive or negative, calculated on the basis of the return of a portfolio of securities, etc., or a model portfolio of securities, etc., and where the individual assets belong to the credit institution in which a customer has made their deposit.
4. Separate deposit: A deposit established by agreement between a credit institution and a customer for savings purposes covered by this Order.
5. Derivative financial instruments: Instruments covered by Annex 2, items 4-11, of the Act on Securities Brokerage Companies and Investment Services and Activities.
6. Securities lending: Lending of securities against later return of the security or an identical security, for which remuneration is paid.
7. Third country: A country outside the European Union, with which the Union has not concluded an agreement in the financial sector.

Form Requirements for Delivery of Customer Information for Pools Section 3. Information personally directed to the customer must be delivered on paper. The information may be delivered on another durable medium than paper if the following conditions are met:

1. The delivery of the information on another durable medium is appropriate in relation to the manner in which the business between the credit institution and the customer is conducted.
2. The customer chooses to have the information provided on another durable medium than paper.

Paragraph 2. Information that is not personally directed to the customer, including the guidelines applicable to the pool, may be delivered via a website that does not constitute a durable medium, if the following conditions are met:

1. The delivery of the information is appropriate in relation to the manner in which the business between the credit institution and the customer is conducted.
2. The customer has given consent to this.
3. The customer is informed beforehand of the website's address and where on the website the information can be found.
4. The information is updated.
5. The information is available on the website for the period necessary for the customer.

Paragraph 3. The credit institution must enter into or confirm all pool agreements with the customer, cf. Section 7, Paragraph 1, on paper or another durable medium than paper. The information mentioned in Section 7, Paragraph 1, items 1-6, must furthermore be given to the customer on paper or another durable medium than paper.

Administration of Pools Section 4. For each individual pool, written guidelines for its administration must be prepared. The guidelines must be approved by the credit institution's management.

Paragraph 2. The guidelines must contain at least information about:

1. Investment strategy with frameworks for asset allocation and risk exposure, including the credit institution's access to make changes thereto,
2. All costs and trading terms, including administration fee, settlement rate in relation to market rate, brokerage, other trading and deposit costs, and rules for calculating interest on cash balances,
3. When returns are credited,
4. How the pool's result and the returns to customers are calculated.

Section 5. A deposit account in Danish kroner or euros must be opened for each customer, where all payments and crediting of returns, both positive and negative, are included.

Section 6. The credit institution must be able to document the pool's result and return to the Financial Supervisory Authority.

Paragraph 2. Any pool assets must be kept separate from the credit institution's other assets.

Disclosure Obligations in Connection with Entering into a Pool Agreement Section 7. The credit institution must enter into a pool agreement with the customer, which contains a description of the parties' most important rights and obligations. In this connection, the credit institution must:

1. Provide the guidelines mentioned in Section 4, Paragraph 1,
2. Inform the customer that the customer does not own the assets on the basis of which the pool's return is calculated, and that any pool assets belong to the credit institution,
3. Inform the customer that the return is based on a calculation of the pool's return, and that the return can therefore be both positive and negative,
4. Inform the customer from which date the customer is considered to have entered the pool, as well as about termination and the terms for withdrawal,
5. Inform the customer of the pool's return for the preceding five years or the entire period during which the pool has been offered, and inform that the figures are historical and that past returns cannot be used as a reliable indicator for future returns, and
6. Inform the customer whether the account is covered by the Guarantee Fund's coverage.

Paragraph 2. Terms included in the agreement may be stated by reference to separate documents, including the credit institution's general business terms and standard terms.

Information in Connection with Changes to Terms of a Pool Agreement Section 8. The credit institution must inform the customer of significant changes to the terms of the pool agreement, including significant changes to the guidelines for the pool's administration, cf. Section 4, Paragraph 1. The changes must be implemented with appropriate notice, and the customer must be informed in reasonable time before the change.

Information During the Term of the Pool Agreement Section 9. The credit institution must inform the customer quarterly of:

1. The percentage return for each individual pool, and
2. The pool's asset composition in percentage.

Paragraph 2. The information, cf. Paragraph 1, must be communicated to the customer no later than 8 weeks after the end of a quarter.

Paragraph 3. At the end of each calendar year, the credit institution must inform the customer of the Effective Annual Percentage Rate (ÅOP) and the Effective Annual Percentage Cost (ÅOK). The information must be communicated to the customer no later than 8 weeks after the end of the calendar year.

Placement of Savings for Pools Section 10. Returns of pools must be calculated and credited to customers on the basis of a pool consisting of balances on a deposit account and the following instruments:

1. Marketable securities (except payment instruments) that can be traded on the capital market, including a) shares in companies and other securities that can be equated with shares in companies, partnerships, and other enterprises, as well as share certificates, and b) bonds and other debt instruments, including certificates for such securities.
2. Money market instruments, including treasury bills, certificates of deposit, and commercial papers, except payment instruments.
3. Shares in Danish UCITS covered by the Act on Investment Funds, etc., and shares in other collective investment institutions with statutory domicile in a country within the European Union or a country with which the Union has concluded an agreement in the financial sector, and which are approved pursuant to Directive 2009/65/EC of the European Parliament and of the Council (UCITS Directive).
4. Shares in alternative investment funds covered by the Act on Alternative Investment Fund Managers, etc., including capital funds, cf. Section 3, Paragraph 1, item 11, of the Act on Alternative Investment Fund Managers, etc., or shares in alternative investment funds that have appointed a manager from another country within the European Union or a country with which the Union has concluded an agreement in the financial sector, when the manager has received permission in accordance with rules implementing Directive 2011/61/EU of 8 June 2011 on Alternative Investment Fund Managers.
5. Savings bank certificates for guarantee capital and cooperative bank certificates for cooperative capital, provided that the certificates are marketable according to the savings bank's or cooperative bank's statutes.
6. Instruments that are neither covered by items 1-5 nor are derivative financial instruments that meet the conditions in Sections 13-21, provided that these instruments amount to at most 20% of the value of the individual pool's total portfolio at the time of investment, and provided that the maximum loss on these instruments can amount to at most the invested amount.

Paragraph 2. The instruments mentioned in Paragraph 1, items 1 and 2, must be admitted to trading on a regulated market or traded on a multilateral trading facility at the time of investment. The instruments mentioned in Paragraph 1, items 1 and 2, may furthermore be admitted to official listing on a stock exchange in a third country, or traded on another regulated market in a third country, which is regularly operating, recognized, and public, provided that the choice of such a stock exchange or such a market is stated in the credit institution's order execution policy, cf. the Order on Securities Dealers' Execution of Orders. The funds may also be invested in newly issued securities provided that the issuance terms include an undertaking that an application for admission to trading on a regulated market, a multilateral trading facility, or on one of the markets mentioned in the second sentence will be submitted. The securities must be disposed of if they are not admitted to trading on a market as stated in the third sentence no later than 1 year after issuance.

Section 11. If a credit institution uses funds for placement in instruments covered by Section 10, Paragraph 1, items 1, 2, 4, and 5, instruments issued by a single issuer may amount to at most 20% of the portfolio's value, cf. however Section 12. These limits, cf. the first sentence, must be met at the time of investment.

Paragraph 2. Paragraph 1 does not apply to mortgage bonds, specially secured mortgage bonds, specially secured bonds, EU government bonds, as well as divisions of capital funds that meet the requirements in Sections 157 a and 157 b of the Act on Financial Business.

Paragraph 3. In capital funds, the individual division is considered to be the issuer, cf. Paragraph 1.

Use of Derivative Financial Instruments, etc., by Pools Section 12. A pool may use derivative financial instruments for risk hedging and portfolio management, provided that the use of the derivative financial instruments meets the provisions in Sections 13-21.

Paragraph 2. Execution of securities lending must be carried out in accordance with the provisions in Section 20.

Section 13. Derivative financial instruments must be based on foreign currency, interest rates, or securities, including securities indices, that can be included in a pool's assets.

Section 14. A net position in a security or securities index is understood as the difference between the sum of the market value of the long positions and the sum of the market value of the short positions. In calculating the net position, which relates to derivative financial instruments, the calculation is made for each underlying security or securities index. A long position is understood as a position that gives a profit in the event of a price increase or interest rate decrease for the relevant security or securities index. A short position is understood as a position that gives a loss in the event of a price increase or interest rate decrease for the relevant security or securities index.

Paragraph 2. A net position in a foreign currency is understood as the difference between the sum of the long positions and the sum of the short positions in the relevant currency. A long position in a currency is understood as a position that gives a profit in the event of an increase in the exchange rate of the relevant currency calculated in Danish kroner. A short position in a currency is understood as a position that gives a loss in the event of an increase in the exchange rate of the relevant currency calculated in Danish kroner. In calculating long and short positions, all balances in the currency are included, where the pool itself bears the exchange rate risk.

Paragraph 3. In calculating the position in the underlying assets, which relate to derivative financial instruments, which include an option element, the market value of the underlying asset is multiplied by the option's delta.

Equity-Based Derivative Financial Instruments Section 15. A pool may use derivative financial instruments based on shares or share indices, provided that the derivative financial instruments reduce the specific risk associated with the pool's holding of shares.

Paragraph 2. The use of derivative financial instruments based on shares or share indices must not result in the pool collectively obtaining a short net position in a given share.

Section 16. A pool may, in addition to the cases specified in Section 15, use derivative financial instruments based on shares or share indices, provided that the pool holds a liquidity reserve corresponding to the net position in the underlying shares or share indices, cf. however Section 15, Paragraph 2. For this purpose, the liquidity reserve includes balances on demand or with a notice period of not more than one month in credit institutions, paid margin in credit institutions, securities brokerage companies, a regulated market, and clearing houses, as well as securities that are variably interest-bearing or have a remaining maturity of not more than 6 months. Furthermore, amounts falling due within 3 months in the form of drawn bonds, interest, and declared dividends are included. Furthermore, synthetic money market deposits are included.

Paragraph 2. A pool may furthermore use derivative financial instruments based on shares or share indices, provided that the pool for each individual derivative financial instrument or for a combination of these, if several derivative financial instruments with the same remaining maturity are used, holds a holding of fixed-income securities corresponding to the net position in the underlying shares or share indices, and provided that the securities' remaining maturity does not exceed the remaining maturity of the relevant derivative financial instrument(s), cf. however Section 15, Paragraph 2.

Bond and Interest-Based Derivative Financial Instruments Section 17. A pool may use derivative financial instruments based on bonds, provided that the derivative financial instruments reduce the pool's interest rate risk associated with the pool's bond holding.

Paragraph 2. Derivative financial instruments based on bonds must not result in the pool collectively obtaining short net positions.

Section 18. A pool may, in addition to the cases specified in Section 17, use derivative financial instruments based on bonds, bond indices, or interest rates, provided that the derivative financial instruments do not increase the pool's total net loss in the event of an interest rate increase compared to the loss the pool could alternatively have received by direct investment in bonds in the same currency.

Paragraph 2. The total market value of the underlying bonds, which relate to the derivative financial instruments used in Paragraph 1, must at all times amount to at most 100% of the pool's assets.

Paragraph 3. The calculations in Paragraph 1 are made for each currency separately and must be based on the bonds' duration or another measure of the bonds' interest rate risk. If the derivative financial instruments include an option element, the option's delta is used.

Currency-Based Derivative Financial Instruments Section 19. A pool may use derivative financial instruments based on currency, provided that the pool's net position in each foreign currency, cf. Section 14, Paragraph 2, does not differ from such a position the pool could alternatively have obtained by direct investment in securities in the relevant currency, and provided that the sum of the pool's net positions in foreign currencies does not exceed the pool's assets.

Special Provisions on Pools' Use of Derivative Financial Instruments, etc. Section 20. If a pool uses derivative financial instruments or executes securities lending, the pool's counterparty must be a credit institution, a securities brokerage company, or a clearing house in a country that is a member of the OECD, or the trade must be executed on a market that is covered by Section 10, Paragraph 2.

Paragraph 2. If a pool executes securities lending, the credit institution must furthermore ensure that there is sufficient guarantee or other security for the lent securities and the other obligations following from the loan terms.

Section 21. The provisions in Sections 13-20 must be met at any time during the term of the derivative financial instruments.

Placement of Savings for Separate Deposits Section 22. A deposit account must be opened for each customer's separate deposit, where all payments and crediting of returns are included.

Paragraph 2. A separate deposit must be located in the same institution as the associated deposit account.

Section 23. Funds in separate deposits may be placed on a deposit account and in the following instruments, cf. however Sections 24 and 25:

1. Marketable securities (except payment instruments) that can be traded on the capital market, including a) shares in companies and other securities that can be equated with shares in companies, partnerships, and other enterprises, as well as share certificates, and b) bonds and other debt instruments, including certificates for such securities.
2. Money market instruments, including treasury bills, certificates of deposit, and commercial papers, except payment instruments.
3. Shares in Danish UCITS covered by the Act on Investment Funds, etc., and shares in other collective investment institutions with statutory domicile in a country within the European Union or a country with which the Union has concluded an agreement in the financial sector, and which are approved pursuant to Directive 2009/65/EC of the European Parliament and of the Council (UCITS Directive).
4. Shares in alternative investment funds covered by the Act on Alternative Investment Fund Managers, etc., including capital funds, cf. Section 3, Paragraph 1, item 11, of the Act on Alternative Investment Fund Managers, etc., when the manager of the relevant alternative investment fund has permission to market the alternative investment fund to retail investors in Denmark, and shares in alternative investment funds that have appointed a manager from another country within the European Union or a country with which the Union has concluded an agreement in the financial sector, when the manager has received permission in accordance with rules implementing Directive 2011/61/EU of 8 June 2011 on Alternative Investment Fund Managers, and when the manager of the relevant alternative investment fund has permission to market the alternative investment fund to retail investors in Denmark.
5. Savings bank certificates for guarantee capital and cooperative bank certificates for cooperative capital, provided that the certificates are marketable according to the savings bank's or cooperative bank's statutes.
6. Instruments that are neither covered by Paragraph 1, items 1-5, nor Paragraph 4, or are derivative financial instruments covered by Section 25, provided that these instruments collectively amount to at most 20% of the customer's savings in the same credit institution placed on deposit accounts and the value of separate deposits at the time of investment, and provided that the maximum loss on these instruments can amount to at most the invested amount.

Paragraph 2. The instruments mentioned in Paragraph 1, items 1 and 2, must be admitted to trading on a regulated market or traded on a multilateral trading facility at the time of investment. The instruments mentioned in Paragraph 1, items 1 and 2, may furthermore be admitted to official listing on a stock exchange in a third country, or traded on another regulated market in a third country, which is regularly operating, recognized, and public, provided that the choice of such a stock exchange or such a market is stated in the credit institution's order execution policy, cf. the Order on Securities Dealers' Execution of Orders. The funds may furthermore be invested in newly issued securities provided that the issuance terms include an undertaking that an application for admission to trading on a regulated market, a multilateral trading facility, or on one of the markets mentioned in the second sentence will be submitted. The securities must be disposed of if they are not admitted to trading on a market as stated in the first sentence no later than 1 year after issuance.

Paragraph 3. Funds may however not be placed in shares or other capital shares or share warrants, etc., in companies that have as their purpose or one of their purposes to grant usage rights, discounts, or similar rights to the investors in the company. This does not apply, however, if the right can only be utilized after the dissolution/release time or is subject to the reporting obligation in Section 8 H of the Tax Control Act.

Paragraph 4. Funds in separate deposits, cf. Paragraph 1, may furthermore be placed in unlisted capital shares, cf. Section 2, Paragraph 1, item 2, in alternative investment funds, including capital funds, cf. Section 3, Paragraph 1, item 11, of the Act on Alternative Investment Fund Managers, etc., which do not have permission to market to retail investors in Denmark, cf. the Order on Permission for Alternative Investment Fund Managers to Market to Retail Investors, in joint-stock companies, limited liability companies, companies listed in Article 1 in the consolidated version of the Council's First Company Directive 68/151/EEC as amended by Directive 2003/58/EF, limited partnerships, and companies with a corresponding legal form within the European Union or a country with which the Union has concluded an agreement in the financial sector, under the following conditions:

1. That the customer invests at least an amount corresponding to 100,000 DKK in unlisted capital shares in each individual company. In investment in limited partnerships and partnerships, the actual payment to the company is decisive.
2. That the value of the unlisted capital shares at the time of investment amounts to at most 20% of the part of the customer's savings in the same credit institution placed on deposit accounts, in pools, or in separate deposits, which is below 2 million DKK.
3. That the value of the unlisted capital shares at the time of investment amounts to at most 50% of the part of the customer's total savings in the same credit institution placed on deposit accounts, in pools, or in separate deposits, which is between 2 and 4 million DKK.
4. That the value of the unlisted capital shares at the time of investment amounts to at most 75% of the part of the customer's total savings in the same credit institution on deposit accounts, in pools, or in separate deposits, which is above 4 million DKK.
5. That the limited partnership and partnership exclusively invest in unlisted capital shares, cf. Paragraph 5, and in asset types covered by Paragraph 1, bo