On Apr. 30, DEN PRL said DEN EM miscellaneous bill had been issued.
DEN PRL issued, following the 1st reading, L 193 proposal for an act amending the financial business act, the alternative investment fund managers act, etc., the investment associations act, the money laundering act and various other acts. (handling crypto exposures, preparation of ESG transition plans, new documentation requirements for the institutions' management structure, division of responsibilities and reporting lines, clearer rules for the authorisation of credit institutions from countries outside the EU/EEA (third countries), new supervisory authority for the danish financial supervisory authority to approve significant acquisitions of equity interests in other companies, criminalisation of the disclosure regulation, modernisation of the rules in the AIFM-UCITS II directive, strengthening the rules on combating national and international money laundering and establishing a single european access point (ESAP) for submitting a number of published information, etc.).
Follows, DEN FSA Dec. 2024 consulted on Act amending financial acts, see #238253.
Document dated Apr. 30, 2025, was added on May 6, 2025 due to editorial backfill.
Contents
Bill makes several amendments of relevance to financial services sector, see #253131.
Including changes to State guarantee for real estate credit agreements in rural areas.
For information regarding these changes see comments on the bill 2.2, 2.2.1, 2.2.2.
Other noteworthy changes that are set out in relevant RR rules are as follows:
2.3; Terms of access to payment systems by payment system providers, see #253186.
2.4; Introduction of output floor in the calculation of institutions' RWEs, see #253196.
2.5; The introduction of transitional rule regarding the output floor, see #253205.
2.6; Amendments that are made regarding the output floor at group level, #253208.
2.7; More frequent disclosure of credit institutions’ risk information, see #253217.
2.8; Approving bank, mortgage firm, financial holding company holdings, #253223.
2.9; Authorization and notification for mergers/significant asset transfers, #253226.
2.10; Fitness/propriety of management members in financial undertakings, #253227.
2.17; Effective forms of corporate governance for financial holding company, #253238.
2.19; DEN FSA powers re concentration risks in banks/mortgage firms, see #253230.
2.33; Banks/mortgage institutions ESG transition plans and stress testing,#253243.
2.34; Rules on the National Supervision of the ESG Ratings Regulation, see #253244.
2.36; Expansion of participants cooperating in money laundering prevention, #253253.
2.37; Processing lawyer pooled client bank account by financial institution, #253309.
2.42; Establishment of a ESAP for reporting across financial legislation, #253325.
2.46; Requirements for operators of trading venues regarding data quality, #253341.
2.47; Definition of participant in payment/securities settlement systems, #253354.
2.55; Debt buffer requirement for mortgage credit institutions in SIFI group, #253346.
Overview
Act on Establishment of a State Guarantee for Part of Real Estate Credit Agreements in Rural Areas provides a scheme under which consumers in peripheral areas (particularly rural) can obtain financing for real estate credit agreements with a state guarantee.
Scheme is limited to 3 years, guarantees not given for applications after Jul. 1, 2025.
The scheme is administered by DEN FStab and is limited to residential properties with a market price below DKK 8k per square meter, and to residential properties priced between DKK 8k and DKK 10k per square meter if located in certain postal code areas.
Guarantee can cover loans 60%-90% of the property's cash value at the time of sale.
It is proposed that Minister for Industry be authorized to set specific rules regarding square meter price limits, as Act on the Establishment of a State Guarantee for Part of Real Estate Credit Agreements in Rural Areas is also proposed to be made permanent.
Given the long-term perspective of the law, it is considered relevant to allow indexation of the square meter price limits to reflect societal developments.
Bill proposes loan range scheme is expanded, to allows a state guarantee for loans covering between 40%- 90% of a property's cash value at the time of sale.
This proposed expansion will provide greater incentives for mortgage lenders to issue loans under the guarantee scheme, thereby improving the availability of loans.
This is because the increased loan access would move further up the lien priority order, giving mortgage lenders greater security for the loan.
However, expanding LTV range eligible for a state guarantee will increase state's risk.
Under current rules, guarantee fees (provisions) are first used by DEN FStab to cover the administrative costs of the scheme, with the remainder going to the state treasury.
Under the proposed rules, this approach will be changed: 50% of the incoming guarantee fee revenue will go to DEN FStab, and the remaining 50% will go directly to the state treasury, prior to deducting administrative costs.
If DEN FStab faces a shortfall (such as due to low usage of scheme and consequently few fee revenues) state will transfer necessary amount to cover administrative costs.
Any surplus remaining after covering administrative costs will be returned to the state.
A state guarantee scheme for part of real estate credit agreements in rural areas entails a fiscal risk, as the state may incur losses if guarantees are triggered.
Any such losses will be borne by the state.
As part of the proposal to make the scheme permanent, an annual risk premium of DKK 3 million will be allocated in the state budget to support the scheme.
According to budget guidelines section 2.2.15, an upper guarantee limit (i.e., a maximum loan amount under the guarantee) must be set when issuing guarantees.
As a result of the proposed permanent legislation, a guarantee cap of DKK 100 million will be established for the loans covered by the state guarantee.
Citizens will be able to obtain a state guarantee for home purchases in relevant areas after Jul. 1, 2025 which will have positive impact on resale prospects and refinancing.
Effectiveness
Act shall come into force on Jul. 1, 2025, subject to the following.
§ 6, numbers 4, 10, 13, 14, and 52, come into force the day after publication in OG.
§ 5, number 30, and § 6, numbers 3, 5, 7, 8, 18, 20, 23-33, 47, and 49, shall come into force on Sep. 29, 2025.
§ 1, numbers 1, 6, 7, 9, 17, 19, 20, 27, 29-32, 34-36, 54, 55, 58, 59, 61-63, 65, 66, § 170b of the Act on Financial Business, as amended by § 1, numbers 68, 69-75, 77-81, 100, 101, 105, 106, 108, 109, 110, 112, 118, 121, § 4, number 3, and § 5, numbers 3-5, shall come into force on Jan. 1, 2026.
§ 1, numbers 78, 97, and 99, § 2, numbers 12 and 53, § 3, number 42, § 5, number 21, § 6, number 36, § 7, number 11, § 8, number 7, § 9, number 8, § 10, number 8, and § 13, number 1, shall come into force on Mar. 1, 2026.
§ 1, numbers 8, 10-15, 37, 40-48, 51-53, 96, 115, 116, and 119, § 2, numbers 2-12, 14-40, 46-51, 60, 66-73, 75, 81-93, § 3, numbers 1, 4-6, 8-20, 22-33, 36, 41, 44, 48-50, and 61, shall come into force on Apr. 16, 2026.
§ 1, numbers 114, 117, and 120, § 2, numbers 55 and 77, § 3, numbers 54, 55, and 59, § 5, numbers 25, 27, and 31, § 6, number 54, § 7, numbers 16, 17, and 21, § 8, numbers 11, 15, and 19, § 10, numbers 18, 19, and 21, come into force Jul. 2, 2026.
§ 6, numbers 2, 11, 45, 50, and 51, shall come into force on Jul. 10, 2026.
§ 1, numbers 2 and 3, shall come into force on Jan. 1, 2027.
§ 1, number 95, and § 2, numbers 42-45, shall come into force on Apr. 16, 2027.§ 3, numbers 35 and 39, shall come into force on Jan. 10, 2028.
§ 1, numbers 38, 39, 76, and 92, § 2, number 41, § 5, numbers 8, 9, 12, 13, and 18, § 6, numbers 1, 12, 19, 21, 22, and 48, § 7, numbers 5-7, § 8, numbers 3-5, and § 17, number 4, shall come into force on Jan. 10, 2030.
§ 1, numbers 64, 68, and 126, shall take effect from Jan. 1, 2025; transitional provisions apply as set out in the Act.
