We advise financial institutions of all sizes on regulatory issues in the financial sector. Our legal services cross national borders, making us an ideal partner for international companies.
Finance
At DLA Piper, we have many years' experience in advising financial institutions on regulatory issues and in-depth knowledge of recent legislative and case law developments. Due to our close working relationship with the Danish Financial Supervisory Authority (the Danish FSA) and other relevant authorities, we are always able to handle requests and contact with the authorities in a smooth and effective manner.
We advise Danish as well as foreign financial institutions, including Danish and foreign (EU and non-EU/EEA) AIF managers (AIFMs), investment services companies, investment advisors, investment associations, insurance companies and insurance intermediaries.
How can we assist you?
Our financial services experts advise on matters such as:
- Formation or merger of financial institutions, insurance intermediaries and investment advisors, including licence applications
- Establishment of branches and registration of foreign investment services companies, insurance companies and insurance intermediaries
- Regulation of securities trading activities, including good practice and the MiFID rules
- Investment services activities
- Direct and indirect marketing of collective investment undertakings (UCITS), including registration in Denmark
- AIFM legislation, including marketing of Danish and foreign AIFs in Denmark and registration of foreign managers
- Insurance products and distribution channels, including insurance contract law
- Transfer of banks, insurance companies and other financial institutions
- Dispute resolution concerning regulatory issues
Financial sector regulation
When financial institutions are looking to start trading, consolidate or provide services and products, financial sector regulation is of crucial importance.
In Denmark, only regulated institutions are permitted to provide financial services, including investment services. By way of example, this could be banks, investment services companies, insurance companies, pension funds and insurance intermediaries. Also the marketing and offering of securities are subject to regulation. This also applies to direct as well as indirect marketing of certain units in collective investment undertakings, e.g. investment associations and alternative investment funds, which are subject to registration with the Danish FSA.
We offer specialised advice to banks, mortgage credit institutions, investment banks and other banks on regulatory and customer-related matters. Our dedicated lawyers in this area also advise banks and other professional lenders as well as commercial borrowers wishing to introduce or phase out financial products.
We help banks and financial institutions analyse complicated commitments. But we also advise clients on non-performing loans (solvency) and handle restructurings in that connection. Finally, we can help draw up prospectuses for initial public offerings (IPOs) in the banking sector.
Regardless of whether the client asks for our advice on how to set up a bank, prepare for and issue securities, purchase assets, such as a branch, or complete a transaction, we deliver solid legal advice tailored to the client's needs.
Furthermore, our legal services include all traditional aspects of banking law such as:
- Loan documents
- Bank guarantees
- Recourse guarantees
- Assignment and other types of security
- Legal opinions
An important part of our legal services to banks concerns customer relationships. Our legal services include:
- Mortgages and lending, including establishment of all types of security
- Bank and recourse guarantees
- Leasing and factoring
- Banks' professional liability, including investor protection legislation and the special issues concerning interest and currency swaps and other types of financial instruments
- Dispute resolution, including assistance in settlement negotiations and participation in mediation as well as litigation and arbitration
- Non-performing loans as well as the taking of possession and sale of assets provided as security
Financial acronyms and terms
The financial sector uses a lot of acronyms and terms, which are useful to know and understand. Below, we have explained some of the most widely used acronyms and terms:
AML is short for anti-money laundering. It is crucial that financial institutions comply with AML legislation – and that their customers do so too. This is an area which is subject to increasing supervision, and at DLA Piper, we can advise you on how to ensure that your business and customers are in compliance. We scrutinise your business procedures and give you directions on how to strengthen them sufficiently to meet regulatory requirements and withstand any risks.
In 2009, the European Union adopted the Alternative Investment Fund Managers Directive, also known as the AIFM Directive. In Denmark, the AIFM Act entered into force in 2013. The purpose of the directive is to harmonise requirements to businesses engaging in the management of alternative investment funds. Such businesses include private equity funds, hedge funds and some property companies. The requirements are intended to boost confidence in the financial markets.
An AIF typically differs from general funds and associations by the absence of strict limitations as to how an AIF can invest and in what. This means that the investor needs to be willing to take a certain degree of risk.
At DLA Piper, we advise on all types of AIFMs. By way of example, we can advise on the so-called fit and proper test. This is a test which the Danish FSA must perform to assess the fitness and propriety of the management of a new Danish-based AIFM or a self-managing Danish-based AIF. This is a required test, and the assessment must be submitted together with the application for an AIFM licence.
FATCA is an acronym for the Foreign Account Tax Compliance Act, a US act aiming at preventing US tax residents from using foreign banks for transactions in order to avoid US taxes. FATCA applies to US tax resident private individuals, businesses and business owners. Denmark has concluded an agreement with the USA in this area, which means that banks must identify all customers who may potentially be US tax residents and report the information to the US tax authorities.
If any of your customers are US tax residents, we can help you declare using a self-certification form. Please contact us for more details.
Good practice for financial institutions is an Executive Order issued by the Danish FSA, which sets out requirements to the conduct of financial institutions.
Obviously, other rules apply in this area that must be complied with by financial institutions, such as the Data Protection Act, the Executive Order on Information about Life Assurance Contracts, consumer legislation, the Credit Agreement Act, the Insurance Contract Act and the Act on Certain Consumer Contracts. We can advise you on all regulatory aspects of sound operations in the financial sector.
Like the Executive Order on Good Practice for Financial Institutions, there is an Executive Order which requires insurance distributors to act in accordance with good practice. We can also advise you on the provisions of this executive order so as to ensure that your business complies with the requirements in this area. Any non-compliance by businesses is punishable by a fine.
MiFID is an acronym for the Markets in Financial Instruments Directive, which is one of the cornerstones of EU financial markets regulation. The purpose of the directive is to strengthen security and efficiency in the financial markets. This is done, for one thing, by increasing transparency in trading, harmonising rules and strengthening investor protection.
According to the Danish FSA, the MiFID rules should also be seen in light of the financial crisis in 2008 and technological advancements, which have facilitated extremely fast computerised trading.
PRIIP is an acronym for Packaged Retail and Insurance-based Investment Products. As a result of the EU PRIIP Regulation, manufacturers and sellers of investment products are required to provide retail investors with a key information document prior to investment. Consequently, PRIIP should be seen as an aid and support for investors investing in financial products.
If you are an investor, we can help you understand the products you invest in. At the same time, we can advise manufacturers and sellers of investment products on the process surrounding the development of documentation for your products.
UCITS is an acronym for Undertakings for Collective Investment of Transferable Securities. Investment associations, securities funds and the like are subject to the European UCITS legislation. If you are planning to set up a UCITS, you must apply to the Danish FSA for registration and a licence. At DLA Piper, we can help you with the entire process and also advise you on the day-to-day operations of UCITS.
