Financial Business Act.pdf

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While this translation was carried out by a professional translation agency, the text is to be regarded as an unofficial translation based on the latest official Consolidated <strong>Act</strong> no. 286 of 4 April 2006. Only the Danish document has legal validity. October 2006, GlobalDenmark Translations Ownership 315. Sections 5(3), 61 and 62 regarding acquisition and ownership of qualifying interests in financial undertakings shall apply correspondingly to electronic money institutions. Management 316. Sections 70 and 71 regarding written guidelines on the most significant areas of activity, etc., of a financial undertaking shall apply correspondingly to electronic money institutions. Solvency 317.-(1) The capital base of an electronic money institution shall, at any time, amount to no less than 2 per cent of the highest of the following amounts: the current value or the average of the previous six months' financial liabilities in respect of outstanding electronic amounts. The average shall be calculated as the simple average of the last six months’ outstanding electronic amounts at the end of the month. (2) If an electronic money institution has not been in operation for six months including the day when operation was commenced, the capital base shall be no less than 2 per cent of the highest of the following amounts: the current value or the amount set as the estimated extent of the financial liabilities in respect of outstanding electronic amounts after six months, cf. section 312(2). (3) Where a member of the board of directors or board of management or an auditor of an electronic money institution has cause to believe that the undertaking does not comply with the solvency requirement, cf. subsections (1) and (2), such a person shall immediately notify the Danish FSA of this fact. The Danish FSA may stipulate a time limit for compliance with the solvency requirement. 318.-(1) The capital base of an electronic money institution shall constitute the sum of the paid-up share capital, share premium and reserves. (2) The capital shall be reduced by the undertaking's own shares, intangible assets, tax assets, and the deficit for the current year. 319. At the end of every six-month period, electronic money institutions shall submit a solvency statement to the Danish FSA. The Danish FSA shall lay down more detailed regulations hereon. Placement of funds 320.-(1) An electronic money institution shall, as a minimum, invest funds corresponding to the undertaking's financial liabilities in respect of outstanding electronic amounts in the following assets: EXCLUDING MINOR AMENDMENTS 1) cash in hand, 2) outstanding accounts against or guaranteed by central governments or central banks within Zone A,
While this translation was carried out by a professional translation agency, the text is to be regarded as an unofficial translation based on the latest official Consolidated <strong>Act</strong> no. 286 of 4 April 2006. Only the Danish document has legal validity. October 2006, GlobalDenmark Translations 3) outstanding accounts against or guaranteed by the European Communities, 4) outstanding accounts against or guaranteed by Danish counties, Danish municipalities, Greenland's Home Rule, or the Government of the Faroe Islands, or secured by means of securities issued by Danish counties, Danish municipalities, Greenland’s Home Rule, and the Government of the Faroe Islands within 90 per cent of the market value of the relevant security, 5) outstanding accounts against or guaranteed by regional and local authorities in EEA countries, or secured by means of securities issued by such regional and local authorities where the competent authorities have provided a zero weighting within 90 per cent of the market value of the relevant security, 6) mortgage-credit bonds and bonds issued by Danish Ship Finance, and 7) demand deposits with credit institutions within Zone A. (2) The Danish FSA may lay down more detailed regulations on placement of funds in assets other than those mentioned in subsection (1). (3) When calculating the funds placed, cf. subsections (1) and (2), the value of the assets shall be recognised at the lower of the purchase price or the market price. (4) If the value of the total funds placed in the assets mentioned in subsections (1) and (2) becomes less than the value of the financial liabilities in respect of outstanding electronic amounts, the Danish FSA shall ensure that the electronic money institution takes the steps necessary to remedy this situation immediately. In such cases, the Danish FSA may temporarily allow that the undertaking's financial liabilities in respect of outstanding electronic amounts are honoured by means of assets other than those mentioned in subsections (1) and (2), up to an amount corresponding to a maximum of 5 per cent of these liabilities or the company’s capital base, applying, however, the lesser of the two amounts. 321.-(1) The funds of an electronic money institution placed in assets that fall within the scope of section 320(1), nos. 6 and 7, may not exceed the company’s capital base by a factor of more than twenty. (2) An electronic money institution’s holding of funds placed in assets that fall within the scope of section 320(1), no. 6, shall not constitute more than 250 per cent of the company’s capital base per issuer. (3) An electronic money institution’s holding of funds placed in assets that fall within the scope of section 320(1), no. 7, shall not constitute more than 125 per cent of the company’s capital base per bank. Placements may not, however, exceed 25 per cent of the bank’s capital base. 322.-(1) If an electronic money institution has an interest-rate risk greater than 10 per cent of the capital base or the currency indicator 1 is greater than 10 per cent of the capital base, the Danish FSA shall lay down more detailed regulations on the weighting of market risks. Interest-rate risks and the currency indicator 1 shall be calculated as for banks. (2) Electronic money institutions may only use derivative financial instruments with a view to hedging market risks. EXCLUDING MINOR AMENDMENTS 323. At the end of each six-month period, electronic money institutions shall submit to the Danish FSA a statement on how funds are placed. The Danish FSA shall lay down more detailed regulations hereon.
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