Financial Business Act.pdf
Financial Business Act.pdf
Financial Business Act.pdf
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While this translation was carried out by a professional translation agency, the text<br />
is to be regarded as an unofficial translation based on the latest official Consolidated<br />
<strong>Act</strong> no. 286 of 4 April 2006. Only the Danish document has legal validity.<br />
October 2006, GlobalDenmark Translations<br />
(2) Core capital and revaluation reserves shall exclude any form of tax that can be foreseen at<br />
the time when the amount is calculated, or it shall be adequately adjusted to the extent that<br />
taxes reduce the amount with which said capital may be used to hedge risks or losses.<br />
129.-(1) The core capital in banks, mortgage-credit institutions, investment companies, and<br />
investment management companies shall consist of<br />
1) paid-up share capital, guarantee capital, or cooperative capital,<br />
2) share premium,<br />
3) reserves,<br />
4) retained earnings or losses,<br />
5) the current profit for the year, net of any tax, expected dividends and other predictable<br />
expenses, provided the amount has been confirmed by the undertaking's external<br />
auditors, cf. subsection (3),<br />
6) undistributable savings bank reserve, cf. section 211,<br />
7) paid-up guarantee capital, cf. section 208(2),<br />
8) hybrid core capital, cf. section 132, if the core capital, cf. nos. 1-7, 9 and 10, after the<br />
deductions mentioned in section 131 constitutes no less than 5 per cent of the riskweighted<br />
items etc. of the bank, mortgage-credit institution, investment company or<br />
investment management company.<br />
9) serial reserve funds in mortgage-credit institutions in series where there is no<br />
repayment obligation to the borrowers, and the part of the serial reserve funds in<br />
series with a repayment obligation, cf. section 25 of the Mortgage-Credit Loans and<br />
Mortgage-Credit Bonds etc. <strong>Act</strong>, which cannot become payable, and<br />
10)undistributable fund reserve in mortgage-credit institutions.<br />
(2) Hybrid core capital under subsection (1), no. 8 shall be no more than 15 per cent of the<br />
core capital after the deductions mentioned in section 131.<br />
(3) If the possibility of recognising the current profit for the year in the core capital is used, cf.<br />
subsection (1), no. 5, the size of the amount shall be subject to confirmation by the external<br />
auditors. The Danish FSA may lay down more detailed regulations on the external auditors'<br />
actions in connection with such confirmation.<br />
(4) The external auditors shall disclose information in the audit book on the work carried out<br />
pursuant to subsection (3). In connection with this, information shall also be disclosed on the<br />
solvency ratio of the bank, mortgage-credit institution, investment company or investment<br />
management company before and after recognition of the current profit for the year.<br />
130.-(1) The core capital of insurance companies and lateral pension funds (nationwide<br />
occupational pension funds) shall consist of<br />
1) own funds,<br />
2) member accounts in mutual companies and lateral pension funds (nationwide<br />
occupational pension funds), cf. section 133,<br />
3) special bonus provisions (type B) in life-assurance companies and lateral pension funds<br />
(nationwide occupational pension funds) fulfilling the conditions in section 134,<br />
4) the value of tax assets as it would be in a management situation, cf. sections 253-258,<br />
and<br />
5) a positive or negative difference between<br />
EXCLUDING MINOR AMENDMENTS