Order on Physical and Legal Persons Exempt from Licensing for Investment Services and Activities

Order on which physical and legal persons may exercise investment services and investment activities without a license under the Act on Securities Trading Companies and Investment Services and Activities or the Act on Financial Business

Pursuant to Section 13, paragraph 5, of Act No. 1155 of 8 June 2021 on Securities Trading Companies and Investment Services and Activities, it is hereby stipulated:

Section 1. This Order applies to physical and legal persons who, on a professional basis or as a regular occupation, provide investment services or perform investment activities, as referred to in Section 13, paragraph 1, of the Act on Securities Trading Companies and Investment Services and Activities.

Section 2. Physical and legal persons covered by this Order, as referred to in paragraph 1, may provide investment services or perform investment activities without a license under Section 13, paragraph 1, of the Act on Securities Trading Companies and Investment Services and Activities, to the extent that this follows from Sections 3-18.

Section 3. Crowdfunding service providers covered by the Act on Financial Business may provide investment services or perform investment activities under Annex I, Section A, points 1 and 7, of the Act on Securities Trading Companies and Investment Services and Activities.

Section 4. Insurance companies covered by the Act on Financial Business may provide investment services or perform investment activities when they are engaged in insurance business.

Section 5. Physical and legal persons may provide investment services when this is done exclusively for their parent company, their subsidiary, or another subsidiary of their parent company.

Section 6. Physical and legal persons who provide investment services may do so if this service is provided occasionally in connection with commercial business, and when this business is regulated by law or a professional code of conduct for the relevant profession, which does not exclude that service of this kind can be provided.

Section 7. Physical and legal persons may trade for their own account with financial instruments that are not commodity derivatives, emission allowances, or derivatives of emission allowances, if they do not provide other investment services or perform other investment activities with financial instruments that are not commodity derivatives, emission allowances, or derivatives of emission allowances.

Paragraph 2. The exemption in paragraph 1 does not apply to physical and legal persons who:

1. are market makers,
2. use an algorithmic high-frequency trading technique, or
3. trade for their own account when executing client orders.

Paragraph 3. Physical and legal persons who are members or participants on a regulated market or in a Multilateral Trading Facility (MTF), or who have direct electronic access to a trading venue, cannot make use of the exemption in paragraph 1. This does not apply, however, to non-financial entities that carry out transactions on a trading venue, which can objectively be measured to reduce the risks directly linked to the business activity or liquidity financing activity of these non-financial entities or their group.

1. The Order contains provisions that implement parts of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments, OJ EU 2014, No. L 173, page 349, Directive (EU) 2016/1034 of the European Parliament and of the Council of 23 June 2016 amending Directive 2014/65/EU on markets in financial instruments, OJ EU 2016, No. 175, page 8, Directive (EU) 2020/1504 of the European Parliament and of the Council of 7 October 2020 amending Directive 2014/65/EU on markets in financial instruments, OJ EU 2020, No. 347, page 50, and parts of Directive (EU) 2021/338 of the European Parliament and of the Council of 16 February 2021 amending Directive 2014/65/EU as regards disclosure requirements, product governance and position limits, and of Directives 2013/36/EU and (EU) 2019/878 as regards their application to investment activities with a view to contributing to recovery from the COVID-19 pandemic, OJ EU 2020, No. L 68, page 14. Certain provisions from Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012, OJ EU 2014, No. L 257, page 1, have been included in the Order. According to Article 288 of the TFEU, a regulation applies directly in each Member State. The reproduction of these provisions in the Order is therefore solely justified by practical considerations and does not affect the direct validity of the regulation in Denmark.

Danish Statute Journal A 2021 Published on 10 November 2021 8 November 2021. No. 2021. : Ministry of Industry, Business and Financial Affairs, Danish Financial Supervisory Authority, file no. 21-002404 CQ001946

Paragraph 4. Physical and legal persons who are exempted pursuant to Sections 4, 12, or 13 are not obliged to meet the conditions in this provision to be exempt.

Section 8. Operators covered by Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community may trade for their own account with emission allowances, provided that they do not execute client orders and do not provide other investment services or perform other investment activities than trading for their own account, provided that they do not use an algorithmic high-frequency trading technique.

Section 9. Physical and legal persons may provide investment services if this service consists exclusively of the management of employee participation schemes.

Section 10. Physical and legal persons may provide investment services if this service only involves both the management of employee participation schemes and investment services exclusively for the use of their parent company, subsidiaries, or another subsidiary of their parent company.

Section 11. The National Bank of Denmark and other public authorities responsible for the management of public debt, or participating in its management, and international financing institutions established by two or more EU Member States, which aim to mobilize capital and provide financial assistance to their members affected or threatened by serious financing problems, may perform their activities without a license under Section 13, paragraph 1, of the Act on Securities Trading Companies and Investment Services and Activities.

Section 12. Collective investment undertakings and pension funds, whether coordinated at EU level or not, as well as depositaries and managers of such undertakings, may provide investment services or perform investment activities.

Section 13. The following physical and legal persons may provide the investment services or investment activities in question:

1. persons who trade for their own account, including market makers, with commodity derivatives or emission allowances or derivatives thereof, except for persons who trade for their own account when executing client orders, or
2. persons who provide investment services, except for trading for their own account, within commodity derivatives or emission allowances or derivatives thereof to their customers or suppliers in their main profession.

Paragraph 2. The provision in paragraph 1 applies only when the following conditions are met:

1. The cases mentioned in paragraph 1 must be both individually and collectively an ancillary activity in relation to the persons' main profession at group level.
2. These persons must not be part of a group whose main profession is to provide investment services in accordance with Annex I, Section A, of the Act on Securities Trading Companies and Investment Services and Activities, perform activities in accordance with Annexes I and 2 of the Act on Financial Business, or act as a market maker in connection with commodity derivatives.
3. These persons must not use an algorithmic high-frequency trading technique.
4. These persons must, upon request, submit a statement to the Danish Financial Supervisory Authority regarding the criteria they use to assess that their activity, as referred to in paragraph 1, is ancillary to their main profession.

Paragraph 3. An activity will, pursuant to paragraph 2, point 1, be considered ancillary to the main profession at group level if it meets the criteria in the applicable regulation at any given time.

Section 14. Physical and legal persons who, in connection with other commercial activities not covered by Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments, provide investment advice, may provide this service when the advice is not remunerated separately.

Section 15. Associations established by Danish pension funds may provide management when they are established solely with the aim of managing the funds of the participating pension funds.

Section 16. The following physical and legal persons may provide the investment services or investment activities in question:

1. Transmission system operators, as defined in Article 2, paragraph 4, of Directive 2009/72/EC of 13 July 2009 concerning common rules for the internal market in electricity or Article 2, paragraph 4, of Directive 2009/73/EC of 13 July 2009 concerning common rules for the internal market in natural gas, when they perform their tasks in accordance with these directives or in accordance with Regulation No 714/2009 of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity or in accordance with Regulation No 715/2009 of 13 July 2009 on conditions for access to the natural gas transmission network or in accordance with network rules or guidelines adopted pursuant to these regulations.
2. Persons who act as service providers on behalf of the persons mentioned in point 1, with a view to performing their tasks in accordance with these legal acts or in accordance with rules or guidelines adopted pursuant to these regulations.
3. Any operator or administrator of an energy balancing mechanism, a pipeline network, or a system to keep the supply of and demand for energy in balance, when they perform such tasks.

Paragraph 2. Physical and legal persons who carry out activities as mentioned in paragraph 1 are only covered by the exemption in paragraph 1 when the persons perform investment activities or provide investment services in connection with commodity derivatives to perform these activities.

Paragraph 3. The operation of a secondary market, including a platform for secondary trading of financial transmission rights, is not covered by the exemption in this provision.

Section 17. Central Securities Depositories (CSDs) may perform their activities without a license under Section 13, paragraph 1, of the Act on Securities Trading Companies and Investment Services and Activities.

8 November 2021. 2 No. 2021.

Paragraph 2. Paragraph 1 does not apply to the central securities depositories established in Article 73 of Regulation (EU) No 909/2014 of the European Parliament and of the Council on improving securities settlement in the European Union and on central securities depositories.

Section 18. Management departments may provide management when they are approved by the Minister of Justice, or when they are authorized by the Minister of Justice to manage funds originating from persons under guardianship, non-commercial foundations, or entailed capital.

Section 19. This Order enters into force on 11 November 2021.

Paragraph 2. Order No. 919 of 26 June 2017 on which physical and legal persons may exercise investment services and investment activities without a license under the Act on Financial Business is repealed.

Danish Financial Supervisory Authority, 8 November 2021 Jesper Berg / Sean Hove 8 November 2021. 3 No. 2021.