The Danish Financial Supervisory Authority (Danish FSA) designated certain institutions as systemically important financial institutions (SIFIs) in Denmark, the Faroe Islands, and the Greenland. Additionally, Danish FSA published consultations on draft amendments to the Financial Business Act, an executive order on product approval procedures, a draft guidance on credit assessment, and a draft guidance on financing real estate. Finally, Danish FSA published a notification on strategy related to the prevention of money laundering.
Below are the key highlights of these recent update:
- The SIFIs in Denmark include Danske Bank A/S, Nykredit Realkredit A/S, Nordea Kredit Realkreditaktieselskab, Jyske Bank A/S, Sydbank A/S, DLR Kredit A/S, Spar Nord Bank A/S, and A/S Arbejdernes Landsbank. The SIFIs in Faroe Islands include P/F BankNordik and Betri Banki P/F while the Bank of Greenland has been designated as a SIF in Greenland. The designation of Danish SIFIs takes place this year for the first time on the basis of a new model for SIFI designation. The rules have not changed for the Faroe Islands and Greenland. In December 2021, the Danish Parliament adopted a new model for designating SIFIs in Denmark. The new SIFI designation model includes 12 indicators against 3 indicators in the current model. With the new SIFI designation model, a more comprehensive determination of the institutions' systemicity will be achieved and it will be more robust to fluctuations in the individual indicators.
- Danish proposed an Act amending the Financial Business Act, the Penal Code, and various other acts. The draft Act implements the political agreement on stricter responsibility assessment for management members in financial companies and a broader recruitment basis for the management bodies in the financial sector from June 2022. The Danish FSA is requesting comments until August 18, 2022.
- The Authority is also consulting on the executive order on product approval procedures. The purpose of the new executive order is to implement the Commission Delegated Directive 2021/1269 on the integration of sustainability factors into product management obligations. The executive order is expected to enter into force on November 22, 2022. Danish FSA is requesting comments on the executive order until July 27, 2022.
- Danish FSA is consulting on draft guidance on the credit assessment when mortgaging homes in growth areas. The changes in relation to the existing guide are related to financial information to the department for customers with a grace period, implementation of recommendations of the Committee on financing rules for cooperative housing, and clarifications based on the experience of the existing guide. Danish FSA is requesting comments on the guidelines until August 19, 2022.
- Danish FSA is consulting on the guidance on financing rental properties and real estate projects. The purpose of the guidance is to create greater clarity about what institutions should consider when financing rental properties and real estate projects in the light of the rules on the credit area in Appendix 1 to the Executive Order on management and governance of banks. In this guide, Danish FSA has summarized what have historically proved to be good practices in this area. Danish FSA is requesting comments until August 19, 2022.
- Danish FSA notified that the Ministry of Finance has announced the national strategy for prevention of money laundering. The strategy sets direction, for the next four years, in the area of anti-money laundering and counter-terrorist financing in Denmark. In the time to come, as part of the strategy, Danish FSA will focus on enhancing the possibility of using new technology, improving the risk assessment methods, enhancing the use of its supervisory tools, and further developing its communication process.
Related Links (in Danish)
- Press Release on Designation of SIFIs
- Press Release on Strategy on AML/CFT
- Consultation on Amendments to Financial Business Act
- Consultation on Executive Order on Product Approval Procedures
- Consultation on Guidance on Credit Assessment
- Consultation on Guidance on Financing Real Estate
Keywords: Europe, Denmark, Banking, SIFI, Regulatory Capital, Systemic Risk, Basel, Credit Risk, AML CFT, ML TF Risk, Danish FSA
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