Act on Securities Trading (Securities Trading Act)

Part 3. Investment firms

Chapter 9. Application and conditions for authorisation

I. Application, procedural rules and withdrawal

Section 9-1.Authorisation to provide investment services and perform investment activities, as well as ancillary services
(1) Investment services provided to third parties, and investment activities performed on a professional basis, may only be carried out by investment firms authorised to do so by Finanstilsynet, and by credit institutions authorised to provide such services and perform such activities under the Financial Institutions Act. The authorisation shall specify which investment services and ancillary services the undertaking may provide. The investment firm shall apply to Finanstilsynet for approval before it offers ancillary services beyond those specified in the authorisation.
(2) Authorisation pursuant to subsection (1) shall only be granted where the licensing authority deems that the conditions for providing investment services or performing investment activities in sections 9-9 to 9-25 and sections 9-38 to 9-48 are met, and where the organisation of the firm and its relationship with parties with which it has close links is such that the investment firm can be supervised in an effective and satisfactory manner. ‘Close links’ means a situation as defined in the Financial Supervision Act, section 3-3 subsection (3) with associated regulations.
(3) Services as mentioned in section 2-1 subsection (1) nos. 1 to 7 which are provided on a professional basis in connection with partnerships interests as defined in the General and Limited Partnerships Act section 1-2 subsection (1) (a), (b), (c) and (e) and interests in corresponding foreign partnerships, may only be provided by undertakings authorised to provide corresponding investment services under subsection (1).
(4) The provisions of chapters 9 and 10 and regulations pursuant thereto, with the exception of sections 9-32 and 9-33, shall apply equally to the provision of services as mentioned in subsection (3).
(5) The ministry may make regulations to supplement this section.
Section 9-2.Systematic internalisation
(1) Investment firms shall notify Finanstilsynet upon the commencement or cessation of systematic internalisation.
(2) The ministry may make regulations to supplement this section.
Section 9-3.Exemption from the authorisation requirement
(1) The authorisation requirement of section 9-1 and the other provisions of chapters 9 and 10 shall not apply to:
1.Norges Bank (the central bank of Norway),
2.National Insurance Scheme Fund,
3.authorities responsible for public debt management, and institutions established by more than one EEA state to provide financial assistance to members facing substantial economic problems,
4.mutual fund management companies,
5.insurance undertakings,
6.pension funds,
7.depositories of securities funds, pension funds and alternative investment funds,
8.central securities depositories (CSDs) with the exception of the provision of Article 73 of the Regulation on securities settlement and CSDs, see section 1-1 of the Central Securities Depositories Act,
9.managers of alternative investment funds.
(2) Subsection (1) shall apply equally to anyone who:
1.provides investment services in an incidental manner in the course of other professional activity regulated by law or by the profession itself,
2.provides investment services only to companies within the same group,
3.provides investment services only in the course of the administration of employee participation schemes,
4.provides investment services only as mentioned in nos. 2 and 3,
5.provides investment advice only in the course of performing another professional activity, provided that the provision of such advice is not specifically remunerated,
6.does not provide other investment services or perform other investment activities than trading on own account in financial instruments that are not commodity derivatives, emission allowances or derivatives thereof. The authorisation requirement under section 9-1 and the other provisions of chapters 9 and 10 shall nonetheless apply if the undertaking:
a.is a market maker,
b.is a member of or participant in a regulated market or an MTF, or has direct electronic access to a trading venue, see section 9-22, unless it is a non-financial entity that carries out transactions on a trading venue which are objectively measurable as reducing risks directly relating to the commercial activity or liquidity financing of the undertaking or undertakings in the same group,
c.engages in high-frequency algorithmic trading, see section 9-22, or
d.deals on own account when executing client orders,
7.
a.anyone who deals on own account, including market makers, in commodity derivatives or emission allowances or derivatives thereof, except for anyone who deals on own account when executing client orders,

or

b.anyone who provides investment services, except for trading on own account, in commodity derivatives or emission allowances or derivatives thereof, to the clients or suppliers of its main business, provided:
i.that this is, for each of these cases, at the individual level and at the aggregate level, an ancillary activity to their main business on a group basis,
ii.that these persons are not part of a group whose main business is to provide investment services under Directive 2014/65/EU, to perform an activity mentioned in Annex I to Directive 2013/36/EU or to act as market maker in relation to commodity derivatives,
iii.that these persons do not engage in high-frequency algorithmic trading, see section 9-22, and
iv.that these persons upon request report to Finanstilsynet the basis on which they consider that their activity under (a) and (b) is ancillary to their main business,
8.anyone who is a transmission system operator as defined in Article 2(4) of Directive 2009/72/EC or Article 2(4) of Directive 2009/73/EC when the operator carries out its tasks, and any person acting as service provider on the operator's behalf to carry out the operator's tasks, under the said directives or under Regulation (EC) No. 714/2009 or Regulation (EC) No. 715/2009, or under rules or guidelines adopted pursuant to the said framework, and any operator or administrator of an energy balancing mechanism, a pipeline network or a system to keep the supply of and demand for energy in balance. This exemption from the requirement of section 9-1 subsection (1) and the other provisions of chapters 9 and 10 shall apply to persons only where they perform investment activities or provide investment services relating to commodity derivatives for the purpose of carrying out tasks as mentioned in the first sentence. The authorisation requirement of section 9-1 and the other provisions of chapters 9 and 10 shall nonetheless apply to the operation of a secondary market, including a platform for trading in financial transmission rights in secondary markets,
9.anyone who is subject to the emission allowance system under the Greenhouse Gas Emission Trading Act, and who does not provide other investment services or perform other investment activities than trading on own account in emission allowances, unless such person subject to the emission allowance system executes client orders or engages in high-frequency algorithmic trading; see section 9-22,
10.anyone who only provides services as mentioned in section 9-1 subsection (3) to clients who undertake to commit a total investment amount corresponding to no less than NOK 5,000,000, or to professional clients referred to in section 10-6.
(3) The provisions of section 9-23 on algorithmic trading, section 9-24 on direct electronic access and section 9-25 on general clearing members shall nonetheless apply to members of or participants on a regulated market or an MTF who fall within the scope of the exemptions in subsection (1) no. 4, 5, 6 or 9, or subsection (2) no. 7 or 9.
(4) The ministry may make regulations to supplement this section.
Section 9-4.Application of the Act to credit institutions
(1) The following provisions do not apply to credit institutions authorised to provide one or more investment services or to perform investment activities:
1.section 9-6, section 9-7, section 9-9, section 9-10, section 9-11 subsection (2) nos. 1 to 5, and sections 9-12 to 9-15,
2.section 9-18 subsection (2) second sentence,
3.section 9-32 subsections (2) and (3), and section 9-33 subsections (2) and (3),
4.sections 9-39 to 9-49,
5.section 20-2.
(2) Section 9-38 does not apply to credit institutions which are banks, and which only provide investment services as mentioned in the Securities Trading Act section 2-1 subsection (1) no. 1 and no. 5, if the bank is a member of the Norwegian Banks’ Guarantee Fund and does not handle clients’ financial instruments or funds other than arranging settlement.
(3) The ministry may make regulations to supplement this section.
Section 9-5.Application of the Act to the sale of, and advice relating to, structured deposits
(1) The following provisions and regulations pursuant thereto shall apply to investment firms and credit institutions when they sell, or advise clients on, structured deposits:
1.section 9-11, section 9-16 subsection (1) nos. 1, 2, 6 and 8, section 9-19 and section 9-38,
2.sections 10-2 to 10-18 and sections 10-21 to 10-23,
3.chapters 19 to 21
(2) The ministry may make regulations to supplement this section.
Section 9-6.Application for authorisation
(1) Applications for authorisation shall state which of the services mentioned in section 2-1 the undertaking intends to provide. The application shall also include information showing that the statutory requirements of chapters 9 and 10 are met, and other information of significance for assessing whether authorisation should be granted. The licensing authorities may request further information.
(2) The undertaking’s articles of association, programme of operations and internal organisational procedures as mentioned in section 9-16 to section 9-19 shall be enclosed with the application.
(3) Authorisation may only be given after consultation with the authorities of another EEA state where the applicant is:
1.a subsidiary of an investment firm, a market operator or a credit institution authorised in another EEA state,
2.a subsidiary of a main undertaking for another investment firm or a credit institution authorised in another EEA state, or
3.controlled by the same natural persons or legal entities as control an investment firm or a credit institution authorised in another EEA state.
(4) The decision regarding authorisation shall be communicated to the applicant as soon as possible and at the latest six months after the application was received. If the application does not contain the information necessary to decide whether authorisation should be granted, the time limit runs from the date on which such information was received.
(5) The investment firm may commence business as soon as authorisation has been granted.
(6) The ministry may make regulations to supplement this section.
Section 9-7.Modification and withdrawal of authorisation
(1) Finanstilsynet may entirely or in part modify, set new conditions for or withdraw an authorisation to provide investment services or perform investment activities if the investment firm:
1.fails to use the authorisation within twelve months, expressly renounces the authorisation or has ceased to provide investment services or perform investment activities more than six months previously,
2.has obtained the authorisation by using incorrect information or by other irregular means,
3.no longer meets the conditions for the authorisation, including the requirements as to own funds,
4.has seriously or systematically infringed provisions laid down in or pursuant to law, thus giving reason to fear that continuation of the activity may harm the clients of the undertaking, confidence in the securities market or the institutions operating in the market, or
5.fails to comply with an order under section 19-7.
(2) Subsection (1) applies equally to authorisation granted under section 9-8.
(3) When the authorisation no longer applies or is withdrawn, business subject to authorisation requirements shall be wound up. Finanstilsynet shall conduct supervision during the winding-up period and may issue orders concerning the implementation of the winding-up process.
(4) The ministry may make regulations to supplement this section
Section 9-7 a.Appointment of administrator
(1) If the investment firm does not comply with orders issued pursuant to section 9-7 subsection (3) second sentence and this is deemed necessary to safeguard investor interests, Finanstilsynet may appoint one or more administrators to ensure proper winding-up of business subject to authorisation requirements. The same applies if Finanstilsynet has reason to assume that the company will not comply with an order issued pursuant to section 9-7 subsection (3) second sentence and the risk that customers will suffer heavy losses is significantly greater if the appointment is postponed. The assignment shall apply until the business subject to authorisation requirements has been wound up or has been terminated by Finanstilsynet. The administrator shall have the necessary qualifications to carry out the assignment and shall not have any conflicts of interest.
(2) The duties and authority of the administrator shall be determined by Finanstilsynet in each individual case and may include the duties of the manager and the board of directors. It may be stipulated that decisions in certain matters cannot be made without the prior consent of the administrator or the approval of Finanstilsynet.
(3) If the administrator is to take over all or part of the duties and authority of the board of directors, Finanstilsynet shall notify the Register of Business Enterprises that an administrator has been appointed and who this is. The notification must also state which of the board's duties and which authority the administrator has taken over. The notification shall be announced by the Register of Business Enterprises.
(4) The administrator shall regularly report to Finanstilsynet on how it fulfils its assignment. The administrator shall not be liable for any damage caused while performing the assignment, unless the damage is due to intent or gross negligence on their part.
(5) The costs incurred by the administrator shall be covered by the investment firm.
(6) The ministry may make regulations to supplement this provision.
Section 9-8.Right of market operators to operate an MTF or organised trading facility

The ministry may grant a market operator authorisation to operate an MTF or an OTF provided the operator meets the requirements of this Act.