Financial Business Act.pdf

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
Act no. 286 of 4 April 2006. Only the Danish document has legal validity.
October 2006, GlobalDenmark Translations
(3) Where a member of the board of directors, board of management, external auditors, or
responsible actuary of a financial undertaking have cause to believe that the undertaking does
not comply with the capital requirement of sections 124-126 or the solvency need under
section 124(3) and section 125(5) such person shall immediately notify the Danish FSA of this
fact.
76. A member of the board of management may not, without the consent of the board of
directors, enter into an agreement between the financial undertaking and himself or an
agreement between the financial undertaking and a third party in which said member of the
board of management has a significant interest that may be incompatible with those of the
financial undertaking.
77.-(1) Persons employed by the board of directors of a financial undertaking in accordance
with legislation or the articles of association and employees for whom there is a significant risk
of conflicts between own interests and the interests of the undertaking may not, at their own
expense, or through companies they control:
1) take up loans or draw on previously established credits to be used to purchase
securities if the securities purchased are used as collateral for the loan or the credit,
2) acquire, issue, or trade in derivative financial instruments, except to hedge risk,
3) acquire equity investments, except for units in investment associations, special-purpose
associations, hedge associations and foreign investment undertakings covered by the
Investment Associations and Special-Purpose Associations as well as other Collective
Investment Schemes etc. Act with a view to selling such units less than six months
from the date of acquisition, or
4) acquire positions in foreign currency, except for euro (EUR), if taking the position takes
place with a view to anything other than payment for the purchase of securities, goods
or services, purchase or management of real property, or for use when travelling.
(2) The group of persons mentioned in subsection (1) may not acquire equity investments in
companies that carry out business mentioned in subsection (1) nos. 1-4. This shall not apply,
however, for purchases of shares in banks, insurance companies, mortgage-credit institutions,
or investment companies, as well as shares in investment associations, special-purpose
associations, hedge associations and foreign investment undertakings covered by the
Investment Associations and Special-Purpose Associations as well as other Collective
Investment Schemes etc. Act.
(3) The board of directors shall decide which employees have a significant risk of conflicts
between their own interests and the interests of the financial undertaking, and who shall
therefore be covered by the prohibition. The board of directors shall ensure that the relevant
employee knows of this decision. The penalty provision in section 373(2) shall apply from the
time the relevant employee has received information regarding the decision.
(4) The board of directors shall, for the persons covered by subsection (1), draw up guidelines
regarding compliance with the bans in subsections (1) and (2), 1st clause, including guidelines
on reporting of investments.
EXCLUDING MINOR AMENDMENTS
(5) The external auditors shall once a year review the financial undertaking's guidelines under
subsection (4) and in the audit book comments relating to the annual report state whether the
guidelines are adequate and have functioned appropriately, as well as whether the
undertaking's control procedures have given rise to observations.