Danish Act on Financial Business

Act on Financial Business 1)

Hereby is promulgated the Act on Financial Business, cf. Consolidated Act No. 1013 of 21 August 2024, with the amendments resulting from Section 19 of Act No. 1602 of 17 December 2024, Section 2 of Act No. 1666 of 30 December 2024, Section 12 of Act No. 1668 of 30 December 2024, and Section 74 of Act No. 52 of 28 January 2025.

Part I General Provisions

Chapter 1 Scope of Application

General rules on scope of application

Section 1. This Act applies to financial undertakings, cf. Section 5, subsection 1, no. 1, as well as undertakings covered by subsections 2-11 and 15.

Subsection 2. For financial holding companies, Sections 6, 6a and 6b, Section 43, subsection 1, Chapter 7, Section 64, subsection 7, Section 64e, subsection 1, Sections 70, 71, 75, 79a, 117, 175a and 179-181, Chapter 13, Sections 344, 345, 346 and 347-348a, Section 350, subsection 3, Section 351, subsections 1, 2 and 6-9, Sections 355 and 357, Section 361, subsection 1, nos. 3 and 9, and subsection 2, Section 368, subsections 2 and 3, subsection 4, no. 1, and subsection 5, and Sections 369, 370, 372, 373, 373a and 374 shall apply. For financial holding companies, Sections 46, subsections 2 and 3, Section 64c, subsection 5, cf. subsections 1 and 4, Sections 71b, 77a-77d, 170-175, 176-178 and 182b-182f, Section 245a, subsection 5, Sections 245b and 260, Section 266, subsection 1, and Sections 271, 274-276, 310, 312, 313, 313b and 344d shall also apply. For mixed holding companies, Section 64, subsection 7, Section 260, Section 264, subsection 1, no. 13, Section 266, subsection 1, Sections 271, 274-276, 344 and 345, Section 347, subsection 1, Section 351, subsections 1, 2 and 6-9, and Sections 355, 372 and 373 shall also apply.

Subsection 3. This Act applies to branches in Denmark of credit institutions and management companies authorized in a country outside the European Union, with which the Union has not concluded an agreement in the financial sector, with the deviations that the branch relationship necessitates, or as provided for in or under international agreements. The Danish Financial Supervisory Authority may lay down detailed rules on the organization of undertakings covered by the first sentence, including rules on capital requirements etc. The Danish Financial Supervisory Authority may lay down detailed rules that branches covered by the first sentence must carry out their activities in a subsidiary. The provisions of the Companies Act on branches of foreign limited liability companies shall apply to the branches mentioned in the first sentence.

Subsection 4. For branches in Denmark of foreign undertakings authorized to carry out the activities mentioned in Sections 7-10a in a country within the European Union or in a country with which the Union has concluded an agreement in the financial sector, Sections 6, 6a, 6b, 30, 32, 43, 43b, 47-48a, 50-54, 344 and 345, Section 347, subsections 1-3, 5 and 7, Sections 347b, 347c and 348, Section 352, subsection 2, and Sections 354a, 354b, 360, 363a, 368-370 and 373-374 shall apply with the deviations provided for in or under international agreements. For branches in Denmark of credit institutions, Section 152a, subsection 4, second sentence, shall apply with the deviations provided for in or under international agreements. For branches in Denmark of a foreign undertaking authorized to carry out the activities mentioned in Sections 7-10a in another country within the European Union or in a country with which the Union has concluded an agreement in the financial sector, Section 347a shall also apply with the deviations provided for in or under international agreements. For branches and associated agents in Denmark of credit institutions authorized to provide investment services or perform investment activities in another country within the European Union or in a country with which the Union has concluded an agreement in the financial sector, and which carry out such activities in Denmark, Sections 30, 32, 344 and 345, Section 347, subsections 1-3, 5 and 7, Sections 348, 354a and 354b and Section 363b, subsections 1 and 2, shall apply with the deviations provided for in or under international agreements. Section 43 and rules issued pursuant thereto shall apply correspondingly to situations mentioned in the fourth sentence.

Subsection 5. For services provided in Denmark by credit institutions and management companies authorized in another country within the European Union or in a country with which the Union has concluded an agreement in the financial sector, Sections 6, 6a, 6b, 31, 43 and 46-54, Section 347, subsection 1, and Section 348, subsection 1, shall apply with the deviations provided for in or under international agreements. For services provided in Denmark by credit institutions authorized to provide investment services or perform investment activities in another country within the European Union or in a country with which the Union has concluded an agreement in the financial sector, Section 31, Section 347, subsection 1, and Section 348, subsection 1, shall apply with the deviations provided for in or under international agreements.

Subsection 6. For services involving trading in securities provided in Denmark by credit institutions authorized in a country outside the European Union, with which the Union has not concluded an agreement in the financial sector, and for which the Commission has not adopted a decision as referred to in Article 47, subsection 1, of Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments, or where such a decision is no longer valid, Sections 6, 6a, 6b, 33 and 43, Section 347, subsection 1, Section 348, Section 363b, subsection 4, and Section 373, subsections 3 and 5, shall apply.

Subsection 7. For services provided in Denmark by insurance companies authorized in a country outside the European Union, with which the Union has not concluded an agreement in the financial sector, Sections 6, 6a, 6b and 37 shall apply.

Subsection 8. Chapter 20 shall apply to savings institutions.

Subsection 9. Chapter 20b shall apply to credit rating agencies.

Subsection 10. Chapter 20f shall apply to CO2 quota traders.

Subsection 11. Chapter 20h shall apply to STS certification bodies.

Subsection 12. Provisions on the board of directors or members thereof in Section 5, subsection 1, no. 6, Section 77, subsections 1 and 3, Section 78, subsection 1, no. 1, Section 98, Section 144, subsection 1, Section 199, subsections 10 and 11, and Sections 203, 209 and 247 shall, in SE companies with a two-tier management system, only apply to the supervisory body or members thereof with the necessary adjustments.

Subsection 13. Chapter 20a shall apply to crowdfunding service providers.

Subsection 14. Chapter 19b shall apply to natural and legal persons and other undertakings involved in the issuance, offering to the public, and admission to trading of crypto-assets, or which provide services in connection with crypto-assets.

Subsection 15. Chapter 19c shall apply to operators of financial digital infrastructure.

Subsection 16. Provisions on the board of directors or members thereof and provisions on management in Section 14, subsection 1, no. 2, Sections 64, 65, 73-75, 80 and 117, Section 124, subsections 1 and 4, Section 179, no. 2, Section 180, no. 2, Sections 184, 185 and 233, Section 346, subsections 2 and 3, Section 349, subsection 2, no. 2, Section 351, Section 355, subsection 2, no. 8, and subsection 3, and Sections 356 and 373-374 shall, in SE companies with a two-tier management system, in addition to the management body and its members, also apply to the supervisory body or members thereof with the necessary adjustments.

Subsection 17. For suppliers and subcontractors to outsourcing undertakings, cf. Section 5, subsection 1, nos. 21 and 22, Sections 6, 6a and 6b and Section 347, subsections 1 and 6, shall apply.

Subsection 18. For investment firms covered by Article 1, subsections 2 and 5, of Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 on prudential requirements for investment firms, and for investment firms covered by Section 236 of the Act on Investment Firms and Investment Services and Activities, the provisions implementing Parts VII and VIII of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions shall apply.

Subsection 19. For credit institutions which are simultaneously authorized as central counterparties (CCPs) in accordance with Article 14 of Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories, Sections 71a-71c, 177a, 177b, 182b-182f and 224a and Chapters 15a, 17 and 17a of this Act shall not apply.

Sections 2-4. (Repealed)

Chapter 2 Definitions

Section 5. In this Act, the following terms shall have the following meanings:

1. Financial undertakings: a) Credit institutions. b) Mortgage credit institutions. c) Investment management companies.

2. Credit institution: a) An undertaking whose business is receiving deposits or other repayable funds from the public and granting credits for its own account. b) An undertaking which performs all the activities referred to in Part A, points 3 and 6, of Annex 1 to the Act on Investment Firms and Investment Services and Activities, if one of the following conditions applies, but the undertaking is not a commodity dealer or emission allowance trader, a collective investment undertaking, or an insurance company: i) The total value of the undertaking's consolidated assets amounts to or exceeds EUR 30 billion. ii) The total value of the undertaking's assets is less than EUR 30 billion, and the undertaking is part of a group where the total value of the consolidated assets of all undertakings in the group which individually have total assets of less than EUR 30 billion and which perform one or more of the activities referred to in Part A, points 3 and 6, of Annex 1 to the Act on Investment Firms and Investment Services and Activities amounts to or exceeds EUR 30 billion, cf. however subsection 8. iii) The total value of the undertaking's assets is less than EUR 30 billion, and the undertaking is part of a group where the total value of the consolidated assets of all undertakings in the group which perform one or more of the activities referred to in Part A, points 3 and 6, of Annex 1 to the Act on Investment Firms and Investment Services and Activities amounts to or exceeds EUR 30 billion, if the consolidating authority decides this in consultation with the supervisory college to take into account potential risks of circumvention and potential risks to financial stability in the Union, cf. however subsection 8.

3. Investment services and investment activities: Activities as referred to in Annex 1, Part A, of the Act on Investment Firms and Investment Services and Activities in connection with the instruments listed in the same Act's Annex 2.

4. Management company: A company which can manage UCITS (in Denmark: investment management company).

5. Finance company: An undertaking which is not a credit institution, an investment firm, cf. the Act on Investment Firms and Investment Services and Activities, or a pure industrial holding company, and whose main business consists of acquiring shareholdings or performing one or more of the activities specified in Annex 2, nos. 2-12 and 15.

6. Parent undertaking: An undertaking which has one or more subsidiary undertakings.

7. Subsidiary undertaking: An undertaking over which a parent undertaking has decisive influence.

8. Group: A parent undertaking and its subsidiary undertakings, cf. Section 5a.

9. Financial holding company: a) A parent undertaking which is not a financial undertaking in a group where at least one of the subsidiary undertakings in the group is a financial undertaking, and where at least 40 percent of the total balance sheet for the group and the parent undertaking's associated undertakings relates to the financial sector, cf. however subsection 7. b) A parent undertaking whose business consists exclusively or mainly of holding shareholdings in subsidiary undertakings which are financial undertakings or finance companies. Subsidiary undertakings are mainly financial undertakings or finance companies if at least one is a financial undertaking and more than 50 percent of the parent undertaking's consolidated assets are linked to subsidiary undertakings which are financial undertakings or finance companies. A parent undertaking as mentioned in the first sentence is not a financial holding company if the financial subsidiary undertakings in the group are exclusively insurance undertakings.

10. Credit institution holding company: A parent undertaking whose business consists exclusively or mainly of holding shareholdings in subsidiary undertakings which are credit institutions or finance companies, and where the group's main business is to operate as a credit institution.

11. Mortgage credit holding company: A parent undertaking whose business consists exclusively or mainly of holding shareholdings in subsidiary undertakings which are credit institutions or finance companies, and where the group's main business is to operate as a mortgage credit institution.

12. Investment management holding company: A parent undertaking whose business consists exclusively or mainly of holding shareholdings in subsidiary undertakings which are credit institutions or finance companies, and where the group's main business is to operate as an investment management company.

13. Associated undertaking: An undertaking in which a financial undertaking and its subsidiary undertakings hold shareholdings and exercise significant influence over its operational and financial management, but which is not a subsidiary undertaking of the financial undertaking. A financial undertaking and its subsidiary undertakings are presumed to exercise significant influence if they collectively hold 20 percent or more of the voting rights.

14. Exposure: The sum of all claims on a customer or a group of interconnected customers which entails credit risk for the undertaking, and shareholdings issued by the customer or by a member of a group of interconnected customers. As far as provisions on exposures in Sections 78 and 182 are concerned, the following claims are excluded: a) In foreign exchange transactions: Claims arising in connection with the normal settlement of a transaction, within a period of 48 hours after payment has been made. b) In the purchase or sale of transferable securities: Claims arising in connection with the normal settlement of a transaction, within a period of 5 working days after payment has been made or the transferable securities have been delivered, depending on which date comes first. c) In payment intermediation, including the execution of payment orders, clearing and settlement of transferable securities in any currency and correspondent bank or offer of clearing, settlement and deposit of financial instruments to customers: Claims regarding delayed receipt of financing and other claims arising as a result of customer activity, and which do not last longer than the following working day. d) In payment intermediation, including the execution of payment orders, clearing and settlement of transferable securities in any currency and correspondent bank: Intraday claims with institutions providing these services.

15. Close links: a) Direct or indirect links of the type specified in no. 8, b) shareholdings, which means a company's direct or indirect holding of 20 percent or more of the voting rights or capital in a company, or c) several companies' or persons' common link, cf. letter a, with a company.

16. Zone A countries: The member states of the EU, other countries which are full members of the Organisation for Economic Co-operation and Development (OECD), and other countries which have concluded special loan agreements with the International Monetary Fund (IMF) and are attached to the General Arrangements to Borrow. A country which restructures its foreign sovereign debt as a result of inability to pay is excluded from Zone A for a period of 5 years.

17. Branch: A division which legally constitutes a non-independent part of a credit institution or management company, and which carries out business of the type for which the undertaking is authorized.

18. Multilateral Trading Facility (MTF): Any system or facility in which the buy and sell interests of various third parties in financial instruments can be brought together, and which is operated in accordance with the rules in Chapters 17, 18, 20, 22 and 23 of the Capital Markets Act.

19. Outsourcing: Any arrangement between an undertaking and a supplier, under which the supplier performs a process, a service or an activity which the undertaking would otherwise perform itself. For insurance companies, outsourcing is defined as an arrangement of any kind between an insurance company and a service provider, where the service provider either directly or through further outsourcing performs a process, a service or an activity which the insurance company would otherwise have performed itself.

20. Outsourcing undertaking: A financial undertaking

21. The Act contains provisions implementing Council Directive 86/635/EEC of 8 December 1986 (Banking Accounting Directive), Official Journal 1986, No. L 372, page 1, Council Directive 89/117/EEC of 13 February 1989 (Publication of annual accounts documents for branches from non-member countries), Official Journal 1989, No. L 44, page 40, Council Directive 91/674/EEC of 19 December 1991 (Insurance Accounting Directive), Official Journal 1991, No. L 374, page 7, Directive 95/26/EC of the European Parliament and of the Council of 29 June 1995 (BCCI Directive), Official Journal 1995, No. L 168, page 7, Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 (Banking Resolution Directive), Official Journal 2001, No. L 125, page 15, Directive 2002/13/EC of the European Parliament and of the Council of 5 March 2002 (Solvency I Directive), Official Journal 2002, No. L 77, page 17, Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 (Conglomerates Directive), Official Journal 2003, No. L 35, page 1, parts of Directive 2006/31/EC of the European Parliament and of the Council of 5 April 2006 (Deferral Directive), Official Journal 2006, No. L 114, page 60, Directive 2007/44/EC of the European Parliament and of the Council of 5 September 2007 (Acquisition Directive), Official Journal 2007, No. L 247, page 1, parts of Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 (Payment Services Directive), Official Journal 2007, No. L 319, page 1, parts of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 (UCITS Directive), Official Journal 2009, No. L 302, page 32, parts of Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 (Solvency II Directive), Official Journal 2009, No. L 335, page 1, Commission Directive 2010/43/EU of 1 July 2010, Official Journal 2010, No. L 176, page 42, parts of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 (CRD IV), Official Journal 2013, No. L 176, page 338, parts of Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 (DGSD), Official Journal 2014, No. L 173, page 149, parts of Directive 2014/50/EU of the European Parliament and of the Council of 16 April 2014, Official Journal 2014, No. L 128, page 1, parts of Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 on a framework for the recovery and resolution of credit institutions and investment firms (BRRD), parts of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 (MiFID II), Official Journal 2014, No. L 173, page 349, parts of Directive 2014/91/EU of the European Parliament and of the Council of 23 July 2014 (UCITS V Directive), Official Journal 2014, No. L 257, page 186, parts of Directive 2015/849/EU of the European Parliament and of the Council of 20 May 2015 (4th Anti-Money Laundering Directive), Official Journal 2015, No. L 141, page 73, parts of Directive 2018/843/EU of the European Parliament and of the Council of 30 May 2018, Official Journal 2018, No. L 156, page 43, parts of Directive 2016/97/EU of the European Parliament and of the Council of 20 January 2016, Official Journal 2016, No. L 26, page 19, parts of Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019, Official Journal 2019, No. L 150, page 253, parts of Directive 2017/828/EU of the European Parliament and of the Council of 17 May 2017, Official Journal 2017, No. L 132, page 1, parts of Directive 2019/879/EU of the European Parliament and of the Council of 20 May 2019 (BRRD II), Official Journal 2019, No. L 150, page 296, parts of Directive 2017/828/EU of the European Parliament and of the Council of 17 May 2017, Official Journal 2017, No. L 132, page 1, parts of Directive 2019/1160/EU of the European Parliament and of the Council of 20 June 2019, Official Journal 2019, No. L 188, page 106, parts of Directive (EU) 2019/2162 of the European Parliament and of the Council of 27 November 2019 on covered bonds and public supervision of covered bonds and amending Directives 2009/65/EC and 2014/59/EU, Official Journal 2019, No. L 328, page 29, parts of Commission Delegated Directive (EU) 2021/1270 of 21 April 2021 amending Directive 2010/43/EU as regards the sustainability risks and sustainability factors to be taken into account in connection with undertakings for collective investment in transferable securities (investment undertakings), Official Journal 2021, No. L 277, page 141, parts of Directive (EU) 2022/2555 of the European Parliament and of the Council of 14 December 2022 on measures to ensure a high common level of cybersecurity across the Union, Official Journal 2022, No. L 333, page 80-152, and parts of Directive (EU) 2022/2556 of the European Parliament and of the Council of 14 December 2022, Official Journal 2022, No. L 333, page 153-163, parts of Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU as regards corporate sustainability reporting, Official Journal 2022, No. L 322, page 15, and parts of Directive (EU) 2024/1174 of the European Parliament and of the Council of 11 April 2024 amending Directive 2014/59/EU and Regulation (EU) No 806/2014 as regards certain aspects of the minimum requirement for own funds and eligible liabilities, Official Journal, L of 22 April 2024. The Act also includes certain provisions from Commission Regulation No 584/2010/EU of 1 July 2010, Official Journal 2010, No. L 176, page 16, Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010, Official Journal 2010, No. L 331, page 1, Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010, Official Journal 2010, No. L 331, page 12, Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010, Official Journal 2010, No. L 331, page 48, Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010, No. L 331, page 84, Regulation (EU) No 346/2013 of the European Parliament and of the Council of 17 April 2013, Official Journal 2013, No. L 115, page 18, Regulation (EU) No 345/2013 of the European Parliament and of the Council of 17 April 2013, Official Journal 2013, No. L 115, page 1, Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 (CRR), Official Journal 2013, No. L 176, page 1, Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 (MiFIR), Official Journal 2014, No. L 173, page 84, Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 (PRIIPs), Official Journal 2014, No. L 352, page 1, Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets. According to Article 288 of the TFEU, a regulation applies directly in each member state. The reproduction of these provisions in the Act is therefore solely justified by practical considerations and does not affect the direct validity of the regulations in Denmark.

9 June 2025. 2 No. 650.