On 31 January 2020 the UK left EU, and in that connection UK and EU entered into a transitional agreement, which includes credit institutions and investment firms from UK being able to continue to provide investment services and activities to customers in Denmark based on EU-regulation until 31 December 2020.
When the transitional period expires, credit institutions and investment firms from UK may not provide investment services and activities in Denmark, unless they have a separate license from the Danish FSA.
There will be no special transition regime for UK credit institutions and investment firms and accordingly they will need to apply for a license to operate as a non-EU/EEA firm from 2021.
Encouragement to send the application before 15 October 2020
If credit institutions and investment firms from the UK want to continue to be able to do business with and provide investment services in Denmark to Danish eligible counterparties and per se professional clients after the expiration of the transitional period, the company must apply to the Danish FSA for a license in accordance with section 33 of the Danish Financial Business Act on the possibility for such companies from a country outside EU/EEA to be active in Denmark in relation to certain customer groups.
"Eligible counterparties" will typically be investment firms, credit institutions and other financial institutions authorized or regulated under EU law or under the national law of a Member State, and "professional clients" are clients who possess the experience, knowledge and expertise to make their own investment decisions and properly assess the risks that they incur. Since section 33 of the Danish Financial Business Act only includes eligible counterparties and professional clients, it will not be possible for a UK company to do business with and provide investment services in Denmark to retail clients.
On 14 September 2020 the Danish FSA has published an encouragement to send applications for a license pursuant to section 33 of the Danish Financial Business Act before 15 October 2020 to ensure that the Danish FSA can assess the application before the end of the transitional period.
For international finance groups, the alternative to applying is to perform these activities and possibly even more activities in Denmark from a group company within EU/EEA including the possibly to establish such a company in Denmark.
Application form to use by credit institutions and investment firms
Our team has significant experience with structuring financial companies' activities and products in Denmark, and we are happy to assist with counselling on handling this situation.