Danish Corporate

Finance Laws 2013

CONTENTS
1

PREFACE

INTRODUCTION

THE COMPANIES' ACT

THE FINANCIAL STATEMENTS ACT

THE SECURITIES TRADING, ETC. ACT

THE ADMISSION REQUIREMENTS ORDER

THE PROSPECTUS ORDER ("MAJOR" OFFERS)

THE PROSPECTUS ORDER ("MINOR" OFFERS)

THE EC REGULATION ON PROSPECTUSES

10

THE MAJOR SHAREHOLDERS ORDER

11

THE TAKEOVER BIDS ORDER

12

THE EC DIRECTIVE ON TAKEOVER BIDS

13

THE EC REGULATION ON BUYBACK PROGRAMMES AND STABILISATION

14

ORDER ON THE ISSUER'S DUTY TO PROVIDE INFORMATION

15

THE MARKET ABUSE ORDER

16

ORDER ON REPORTING OF TRASACTIONS IN SECURITIES

17

ORDER ON THE PRODUCTION AND DISSEMINATION OF CERTAIN INVESTMENT ANALYSES

18

RULES FOR ISSUERS OF SHARES - NASDAQ OMX COPENHAGEN A/S

19

CORPORATE GOVERNANCE RECOMMENDATIONS

20

THE COMPETITION ACT

21

MEMO ON DANISH (AND EU) MERGER CONTROL

22

INTRODUCTION TO DANISH TAX LAWS RELATED TO TRANSFERS OF ASSETS OR

SHARES AND REORGANISATIONS

23

MEMO ON HUMAN RESSOURCE ISSUES RELATED TO TRANSFER OF SHARES AND ASSETS

24

MEMO ON ACQUISITION FINANCE

25

INSTITUTIONS - CONTACT DETAILS

DANISH CORPORATE FINANCE LAWS 2013

PREFACE
The Danish market for corporate market transactions has been and is significantly impacted by the repercussions of the financial crisis, although the market has recently shown signs of recovery. In the private M&A market, many structured sales processes have been abandoned and others have resulted in
transactions in which the seller has maintained a significant stake. Deal activity was not least constrained due to the huge economic uncertainty facing businesses creating difficulties in predicting with
any certainty revenues and results for the coming 12 months, let alone attaching a fair value to them.
However, the market is showing signs of slow recovery. In the first part of 2013, a number of PE exits
have taken place. Also, an IPO is now being seriously considered again by a number of PE funds as a
(partial) exit possibility.
Considering the overall market, Plesner's corporate finance practice had a good past 18 months. We
acted in a total of 59 Danish (or Denmark related) M&A transactions, as reported to Mergermarket.
Plesner had significant involvement in most of the large transactions that occurred during this period,
including Montagu's divestment of Unifeeder, Advent's acquisition of KMD and the sale of Tiger to EQT.
In the same period, we assisted major clients with significant listings of various types of debt instruments.
Thus, Plesner is continuing to be the law firm (since 1 January 2004) credited with more significant
Danish M&A transactions than any other law firm.
Nearly all cross-border transactions involving Danish companies are documented and negotiated in the
English language. However, as the relevant Danish legislation is written in Danish, the need for common
terms of reference arises. To meet this need, we have since 1998 published or updated this publication,
which includes English translations of the most important Danish laws and regulations of relevance to
corporate finance transactions, as well as a brief introduction to the subject. It is our hope that this
book may serve as an efficient tool for our foreign clients in connection with Danish corporate finance
transactions.
Whilst this book provides an overview of Danish legislation pertaining to corporate finance, it is no substitute for detailed legal advice in relation to any particular transaction, and the book should not be acted or relied upon in any specific situation without appropriate legal advice. Plesner has no responsibility
for the contents of this book and does not make any warranty, express or implied, regarding the contents.
The contents of this book are up to date to 1 June 2013.

We gratefully acknowledge the assistance we have received from the Danish Financial Supervisory Authority, NASDAQ OMX Copenhagen A/S, the Danish Business Authority and the Danish Competition and
Consumer Authority for letting us use their translations into English of the various Danish corporate finance laws and regulations.
Plesner is one of the largest commercial law firms in Denmark with more than 200 lawyers. Plesner's
M&A and Corporate Finance practice group deals with a broad spectrum of transactions, including crossborder mergers and acquisitions, takeovers, bids and trading in, as well as offerings and issues of, securities, restructuring and the establishment of joint-ventures. Our clients are mainly investment banks,
corporations and financial investors.
PLESNER
Corporate Finance
Copenhagen
1 July 2013

I NTRODUCTION

Danish corporate finance regulations do not consist of a single set of regulations or

a "corporate finance" code. The regulations applicable to companies and corporate
finance transactions are set out in a variety of acts and executive orders, as well as
EU legislation in the form of directives implemented in Danish law and regulations
directly applicable in Denmark. Further, companies and corporate finance
transactions are subject to practice in the Danish corporate finance market. The
most important acts, executive orders and EU legislation are the following:
Companies Act,
etc.

The provisions concerning the incorporation and organisation of public limited

companies and private limited companies are organised under and subject to the
provisions of the Companies Act (Chapter 3). The Companies Act was adopted on
12 June 2009 and entered partly into force on 1 March 2010. On 1 March 2011 all
provisions except for provisions relating to an electronic shareholders' register,
which are awaiting the implementation of a new IT-system at the Danish Business
Authority, have entered into force.
A number of other types of corporate entities exist in Denmark. In the context of
the organisation of Danish businesses, the most important of these other types is
commercial foundations.

Financial
Statements

Public limited companies, private limited companies and commercial foundations

are subject to the Financial Statements Act (Chapter 4), setting out statutory
accounting principles. The statutory accounting principles are supplemented by the
guidelines in the Danish Accounting Standards issued by the Danish Institute of
State Authorised Public Accountants (FSR), as well as the International Accounting
Standards.

Securities
Regulation

The Securities Trading, etc. Act (Chapter 5) is the principal regulatory

instrument with respect to trading (whether on a regulated market or not), and
registration of securities. The act lays down the general provisions concerning
requirements for offering of securities, offering of securities listed on a regulated
market (a stock exchange or an authorised market place), disclosure requirements,
including major holding notifications, mandatory and voluntary takeover bids and
prohibition against abuse of inside information and price manipulation (market
abuse). Additionally, the Securities Trading, etc. Act contains the provisions and
regulations related to stock exchange business, authorised market place business,
and clearing business.

The Securities
Trading, etc. Act
and Executive
Orders

Several important and detailed executive orders have been issued by the Danish
Financial Supervisory Authority pursuant to the Securities Trading, etc. Act: The
Admission Requirements Order (Chapter 6) sets out the requirements applicable
to the listing of securities on a regulated market. The Prospectus Order ("Major"
Offers) (meaning admission of securities to listing or trading and public offer of
securities with a value of more than EUR 5 million) (Chapter 7) deals partly with
the exemptions from the obligation to publish a prospectus, and partly with the
format and contents of a prospectus, in order to ensure that the information given
to investors about the issuing company and the securities is correct, complete and

not misleading. Importantly, the format and contents of such a prospectus is now
regulated in detail by the Prospectus Regulation, as defined further below. The
Prospectus Order ("Minor" Offers) (Chapter 8) contains similar prospectus
requirements with respect to public offering of unlisted securities having a value
between EUR 1 million and EUR 5 million. There are no prospectus rules regarding
offers of unlisted securities of a value below EUR 1 million.
The Prospectus
Regulation

The Commission Regulation (EC) No. 809/2004 of 29 April 2004 as amended by EC

Regulations 1787/2006 and 211/2007 (on complex financial history), and EU
Regulations 486/2012 and 862/2012 (the "Prospectus Regulation") is contained in
Chapter 9.

Stake-building

The Major Shareholders Order (Chapter 10) supplements the Securities Trading,
etc. Act which contains provisions requiring holders of listed shares to notify the
Danish Financial Supervisory Authority and the company whenever certain
thresholds of either voting rights or share capital ownership stake are exceeded or
no longer exceeded. The Order itself contains provisions relating to the calculation
of major holdings and the notification thereof.

Takeover Bids
Order

The Takeover Bids Order (Chapter 11) supplements the provisions in the
Securities Trading, etc. Act with respect to the obligation to submit a mandatory
bid and the content hereof, and also contains provisions applicable to a voluntary
public takeover offer.

Buy-Back
Programmes and
Stabilisation

The EC Regulation on Buy-Back Programmes and Stabilisation No. 2273/2003

of 22 December 2003 (Chapter 13) is directly applicable in Denmark, and it
contains provisions regulating and implementing the exemptions for share buy-back
programmes and stabilisation of financial instruments.

Disclosure Obligations for Listed

Companies

Pursuant to the Securities Trading, etc. Act and the Executive Order on the Issuers Duty to Provide Information (Chapter 14) , a listed company must disclose information concerning the company that, if such information was made public, would be likely to have a significant effect on the value of its shares. Such information must be made public as soon as possible. However, the board is, at its
own responsibility, entitled to postpone the disclosure of inside information, provided that the postponement is in the interest of the company, and that the inside
information is not and has not been leaked in whole or in part to an unauthorised
person or to the press.

Rules Governing
Securities Listing
on NASDAQ OMX
Copenhagen A/S

The Securities Trading, etc. Act authorises the board of a company operating a
regulated market to issue supplementary provisions on terms and conditions for
admission of securities to trading or listing, the contents of prospectuses and disclosure obligations. Pursuant to such authority, NASDAQ OMX Copenhagen A/S,
which is currently the only stock exchange in Denmark, has issued the Rules for
Issuers of Shares on NASDAQ OMX Copenhagen A/S (Chapter 18).

Corporate
Governance

The Recommendations for Good Corporate Governance (Chapter 19) contain

"soft law" recommendations, and are primarily directed towards listed companies
and companies aiming to obtain a listing through an initial public offering. It is the
intention of the Committee on Good Corporate Governance that the recommendations will also prove to be an important tool for other non-listed enterprises in

whole or in part.
Antitrust

All mergers, acquisitions and joint ventures must comply with Danish competition
law and EU competition law. Danish competition law is to a large extent based on
comparable EU competition law.

Merger Clearance

Mergers, acquisitions and joint ventures, where the combined aggregate turnover
in Denmark of all the undertakings concerned exceeds DKK 900 million, will in
many cases be subject to the prior approval of the Danish Competition Authority in
accordance with the Competition Act (Chapter 20). Chapter 21 contains a Plesner
memorandum Memo on Danish and EU Merger Control.

Tax

There exists no single set of regulations or codes regulating tax issues in

connection with mergers, acquisitions or other capital market transactions.
However, included in Chapter 22 is a Plesner memorandum on Introduction to
Danish Tax Laws related to transfers of assets or shares and reorganisations.

Human
Issues

Resource A Plesner memorandum on Human Resource Issues Related to Transfer of Shares

and Assets is included in Chapter 23.

Acquisition
Finance

Included in Chapter 24 is a Plesner memorandum Memo on Acquisition Finance.

Impact of EU
Legislation

EU legislation has a material impact on the regulation of Danish corporate finance

laws and regulations. Danish law on companies, financial statements, securities
regulation, antitrust regulation, labour market regulation, etc. contains
implemented EU legislation. In addition, a number of EU regulations have direct
applicability in Denmark. In this guide, references are made to material applicable
EU legislation where we have deemed it relevant.

Plesner Danish Corporate Finance Laws contains general and introductory

information on the following subjects:
1

CORPORATE STRUCTURES ................................................................. 4

REGULATION OF PUBLIC LIMITED COMPANIES (A/S).............................. 5

COMMERCIAL FOUNDATIONS ........................................................... 13

FINANCIAL STATEMENTS ................................................................. 14

EXCHANGE AND INVESTMENT CONTROL............................................. 16

LABOUR MARKET............................................................................ 16

COMPETITION RULES ...................................................................... 18

MERGERS AND ACQUISITIONS ......................................................... 19

PUBLIC TAKEOVERS........................................................................ 23

10

COMPULSORY ACQUISITION OF MINORITIES (SQUEEZE-OUT) ............... 33

11

INSIDER DEALING AND MARKET MANIPULATION ................................. 33

12

FINANCIAL ASSISTANCE ................................................................. 36

13

PUBLIC OFFERINGS OF SECURITIES .................................................. 38

14

INSTITUTIONS............................................................................... 40

CORPORATE STRUCTURES

Public and Private

Companies

Commercial businesses in Denmark are most commonly organised as either public

limited companies ("Aktieselskaber" or "A/S") or private limited companies
("Anpartsselskaber" or "ApS").

Other Corporate
Structures

Business is also carried out in co-operative limited companies ("Andelsselskaber

med begrnset Ansvar" or "AmbA"), commercial foundations ("erhvervsdrivende
fonde"), partnerships ("Interessentskaber" or "I/S"), limited partnerships
("Kommanditselskaber"
or
"K/S"),
and
partnerships
limited
by
shares
("Partnerselskaber" or "P/S").

Minimum Share
Capital

An A/S must have a minimum share capital of DKK 500,000, while an ApS must
have a minimum share capital of DKK 80,000. At least 25% of the share capital
must be paid upon subscription of the shares, however at least DKK 80,000
(meaning that for an ApS this provision will only be relevant if the ApS has a share
capital of more than DKK 80,000 and only has full effect if the share capital is at
least DKK 320,000). The possibility to pay in 25% applies to the nominal value only
and to cash contributions only. Accordingly, any share premium agreed in
connection with a cash subscription of capital (whether at the time of foundation or
a subsequent capital increase) and contributions made in kind must be paid in full.
The share capital may be stated and paid up in Euro provided that the amount in
Euro is equivalent to the minimum amount required in DKK as at the date of the
decision to incorporate the company.

Amendments to
the Danish
Companies Act

In the end of February 2013, the Minister of Business and Growth submitted a bill
to amend the Danish Companies Act. The bill mainly contains technical
adjustments, however some significant amendments have been proposed, including
reduction of the minimum capital requirement for an ApS from DKK 80,000 to DKK
50,000, introduction of entrepreneurial companies ("Ivrkstterselskaber" or
"IVS") with a share capital of DKK 1, and optional partial payment of premium in
an ApS. The bill was finally adopted on 16 May 2013, and the Danish Business
Authority is authorised to decide when the Act is to enter into force, which has not
been determined yet.

A/S and ApS

Differences

The Companies Act differentiates between an A/S and an ApS in various areas, with
the underlying principle that an ApS is less regulated and in consequence has a
higher contractual freedom, including:

An A/S must have a management system with a board of directors

("bestyrelse") consisting of at least three (physical) persons and with a management board ("direktion") consisting of one or more members undertaking
the day-to-day operations; or a supervisory board ("tilsynsrd") consisting
of at least three (physical) persons and a management board ("direktion").
Members of the management board may serve as members of the board of
directors, but cannot hold the position of chairman or deputy chairman of the
board of directors. In addition, the majority of the members of the board of
directors cannot be members of the management board in the company as
well. In companies with a supervisory board, members of the management
board cannot be members of the supervisory board. In contrast hereto, an
ApS may have a one-tier management system consisting of a management
board only, unless the employees are entitled to representation on the
board, in which case the ApS is also required to have a board of directors or
a supervisory board (see below for provisions related to board representation). When the word "board" is used in this introduction, it covers board of
directors as well as supervisory board.

An ApS cannot allot bearer shares and the shares in an ApS cannot be listed
on a stock exchange or other regulated markets.

The A/S is the most common limited liability company for large businesses in
Denmark. In practical terms most businesses likely to be interesting to a foreign
entity considering making an acquisition in Denmark are incorporated as an A/S.
However, subsidiaries of US companies will often be (re)incorporated as an ApS for
tax purposes, as we understand that an ApS can "check-the-box" for US income tax
purposes, whereas this is not the case for an A/S.
This introduction to Danish Corporate Finance Laws deals primarily with the
provisions and regulations governing the A/S.

2
Public Limited
Company

REGULATION OF PUBLIC LIMITED COMPANIES (A/S)

The A/S is a limited liability company, ownership of which is conferred by the

holding of issued shares. Equal rights are attached to all shares, unless the

company is incorporated with or subsequently resolves to have more than one class
of shares. If so, the articles of association shall set out the different rights of the
share classes. Shares carrying weighted preferential voting rights are often
designated as "A" shares, while ordinary shares (one share one vote) are referred
to as ordinary "B" shares. Shares in an A/S may be issued as either registered or
bearer shares. It is also possible to have shares without any voting rights.
Registered shares may in the articles of association be subject to restrictions on
the transferability or conditions with respect to compulsory acquisition.
Share Certificates

The central governing body of the company may decide that share certificates shall
be issued. If the shares are traded on a regulated market, share certificates cannot
be issued. Shares in an A/S traded on a regulated market must be issued
electronically and registered with VP SECURITIES A/S ("Vrdipapircentralen"). If
the company has already issued share certificates, the company may resolve to
withdraw and annul the share certificates after having given three months' notice
by an announcement to the shareholders. The shareholders cannot exercise any
other rights than the right to receive dividend and other payments from the
company and subscribe for newly issued shares pursuant to the statutory preemption right (if not waived by qualified majority by the general meeting) until the
share certificates have been returned to the company. This, however, does not
apply to negotiable shares or bearer shares.

Shareholders'
Register

Companies must maintain a shareholders' register containing details of the owners

of registered shares. Further, it may also include details concerning the owners of
bearer shares, in order for allowing notices of general meetings and copies of the
company's annual reports to be sent to the current shareholders. The transferee of
a registered share may not exercise the rights as shareholder unless the
transferee's name has been recorded in the register of the shareholders, or the
transferee has notified the company of its acquisition and proven its title (which
limitation shall, however, not apply to the right to receive dividend and other
payments from the company, or the right to subscribe for newly issued shares
pursuant to pre-emption rights). Entry into the shareholders' register does not
affect the legal status of bearer shares or change the requirements for their
transfer. Shareholders have the right to vote on the basis of newly acquired shares
at any subsequent general meeting. In listed companies the right to vote is
determined based on the shareholdings at the registration date, being one week
prior to the general meeting. Further, the articles of association may provide that
shareholders are required to notify the company that they will attend the general
meeting no later than three business days before the date of the meeting.
Shareholders must report to the company when their ownership of either share
capital or voting rights in the company reach 5%. Further, any changes in an
existing ownership whereby thresholds of 5, 10, 15, 20, 25, 50, 90 and 100% as
well as 1/3 and 2/3 of the company's share capital or voting rights are reached or
no longer reached must be reported. Once the new IT-system of the Danish
Business Authority has been implemented and the applicable provisions of the
Companies Act have entered into force, the company must file the information with
the public ownership register administered by the Danish Business Authority.
Details concerning the owners of bearer shares corresponding to less than 5% of
the share capital or voting rights in the company must also be registered, when the
system has been implemented). The public will hereafter have access to detailed

information about the ownership and voting rights of all companies, even though
the actual shareholders' register will not be publicly available.
Listing

Shares in an A/S can be listed on NASDAQ OMX Copenhagen A/S, another

regulated market or on an alternative market. Shares of all listed companies must
be freely transferable. Shares listed on NASDAQ OMX Copenhagen A/S are
registered, and transfers are settled, through the VP SECURITIES A/S
(Vrdipapircentralen). If an A/S is listed, all or some classes of shares in the
company may be listed, and it is not required to obtain a listing on NASDAQ OMX
Copenhagen A/S for all classes of shares. However, if a class of shares is listed, all
shares within such class of shares must be listed.

Voting, Ownership
and other
Restrictions

Provisions may exist in the articles of association of Danish companies limiting the
number of votes a single shareholder can exercise at general meetings to a
specified percentage of the issued share capital, irrespective of such shareholder's
total shareholding (absolute voting restrictions). Some companies listed on
NASDAQ OMX Copenhagen A/S have adopted such absolute voting restriction,
which primarily works as a defence mechanism.
An alternative absolute restriction is an absolute ownership restriction, which limits
the total number of shares that a single shareholder can own. The articles of
association may also restrict any shareholder from acquiring shares in excess of a
defined threshold without consent from the company's governing body or others.
In each of these circumstances, unsolicited takeover bids are less likely to succeed.
Unless otherwise stipulated in the articles of association (which will, indeed, often
be the case), shares held by associates or persons acting in concert with a
particular shareholder will not be treated as part of a single holding. However, the
voting rights of shares held by a company, which a person controls, will be
included
when
calculating
the
ownership
thresholds
determining
the
abovementioned reporting obligations.

A and B Shares
and Foundations

In several large companies listed on NASDAQ OMX Copenhagen A/S, the original
owners have retained high-voting class A shares in the company and only made
low-voting ordinary class B shares available to the public in the initial public
offering. A shares are sometimes owned by a commercial foundation ("fond"),
which may be restricted by its charter from freely disposing of the A shares.
Control of the company is therefore due to remain with the foundation, unless and
until the foundation wishes and obtains permission to amend its charter. Over the
recent years some of the large commercial foundations have obtained permission
to amend their charters.
In practice, the charter of commercial foundations holding shares in listed
companies is one of the most important (defensive) structures preventing
takeovers of Danish listed companies, although its popularity has declined as a
result of objections from institutional investors and corporate governance reforms.
Reference is made to the comments on the Takeover Directive.

Shareholders'
Agreement

An alternative defence against unsolicited offers for a listed company is a

shareholders' agreement. Shareholders' agreements may for example contain

10

transfer restrictions related to the exercise of voting rights, require that the
transfer of shares (possibly beyond a certain percentage) is subject to the prior
approval of the other parties or the board, or contain provisions on tag-along or
drag-along rights or pre-emptive rights. However, shareholders' agreements are
not binding on the company. Consequently, such defensive measures must be
included in the articles of association if the provisions are to be directly enforceable
against the company and third parties.
Transfer of Shares The transfer of shares in an A/S is regulated by the articles of association of the
company and/or a shareholders' agreement between the shareholders of the
company. The articles of association and/or a shareholders' agreement of an
unlisted company will often contain a pre-emption right (right of first refusal) for
existing shareholders when shares are transferred. Such provisions must also be
contained in the articles of association in order to be enforceable against the
company and third parties. For registered shares, the articles may also require that
the board approves any transfer before the transfer can be registered in the
shareholders' register. If so, the board is required to make the decision promptly
and if no notification is given within four weeks, consent is deemed granted. Such
provisions constitute a considerable obstacle to the acquisition of an unlisted
company where the support of the board of the target company is not forthcoming,
but if the majority of the shareholders wish to sell, the board can be replaced.
Breakthrough
Provisions of the
Takeover
Directive

The so-called breakthrough provisions of the Takeover Directive have been

implemented in the Companies Act. However, the provisions only apply where a
company has adopted the breakthrough provisions, which no listed company has
done so far. Accordingly, the provisions are not expected to have significant
practical implications.

Shareholders'
Decisions

According to the Companies Act, all business transacted at general meetings is

determined by simple majority of votes in the absence of any provision to the
contrary in the Companies Act or the articles of association. For example the
company's board is elected by simple majority (except for employee elected
members, who are appointed by the employees of the company and any Danish
subsidiaries, see further below). A simple majority accordingly provides a sufficient
majority operational control through the election of (all) shareholder elected board
members of the company, unless the articles of association provide otherwise.

Amendment
of Articles of
Association

Amending the articles of association requires a 'double' qualified majority of

shareholders in favour of the resolution holding two thirds of the share capital
represented at the general meeting, and two thirds of the votes casted (this double
requirement is important in companies with different classes of shares carrying
different voting rights). According to the Companies Act, certain amendments such
as those which restrict the free transferability of shares, or the right of
shareholders to receive dividend or capital distributions, must be adopted with a
higher qualified majority ranging from 9/10 to the consent from all affected
shareholders. For example, any resolution to increase the liabilities of the
shareholders towards the company must be adopted with the consent of all
shareholders whose liabilities are so increased. The stipulated majority
requirements are minimum requirements pursuant to the Companies Act. It is not
unusual for the articles of association to impose stricter qualified majority
requirements on some or all types of resolutions.

11

Where an amendment of the articles of association is proposed which would impair

the rights attached to a particular class of shares, the consent of two thirds of the
represented shareholders within this class is required at the general meeting.
The Companies Act contains a further restriction on the power of shareholders at
general meetings; namely, that no resolution passed at a general meeting may be
passed if its prima facie effect would be to confer on certain shareholders or third
parties an unfair advantage over other shareholders or the company. A similar
restriction applies to actions that can be taken by the board of a Danish company.
Increase
of Capital

A resolution to increase the issued share capital of a company requires the same
majority as an ordinary amendment to the articles of association, unless a higher
majority is required by the articles of association or unless the new shares are
subscribed for at a discount and the existing shareholders do not hve a preemption right. Existing shareholders have a statutory pre-emption right to
subscribe for newly issued shares, if the shares are to be paid up in cash (but not if
the shares are paid by conversion of debt or in kind). This pre-emption right can be
rescinded by a shareholders' resolution with the same majority as is required to
adopt the capital increase (unless special majority provisions apply). Unless
specifically authorised by the general meeting adopting the capital increase, new
shares can only be subscribed for against cash payment. Where shares are to be
paid up otherwise than in cash or conversion of debt, generally, the consideration
paid to the company must be appraised. The board may be authorised by the
shareholders to issue and allot new shares under certain conditions, during a
period of up to five years from the shareholders' decision on the authorisation. The
subscription price per share cannot be less than the share's nominal value and
minimum 25 % of the nominal value together with the full share premium (if any)
must be paid up in connection with the subscription.

Management

An A/S is managed by a board of directors ("bestyrelse") or a supervisory board

("tilsynsrd") consisting of at least three (physical) persons and by a management
board ("direktion") consisting of one or more (physical) persons. The board is
appointed by the general meeting with a simple majority, and may include persons
who are not residents of Denmark. The management board is appointed, and may
be removed, by the board of directors or the supervisory board. In companies with
a board of directors, the management board is responsible for the day-to-day
conduct of the company's business, but is subject to control by the board of
directors. One of the principal obligations of the board of directors is to consider
from time to time whether the financial position of the company is sound in the
context of the company's operations. Any action outside the company's ordinary
course of business must normally be sanctioned in advance by the board of
directors. The supervisory board has more limited powers than the board of
directors. The supervisory board does not have any influence on the business of
the company, but is purely a supervisory organ, monitoring that the management
board fulfils its obligations. A member of the management board cannot be a
member of the supervisory board.

Gender equality

The Danish Parliament recently adopted a bill with the aim to create a more equal
share of men and women on the boards of directors of Danish companies. The bill
introduces new provisions in the Danish Companies Act and the Danish Financial

12

Statements Act, pursuant to which, inter alia, listed companies and large
commercial enterprises are required to set target figures and to prepare a policy
for gender equality in order to increase the share of the underrepresented gender
at companies' management levels in general. The companies must also report on
the status of fulfilment of these requirements in their annual reports. The new
requirements entered into force on 1 April 2013 and the reporting obligation is
applicable for financial years starting on 1 January 2013 or later.
Rules of
Procedure

The company's board is obliged to adopt specific rules of procedure relating to the
performance of its duties.

Employee Board
Representation

If a company has employed an average of at least 35 employees during the

previous three years, the employees are entitled to elect from amongst themselves
a number of members to the board. The employees may elect up to one third of
the total number of members and at least two members. An employee elected
member has the same powers, rights and duties as any other member of the board
of the company, but - subject to the continuous employment of the elected
employees - the shareholders cannot remove him or her during his/her four-year
term of election.

Board Members'
Liability

Formerly, Danish courts were reluctant to render board members liable for exercise
or lack of exercise of their powers and duties unless clear specific duties had been
breached. However, the trend appears to be moving towards a stricter liability for
board members. On 11 June 2004 the Supreme Court delivered a judgment holding
a board member liable for the losses of the company's creditors caused by the
board member's negligent behaviour, including the lack of taking adequate and
necessary actions in order for the board member to comply with his duties as a
board member. A Supreme Court judgment of 15 December 2004 held a board
member liable for damages for negligent failure to observe his duty to ensure that
there was substance in a specific investment project, subsequently revealed to be
worthless to the project investors. On 22 November 2006 the Supreme Court held
board members as well as management liable for breach of their duties to monitor
the company's financial situation and monitor the general affairs of the company.
The company had been operated in a way that the Supreme Court characterised as
clearly irresponsible, and the board members were ordered to pay damages to the
company. In another case on 14 May 2007, the Supreme Court ruled that a number
of members of the board of directors failed their duty to secure an equal division of
assets between the company's creditors in the event of bankruptcy. As a result of
this negligence the board members were held liable for losses incurred by the
creditors.

Board Duties

A summary of the duties of the board and the management will necessarily be
incomplete, as much will depend on the company's specific circumstances and the
situation from time to time. However, the duties of the board generally include:

To consider whether the company's capital resources are appropriate considering the company's business at any time.

To adopt rules of procedure that must include, among others, provisions regarding the frequency of board meetings, voting procedures and constitu-

13

tion.

To adopt guidelines for the allocation of specific duties between individual

board members and any delegation of responsibility.

To adopt guidelines for bookkeeping, maintenance and safekeeping of books

and records as required by law, to follow up on plans, budgets, major transactions, insurance cover, financing, cash-flow and special risks and also frequently review and consider the auditors' minutes (reports to the Board) and
review interim/quarterly accounts as well as consider any discrepancies from
the budget for the relevant period and/or to instigate specific investigations
if the situation so requires.

To organise accounting, internal checks and controls.

To provide a statement on the annual report.

The board must ensure that it receives the information necessary for the board to
fulfil its duties, and the board is obliged to provide the auditor(s) with the
information considered important and necessary for the audit of the company.
The board of directors must further provide instructions to the management board,
which are commonly set out in written specific management instructions (where the
supervisory board shall only ensure that management conducts its duties properly),
perform the overall management duties and strategic management and ensure
proper organisation of the company's business.
Conduct of
Meetings of the
Board of Directors
and Supervisory
Board

Certain specifically defined board matters may be conducted in writing if it is

compatible with the nature of such matters. Meetings of the board may further be
held by use of electronic media (electronic meeting of the board), if consistent with
the performance of the duties of the board. However, a board member or a
member of the management board may at any time request that an oral discussion
takes place.

General Meetings
and Electronic
Communication

The shareholders' right to make decisions concerning the company shall be

exercised at the general meeting(s), which normally are to be held at the
company's registered address. Every shareholder is entitled to attend general
meetings and every shareholder has the right to speak at general meetings. A
shareholder who is prevented from attending a general meeting may vote by proxy
or - in listed companies - by postal vote. It is possible for a company to allow
shareholders to attend and vote at general meetings electronically, i.e. without
physical attendance. Depending on further requirements to be fulfilled pursuant to
the Companies Act, the general meeting may be held partially or completely as an
electronic general meeting.
Furthermore, a company may resolve to use electronic exchange of documents and
electronic mail in its communication with shareholders instead of submission or
presentation of papers.

Recommendations
for good

The Committee on Corporate Governances recommendations from 6 May 2013

comprise recommendations, which are primarily aimed at Danish listed companies,

14

Corporate
Governance

within the five subjects mentioned below.

Communication and interaction by the company with its investors and other stakeholders. The Committee recommends that the shareholders' exercise of ownership
is facilitated and strengthened by the use of information technology and
authorisations. Further, it is recommended that the board adopts a policy regarding
the company's relationship with its stakeholders and ensures that the interests of
the stakeholders are respected in accordance with the company's policy. Also, it is
recommended that companies publish quarterly reports. Finally, it is recommended
that the board refrains from countering takeover bids on its own initiative.
Tasks and responsibilities of the board of directors. The Committee recommends
that the board establishes procedures for how the management reports to the
board, and that the board ensures relevant diversity at management levels. Also, it
is recommended that the board ensures that the company has a capital and share
structure ensuring that the strategy and long term value creation of the company
are in the best interest of the shareholders and the company. Moreover, the
Committee recommends that the board adopts a corporate social responsibility
policy.
Composition and organisation of the board of directors. The Committee recommends that the board is composed so that it is able to execute its strategic managerial and supervisory tasks in an effective manner and in a constructive and qualified dialogue with the management. Additionally, it is recommended by the Committee that the board regularly assesses whether its composition, including as regards diversity in relation to gender and age, and the skills of its members, individually and collectively reflect the requirements of the company's situation and
conditions. The Committee recommends, inter alia, that information concerning the
candidates and the recruitment criteria is made available for the shareholders when
election is on the agenda at the general meeting. The board must always act independently of special interest, and it is recommended that at least half of the members of the board are independent.
It is also recommended that the board establishes an evaluation procedure where
contributions and results of the board and the individual members, as well as collaboration with the management are annually evaluated. Further, the Committee
recommends that the board at least once a year evaluates the work and performance of the management in accordance with predefined clear criteria, and that
the management and the board establishes a procedure according to which their
cooperation is evaluated annually.
Finally, the Committee recommends that the board appoints (i) an audit committee,
(ii) a remuneration committee to evaluate the remuneration policy in general and
the remuneration of the board and the management board and (iii) a nomination
committee to establish the necessary qualifications of members of the board and
the management and assess the overall structure of the management of the company.
Remuneration of management. The Committee recommends that the total remuneration be competitive and reasonable, and that the board establishes a remuneration policy, which is approved by the general meeting and published on the com-

15

pany's website, and that information regarding the total remuneration granted to
each member of the board and the management is disclosed in the annual report.
Moreover, it is recommended that incentive pay programmes are transparent and
based on actual achievements over a period of time with a view to long-term value
creation.
Financial reporting, risk management and audits. The Committee recommends that
the board ensures effective risk management and effective internal controls. It is
recommended that the board reviews and accounts for the most important strategic
and business-related risks, risks in connection with the financial reporting as well
as for the companys risk management. It is recommended that the management
regularly identifies the most important risks and reports to the board about the developments in the most important risk areas.
Soft Law/
The Committee's recommendations are not legally binding, which complies with the
Comply-or-Explain recommendations by the European Commission of May 2003 and October 2004.
However, the European Commission recommended that the annual reports of the
listed companies should contain a description of the listed companies' corporate
governance structures, practice and compliance or non-compliance with a relevant
code of conduct (the "comply-or-explain" principle). The "comply-or-explain" principle applies to Danish listed companies, as NASDAQ OMX Copenhagen A/S has implemented the recommendations into the disclosure requirements contained in the
Rules for Issuers of Shares on NASDAQ OMX Copenhagen A/S. Further, the principle is laid down in the Financial Statements Act.

3
Commercial Foundations

COMMERCIAL FOUNDATIONS

A foundation has no shareholders or owners but only beneficiaries and is based on

a charter ("fundats" or "vedtgt"), which sets out the objects of the foundation,
the way in which the foundation shall be administered by the board of the foundation, the way in which the board is elected (often by itself) as well as how the
board shall apply its means by distribution to the beneficiaries of the foundation.
Foundations engaged in commercial activities are so-called commercial foundations
("erhvervsdrivende fonde") and are governed by The Act on Commercial Foundations, which includes a number of provisions similar to the ones applicable to Danish public limited companies (A/S) set out in the Companies Act. There are significant Danish listed companies controlled by such commercial foundations, e.g.
Carlsberg.

Amendment of the A question of particular interest when dealing with commercial foundations is
Charter
whether or not and to what extent it is possible to amend the charter of the foundation. In this respect the Act on Commercial Foundations provides that, following
an application from the board of the foundation, the public body with authority to
supervise foundations ("Fondsmyndigheden") can recommend and approve
amendments to the provisions of the charter with the ultimate approval from the
Ministry of Justice. In recent years administrative practice has in some cases allowed amendments of the objects of a foundation, as well as amendments of the
provisions related to a foundation's administration of its means etc. In all cases,
however, a balance is sought between the original interest and intent of the found-

16

er on the one hand and the long-term (financial) interest of the foundation on the
other hand.
Review of the Act
on Commercial
Foundations

In March 2012 the Minister of Business and Growth appointed a committee

"Erhvervsfondsudvalget" to review the Act on Commercial Foundations. The purpose of the revision was to modernize the Act on Commercial Foundations in order
to ensure that the act is efficient, modern and creates a good and timely framework for the commercial foundations. The work of the committee was concluded in
a report, published in December 2012, containing the committee's suggestion to a
revised Act on Commercial Foundations.
One of the essential elements in the report is the introduction of recommendations
on corporate governance for commercial foundations. The purpose of these recommendations is to ensure proper management of the foundation and transparency
and insight into the work of the board of directors. The report contains 16 new recommendations concerning, inter alia, transparency, independence etc.
During the fall of 2013 the Minister of Business and Growth is expected to table a
bill which is based on the report from the committee.

FINANCIAL STATEMENTS

Enterprises regulated by the Act

The Financial Statements Act applies to commercial enterprises supplying or

providing goods, rights, funds, services or the like for which they normally receive
consideration (except financial companies subject to the Danish Financial Business
Act). Enterprises regulated by the Companies Act, the Act on Commercial Foundations and the Act on Certain Commercial Enterprises are always regarded as commercial enterprises.

International Accounting Standards (IAS)

The Financial Statements Act and subsequent amendments enable Danish enterprises to present annual accounts in accordance with the International Accounting
Standards (IAS). Importantly, all Danish companies listed on a regulated market
must pursuant to EC-Regulation 1606/2002/EC as subsequently amended present
consolidated financial statements in accordance with IAS.

Contents of the
Annual Report

The Financial Statements Act is meant to ensure that the annual report assists
shareholders and other stakeholders in making financial decisions. Accordingly, the
Financial Statements Act comprises extensive disclosure of the operating and financial review, value-based accounting principles and additional requirements and
statements in particular with respect to listed companies and large and mediumsized enterprises.
The objective of the Financial Statements Act is to make annual reports more informative and forward-looking by including statements on e.g. resources of a nonfinancial nature, risks and risk management, environmental issues and target figures for the share of the underrepresented gender at the management of the Enterprise (see section 2 of this Introduction). In addition, the annual report shall include a statement by the management and the board or supervisory board on the
annual report, the auditors' report, the operating and financial review, the description of accounting policies, the financial statements, and any supplementary state-

17

ments.
The Building
Block Model

In order for the Financial Statements Act to comprise accounting provisions for all
enterprises (the so-called "building-block model" applies). The building-block model comprises the following:

Class D: Listed companies and state-owned enterprises.

Class C: Large (all enterprises not comprised by the definitions of small and
medium-sized enterprises) and medium-sized enterprises (balance sheet total between DKK 36 million and DKK 143 million, revenue between DKK 72
million and DKK 286 million, and number of employees between 50 and 250.
Two out of the three criteria have to be met for two consecutive financial
years).

Class B: Certain small enterprises which for two consecutive years do not
exceed two of the following criteria (i) a balance sheet total of DKK 36 million, (ii) a revenue of DKK 72 million or (iii) a number of employees that exceed 50

Class A: Enterprises which are under no obligation to be audited but chooses

to do so voluntarily.

The structure means that enterprises, as a minimum, must comply with the provisions of the accounting class to which they belong and with the ones of any preceding class.
Enterprises comprised by Class B may choose to have the auditing conducted according to a specific declaration for small sized enterprises produced by the Danish
Business Authority.
The Danish Accounting Standards issued by the Danish Institute of State Authorised Public Accountants (FSR) supplement the Act and have been revised to reflect
the Act. Following their revision, the Danish Accounting Standards should be in
compliance with the corresponding IAS standards.
Financial Statements by Listed
Companies

Companies listed on NASDAQ OMX Copenhagen A/S or on another regulated market comprised by reporting under class D must use IAS from the financial year
2005 in respect of the consolidated financial statements as set out in the Council's
Regulation 1606/2002/EC as subsequently amended by Regulation 1725/2003 and
other regulations on the application of IAS.

Information and
Transparency

On 26 June 2005 the Financial Statements Act was amended to implement the provisions on information and transparency pursuant to the Takeover Directive. The
amendment has the effect that a company listed on NASDAQ OMX Copenhagen A/S
or on another regulated market shall list any information, which may affect the
company, in the management review in the annual report. This amendment is implemented to create transparency in respect of the circumstances of the company
and thereby further the free trade of the company's shares. Such information includes, among other matters, voting rights of the shares and restrictions hereof,
the identity of major shareholders, possibility for the central governing body to in-

18

crease the share capital, major contracts with third parties containing a change of
control clause, and agreements between the company and members of the board,
the management, or the employees, regarding compensation to be paid to these
individuals, if they retire or if their position is terminated due to a takeover bid.
Financial Enterprises

The Financial Statements Act does not apply to financial enterprises that are subject to the Danish Financial Business Act and any executive orders issued under
that Act.

EXCHANGE AND INVESTMENT CONTROL

No Danish exchange control permit is required for the acquisition of a company or

a business in Denmark.
Acquisition
Restrictions

There are no general restrictions on foreign acquisitions of Danish enterprises, or

on domestic mergers and acquisitions, although restrictions do apply in respect of
certain industries such as the defence industry.
Furthermore, any natural or legal person who contemplates acquiring directly or
indirectly a qualified share of 10% (of the capital or voting rights) or more of a financial enterprise or a financial holding company, whereby the person may exercise a significant influence on the management of the financial enterprise, shall in
advance be approved by the Danish Financial Supervisory Authority. This further
applies in case of an increase of the holding of shares in such enterprises if the acquisition results in the acquirer obtaining a holding in excess of thresholds of 20%
or 50% of the share capital or the voting rights of the company or if the financial
enterprise or the financial holding company becomes a subsidiary.

6
Danish Employment Regulation

LABOUR MARKET

Foreign investors will - regardless of whether setting up a new business or acquiring an existing one - need an understanding of the structure of the Danish labour
market and the provisions and regulations governing the employment of personnel
in Denmark. In general, these rules are liberal compared to other European countries.
Some areas are subject to rules of law applicable to all categories of employees;
this is the case for holiday entitlements, exercise of options or subscription rights
for shares etc., pregnancy, maternity/paternity and parental leaves, right to employment contracts, equal treatment of men and women, and regulations on working environment etc. However, not all of these rules apply to employees with the
status of a member of the board of management.
With regard to hiring, notice periods, rights during and in connection with the termination of employment etc., the applicable rules will depend on the category of
employees involved. Salaried employees (white-collar workers) are subject to the
Danish Salaried Employees Act. Manual workers (blue-collar workers) are usually
covered by collective agreements, which in most cases are negotiated with the relevant trade union(s).

19

Contrary to most other countries, the Danish labour market is based on widespread
autonomy - the so-called "Danish model". This Danish model implies that the social
partners enter into collective agreements on salary and employment conditions
which are normally applicable for two to four years. Collective bargaining agreements only apply to employers who are members of an employers' association, or
who themselves directly have entered into collective bargaining agreements with a
trade union.
Consequently, the proportion of employers and employees belonging to an
employer's association or a trade union in Denmark is very high. A large number of
employers are members of special employers' associations, e.g. the Confederation
of Danish Industries ("Dansk Industri" or "DI") who again are members of the
Danish Employers Confederation ("Dansk Arbejdsgiverforening" or "DA").
Employees are often members of the relevant trade union, e.g. the United
Federation of Danish Workers ("Fagligt Flles Forbund" or "3F") or Danish
Metalworkers Union ("Dansk Metal"). Most trade unions are members of the Danish
Confederation of Trade Unions ("Landsorganisationen i Danmark" or "LO") dealing
with the labour movement's paramount tasks across all industrial sections and
coordinating the conduct of collective bargaining.
Act on Employees'
Legal Status on
Transfer of Undertakings

In a transfer of assets, the purchaser of an undertaking is obligated to accept and

continue the existing salary and employment conditions of the employees (whitecollar and blue-collar workers) pursuant to the Act on Employees' Legal Status on
Transfer of Undertakings (implementing the EC Directive 77/187 as amended by EC
Directive 2001/23). Moreover, the purchaser shall within a certain time limit inform
the trade unions concerned if the purchaser does not want to ratify the collective
agreements comprehending the employees transferred. In addition, the Act on Employees' Legal Status on Transfer of Undertakings contains obligations on the part
of the transferor to inform and consult the employees concerned. Depending on the
circumstances such obligations also apply to the transferee in relation to its employees.
In an acquisition of shares, the legal entity does not change in relation to the employees. Consequently, the existing salary and employment conditions remain unchanged with the new owner of the undertaking.

Act on Employment Contracts

Minimum requirements to the contents of an employment agreement are stipulated

by the Act on Employment Contracts (implementing EC Directive 91/533). If the
employer does not fulfil these requirements, the employee may be entitled to compensation.

Information and
Consulting Procedures for Employees in connection
with Acquisitions
and Mergers

Before a final decision on the transfer of assets or shares is made, there may - depending on the circumstances - be an obligation to involve the employees in the decision-making process.
In the event of a transfer of assets, the transferor shall, in reasonable time before
making the final decision to carry through the transfer, inform and consult the employees' representatives with regard to the contemplated transfer.
In case of a transfer of shares, it is basically not required to inform and consult the

20

employees' representatives. However, there might - depending on the circumstances - be a duty to inform and consult the employees.
In special cases, the employees' representatives can be imposed secrecy on all information that is disclosed to them. Information specifically provided in confidentiality to the employees' representatives may not be disclosed to third parties.
The undertaking may omit to inform the employees' representatives in situations
where such information could be detrimental to the undertaking. This will depend on
a specific assessment in each case.

7
Danish
Competition Act

COMPETITION RULES

The Danish Competition Act of 1997 with amendments has aligned Danish
Competition Law with EC Competition Law to a large extent. Thus, provisions similar
to the prohibitions against anti-competitive agreements and against abuse of
dominant market positions in Art. 101 and 102 of the EC Treaty are found in the
Competition Act. EU competition law often interacts with Danish competition law.
The restraints of competition law may often have a significant effect on the
operation of an enterprise, and may as such also affect the valuation hereof. Due to
the limited size of the Danish market, even small and medium sized companies may
enjoy sufficient market power to be affected by the prohibition against abuse of a
dominant position and/or the restraints on exclusive dealings which on other
markets are relevant only for large companies. Although Danish law contains a
possibility of notifying agreements to the Danish Competition Authority, the
evaluation is in practise left to self-assessment and/or becomes actualised through
an investigation.

Due Diligence

Thus, these restraints must be the subject of focus in a competition due diligence,
as the rules may affect the ability to continue established business practises or
preferred business relations. Violations of competition law entail punitive fines and
imprisonment as well as private enforcement through claim for damages, and it is
an important part of due diligence to assess the risk of survival of liability for past
infringements which may have been discontinued.

Danish Merger
Control

Certain mergers, acquisitions and joint ventures (hereinafter referred to as

"concentrations") are as a starting point subject to prior approval by the Danish
Competition Council. Provided one of the following two thresholds are met, a
concentration must be notified to the Danish Competition Authority and cleared by
the Danish Competition Council before it can be implemented:
In the last financial year preceding the concentration:
(a)

The combined annual aggregate turnover in Denmark of all the undertakings

concerned is at least DKK 900 million (approx. EUR 120 million) and the
annual aggregate turnover in Denmark of each of at least two of the
undertakings concerned is at least DKK 100 million (approx. EUR 13 million),
or

21

(b)

the annual aggregate turnover in Denmark of at least one of the undertakings

concerned is at least DKK 3.8 billion (approx. EUR 510 million) and the
aggregate annual worldwide turnover of at least one of the other
undertakings is at least DKK 3.8 billion (approx. EUR 510 million).

Turnover is to be calculated on a company group basis applying a wider definition of

the notion of the company group than is the case in other areas of corporate law.
The Danish provisions on merger control are based on the EU Merger Regulation
(Regulation 139/2004) to a large extent and are to this extent accordingly to be
interpreted in accordance with the EU provisions.
The merger control will not automatically encompass an evaluation of restrictive
agreements which form part of an acquisition agreement.
EU Merger Control

Concentrations are subject to control at European Community level provided that

the thresholds defined in the EU Merger Regulation are exceeded. In such cases,
transactions must be notified to and cleared by the European Commission, and
merger control rules of the EC Member States (including Denmark) are not
applicable according to the "one stop shop" rule.
A more detailed description of Danish and EU merger control rules is set out in
Chapter 21.

8
Acquisition
Methods

MERGERS AND ACQUISITIONS

The acquisition of companies is typically carried out by means of either (i) the
acquisition of shares, (ii) the acquisition of assets, or (iii) a statutory merger.
The different types of transactions include the acquisition of both private and public
limited companies ("Private M&A") or the acquisition of listed companies ("Public
M&A"). Listed companies are often delisted following an acquisition ("P2P" or "takeprivate" or "going-private" transactions). Transactions include management buyouts ("MBO") or management buy-ins ("MBI") and transactions in the Danish
market carried out by private equity funds are usually carried out as leveraged buyouts ("LBO").

Share or Asset
Acquisitions

Most transactions are share acquisitions rather than asset acquisitions. The type of
definitive transaction documents depends on the transaction and the parties'
negotiations. The purchase of a non-listed limited company (Private M&A) is usually
subject to a sale and purchase agreement between a purchaser and the seller(s)
whether in a share or asset acquisition together with ancillary documentation, as
required. If the target company is listed, definitive transaction documents may
include a share purchase agreement with majority shareholders (possibly on an
irrevocable basis), agreements with the target as well as the public tender offer
document.
There is no special law or regulation regarding the contents of definitive
agreements in connection with the acquisition of the shares or the assets of a
company. The Danish Sale of Goods Act applies to the acquisition of shares or

22

business assets. The Sale of Goods Act is, however, considered by most
practitioners to be wholly inadequate for the acquisition of the shares or business
assets of a company. Therefore, it is customary that the agreement for the sale and
purchase of shares or business assets comprehensively regulates the parties' rights
and obligations.
Definitive
Agreements

In relation to Private M&A transactions in Denmark, definitive agreements (share

purchase agreement or otherwise) are typically according to international standards
and may include conditions such as approval by the relevant competition
authorities, material adverse change, specific conditions to the transaction,
extensive warranties that depend on the parties' negotiations together with any
specific indemnifications required on the basis of due diligence and/or general
indemnifications, e.g. tax or environment, as well as provisions on limitation of
liability (if any), other covenants, boilerplate provisions, etc.
In Public M&A transactions there may or may not be a purchase agreement,
typically depending on whether there is a major or a majority shareholder(s) in the
listed company. If so, the purchase documentation may be similar to the
documentation in the private transaction, either in the form of a direct purchase
from the majority shareholder or in the form of a conditional share purchase
agreement (or irrevocable undertaking to accept the subsequent mandatory public
offer). The scope of warranties, indemnifications and any limitations depends on the
parties' negotiations. In addition, in public offers which have beforehand been
agreed and negotiated with the board of the target company, an agreement is
normally entered into between the offeror and the target company regarding so
called "no-shop" provisions and an obligation for the target's board to recommend
the offer and possibly warranties that terminate together with settlement of the
public tender offer.

Due Diligence

In connection with an acquisition or merger, the purchaser (or both parties) will
usually carry out extensive due diligence investigations with respect to legal,
accounting, tax, environmental, commercial and technical matters. Due diligence
and access to information is usually subject to confidentiality, most commonly
regulated in a confidentiality agreement between the contemplated purchaser(s)
and the seller (and possibly the target company). Confidentiality undertakings
generally follow international M&A standards.

Statutory Mergers

A statutory merger including a Danish public limited company follows the conclusion
of a joint merger plan (a merger agreement) prepared by and entered into by the
boards of the merging companies, which merger plan is filed with the Danish
Business Authority. A statutory merger may involve either the absorption of the
assets and liabilities of the target company by the acquiring company in connection
with the dissolution of the target, or the incorporation of a new limited company by
way of the merger between two or more existing companies (which existing
companies will automatically be dissolved upon the merger). The applicable
procedure is prescribed by the Companies Act. Assets and liabilities are as a
general rule subject to statutory succession; however, there are exceptions, see
further below.
The board of each of the companies involved must prepare a report for the
shareholders explaining the terms of and the reasons for the merger, unless the

23

shareholders unanimously decide otherwise.

Unless the shareholders unanimously decide otherwise, independent valuation
experts must prepare a written opinion on the merger plan, including a statement
as to whether the consideration for the shares in a discontinuing company is
reasonable and factually based. Further, unless otherwise unanimously decided by
the shareholders, the independent valuation experts must submit a statement as to
whether the creditors in the involved companies are expected to be sufficiently
secured after the merger.
Provided that the valuation experts have stated that the claims of the creditors in
the involved companies are expected to be sufficiently secured after the merger, all
assets and liabilities of the dissolved company, including contingent liabilities, will
automatically be transferred to the continuing company, unless a specific contract
contains a change of control-clause.
Approval of
Merger

Where, as a result of the merger, any company involved is to cease business, the
merger must be approved by the shareholders of such company in the manner
required for an amendment of the articles of association (described above under
"Regulation of Public Limited Companies"). If a company involved in a merger is to
continue its existence, it is sufficient for the merger to be approved by the board,
provided that no amendments to the articles of association of the continuing
company (except for adoption of the dissolved company's name and secondary
names as new secondary names for the continuing company) will be made as a
result of the merger. However, holders of 5% or more of the share capital of the
company (or such lower percentage as has the right to request a general meeting
under the company's articles of association) may demand that the decision on the
merger be adopted by the general meeting. The merger will become effective when
any claims for compensation by dissenting shareholders in the dissolved company
and any claims by creditors permitted under the Companies Act, have been satisfied
or secured. Subject to a right in certain circumstances to receive compensation,
dissenting shareholders will be bound by a merger plan which has been duly
approved by the companies involved and have no right to be bought out or
redeemed for cash.

Cross-border
Merger

Directive 2005/56/EC concerning cross-border mergers has been implemented into

Danish legislation. This implementation allows cross-border mergers between a
Danish company and a company domiciled in another EU Member State. The
Directive was passed to comply with the need for cooperation and redistribution
between companies with limited responsibilities domiciled in different EU Member
States and EEA States.
National Danish law and regulations apply with respect to the Danish company
involved in the cross-border merger.
A cross-border merger with a non-Danish company can be made with companies of
other EU or EEA States.

Companies affected by the new

Cross Border Pro-

The provisions on cross-border mergers apply to public limited companies (A/S), as

well as private limited companies (ApS). The Minister of Business and Growth has
been authorised to implement provisions on cross-border mergers for commercial

24

visions

foundations, but this authorization has not yet been used.

Procedures

The provisions governing the procedures for mergers between Danish companies
also apply to cross-border mergers, with the necessary adjustments and with a few
additional requirements in order to protect the shareholders, creditors and
employees
of
the
companies
involved.
Consequently,
a
joint
merger
agreement/merger plan must be prepared by the boards of the merging companies.
In addition, the board of each of the companies involved must prepare a report for
the shareholders explaining the terms of and the reasons for the cross-border
merger. Finally, independent valuation experts must prepare a written opinion on
the merger plan, including a statement as to whether the consideration for the
shares in a discontinuing company is reasonable and factually based. The
independent valuation experts must also submit a statement as to whether the
creditors in the involved companies are expected to be sufficiently secured after the
merger. If all shareholders in the companies involved consent thereto, the report by
the independent valuation experts on the merger plan (including the consideration)
and the statement relating to the creditors will, however, not be required.
Provided that the valuation experts have expressed in their statement that the
claims of the creditors in the involved companies are expected to be sufficiently
secured after the merger, all assets and liabilities of the dissolved company,
including contingent liabilities, will automatically be transferred to the continuing
company, unless a specific contract contains a change of control-clause.
The majority required in a Danish company to adopt a cross-border merger is the
same as the majority required to adopt a merger between Danish companies, cf.
above.

Protection of the
Shareholders

The shareholders who have opposed to the cross-border merger at the general
meeting adopting such merger may claim that the company redeem their shares, if
such claim is made in writing within four weeks from the general meeting.

Rules on Employee Representation

One of the challenges when drafting the Directive 2005/56/EC was to ensure that
the employees did not lose their representation right as the result of a cross-border
merger by being merged into a different country's jurisdiction. The solution has
been to sustain the national provisions on employee representation, if they provide
the same degree of representation as the employees had prior to the merger. As
mentioned under section 2 of this Introduction, the employees of an A/S, with an
average of at least 35 employees during the previous three years, are entitled to
elect from amongst themselves a number of members of the board - up to one third
of the total numbers of board members and no less than two members. This level of
representation of the employees in a Danish company has to be maintained after
the cross-border merger, unless the degree of representation in the legislation
governing the other company involved in the merger provides a higher degree of
representation.
The general meeting may make the adoption of a cross-border merger subject to
subsequent adoption of the guidelines laid down in respect of employee
representation.

25

The European
Company

A different method of merging two companies, which have their domiciles in

different EU Member States, is by creating an SE-company. This was made possible
by the passing of the Council Regulation (EC) No 2157/2001 on the Statute for a
European Company (SE).

Creating a SEcompany

An SE-company can be created by:

Merging companies from different EU Member States.

Creating an SE holding company.

Creating a joint SE subsidiary between companies governed by the laws of

different Member States.

Transforming a public limited liability company with a registered office and

head office within the European Union into an SE without entering the
company into liquidation, provided it has a subsidiary in a Member State
other than that of its registered office.

Minimum Share
Capital

The SE itself must take the form of a company with a minimum capital of EUR
120,000 (fully paid-up) to ensure that the company has sufficient assets without
making it difficult for small and medium-sized undertakings to form an SE.

Companies with
Non-EU Head Offices

A company, the head office of which is not in the Community, may be allowed to
participate in the formation of an SE provided that the company (i) is formed under
the laws of a Member State, (ii) has its registered office in that Member State and
(iii) has a real and continuous link with a Member State's economy according to the
principles established in the 1962 General Programme for the abolition of
restrictions on freedom of establishment. Such a link exists in particular if a
company has an establishment in that Member State and conducts operations
therefrom. The SE may transfer its registered office to another Member State. Such
a transfer shall not result in the winding up of the SE or in the creation of a new
legal person.

European Economic Interest

Groupings

Council Regulation No. 2137/85 on European Economic Interest Groupings (EEIG) is

directly applicable in Denmark. Consequently, any such entity may choose to have
its registered domicile in Denmark.

9
Stake-building
and Disclosure

PUBLIC TAKEOVERS

Before opening negotiations with controlling shareholders in a target company listed

or admitted to trading on a regulated market, a potential acquirer may wish to
acquire a substantial interest in the target by purchasing shares in the market.
Substantial shareholdings must be publicly disclosed, as described below. Disclosure
of a substantial acquisition of shares in a target company could have the effect of
pushing up the target company's share price, so that the acquisition of further
shares in the market becomes more expensive.

The Major Share-

Pursuant to the Companies Act (Chapter 3) and The Major Shareholders Order

26

holders Order

(Chapter 10), any acquirer whose shareholding in a company reaches 5% of the

share capital or voting rights, is required to immediately notify the company and, if
the company is listed, the Danish Financial Supervisory Authority of that fact.
Shareholdings in companies controlled by the acquirer must be aggregated for this
purpose. Interests of 5% or more must be notified immediately by the acquirer to
the Target company and to the Danish Financial Supervisory Authority, if the
company is listed, and within two weeks if the company is unlisted. The same apply
if a subsequent variation in a notified shareholding results in the shareholding
reaching, or no longer reaching, thresholds of 5%, 10%, 15%, 20%, 25%, 50%,
90%, 1/3, 2/3 - or 100% if the company is unlisted - of the share capital or the
votes.
Companies receiving notifications of major shareholdings are required to enter the
details in a special register, and listed companies shall immediately publish the
notification to the market. Information shown in this register will include details of
any bearer shares held by the shareholder concerned. The register is open for
inspection by public authorities, and the company's shareholders, board and
employee representatives. In addition, any other person may obtain a transcript of
the special register by applying to the company in writing. Failure to comply with
the notification requirements is punishable by fine. It follows that an acquirer will
be able to obtain details of the substantial shareholders in the target. However,
information on significant increases in the acquirer's own shareholding will in
consequence also be publicly available.
A company's general share register may, if this is provided for in the articles of
association, be open to shareholders, but is not open to public inspection. Listed
companies and state-owned enterprises, however, shall further disclose in the
annual report the exact ownership interest or voting share for any party holding
shares in the enterprise if the voting rights attached to the shares amount to a
minimum of 5% of the voting rights of the share capital, or their nominal value
amounts to a minimum of 5% of the share capital, but not less than DKK 100,000.

Publicly available
Information

Danish companies are required to prepare financial statements/reports each year

and file these with the Danish Business Authority where they are open to public
inspection. As a general rule these financial statements must be audited. In
addition, the articles of association of all companies and the names and addresses
of the directors, managers and auditors are registered with the Danish Business
Authority. A complete transcript from the Danish Business Authority, available on
any limited company, also includes historical registrations, e.g. change of directors,
auditors or changes to the articles of association. Shareholders' agreements are not
available from the Danish Business Authority, but may be available if disclosed to
NASDAQ OMX Copenhagen A/S. In view of the ability of Danish companies to issue
shares with differing voting rights and to restrict the number of votes exercisable
by single shareholders, it will be important to carefully consider the articles of
association of an intended target company to discover potential obstacles to an
acquisition. Further information can be obtained from other sources, including
privately published directories, credit information agencies, and the trade press.
Other sources of publicly available information include the company's website, the
land register, the register of persons (where other rights besides rights over land
may be registered, e.g. liens in cars), the patent and trademark registrations, the
Danish Financial Supervisory Authority for permissions and the local municipality for

27

environmental permissions.
Disclosure Obligations for Listed
Companies

The Securities Trading, etc. Act which implements the European Parliament and
Council Directive 2003/6/EC of 28 January 2003 (as amended by Directive
2003/124/EC) on insider dealing and market manipulation (the "Market Abuse
Directive") and the Issuer's Duty to Provide Information Order, which implements
the European Parliament and Council Directive 2004/109/EC of 15 December 2004
(as amended by Directive 2010/73/EU) on transparency requirements (the
"Transparency Directive"), require that a listed company shall disclose any
information concerning the company that, if the information was made public, would
be likely to have a significant effect on the value of the shares. Such information
shall be made public as soon as possible. However, the board is, at its own
responsibility, entitled to postpone the disclosure of inside information, if such
postponement is in the interest of the company, and provided that the inside
information or part thereof is not leaked to an unauthorised person or the press.

Methods of Disclosure

Listed companies are obliged to have reporting systems that are adequate to ensure
that the company complies with the disclosure obligations applicable to listed
companies. A company shall disclose the information mentioned above to the
relevant regulated market on which the company has securities listed, and in a
manner which ensures that the information is available to the public in all EU/EEA
jurisdictions, e.g. by way of electronic news services etc. Moreover, concurrently
with the publication of the information, the company shall submit the information to
the Danish Financial Supervisory Authority. The disclosure must be adequate and be
of such quality that an investor can assess the content and the consequences of the
published information. The information shall also be disclosed on the company's
website.

Additional Disclosure Rules

In addition to the provisions of the Securities Trading, etc. Act (Chapter 5),
NASDAQ OMX Copenhagen A/S requires (as set out in Rules for Issuers of Shares
on NASDAQ OMX Copenhagen A/S - Chapter 18) publication by listed companies of
a range of information, including, inter alia, financial statements, interim reports,
details of significant transactions and events affecting the company, changes in the
management of the company, notices to attend general meetings, and decisions to
introduce share-based incentive programmes.
As described above, a listed company must also in the annual report inform of
certain circumstances which might hinder a takeover of the company, e.g., voting
rights of the shares and restrictions hereof, the identity of major shareholders,
possibility for the board to increase the share capital, and major contracts with
third parties containing a change of control clause.

Access to Order
Books

NASDAQ OMX Copenhagen A/S has made it possible for all investors and not merely
the members of the stock exchange to obtain access to the full order books at the
stock exchange. This should improve the investors' access to trade large
stockholdings when the investors may review all interests of purchase and sale in
the market.

Disclosure by the
Target Company
of a possible Pub-

Information on pending negotiations and the exploration of possibilities need not be

disclosed to the market by the target company, provided that the information is
kept strictly confidential. Under the Securities Trading, etc. Act, the disclosure

28

lic Offer

requirements are not deemed triggered, until negotiations/explorations have

resulted in an agreement (which agreement does, however, not need to be in
writing). However, if information on negotiations/explorations is passed on by the
target company to an unauthorised person, or if the target company becomes
aware, or should have become aware, that such information is otherwise leaked to
the press/public (even without any fault on the part of the target company), the
target company shall publish the leaked information to the market.
Companies listed on NASDAQ OMX Copenhagen A/S are obligated to notify the
exchange when the company has been informed that a third party intends to make
a public tender offer to the shareholders of the company, and there are reasonable
grounds to assume that such tender offer will actually be made, provided that this
information has not been made public to the market. The information will not be
published by the exchange, but will be used to monitor trading in order to detect
unusual price movements and to prevent insider trading.

Conduct of a Public Offer

The decision of making any public offer for the acquisition of shares in a company
listed on a regulated market must be disclosed as soon as possible by the offeror
to the relevant regulated market on which the target company has securities listed.
The offeror is required to ensure that the offeror is capable of meeting any
requirement regarding consideration for the shares, before disclosing the decision
of making the public offer

Filings and Announcement

No later than four weeks after the publishing of the decision of making an offer, the
offeror shall publish a bid announcement announcing the offer, via electronic media,
and the offer document. At the same time, the offeror shall send the bid
announcement to the regulated market on which the shares that are subject to the
offer are listed or admitted for trading. An offeror will usually publish the offer
document together with the bid announcement (and must if the announcement is
published at the last day of the four weeks period). The Danish Financial
Supervisory Authority shall prior to publication ensure that the contents of the bid
announcement and the offer document are adequate and comply with the
requirements of the Takeover Bids Order. The publication of both voluntary and
mandatory offers shall be performed in a manner which ensures that the
information and the offer document is available to the public in the EU/EEA
jurisdictions in which the target company has securities listed, e.g. by way of
electronic news services etc. The offer document shall always be available for
download from a publicly accessible webpage.
In the case of both voluntary and mandatory offers, the target company must send
the bid announcement to all registered shareholders at the offeror's expense. The
offer document will usually be sent to the shareholders together with the bid
announcement.

The Offer Document

The Takeover Bids Order (Chapter 11) sets out detailed minimum requirements for
an offer document. An offer document must include details concerning the target
company, the offeror (including information on the party ultimately controlling the
offeror, if relevant), the terms of the offer, the offer conditions, tender price,
information regarding the financing of the offer, the time and terms of payment, the
period for acceptance (minimum of four weeks, maximum of ten weeks, unless
extended due to specific circumstances), information on publication of result of

29

tender, and a description of the offeror's future plans for the target company etc.
Moreover, the offeror shall disclose any contemplated payment of dividend or other
distributions from the target company in a period of 12 months following the
completion of the takeover bid. Failure to do so entails that the target company
may not declare any dividend or other distributions to the shareholders in this 12
month period unless special circumstances apply. Finally, it shall appear from the
offer document whether the shareholders who have already accepted an offer may
freely accept any subsequent offer, e.g. competitive offers.
Consideration Offered

Mandatory public offers must offer a price, which is at least equal to the highest
price that the offeror has paid for any shares already acquired by the offeror during
the six months preceding the making of the offer. However, the Danish Financial
Supervisory Authority may adjust the price (upwards or downwards) in special
situations, e.g. if the price of the shares has been manipulated, if the offer is made
in order to rescue a company in financial difficulties, or if the offer price is
significantly lower than the market price for the shares.
In voluntary public offers the offeror is free to determine the type of consideration
offered to the shareholders, provided that all shareholders within the same share
class are treated equally. In mandatory public offers the offeror may offer cash or
voting shares, or a combination thereof as consideration for the target company's
shares. However, cash shall always be offered as an alternative if voting shares
offered as consideration are not liquid shares listed on a regulated market, or if the
offeror, or any person acting in concert with the offeror, has purchased at least 5%
of the target's shares against cash consideration in the period from 6 months prior
to the submission of the offer and until expiry of the offer period. If the controlling
interest triggering the mandatory public offer was obtained (partly of fully) through
a share exchange, the offeror is also obligated to offer the shareholders in the
target company a share exchange.
Where cash is offered, there is no obligation for the offeror to include in the offer
document any guarantee or assurance from a financial institution that the offeror
will have sufficient cash available to satisfy the offer in full. If shares are offered as
consideration, the board of directors of the offeror shall confirm, and if relevant
document, that the board of directors, as of the date on which the offer is
announced, holds or is authorised to issue the consideration shares.

Different Share
Classes

If the target company has different share classes, the offeror may offer different
terms to the different share classes, provided that all shareholders within the same
share class are treated equally. In mandatory public offers the consideration offered
for the different classes of shares must, however, reflect the difference in market
price between the different shares. If not all of the share classes in a company are
listed, the price for the un-listed shares must not exceed the price for the listed
shares by more than 50% in a mandatory public offer.
Voluntary public offers need not include all of the company's shares, but any such
limitations must be clear from the offer document. If a voluntary public offer does
not include all of the company's shares, and if a controlling interest in the company
is obtained through the offer, the voluntary public offer must be succeeded by a
mandatory offer.

30

Binding Offer

Once published, the offer will, subject to the conditions of the offer, be binding on
the offeror during the acceptance period of four to ten weeks. However, at any time
until the expiry of the period during which the offer is open, the offeror may amend
the terms attached to the offer if this constitutes an improvement of the terms
offered for the offerees, provided, however, that the offer period cannot be
extended beyond 12 weeks, and thus the offer can only be improved once at the
expiry of the ten-week maximum period. If the amendment is effected within the
last two weeks of the period during which the offer is open, said period shall be
extended to expire 14 days after the publication of the amended offer.

Offer Conditions

Mandatory public offers may not be made subject to any conditions. It is usual for a
voluntary public offer to be made subject to a specified level of acceptances, often
set at a level which would give the offeror a controlling interest in the target and/or
a right to squeeze out any shareholders that have not accepted the offer. De facto
controlling interest may in some instances be obtained at levels which are lower
than 50% of the shares and the voting rights of the target company. More than
90% of the share capital and voting rights in the target is required in order to
enable the offeror to exercise its legal squeeze-out right under Sections 70 and 71
of the Companies Act (see section 10 of this Introduction). Voluntary public offers
may be made subject to other (objective) conditions, e.g. no material adverse
change, the obtaining of necessary competition clearances, etc. Neither a
mandatory nor a voluntary public offer can be made subject to a financing
condition.

Acceptances

Acceptances will be tendered by the target company's shareholders completing and

returning a form of acceptance through their depositary.

Further Offers

If the offer is unsuccessful, there is no restriction on the freedom of the offeror to

launch a further offer for the target at any time, and no restriction on the price at
which such an offer may be made (other than the restrictions set out above with
regard to price in a mandatory public offer).

No Suspension
of Dealings

An offeror is free to purchase shares in the target company on the regulated market
during the course of the offer period, provided that dealings in the target's shares
have not been suspended. The stock exchange will suspend trading in the target's
shares if it considers that it is not for the time being providing a satisfactory market
for those shares, or if it believes that suspension is necessary to prevent
shareholders in the target from suffering from a false market. Dealings will
normally not be suspended in the event of a public offer.

Disclosure of
Share Purchases

There are no special disclosure requirements in relation to shares acquired by the

offeror or persons acting in concert with the offeror during an offer period, other
than the stake-building and disclosure rules described above.

Increased and
Competing Offers

There is no restriction on the freedom of an offeror to improve its offer at any time,
provided, however, that the offer period cannot be extended beyond 12 weeks, and
thus the offer can only be improved once at the expiry of the ten-week maximum
period. There is also no restriction preventing other bidders from making a
competing offer. However, any competing offer shall be made before the expiry of
the existing offer period stipulated for acceptance in the offer already made (or, if
there are several outstanding offers, before the expiry of the period stipulated for

31

acceptance that expires the latest). If the original offeror does not withdraw its
offer (provided the original offeror has reserved such right in the offer document),
the period stipulated for acceptance of the original offer will automatically be
extended until expiry of the period stipulated for acceptance of the competing offer.
Automatic extension of the original period must be published as previously
described.
A shareholder in the target company who accepts an offer will be bound by the
shareholder's acceptance of that offer and will not be able to benefit from any
improvement in terms subsequently offered by the offeror or to accept a competing
offer from another offeror unless otherwise stipulated in the accepted offer (which
in practice invariably is the case).
Equal Treatment
of Shareholders

Shareholders within the same share class shall be treated equally. If the offeror, or
any person acting in concert with the offeror, during the offer period enters into
agreements with shareholders or others concerning the purchase and sale of shares
in the listed company covered by the offer on terms more favourable than those
offered to the shareholders under the offer document, the offeror must offer similar
terms to the rest of the shareholders. If the offeror prior to launching its offer has
entered into agreements with individual shareholders during the offer period, this
must be stated in the offer document.

Convertible Securities

There is no obligation to offer to purchase warrants, convertible bonds or other

securities convertible into shares. However, if the offeror offers to purchase such
securities, holders of the same class of convertible securities shall be treated
equally, and the offer shall be addressed to all owners thereof. The price offered
shall ensure that the owners of such securities are proportionately accorded equal
treatment in relation to the price which the shareholders of the company are
offered.

Defences and Directors' Duties

Both on being approached with a proposal for a takeover offer and once an offer
has been announced, the directors of the target company remain subject to their
general duties as directors, including the duty to act in the best interests of the
company, its stakeholders, and its shareholders. The taking of actions to further the
interests of the management or the board of directors at the expense of the
shareholders is not permitted.

Breakthrough

The provisions of the Takeover Directive (Chapter 12) concerning breakthrough and
obligations of the board of the target company have been partly implemented into
the Companies Act. The provisions only apply in case of a public takeover bid and
their aim is to eliminate or weaken many of the obstacles for a successful public
takeover bid.
The concept of breakthrough and the suspension of special rights or restrictions of
the shares were greatly opposed by some of the Member States, especially by the
Nordic countries. Consequently, the Takeover Directive warrants the right for a
Member State to make these rules optional, which right Denmark used when
implementing the directive into the Companies Act.
As a result of the amendment, a qualified majority of the shareholders (i.e. two
thirds of the share capital and of the voting power) present at a general meeting

32

may decide to introduce a system in the company which, in case a public offer is
made, obligates the board to obtain approval from the shareholders (qualified
majority) before initiating any defensive measures against such offer. Furthermore,
a qualified majority of the shareholders may decide to establish a system according
to which any restriction of voting rights, or any difference of voting rights (i.e. class
A shares and class B shares), or any restrictions in the right to transfer or acquire
shares, shall be suspended in case a public offer is made. This rule applies to
restrictions and differentiations set out in the articles of the target company as well
as those contained in a shareholders' agreement. If a decision of suspension has
been made by the shareholders of the target company and a subsequent takeover is
successful, the offeror is obliged to compensate any shareholder who has suffered a
financial loss due to the dispossession of their special rights. However, restrictions
in the right to transfer or acquire shares which are agreed in a shareholders'
agreement before 31 March 2004, are not affected by the rules.
If the offeror has acquired 75 % of the share capital of the target company and the
target company has adopted breakthrough provisions as described above, the
offeror may convene the general meeting with a view to amend the articles of
association of the company or replace the board. If the offeror does not initiate an
amendment of the articles during this general meeting terminating the restrictions
or rights mentioned above, the restrictions or rights are revived. The suspension of
restrictions or differentiations of voting rights applies only to the decisions stated
above and does not affect other votes at the general meeting.
The breakthrough rules have not yet been adopted by any listed company.
Account of the Directors

When a public offer has been made and published, the board of the target company
must draw up, for the shareholders of the company, an account of its opinion of the
offer and the reasons on which it is based, the offer's consequences for all interests
of the company, including on the employment and the offeror's strategic plans for
the target company and their likely repercussions on employment and the locations
of the company's places of business. The account shall be published by the target
company before the expiry of the first half of the offer period. The publication of
the account shall be conducted in a manner ensuring that the account is available to
the public in those EU/EEA jurisdictions where the company has securities listed,
e.g. by way of electronic news services etc. Concurrently with the publication of the
account, the target company must also publish the account on the company's
webpage and submit the account to the Danish Financial Supervisory Authority and
the registered shareholders. Finally, the board of the target company shall submit
its opinion to the representatives of the employees or, if there are no
representatives, directly to the employees. If the board receives a separate
statement from the representatives, the board shall immediately publish the
statement in accordance with the principles described above.
The board must also publish a new account if the offeror amends the public offer.
It is usual practice for the board of a target company to obtain a "fairness opinion"
from a financial advisor, and the board may arguably be obligated to do so in order
to perform their duties towards the shareholders.

Bonus Agree-

The board of the target is prohibited from entering into or amending existing bonus

33

ments

agreements with the offeror, or any person acting in concert with the offeror, or the
target company, in the period from the time where the offeror initiates takeover
negotiations with the target company and until such negotiations are terminated or
the takeover is completed.

Payments from
the Target Company's Funds

If the offeror intends to allow the target company to make payments from its funds
within the first 12 months after the completion of the takeover, this shall be stated
in the offer document. In addition, the offeror shall provide information on the type
and size of the intended payment.
If the offeror has not provided the necessary information about the intended
payment, the offeror may not permit the target company to make payments from
its funds during the first 12 months after completion of the takeover, unless the
payment is made on the basis of specific circumstances improving the financial
situation of the target company, which could not have been anticipated by the
offeror during preparation of the offer document.

Mandatory Public
Offers

The Securities Trading, etc. Act and The Takeover Bids Order set out the
circumstances where a mandatory bid must be submitted by an acquirer of shares
in a company, having one or more share classes admitted to trading on a regulated
market or an alternative market. The obligation to submit a mandatory offer (as
soon as possible and no later than four weeks after the acquisition) is triggered if,
as a result of a transfer of shares, the acquirer (or persons acting in concert with
the acquirer):

obtains the majority of the voting rights in the company, unless it is in special instances clearly established that such ownership does not constitute a
controlling interest in the company;

as a result of agreements with other shareholders obtains control of the majority of voting rights in the company;

is authorised to manage the financial and operational matters of the company

under the company's articles of association or an agreement;

is authorised to appoint or dismiss a majority of the company's members of

the board;

holds more than one third of the voting rights in the company and has de
facto majority at general meetings and thereby a controlling interest in the
company.

The voting rights attached to the shares owned by the company itself shall be
included when counting the total votes in the company.
When determining whether an acquirer (and persons acting in concert with the
acquirer) has obtained a controlling interest in a company, the existence and effect
of potential voting rights, including subscription rights, warrants and/or call options
that may be exercised or converted now, shall be taken into consideration.
Whether or not a controlling interest is exercised depends on a specific assessment.

34

The assessment is equivalent to the assessment found in Sections 6 and 7 of the

Companies Act setting out the criteria for determining which companies are included
in a group of companies. The assessment will, inter alia, depend on the acquirer's
ability to influence the composition of the board or its majority and the composition
of all the shareholders in the company. Various types of exemptions to the
obligation to submit a mandatory bid exist, e.g. consolidation of controlling
influence or intergroup transactions.
If it is uncertain whether an acquisition will trigger the obligation to submit a
mandatory bid, the potential acquirer may submit this issue for evaluation by the
Danish Financial Supervisory Authority. In rare cases, the Danish Financial
Supervisory Authority may grant exemptions from the obligation to submit a
mandatory offer if the acquisition is not intended to create such controlling
influence.
Dispensation from
the Obligation to
make a Mandatory
Offer

The Danish Financial Supervisory Authority may grant an acquirer who has acquired
a controlling interest in a company listed on a Danish regulated market a
dispensation from the obligation to make a mandatory offer. The Danish Financial
Supervisory Authority has in a limited number of occasions granted such
dispensation if the acquirer has obtained the controlling interest through a
subscription for new shares in a listed company in a financial distressed situation if
the existence of the company has been threatened and the company has not been
able to raise new capital in any other way.

Control through a
Voluntary Offer

If the control of the target company is obtained through a voluntary public offer for
all shares of the target company in accordance with the requirements of the
Takeover Bids Order, a subsequent mandatory public offer is not required.

The Price to be
Offered

If a mandatory public offer is required, the price offered shall at least be equal to
the highest price the offeror has paid for shares already acquired during the six
months preceding the date of the offer. However, the Danish Financial Supervisory
Authority may adjust the price in special situations (upwards or downwards), e.g., if
the price of the shares has been manipulated or is below the current market price,
or if the offer is made in order to rescue a company in financial difficulties. If the
target company has different share classes, the offeror may offer different terms to
the different share classes, provided that all shareholders within the same share
class are treated equally. In mandatory public offers the consideration offered for
the different classes of shares must, however, reflect the difference in market price
between the different shares. If not all of the share classes in a company are listed,
the price for the un-listed shares must not exceed the price for the listed shares by
more than 50% in a mandatory public offer.

Shareholder
Approval

Except where the transaction is structured as a statutory merger, approval will

normally not be required from the shareholders of the offeror or the target unless
the nature of its business would be altered so radically that an amendment to the
objects of the company (as set out in the articles of association) would be
necessary. Under Danish law, shareholder approval in the offeror will only be
required, if the objects (as set out in the articles of associations) of the target
company are not comprised by the objects of the offeror.

Treasury Shares

company

is

permitted to acquire its own

shares against consideration if

35

authorised to do so by a shareholders' resolution. Any consideration paid for the

shares may not exceed the revenue reserves of the company. In exceptional cases,
a company may purchase its own shares without authority from shareholders, if this
is necessary to avoid irreparable harm to the company's interests. An unsolicited
offer will not in itself justify this. Listed companies will normally maintain authority
to purchase their shares as a matter of course. A company purchasing its own
shares will not be permitted to exercise any voting rights attached to those shares.
The company may seek to acquire shares as part of a reduction of the share capital.
Provided an authorisation to acquire own shares exist, the target company may
seek to defend itself against an unsolicited offer by buying shares in the market
while persuading friendly investors to keep their shares and then reduce the capital.
Such a share buy-back manoeuvre, however, raises some difficult tax issues, which
must be considered.
Shares acquired by the company against consideration may be held for an unlimited
period of time only subject to the management's obligation to ensure reasonable
capital resources in the company. Shares acquired free of charge or to prevent
irreparable harm must be disposed of as soon as a sale can be made without
damage to the company, however, no later than three years after the acquisition if
the value of own shares exceeds the revenue reserves of the company.

10

COMPULSORY ACQUISITION OF MINORITIES (SQUEEZE-OUT)

When a shareholder holds more than 90% of the share capital and voting rights in
a limited company, the shareholder may resolve that the outstanding shares will be
acquired compulsorily by the shareholder. The minority shareholders have a right
to demand that the price under the squeeze-out is determined by an independent
valuer appointed by the local court. If the valuer determines that a higher price
should be paid to the minority shareholders than offered by the majority
shareholder, the higher price must also be paid to the minority shareholders of the
same class of shares who did not join in the demand for an independent valuation.
The costs of the valuation are to be paid by the person requesting the valuation
unless decided otherwise by the local court.
As a parallel right when a majority shareholder holds more than 90% of the share
capital and voting rights, the majority shareholder may be required by any of the
company's minority shareholders to acquire the shares of that minority
shareholder. The valuation and price-fixing of the shares may likewise be
determined by an independent valuer appointed by the local court if so requested.

11
EC Directive on
Insider dealing
and Market Abuse

INSIDER DEALING AND MARKET MANIPULATION

Directive 2003/6/EC of 28 January 2003 on insider dealing and market

manipulation (the "Market Abuse Directive") and the subsequent amendments to
the Market Abuse Directive (in particular Directive 2003/124/EC of 22 December
2003 on the definition and public disclosure of inside information and the definition
of market manipulation, and Directive 2004/72/EC of 29 April 2004 on accepted
market practices, the definition of inside information in relation to derivatives on

36

commodities, the drawing up of lists of insiders, the notification of managers'

transactions and the notification of suspicious transactions) have been implemented
into Danish law through the Securities Trading, etc. Act and the Executive Order on
Market Abuse (the "Market Abuse Order") (Chapter 15).
The Market Abuse Directive aims to ensure the integrity of European financial
markets, to establish and implement common standards against market abuse
throughout Europe, and to enhance investor confidence in these markets, e.g. by
requiring that any natural person or entity professionally arranging transactions
involving financial instruments shall refrain from entering into transactions and
reject orders on behalf of its clients, if it reasonably suspects that a transaction
would be based upon inside information or would constitute market manipulation.
Insider Dealing

Pursuant to Section 36 of the Securities Trading, etc. Act, any person with inside
information may not disclose such information to any other person unless such
disclosure is made within the normal course of the exercise of his employment,
profession or duties.
Section 34 in the Securities Trading, etc. Act contains the following definition of
inside information: "Inside information" is defined as information of a precise
nature which has not been made public, relating to issuers of securities, securities,
or market conditions which, if it were made public, would be likely to have a
significant effect on the prices of one or more securities. Information shall be
considered as published once there has been general and relevant dissemination
hereof to the market. " Information of a precise nature" is defined as information
which a) indicates a set of circumstances which exists or may reasonably be
expected to come into existence or an event which has occurred or may reasonably
be expected to do so and b) is specific enough to enable a conclusion to be drawn
as to the possible effect of that set of circumstances or event on the prices of the
relevant securities.
Finally, "information which would be likely to have a significant effect on the prices
of one or more securities" is defined as information a reasonable investor would be
likely to use as part of the basis of investment decisions.
Insider dealing is prohibited by the Securities Trading, etc. Act. Pursuant hereto a
person must not purchase or sell any listed security (whether on a regulated
market within the EU/EEA or similar market outside EU/EEA) or any unlisted
security linked to a listed security (i.e. warrants, bonds etc.), if that person has
inside information which could be of importance to the transaction in question. As a
result hereof, trading on the basis of qualified information which is not publicly
available, as described above, implies a substantial presumption of abuse of such
knowledge. However, in a ruling by the Supreme Court of 22 December 2004, the
Court has clarified that only abuse of inside information in connection with such a
transaction constitutes inside information, and that the presumption of abuse can
be rebutted provided that specific and considerable circumstances exist
The aim of the regulation on insider dealing is to ensure market transparency and
to avoid any fraudulent insider dealing. The terms of the provision on insider
dealing have a wide scope of application. A Person in possession of unpublished
price-sensitive information, but who is not connected in any way with the company

37

concerned, will for example be subject to the prohibition on insider dealing.

An offeror is not prevented from performing a due diligence investigation of the
target company and subsequently making a public offer for all shares of the
company.
This is specifically provided for in the Securities Trading etc. Act according to which
the insider dealing prohibition does not apply to:

purchase of securities effected as a necessary part of the realisation of a

public takeover bid for the purpose of gaining control of a company which
has one or more classes of shares admitted to listing or trading on a regulated market within the EU/EEA or a similar market outside the EU/EEA, if the
inside information is acquired in connection with an investigation of the company made with a view to making the takeover bid;

purchase and sale of securities completed in order to meet an obligation,

provided that such obligation is due at the time of completion of the deal,
and that the obligation is based on an agreement made before the person
concerned received the inside information.

Furthermore, it follows from the Securities Trading etc. Act that the prohibitions do
not apply to trading in own shares in buy-back programmes or in securities as part
of the stabilisation of the price of a security provided such trading is carried out in
accordance with Commission Regulation (EC) No. 2273/2003 of 22 December 2003
implementing Directive 2003/6/EC of the European Parliament and of the Council
as regards exemptions for buy-back programmes and stabilisation of financial
instruments (Chapter 13).
Internal Rules and
Compliance

Any issuer of securities admitted to listing on a regulated market and its parent
company shall draw up internal rules governing the access for members of the
board, members of the management board and other employees to deal for their
own or any third party's account in the listed securities issued by the issuer. A
listed company on a regulated market shall also prepare a set of rules, which
ensures that inside information is only distributed on a need to know basis.
Public authorities and other undertakings, which by virtue of the exercise of their
profession regularly come into possession of inside information, e.g. securities
traders, lawyers, and accountants, shall also prepare such internal rules.

Insider Lists and

Notification

Pursuant to the Securities Trading, etc. Act and the Market Abuse Order, an issuer
of securities admitted to listing on a regulated market, and natural or legal persons
acting on behalf of such issuer, shall keep an updated list of the natural and legal
persons having access to inside information.
Furthermore, board members, members of the management board and executive
staff members must personally, or by proxy to e.g. the issuing company, notify
the Danish Financial Supervisory Authority of transactions conducted on their own
account which are related to the issuing company's shares or other securities linked
to such shares. Notification must be made electronically to the Danish Financial
Supervisory Authority no later than two business days after the transaction date at

38

the latest. The Danish Financial Supervisory Authority will promptly publish such
information. To prevent circumvention of the rule, natural or legal persons closely
related to the persons listed above, have a similar obligation of disclosure.
The above obligation to disclose information on transactions related to securities
issued by the listed company only applies if the market value of the transactions
concluded during a calendar year by said person, and by closely related persons,
equals or exceeds EUR 5,000. If the limit is surpassed, the duty to notify and
disclose information only applies to the transaction whereby the threshold is
exceeded and to subsequent transactions in the remaining part of the calendar
year.
Market Manipulation

The Securities Trading, etc. Act and the Market Abuse Order also prohibit certain
artificial means of influencing the market price of listed and unlisted securities,
including the spreading of incorrect information about a listed company. The
Securities Trading, etc. Act contains a general prohibition against transactions
which are not carried out in conformity with good securities trading practices. The
provision on market manipulation does not apply to trading in own shares in buyback programmes or in securities as part of the stabilisation of the price of a
security, provided such trading is carried out in accordance with Commission
Regulation (EC) No. 2273/2003 of 22 December 2003 implementing Directive
2003/6/EC regarding buy-back programmes and stabilisation.
Further exemptions to the prohibition of market manipulation apply to transactions
or orders to trade, which would be likely to give false or misleading signals as to
the supply of, demand for or price of securities; or which secure an abnormal or
artificial price level of one or several securities, if the person establishes that the
transaction or the order to trade was in conformity with accepted market practices
and that the reasons for entering into such transaction or issuing such order to
trade was legitimate. The scope of the term "accepted market practices" is to be
determined by the Danish Financial Supervisory Authority in accordance with the
guidelines set out in the Market Abuse Order.
Securities dealers who carry out transactions with securities shall without undue
delay notify the Danish Financial Supervisory Authority if a transaction conducted
may reasonably be assumed to constitute a violation of inside information or
market manipulation rules.

12

FINANCIAL ASSISTANCE

The Companies Act (Chapter 3) prohibits a Danish company from providing loans or
making funds or security available to the acquirer in connection with the acquisition
of its own shares or the shares of its parent company. Contravention of these
prohibitions constitutes a criminal offence. It may also result in the board member
and/or the members of the management board of the company becoming liable for
the repayment of any such loans and interest thereon. Therefore, when
contemplating an acquisition, it must be carefully considered whether and to what
extent, if at all, the free funds of the target company may be used for financing the
acquisition.

39

Transfer of the assets of the company to the shareholders may be made

in the form of dividend based on the latest audited and approved annual report,

as extraordinary dividend,

as distribution in connection with a reduction of the share capital,

as a share repurchase programme, or

in connection with the dissolution of the company.

However, the Companies Act allows financial assistance under certain conditions. It
is possible for a company to provide a loan to a purchaser of shares in the
company on the condition that the loan is on arm's length terms, that the financial
assistance has been approved by the general meeting of the lending company by
qualified majority and that the loan amount is available to the lending company as
free reserves which could have been distributed to the shareholders as dividends.
The loan must be included in the balance sheet of the lending company as a special
reserve which cannot be distributed as dividends.
The Companies Act contains a number of specific provisions to be complied with in
order to distribute dividend or other assets from the company to a shareholder. An
acquirer - who would become the receiving shareholder - may receive dividend or
assets, which the acquirer may subsequently use with the purpose of financing the
acquisition of the shares of the company or of the company's parent company on
the condition that the specific provisions have been fully complied with.
Such distribution may be the distribution of extraordinary dividend, which is
possible on the condition that the general meeting by simple majority decides so
itself or authorises the board to adopt a resolution to distribute extraordinary
dividend. The authorisation may be incorporated in the articles of association and
may indicate a date or an event when the authorisation expires as well as any
restrictions in the authorisation. The board's resolution must include (i) an interim
balance demonstrating that sufficient means are available for the distribution and
the interim balance must be reviewed and signed by the company's auditor, and (ii)
a statement from the board that the extraordinary dividend does not exceed what
may be justified in consideration of the financial position of the company and, in
parent companies, the group. Ordinary dividends may only be paid out of amounts
listed in the latest approved annual report as profit and free reserves (including
share premium accounts) carried forward with deduction of losses carried forward.
Extraordinary dividends may also be paid out of profits earned during the period
after the balance sheet date in the latest approved annual report.
As stated above, additional provisions apply where the distribution is to be made
by a Danish listed company, including inclusion of certain information in the offer
document, if it is the intention to make distributions to the shareholders within the
first 12 months following the completion of the tender offer.

40

13

PUBLIC OFFERINGS OF SECURITIES

Admission to Listing

A regulated market shall admit securities to listing on application from an issuer,

provided that the conditions stipulated by law and regulation are satisfied, the
securities concerned are covered by the objects of the articles of association of the
relevant regulated market and the regulated market deems that admission to
listing is of public interest.

Admission Requirements Order

The Danish Financial Supervisory Authority has prescribed rules governing the
conditions for admission of securities for listing on a regulated market (the
Admission Requirements Order, Chapter 6). Accordingly, shares may be admitted
to listing on a regulated market if the expected market value of the shares of which
admission to listing is sought is at least EUR 1 million. Furthermore, the company
and its shares shall satisfy a number of conditions, including the following:

The legal position of the company and of the shares must be in conformity
with the laws and regulations to which it is subject, and with regard to the
company further conformity is required as regards both the company's formation and its operation under its statutes;

the filing or publication of the company's annual reports, and, if relevant, the
consolidated accounts, for the last three financial years preceding the application for listing (unless the Danish Financial Supervisory Authority exempts
from this requirement);

the shares must be freely transferable and the application for admission to
listing must generally cover all the shares of the same class already issued
(certain special exemptions exist);

the share capital of the company shall as a starting point be fully paid up;

at least 25% of the company's shares shall be offered at the initial public offering (i.e. at least 25% "free float").

Shares, which do not meet the conditions provided for above, may be admitted to
listing if an exemption is obtained from the Danish Financial Supervisory Authority.
Likewise, a number of conditions for the admission of bonds, debt securities and
other securities to listing have been set out in the Admission Requirements Order.
Rules issued by
NASDAQ OMX Copenhagen A/S

NASDAQ OMX Copenhagen A/S has issued a set of Rules for Issuers of Shares (the
"Rules", Chapter 18). The Rules are issued pursuant to Section 21(1) of the Securities Trading, etc. Act, according to which the operator of a regulated market shall
lay down supplementary provisions on terms and conditions for admission of securities to trading or listing, contents of prospectuses and disclosure requirements,
etc.

Prospectus Listed Securities

and Initial Public
Offer of unlisted

When applying for admission of securities for listing on a regulated market or initiating a public offer of unlisted securities, a prospectus shall have been drawn up
with a view to publication.

41

Securities with a
Value of more
than EUR5 Million

Two executive orders regulate the obligation to prepare and publish a prospectus;
one concerning "major" offers and one concerning "minor" offers. The Prospectus
Order ("Major" Offers) (Chapter 7) governs both listed securities and the initial
public offer of unlisted securities with a value of more than EUR 5 million, and is
amended in accordance with the Prospectus Directive. Furthermore, the European
Commission's Regulation 809/2004 as amended by EC Regulations 1787/2006 and
211/2007 (on complex financial history), and EU Regulations 486/2012 and 862/2012
(the Prospectus Regulation), are directly applicable in Denmark and contain a number of minimum requirements concerning the information to be provided in the prospectus.

Required Contents A prospectus must include the information which the Danish Financial Supervisory
of a Prospectus
Authority and the regulated market deem necessary for the investors and their investment advisers to be able to make an informed assessment of the issuer's assets and liabilities, financial position, profits and losses, and prospects of the issuer
and of any guarantor, and of the rights attached to the securities offered to the
public or admitted to listing or trading. The minimum requirements for the content
of a prospectus, which depend on the size of the issuer and the type of security to
be offered or listed, are set forth in the annexes to the Prospectuses Regulation.
Prospectus Exemptions

A number of exemptions exist from the obligation to publish a prospectus. The exemptions include, but are not limited to situations where the securities for which
admission to listing is applied for, are securities issued in connection with a public
exchange offer; or securities issued in connection with a merger; or securities issued to board members or employees of a listed company. Furthermore, the exemptions also include, but are not limited to, situations where the securities are
exclusively addressed to qualified investors; or are addressed to fewer than 150
natural or legal persons (which are not qualified investors) per EU Member State;
or if the nominal value per security amounts to at least EUR 100,000.

Publication

Public offers for subscription or sale of securities for which an application for admission to listing has been made shall not take place until a prospectus has been
published. After the Danish Financial Supervisory Authority's approval of the prospectus, it shall be published either by insertion in a Danish daily newspaper; or by
making it available, free of charge, to the public at the registered office of the issuer and at the offices of the financial organisations acting as the latter's paying
agents in connection with the application for admission to listing at the stock exchange; or electronically on the homepage of the issuer and on the homepage of
the financial organisations acting as the issuer's paying agents; or electronically by
use of the information system of the regulated market.
The prospectus shall be published as soon as practicably possible and no later than
prior to the listing of the securities on the regulated market or the public offer becomes effective.

Prospectus - Initial Public Offer of

unlisted Securities
with a Value between EUR 1 Mil-

Initial offers to the public of unlisted securities with a value between EUR 1 million
and EUR 5 million are not regulated by EU law, and thus the Member States are
free to lay down rules governing such offers. Consequently, the Prospectus Order
("Minor" Offers) (Chapter 8) has been passed. Pursuant to the Prospectus Order
("Minor" Offers), a prospectus shall be drawn up in a clear and well-organised

42

lion and EUR 5

Million

manner, and shall contain all information deemed necessary to enable investors
and their investment advisers to make an informed assessment of the issuer's assets and liabilities, financial position, profits and losses, and prospects of the issuer
and of any guarantor, and of the rights attached to the securities offered to the
public. A prospectus shall further contain information on the purpose of the issue,
the nature of the securities being offered and the price thereof, the nominal value
of the securities and number hereof, the rights attached to the securities as well as
any restrictions on the negotiability. The requirements applicable to such prospectuses comprise of less onerous terms than the requirements applicable to prospectuses concerning listing of securities etc. as mentioned above.

Prospectus Exemptions

A number of exemptions have been set out and they include a paramount majority
of the exemptions concerning "major" offers as listed above, as well as few additional exemptions concerning bonds and warrants. A prospectus which meets the
requirements for prospectuses with respect to securities to be admitted for official
listing on a regulated market in another Member State of the European Union or in
a country with which the Community has made an agreement pursuant to the provisions of Directive 2003/71/EC and which has been approved by the competent
authority in the Member State or in a country with which the Community has made
an agreement shall rank equal to a prospectus fulfilling the Danish requirements.
If admitted to listing on a regulated market, further requirements have to be adhered to by the company. Accordingly, the company shall ensure equal treatment
of all shareholders who are in the same position, and the company must ensure, at
least in each Member State in which its shares are listed, that all the necessary facilities and information are available to enable shareholders to exercise their rights.

14

INSTITUTIONS

Limited liability companies are not generally supervised by any authority.

However, certain corporate decisions must be registered and filed with the Danish
Business Authority ("Erhvervsstyrelsen") in order to be valid.
The Danish Financial Supervisory Authority ("Finanstilsynet"), a body under
the Ministry of Economics and Business Affairs, supervises compliance with a
number of provisions of the Securities Trading, etc. Act, supervises financial
institutions (banks, insurance companies, etc.) and issues rules and regulations
under the Securities Trading, etc. Act.
The Financial Council ("Det Finansielle Rd") serves as counsel to the Danish
Financial Supervisory Authority and is responsible for the supervision of the
accounting of companies listed on a stock exchange or on an authorised market
place.
NASDAQ OMX Copenhagen A/S (formerly OMX Nordic Exchange Copenhagen)
and GXG Official List (formerly Dansk AMP) are currently the only regulated
markets in Denmark. In addition, First North is a multilateral trading facility
established by NASDAQ OMX Copenhagen A/S. Securities listed on a Danish
registered market or on First North must be registered in VP SECURITIES A/S
("Vrdipapircentralen").

43

The Danish Competition Council ("Konkurrencerdet") and its secretariat, the

Danish
Copetition
and
Consumer
Authority
Competition
Board
("Konkurrence- og Forbrugerstyrelsen"), administer the Competition Act. Most
decisions of the Danish Competition Council can be appealed to the Appeal
Tribunal for Competition ("Konkurrenceankenvnet") or brought before the
judiciary.

44

Please note that the Danish Companies Act will come into force in phases and that some of its
provisions are therefore not yet effective. The first parts of the Act came into force on 1
March 2010, see Executive Order no. 172 of 22 February 2010 on the phased effectiveness of
the Danish Act on Public and Private Limited Companies (the Danish Companies Act), as
amended by Executive Order no. 142 of 22 February 2011.

Consolidated Act no 322 of 11 April 2011 on Public and Private Limited Companies
(the Danish Companies Act)1
(lov om aktie- og anpartsselskaber (selskabsloven))
as amended by Act no 1231 of 18 December 2012 and Act no 1383 of 23 December 2012
Future amendments: Act no 477 of 30 May 2012

Part 1
Scope of the Act, etc.
Scope

(1)

This Act applies to all public and private limited companies (limited liability companies).

(2)

The holders of shares in public and private limited companies (the shareholders) are not
personally liable for the obligations of the limited liability company, but are liable only to the
extent of their contributions. The shareholders have a right to a share of the profits of the
limited liability company in proportion to their ownership interest, unless otherwise provided
by the company's articles of association.

(3)

A private limited company may not offer its shares to the public.
Name of the limited liability company

(1)

Only public and private limited companies have the right and duty to use in their names the
designations "aktieselskab" (in English, public limited company) and "anpartsselskab" (in
English, private limited company) respectively, or the abbreviations "A/S" and "ApS" respectively.

(2)

The name of a limited liability company must be clearly distinguishable from the names of
other businesses registered with the Danish Commerce and Companies Agency (Erhvervs- og
Selskabsstyrelsen). The name may not include any family name, business name, distinctive
name of real property, trademark, distinctive mark or similar feature not belonging to the
limited liability company, or anything likely to cause confusion with such name or mark.

(3)

The name of a limited liability company must not be capable of being misleading. Where the
name of a limited liability company indicates a specific activity, the company may not continue using that name if the company significantly changes its principal activity.

(4)

Limited liability companies must specify their name, registered office and Central Business
Register (CVR) number on letters and other business papers, including electronic messages,
and on their website.

(1)

Section 2 also applies to any secondary names of limited liability companies.

45

(2)

If a limited liability company registers more than five secondary names, an amount of DKK
1,000 will be payable for each secondary name. However, this requirement does not apply to
secondary names that pre-date any reorganisation, merger or division.
Share capital

(1)

Limited liability companies within the meaning of this Act must have a share capital to be
denominated in Danish kroner or euro (but see subsection (3)).

(2)

Public limited companies must have a minimum share capital corresponding to DKK 500,000,
and private limited companies must have a minimum share capital corresponding to DKK
80,000.

(3)

The Commerce and Companies Agency may prescribe detailed rules governing the right to
denominate the share capital in a currency other than Danish kroner or euro.
Definitions

In this Act, the following terms have the following meanings:

1)

"Public limited company":

A limited liability company, including a limited partnership company, in which the capital
paid in by the shareholders is divided into shares. The shares may be offered to the
public. Shareholders are liable only to the extent of their contributions to the company.

2)

"Private limited company":

A limited liability company in which the capital paid in by the shareholders is divided into shares. Private limited companies may not offer their shares to the public (see section 1(3)). Shareholders are liable only to the extent of their contributions to the company.

3)

"Subsidiary":
A business controlled by a parent company (see sections 6 and 7).

4)

"The central governing body":

a)

the board of directors of companies having an executive board and a board of directors (see section 111(1), paragraph 1);

b)

the executive board of companies having only an executive board (see section
111(1), paragraph 2); and

c)

the executive board of companies having both an executive board and a supervisory
board (see section 111(1), paragraph 2).

46

5)

"The supreme governing body":

a)

the board of directors of companies having an executive board and a board of directors (see section 111(1), paragraph 1);

b)

the executive board of companies having only an executive board (see section
111(1), paragraph 2); and

c)

the supervisory board of companies having both an executive board and a supervisory board (see section 111(1), paragraph 2).

6)

"Shareholders' agreement":
An agreement governing the ownership and management of the company entered into
between the shareholders.

7)

"Share certificates":
Evidence of ownership of a share (see sections 59 and 60).

8)

"Register of shareholders":
A complete register of all shareholders that must be kept by the limited liability company (see section 50).

9)

"Bonus shares":
Shares issued in connection with a bonus share issue (see section 165).

10) "Cross-border relocation of registered office":

A limited liability company's relocation of its registered office from one EU or EEA Member State to another EU or EEA Member State.
11) "Cross-border merger or division":
A merger or division involving limited liability companies which are subject to the laws
of at least two different EU or EEA Member States.
12) "Registered office":
The address in Denmark at which the company may be contacted.
13) "Share":
A share as specified in sections 45 to 49.
14) "Shareholder":

47

An owner of one or more shares.

15) "Share class":
A group of shares carrying the same rights or obligations.
16) "Limited liability company":
A private limited company or a public limited company, including a limited partnership
company.
17) "Group":
A parent company and its subsidiaries (see section 7).
18) "Management":
All of the bodies specified in paragraphs 4 and 5 of this section. Any member of management may be a member of the company's supervisory board, board of directors or
executive board.
19) "Parent company":
A limited liability company controlling one or more subsidiaries (see sections 6 and 7).
20) "Limited partnership company":
A limited partnership (see section 2(2) of the Danish Act on Certain Commercial Enterprises (lov om visse erhvervsdrivende virksomheder)) in which the limited partners have
contributed a certain amount of capital which is divided into shares (see Part 21 of this
Act).
21) "Restoration":
Temporary reinstatement of a company after it has been deleted from the IT system of
the Commerce and Companies Agency (see section 235).
22) "Public limited shipping company:
A public limited company carrying on shipping activities (see section 112(2)).
23) "Date of registration":
The date on which a shareholder's right to attend and vote on his shares at a general
meeting is determined.
24) "Capital represented":

48

Voting or non-voting shares represented at the general meeting and carrying the right
of representation as provided by the articles of association.
25) "Right of representation":
A right that can be attached to non-voting shares, allowing the shareholder to attend
general meetings and be counted in the assessment of capital represented at the general meeting. Voting shares always carry a right of representation (see section 46).
26) "Share capital":
The contribution amount representing the extent of shareholder liability under this Act
(see section 4).
27) "State-owned public limited companies":
A public limited company with which the Danish Government has a connection similar to
that of a parent company and a subsidiary (see sections 6 and 7).
Groups

A group consists of a parent company and one or more subsidiaries. No business may have
more than one direct parent company. If more than one company satisfies one or more of
the criteria in section 7, only the company that has actual control of the financial and operating decisions of the business is deemed to be the parent company.

(1)

Control means the power to exercise decisive influence over a subsidiary's financial and operating decisions.

(2)

Control of a subsidiary exists where the parent company owns, directly or indirectly through
a subsidiary, more than half of the voting rights in a business, unless, in exceptional circumstances, it can be clearly demonstrated that such ownership does not constitute control.

(3)

Where a parent company holds half or less than half of the voting rights in a business, control exists if the parent company has
1)

the power to exercise more than half of the voting rights by virtue of an agreement with
other investors;

2)

the power to control the financial and operating policies of a business under any articles
of association or agreement;

3)

the power to appoint or remove the majority of the members of the supreme governing
body, and this body has control of the business; or

4)

the power to exercise the actual majority of votes at general meetings or an equivalent
body and thus the actual control of the business.

49

(4)

The existence and effect of potential voting rights, including rights to subscribe for and purchase shares that are currently exercisable or convertible, must be taken into account when
assessing whether a company has control.

(5)

Any voting rights attaching to shares owned by the subsidiary itself or by its subsidiaries
must be disregarded in the determination of the voting rights in a subsidiary.
Powers of the bankruptcy courts and the Maritime and Commercial Court

Any powers granted to the bankruptcy courts under this Act must be exercised by the bankruptcy court that has jurisdiction over the place where the company's registered office is situated. However, such powers must be exercised by the Maritime and Commercial Court in
Copenhagen for areas that fall within the jurisdiction of the Copenhagen City Court, the
Court of Frederiksberg, and the Courts of Glostrup and Lyngby (see section 4 of the Danish
Bankruptcy Act (konkursloven)).
Part 1a
Communication

8a

(1)

The Business Authority may prescribe rules stipulating that written communication to and
from the Authority about matters covered by this Act or rules issued under this Act must be
electronic.

(2)

The Business Authority may prescribe detailed rules about electronic communication, including the use of specific IT systems, particular electronic formats and digital signatures etc.

8b

(3)

Electronic communication is considered received when it is available to the addressee.

(1)

The Business Authority may prescribe rules stipulating that the Authority may issue decisions and other documents under this Act or under rules issued under this Act without any
signature, with an automatically or similarly reproduced signature or by use of a technique
that ensures precise identification of the party that has issued the decision or the document.
Such decisions and documents are compared to decisions and documents provided with a
personal signature.

(2)

The Business Authority may prescribe rules stipulating that decisions and other documents
that are exclusively made or issued solely on the basis of electronic data processing may be
issued merely with an indication that the Business Authority is the sender.

8c

(1)

Where this Act or rules issued under this Act requires a document issued by others than the
Business Authority to be signed, such requirement may be satisfied by the use of a technique that ensures that precise identification of the party that has issued the document (but
see subsection (2)). Such documents are compared to documents provided with a personal
signature.

50

(2)

The Business Authority may prescribe detailed rules about deviation from the signature requirements. It may be prescribed that requirements about a personal signature cannot be
deviated from in relation to specific types of documents.

Part 2
Registration and time limits
Registration

(1)

All information to be registered under this Act must be recorded in the Commerce and Companies Agency's IT system no later than two weeks after the date of the operative resolution, unless otherwise provided by or under this Act. Where the applicant does not register
the information directly in the Commerce and Companies Agency's IT system (see section
12(1), an application for registration must be received by the Agency no later than two
weeks after the date of the operative resolution.

(2)

The company's central governing body is responsible for ensuring that the information is
registered, or that an application for registration is filed with the Commerce and Companies
Agency.

(3)

Subsections (1) and (2) also apply to the publication of documents and other notices in the
Commerce and Companies Agency's IT system. Where the applicant does not publish the
document or notice in the Commerce and Companies Agency's IT system (see section
12(2)), the document or notice must be received by the Agency no later than two weeks after the date of the relevant event.

10

(1)

All members of the executive board, board of directors and supervisory board of a limited liability company as well as the company's auditor, if applicable, must be registered in the
Commerce and Companies Agency's IT system.

(2)

If an auditor (see section 144(1)) resigns or is removed before the end of his term, the registration of that information or the application for registration must be accompanied by an
adequate account by the central governing body of the reason for such termination of office.

11

Any amendment to the articles of association of a limited liability company or changes to

any other information registered with the Commerce and Companies Agency must be registered directly in the Agency's IT system or submitted to the Agency for registration (see section 9).

12

(1)

The Business Authority prescribes rules for applications for registration and registration of
matters registrable under this Act.

51

(2)

The Business Authority prescribes rules on the publication of registrations, documents and
other notices in the Authority's IT system under this Act.

(3)

The Business Authority may prescribe rules on fees for registration and printouts etc, publication, use of the Authority's IT system, and fees for reminders, etc. in connection with late
payment.

(4)

The Business Authority may prescribe rules for the payment of an annual fee for the administration of the provisions of this Act and for services for which no particular price has been
fixed.

13

(1)

The Commerce and Companies Agency may prescribe rules stipulating the language to be
used in the documentation submitted in connection with registrations or applications for registration by limited liability companies.

(2)

The Agency prescribes rules stipulating that voluntary registration and publication of company information may also be made in any other official language of the European Union in addition to the statutory publication in one of the languages permitted under subsection (1).

(3)

If there is any inconsistency between the documents and information that are subject to
compulsory registration and publication under subsection (1) and any translations of such
documents and information that have been voluntarily published under subsection (2), the
company cannot rely on the translation as against third parties. However, third parties may
rely on the text that has been voluntarily published as against the company, unless it is established that the third party had knowledge of the registrable version published in the IT
system of the Commerce and Companies Agency. Section 9(1) does not apply to documents
published voluntarily.

14

(1)

The Commerce and Companies Agency keeps a register of companies registered under this
Act. All registrations and publications under this Act must be made in the Agency's IT system.

(2)

All information published in the IT system is deemed to have been communicated to third
parties. However, the first sentence does not apply to transactions made on or before the
16th day after the date of publication if it is established that the third party could not have
known about the published information.

(3)

Information that is required to be registered and published cannot be enforced against third
parties until it has been published in the IT system, unless it is established that the third
party knew about the information. Third parties are not prevented from relying on information that has not yet been published.

15

(1)

Information cannot be registered if it does not comply with the provisions in or made under
this Act, or the company's articles of association. The subject-matter of any resolution can-

52

not be registered if the resolution has not been passed in accordance with the provisions in
or made under this Act, or the company's articles of association.
(2)

Any applicant registering information directly or filing an application for registration in the IT
system of the Commerce and Companies Agency warrants that the registration or application
is lawful, including that the applicant is duly authorised, and that the documentation required for the registration or application is valid.

(3)

Subsections (1) and (2) also apply to documents, etc. published in the IT system of the
Commerce and Companies Agency or filed with the Agency for publication, etc. under this
Act.

16

(1)

If the Commerce and Companies Agency believes that there is an error or defect in any information that has been filed for registration, and the error or defect can be rectified by a
resolution of the general meeting or the central governing body of the limited liability company, the Agency may set a deadline for remedying the matter. If the defect is not remedied
within the time stipulated, registration cannot be made.

(2)

If registration is refused under subsection (1), the applicant must be notified in writing to
such effect, including the reason for non-registration.

(3)

If the Commerce and Companies Agency learns that the legality of any registration, whether
pending or completed, is questionable, the Agency may decide to discontinue registrations
under section 9(1) until the matter has been clarified. The applicant must be notified in writing that registration cannot take place, including the reason for nonregistration. The Agency
may also publish a statement in its IT system explaining the reason for the decision.

(4)

For matters falling within subsection (3), the Commerce and Companies Agency may also
register any resignations of management.

17

(1)

The Commerce and Companies Agency may request any information necessary to determine
whether a limited liability company is in compliance with this Act, any rules made pursuant
to this Act, and the company's articles of association.

(2)

For the purposes of direct registration or an application for registration under the rules in
this Part of the Act, the Commerce and Companies Agency may request evidence of legal
registration or application for registration for up to three years after the date of registration.
In special cases, the Agency may also demand that the company submit a declaration by an
auditor that the financial transactions relating to the registration or the application for registration were legal. If the requirements in the first and second sentence are not complied
with, the Agency will set a time limit for remedying such non-compliance. If remedial action
is not taken within the time stipulated, the Agency may, if necessary, take steps to have the
limited liability company dissolved under the rules in section 226.

53

18

(1)

Particulars of the names and addresses of a company's promoters and the names, positions
and addresses of the members of management must be available at any time in the IT system of the Commerce and Companies Agency, whether the company is active or has been
dissolved. The Agency can make rules stipulating that certain information is not to be disclosed.

(2)

The personal information in subsection (1) will stop being updated once ten years have
passed since the person in question ceased to be registered in respect of a business registered in the Agency's IT system.

19
20

(Repealed).
(1)

If anyone asserts, except as provided in section 109, that the registration of a resolution
passed by the general meeting or the management of a company is detrimental to them, the
question of deregistration is to be determined by the courts.

(2)

Such legal proceedings must be commenced against the company within six months from the
date of publication of the registration in the Commerce and Companies Agency's IT system.
The court will send a transcript of the judgment to the Agency for publication of the outcome
of the case in the Agency's IT system.
Time limits

21

(1)

Where it is provided in this Act or in any rules or regulations made pursuant to this Act that
an action can or must be taken within a certain number of days, weeks, months or years before a specific event, the time allowed for taking such action is calculated from the day before the event.

(2)

If the time limit for taking action expires on a weekend, public holiday, 5 June (Constitution
Day), 24 December or 31 December, action must be taken on or before the last preceding
working day.

22

Where it is provided in this Act or in any rules or regulations made pursuant to this Act that
an action or a decision cannot be taken or made until a certain number of days, weeks,
months or years after a specific event has occurred, the time allowed for taking such action
or making such decision is calculated from the day after the event. Such action or decision
can only be taken or made from the day after expiry of the time limit.

23

(1)

Where it is provided in this Act or in any rules or regulations made pursuant to this Act that
an action must be taken within a certain number of days, weeks, months or years after a
specific event has occurred, the time allowed for taking such action is calculated from the
day after the event (see subsections (2) to (4)).

(2)

If the time limit in subsection (1) is stated in weeks, the time limit for taking action expires
on the same day of the week that the event took place.

10

54

(3)

If the time limit in subsection (1) is stated in months, the time limit for taking action expires
on the same day of the month that the event took place. If the event took place on the last
day of a month, or if the time limit expires on a date that does not exist in that month, the
time limit always expires on the last day of the month, irrespective of the number of days in
that month.

(4)

If the time limit in subsection (1) is stated in years, the time limit for taking action expires
on the anniversary of the date of the event.

(5)

If the time limit expires on a weekend, public holiday, 5 June (Constitution Day), 24 December or 31 December, action must be taken on or before the next working day.
Part 3
Formation
Promoters

24

(1)

A limited liability company can be established by one or more promoters.

(2)

A promoter must not be the subject of any pending reorganisaton or bankruptcy proceedings.

(3)

If the promoter is a natural person, that person must have full legal capacity and may not
be under guardianship under section 5 of the Danish Guardianship Act (vrgemlsloven),
nor may any surrogate decision-maker have been appointed for the promoter under section
7 of the Guardianship Act.

(4)

If the promoter is a legal person, that person must be authorised to acquire rights, enter into commitments and be a party to legal proceedings.
Memorandum of association

25

The promoters must sign a memorandum of association, which includes the articles of association of the limited liability company.

26

The memorandum of association must specify

1)

the names, addresses and Central Business Register (CVR) numbers, if applicable, of the
promoters of the limited liability company;

2)

the subscription price of the shares;

3)

the time limits for subscribing and paying for the shares;

4)

from which date formation takes legal effect (see section 40(3) to (5));

5)

from which date formation takes effect for accounting purposes (see section 40(6)); and

11

55

6)

whether the limited liability company must pay the initial expenses and, if so, the estimated amount of such expenses

27

(1)

The memorandum of association must also include provisions on the following matters if so
resolved:
1)

special rights or benefits accruing to the promoters or others;

2)

any agreement entered into with the promoters or others that may impose a major financial obligation on the limited liability company;

3)

that shares may be subscribed against contribution of assets other than cash (see section 35);

4)

that the annual report of the limited liability company is not to be audited if the company qualifies for an audit exemption under the Danish Financial Statements Act (rsregnskabsloven) or any other statute; and

5)
(2)

he amount of the subscribed share capital that is paid up at the date of formation.

In the memorandum of association the promoters must give an account of the circumstances
affecting the assessment of the provisions included pursuant to subsection (1). The account
must include the names and addresses of the persons who are subject to the provisions.

(3)

Documents that are referred to in the memorandum of association without their main contents being reproduced must be annexed to the memorandum of association.

(4)

Agreements on matters that are dealt with but not approved in the memorandum of association are not enforceable against the limited liability company.
Articles of association

28

The articles of association of a limited liability company must include information on:
1)

the company's name and any secondary name(s);

2)

the company's object(s);

3)

the amount of the share capital and the number or nominal value of the shares;

4)

the rights attaching to the shares;

5)

the company's governing bodies;

6)

notice of general meetings; and

7)

the company's financial year.

12

56

29

The articles of association of a limited liability company must also specify the resolutions to
be included in the articles of association as required by this Act and the latest date for termination of the company if its existence is time limited.
Subscriptions for share capital

30

Any subscription for shares must be specified in the memorandum of association with appendices (if any).

31
32

No share subscriptions may be made subject to reservations or at a discount.

(1)

The promoters decide whether to accept subscriptions for shares (but see section 31).

(2)

Where shares are oversubscribed, the promoters must decide how many shares to allot to
each individual subscriber before registration or application for registration (see sections 9
and 40). No promoter may be allotted shares of a smaller amount than that subscribed for
by that promoter in the memorandum of association.

(3)

The promoters must notify any subscriber for shares in a limited liability company as soon as
possible if

(4)

1)

the subscription is not accepted;

2)

the promoters consider the subscription to be invalid; or

3)

the amount subscribed for has been reduced because of oversubscription.

Any proposal to form a limited liability company with a larger or smaller share capital than
that specified in the articles of association is subject to the consent of all promoters and
subscribers for capital (see section 39(2)).

(5)

Where the share capital or any prescribed minimum capital has not been fully subscribed for
and accepted by the promoters, the formation of the limited liability company and the subscribers' obligations lapse. Any amount paid on the shares must be refunded. However, all
initial expenses may be deducted from the refunded amount where so stipulated in connection with the subscription.
Payment of share capital

33

(1)

An amount equal to 25% of the share capital, but not less than DKK 80,000, must be paid
up at all times.

Where a premium is fixed, it must be fully paid up, notwithstanding that

part of the share capital is not paid up. Payment must be made on each individual share.
However, where all or part of the share capital is paid up by way of noncash contributions
(see section 35), the entire share capital must be paid up.

13

57

(2)

The limited liability company's central governing body may call up share capital that has not
been paid up. Two weeks or more must be allowed for payment. The articles of association
may provide a longer period for payment, but this must not exceed four weeks.

(3)

The limited liability company's claims for payment on shares cannot be transferred or used
as security.

(4)

If the amount of the share capital is stated on the limited liability company's letters and
other business papers, including electronic messages, and on the company's website, both
the subscribed and the paid-up share capital amounts must be stated.

34

(1)

The rights of a shareholder under this Act subsist regardless of whether their shares are fully paid up (but see subsection (3)).

(2)

A shareholder must make payment on a share upon request from the central governing body
(see section 33(2)). However, any shareholder is entitled to pay the amount outstanding on
a share at any time, notwithstanding that the central governing body has not called up such
capital. In that case, the shareholder must pay the full amount outstanding on the share,
unless otherwise provided by the articles of association.

(3)

If a shareholder has failed to duly comply with the central governing body's request for
payment of the amount outstanding on a share, the shareholder may not exercise the voting
rights attaching to any part of his shareholding in the limited liability company at general
meetings and his shares will be considered unrepresented at general meetings until the
amount has been paid to and registered by the company. However, this does not apply to
the right to dividends and other payments, nor to the right to subscribe for new shares in
connection with a capital increase. The central governing body may set off the limited liability company's claim for payment of the share capital against distributions from the company
which the shareholder is entitled to receive as a shareholder.

(4)

Shareholders cannot set off a claim against the limited liability company against their obligation to pay outstanding amounts without the consent of the company's central governing
body. Such consent may not be given if the set-off may be detrimental to the limited liability
company or its creditors.

(5)

Shareholders cannot contribute assets other than cash to the limited liability company in
discharge of their obligations to pay outstanding amounts without the consent of the company's central governing body. Such consent may not be given if the contribution may be detrimental to the limited liability company or its creditors. A valuation report must also be
prepared under the provisions of sections 36 and 37, unless the contribution is governed by
section 38.

14

58

(6)

Where a shareholder transfers a share that has not been fully paid up, he will be jointly and
severally liable with the transferee and any subsequent transferees for payment of the outstanding amount on the share.
Special provisions on non-cash contributions

35

(1)

Any contribution of assets other than cash - a non-cash contribution - must have a value
that can be expressed as a money equivalent and may not consist of an obligation to do
work or perform services.

(2)

Claims against promoters or shareholders may not be contributed or acquired, regardless of

whether the claims are secured by a charge.

36

(1)

If the limited liability company is to acquire assets other than cash, the memorandum of association must be accompanied by a valuation report. The report must include
1)

a description of each contribution;

2)

information on the valuation method applied;

3)

the amount of the consideration to be paid for the acquisition; and

4)

a declaration that the financial value of the assets as assessed in the report is no less
than the agreed consideration, including the nominal value of the shares to be issued, if
applicable, and any premium on them.

(2)

The valuation may not be made more than four weeks before the date of signing of the
memorandum of association. If the four-week period is exceeded, a new valuation must be
made.

(3)

Where, in connection with its formation, the limited liability company acquires an existing
business or a controlling interest in another limited liability company, the valuation report
must also include an opening balance sheet for the limited liability company. The opening
balance sheet must be prepared in accordance with the Danish Financial Statements Act.
The opening balance sheet must be without any qualifications. If the limited liability company is subject to audit obligations under the Financial Statements Act or any other statute,
the opening balance sheet must contain an unqualified audit report.

37

(1)

The valuation report must be prepared by one or more impartial valuation experts. The promoters can appoint approved auditors to be valuation experts. In other cases, valuation experts may be appointed by the bankruptcy court that has jurisdiction over the place where
the limited liability company's registered office is to be situated.

(2)

Sections 133 and 149 of this Act and section 24 of the Danish Act on Registered and StateAuthorised Public Accountants (revisorloven) also apply to valuation experts.

15

59

(3)

The valuation experts must be allowed to make any investigation deemed necessary by them
and may request any information and assistance from the promoters or the limited liability
company that is required for the performance of their work.

38

(1)

The requirement for the preparation of a valuation report under section 36(1) does not apply
to contributions of:
1)

Assets measured individually and presented in financial statements or consolidated financial statements for the previous financial year that have been prepared in accordance with the provisions of the Danish Financial Statements Act or international accounting standards (as specified in the Regulation of the European Parliament and of the
Council on the application of international accounting standards) in accordance with accounting rules included in or made under financial services law, or in the financial
statements of a foreign business prepared under the rules of the Fourth Council Directive of 25 July 1978 (78/660/EEC), as amended, or the Seventh Council Directive of
13 June 1983 (83/349/EEC), as amended, and containing an audit report.

2)

Securities or money-market instruments recorded at the average price at which they

have been traded on one or more regulated markets over the four weeks preceding the
date of signing of the memorandum of association. However, a valuation report must be
prepared in accordance with section 36(1) if the central governing body of the limited liability company assesses that the average price is affected by extraordinary circumstances or otherwise cannot be assumed to reflect the current value.

(2)

The central governing body of the limited liability company is responsible for ensuring that
contributions made under subsection (1) are not detrimental to the company, its shareholders or creditors, and must issue a declaration containing
1)

a description of the asset and its value;

2)

information on the valuation method applied;

3)

a statement that the values stated at least correspond to the value of and, if applicable,
the premium on the shares to be issued as consideration for the contribution; and

4)
(3)

a statement that no new circumstances have arisen that affect the original valuation.

The central governing body must publish its declaration under subsection (2) in the Commerce and Companies Agency's IT system on or before the date of registration or application
for registration of the company's formation.
Election of management and, if applicable, auditor, etc.

39

(1)

Where the management and auditor, if applicable, of the limited liability company have not
been elected in connection with the company's formation, the promoters must hold a general
meeting to elect the management and auditor no later than two weeks after signing the

16

60

memorandum of association. The company's formation and the elected management and auditor, if applicable, must be registered directly or an application for registration must be
filed as provided in section 9.
Registration
40

(1)

The limited liability company must be registered directly in the Commerce and Companies
Agency's IT system or an application for registration must be submitted (see section 9) no
later than two weeks after the date of signing of the memorandum of association. If no registration has been made or no application for registration has been received by the Commerce and Companies Agency before expiry of the two-week period, the company cannot be
registered.

(2)

The limited liability company may only be registered if at least 25% of the aggregate share
capital, but not less than DKK 80,000 (see section 4(2)), has been paid up (see section
33(1), first sentence). Where a premium has been fixed, this must be paid up in full (see
section 33(1), second sentence). On registration or submission of an application for registration under subsection (1) proof of the capital having been paid to the company no later than
at the time of registration/application for registration must be submitted.

(3)

The formation of the limited liability company will be effective from the date of signing of, or
from any later date specified in, the memorandum of association (but see subsections (4)
and (5)).

(4)

If the share capital is paid up by way of cash contributions, formation may be effected no
later than 12 months after the memorandum of association has been signed.

(5)

If the limited liability company acquires assets other than cash in connection with its formation, the formation must be effected on or before the date of registration or application
for registration of the company (see subsection (1)).

(6)

If the limited liability company acquires an existing business or a controlling interest in another limited liability company in connection with its formation, the formation may take effect for accounting purposes from the first day of the current financial year of the business
which is acquired or in which an interest is acquired.

41

(1)

No limited liability company that has not been registered may acquire rights, undertake obligations or be a party to any legal action other than actions to recover subscribed share capital and other actions relating to the subscription for shares. The company must add the
words "under stiftelse" (in English, in the process of formation) to its name.

(2)

Where a limited liability company is formed and the date of formation falls after the date on
which the memorandum of association is signed, no rights may be acquired and no obligations may be entered into on behalf of the company in the period until the company's formation becomes legally effective.

17

61

(3)

Anyone who has undertaken an obligation on behalf of the limited liability company after the
date on which the memorandum of association is signed, but before the date of registration,
or who has joint responsibility in this respect, will be jointly and severally liable for that obligation. Upon registration, the limited liability company acquires the rights and obligations
stipulated in the memorandum of association or conferred on the company after the signing
of the memorandum of association.

(4)

Where a contract is made before the limited liability company has been registered and the
contracting party knew that the company was not registered, the contracting party may
terminate the contract if the company is not registered with the Commerce and Companies
Agency on or before expiry of the time limit specified in section 40(1), or if registration is
refused. However, this only applies in the absence of an agreement to the contrary. If the
contracting party did not know that the limited liability company was not registered, the
contracting party may terminate the contract as long as the company remains unregistered.
Subsequent acquisitions

42

(1)

Where a public limited company acquires assets from a promoter, the central governing
body of the company must for the general meeting's resolution to approve the acquisition issue a statement giving particulars of the circumstances of the acquisition if
1)

the acquisition takes place in the period between the date of signing of the memorandum of association and 24 months after the date of registration of the limited liability
company; and

2)
(2)

the consideration corresponds to no less than one-tenth of the share capital.

The central governing body of the public limited company is responsible for ensuring that no
acquisition of shares is detrimental to the company, its shareholders or creditors.

43

(1)

Where a public limited company acquires assets from a promoter and that acquisition falls
within section 42(1), a valuation report must also be prepared as provided by sections 36
and 37, unless the acquisition is governed by section 38.

(2)

However, if the asset acquired under subsection (1) is an existing business, the opening balance sheet to be prepared under section 36(3) must be prepared as a pre-acquisition balance sheet for the acquired business.

44

(1)

The statement under section 42 and the valuation report under section 43 must be published
by the central governing body in the Commerce and Companies Agency's IT system no later
than two weeks after the date of the resolution to make the contribution.

(2)

Sections 42 and 43 do not apply to the usual business transactions of the public limited
company.

18

62

Part 4
Shares, registers of shareholders, etc.
Shares
45

In limited liability companies, all shares carry equal rights. However, the articles of association of a company may provide that the company must have different share classes, in which
case the articles must specify the different characteristics and size of each class.

46

(1)

All shares carry voting rights. However, the articles of association of a limited liability company may provide that certain shares carry no voting rights, and that the voting power of
certain shares differs from that of the other shares.

(2)

Non-voting shares only carry a right of representation if so provided by the articles of association.

47

(1)

Limited liability companies may issue par value shares or non-par value shares, or any combination of such shares.

(2)

Non-par value shares have no nominal value. Each non-par value share represents an equal
amount of the share capital.

(3)

The amount of the share capital represented by par value shares is based on the proportion
between the par value and the share capital, and the amount represented by non-par value
shares is based on the number of shares issued.

48

(1)

Shares are freely transferable and non-redeemable, unless otherwise provided by statute.

(2)

Shares may be registered in the names of the holders. The articles of association may include restrictions on the transferability of registered shares, or rules on their redemption.
Shares may also be issued to bearer.

49

(1)

No purchaser of a registered share may exercise the rights conferred on that purchaser as a
shareholder unless and until the purchaser has been registered in the register of shareholders or has given notice of his acquisition of the shares to the company and established good
title to them. However, this does not apply to the right to receive dividends and other distributions, or to the right to subscribe for new shares issued in connection with a capital increase.
Register of shareholders

50

(1)

As soon as possible after the formation of the company, the central governing body must set
up a register of shareholders.

(2)

The company may keep the register of shareholders by registering the information specified
in sections 52 and 56(2) in the Commerce and Companies Agency's IT system (see section
58).

19

63

(3)

The articles of association may provide that the register of shareholders must be kept by a
person designated by the company to keep the register on its behalf. The articles of association must set out the name and address of the person charged with keeping the register of
shareholders. If that person is a legal person, only the Central Business Register (CVR)
number needs to be stated. The Commerce and Companies Agency may prescribe detailed
rules permitting persons to keep registers of shareholders, including the requirements that
must be met by such persons.

51

(1)

The register of shareholders must be kept available for inspection by public authorities. The
articles of association must specify the place where the register of shareholders is to be kept
if it is not kept at the company's registered office. The register of shareholders must be kept
within the EU/EEA.

(2)

For companies whose employees are entitled to elect representatives to the company's supreme governing body under section 140, but that right has not been exercised, the register
of shareholders must also be kept available for inspection by an employee representative.
For groups whose employees have not elected members to the company's supreme governing body under section 141, the register of shareholders of the parent company must be
kept available for inspection by employee representatives from the other Danish group companies.

(3)

Subsection (2) that applies to companies with no employee representatives on the board of
directors also applies to European Companies (SEs) in which no employee representatives
have been elected to the administrative or supervisory body in accordance with the rules
governing employee participation in SEs.

(4)

The articles of association may provide that the register of shareholders must also be kept
available for inspection by the shareholders, including in electronic form (but see subsections (5) and (6)). A resolution to such effect must be passed by the general meeting with
the majority of votes required to amend the articles.

(5)

Where the register of shareholders as specified in section 50(2) is kept available for inspection in electronic form, the company may fulfil its obligations under subsections (1) to (4) by
giving those entitled to inspect the register under subsections (1) to (4) access to the electronic register. The company may discharge its obligations by registering the information
specified in section 52 in the Commerce and Companies Agency's IT system (the public register of shareholders) in accordance with section 58(2).

(6)

In private limited companies, the register of shareholders must be kept available for inspection by all shareholders.

52

(1)

Unless issued through a securities centre, shares must be entered in the register of shareholders in numerical order. For companies that have not issued share certificates or have issued registered shares, or whose shares have not been issued through a securities centre,

20

64

the register of shareholders must contain information about all holders of shares and charges, the date of acquisition, disposal of or charge over the shares, the voting rights attaching
to the shares, the names and addresses of the shareholders or, in the case of businesses,
their name, Central Business Register (CVR) number and registered office. If the shareholder or charge holder is a foreign national or a foreign legal person, the notice to be given under section 53(1) must be accompanied by other documentation ensuring unambiguous identification of the shareholder.
53

(1)

The shareholder or charge holder must notify the limited liability company of any change in
share ownership or charge. The notice from the shareholder or charge holder must be received by the company no later than two weeks after the date of the change of ownership or
charge. The notice must contain information about the new shareholder or charge holder as
specified in section 52. Where shares are transferred, the name of the new holder need not
be registered (but see section 54(3)).

(2)

Any notice of a change of ownership or charge must be entered in the register of shareholders, including particulars of the new shareholder or charge holder, provided that the articles
of association do not prevent the acquisition.

The company or, respectively, the keeper of

the register of shareholders can make registration subject to the new shareholder or charge
holder establishing good title to the shares or charge. Entries in the register of shareholders
must be dated.
(3)

The company or, respectively, the keeper of the register of shareholders must provide evidence of registration in the register of shareholders upon request from a shareholder or
charge holder.

54

(1)

In public limited companies that have not issued share certificates or have not issued shares
through a securities centre, the information specified in section 52 must be set out in the
register of shareholders, but bearer shares need only be registered with a serial number.
Unless issued through a securities centre, the shares must be entered in the register of
shareholders in numerical order.

(2)

Where a share certificate is issued for more than one share, the register of shareholders
must also contain information about the serial number of the share certificate, the serial
numbers of the shares covered by the certificate and their nominal value.

(3)

Where a registered share is transferred, and the articles of association do not prevent the
new owner's acquisition of the share, the name of the new owner must be registered if the
new owner so requests and establishes good title to the share. The company or, respectively, the keeper of the register of shareholders must endorse the registered share to the effect
that registration has been made, or, if so provided by the articles of association, issue evidence of Notification of significant shareholdings

55

(1)

Any holder of shares in a limited liability company must notify the company if

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65

1)

the voting rights attaching to the shares represent 5% or more of the voting rights of
the share capital, or represent 5% or more of the share capital; or

2)

any change occurs to a previously notified shareholding to the effect that the 5, 10, 15,
20, 25, 50, 90 or 100% thresholds and the thresholds of one-third or two-thirds of the
voting rights or of the share capital are reached or no longer reached.

(2)

Shareholdings under subsection (1) include

1)

shares whose voting rights are held by a business controlled by the shareholder as specified in section 7; and

2)

shares that the holder has provided as security, unless the charge holder controls the
voting rights and declares an intention to exercise them.

(3)

The Commerce and Companies Agency may prescribe detailed rules on the holding of shares
and notification of shareholdings under subsections (1) and (2). The Agency may also prescribe rules deviating from subsection (1) for shares in public limited companies whose
shares are admitted to trading on a regulated market, including rules on a shorter notice period.

56

(1)

Notification under section 55 must be provided to the company no later than two weeks after
a change that affects one of the thresholds specified in section 55(1) with the result that a
new threshold is reached, or a threshold that was previously satisfied is no longer reached.
The company must enter the information in the register of shareholders.

(2)

The notification must include information on the date of acquisition or disposal of the shares,
the number and, if applicable, the class of shares, the shareholder's full name and address
or, in the case of a business, its name, Central Business Register (CVR) number and registered office. If the shareholder is a foreign national or a foreign legal person, the notification
must be accompanied by other documentation ensuring clear identification of the shareholder. The Commerce and Companies Agency may prescribe detailed rules in this respect.

(3)

The notification must also include information on the size and nominal value, respectively, of
the shares and the voting rights attaching to them. The notification to the company may be
given in connection with the notice to be given under section 53(1).

57

The Commerce and Companies Agency prescribes rules on the notification of shareholdings
in state-owned public limited companies in accordance with section 55, including rules stipulating
1)

the definition of a shareholding; and

2)

that notification must be given to the company as soon as possible.

22

66

Public register of shareholders

58

(1)

Upon receipt of a notification under section 55(1), the company must register the information in the Commerce and Companies Agency's IT system as soon as possible.

(2)

The company must also provide notice as soon possible of any changes to the information
notified under subsection (1) that affect the thresholds in section 55(1) and mean that any
new thresholds are reached, or any that were previously satisfied are no longer reached.

(3)

All information received under subsections (1) and (2) must be published in the Commerce
and Companies Agency's IT system. The provisions of Part 2 governing registration apply
with such changes as are necessary.
Share certificates

59

A share certificate may be issued for one or more shares. If a share certificate is issued for
more than one share, the certificate must state its own serial number and the serial numbers and nominal value, if applicable, of the shares covered by the certificate.

60

(1)

The central governing body can resolve to issue and cancel share certificates. Share certificates may only be issued if so provided by the articles of association (but see section
64(1)), or if the share certificates are negotiable instruments or issued to bearer, in which
case share certificates must be issued for all shares, unless they are issued through a securities centre (see section 7(1)(iii) of the Danish Securities Trading Act (lov om vrdipapirhandel m.v.)).

(2)

However, if the shares are subject to restrictions on transferability or the shareholders are
required to have their shares redeemed, no share certificates may be issued to bearer, and
no transfer of share certificates to bearer will be binding on the public limited company.

(3)

No share certificates may be delivered until the capital subscription has been registered with
the Commerce and Companies Agency. Registered shares may only be delivered to shareholders registered in the company's register of shareholders.

(4)

Share certificates must state the name, registered office and registration number of the
company, and the serial number, size or nominal value of the share. Share certificates must
also state whether the certificate is to be registered in the name of the holder or whether it
may be issued to bearer, and must indicate the date or month of issue. Share certificates
must be signed by the central governing body. However, the signature may be mechanically
reproduced.

(5)

If the articles of association provide that shares of different classes can be issued, the share
certificate must state the class of the share.

(6)

Share certificates must also reference any provisions of the articles of association that stipulate that

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67

1)

the shares must be registered in the names of the holders in order to carry voting
rights;

(7)

2)

certain shares carry special rights;

3)

shareholders are required to have their shares redeemed;

4)

the shares are non-negotiable instruments;

5)

the shares are subject to restrictions on transferability; and

6)

the shares may be cancelled without a court order.

Share certificates must contain a proviso that the particulars set out in subsection (6), paragraphs 3 to 5, may have been changed subsequent to the date of issue, altering the legal
position of the shareholder. Where such changes are made, the central governing body must
take all reasonable steps to have the share certificates endorsed to such effect or replaced
by new share certificates.
Shares issued through a securities centre

61

(1)

For shares issued through a securities centre, the limited liability company's central governing body must ensure that the securities centre receives the following particulars as well as
information on any subsequent changes to these as soon as possible:
1)

The company's name, registered office, postal address and registration number in the
register of limited liability companies.

2)

The company's share capital, including the number and size of the shares, and, for registered shares, also the names and addresses of the shareholders. Companies with more
than one class of shares must list the information by class.

(2)

3)

Any particular rights or obligations attaching to specific shares.

4)

Any requirement for the shares to be registered in order to carry voting rights.

No shares may be issued through a securities centre until the company has been registered
in the Commerce and Companies Agency's IT system.

(3)

In connection with any capital increases, the central governing body must ensure that preemption rights and rights to bonus shares are registered, and specify the number of rights
required for new shares. For new shares, the date from which they confer rights in the company must be specified. If the capital increase has not been registered in the register of limited liability companies, or if a share has not yet been fully paid up, the central governing
body must register information to that effect with the securities centre.

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68

(4)

The central governing body must ensure that any resolution to reduce capital, and the
amount of the reduction, is registered with the securities centre as soon as possible after
the resolution is passed.

(5)

The Commerce and Companies Agency may prescribe detailed rules on the information to be
provided under subsections (1) to (4).

62

(1)

If the shares in a public limited company are to be issued through a securities centre, the
company must provide the securities centre with the information specified in section 61 as
soon as possible.

(2)

Any share certificates for shares in the public limited company must be delivered to an account-holding bank in the manner prescribed by the registration notice issued by the securities centre. The shareholder and the company must provide the information prescribed in
the registration notice.

(3)

The public limited company must pay all of the costs associated with issuing its shares, etc.
through a securities centre. The public limited company must enter into an agreement with
one or more account-holding banks stipulating that the shareholders may, at the company's
expense,

(4)

1)

have their shares, etc. registered and held in safe keeping by such banks; and

2)

receive notification of dividends, etc. and an annual statement of their account.

The shareholders are entitled to appoint an account-holding bank of their choice to provide
the services listed in paragraphs 1 and 2, provided that that bank agrees to provide these
services at the same cost to the public limited company as would have been charged by the
bank with which the company has an arrangement.

63

Where the company's shares are required to be registered with a securities centre, and
three years after the call for registration has been made there are still some shares that
have not been registered, the central governing body may, by notice in the Commerce and
Companies Agency's IT system, request that the shareholders register their shares within an
additional period of six months. Upon expiry of that six-month period, the central governing
body may sell any unregistered shares, at the expense of the relevant shareholder(s),
through a securities dealer as defined in section 4(3) of the Danish Securities Trading Act.
The public limited company is entitled to deduct the expenses incurred in connection with
the notice and sale of the shares from the proceeds of the sale. Any proceeds not claimed
within three years of the sale will accrue to the public limited company.

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69

Cancellation of share certificates

64

(1)

Where a company's shares are admitted to trading on a regulated market (see section
7(1)(ii) of the Danish Securities Trading Act), the shareholders are not entitled to demand
that share certificates be issued.

(2)

Where a limited liability company has issued share certificates, the company may request
the shareholders to return the certificates for cancellation. The company must provide at
least three months' notice in accordance with the rules provided by this Act and the company's articles of association regarding notice of annual general meetings, and must provide
notice in writing to all shareholders registered in the register of shareholders. The rights
conferred on a shareholder may not be exercised until the share certificate has been returned to the limited liability company. However, this does not apply to the right to receive
dividends and other distributions or the right to subscribe for new shares issued in connection with a capital increase.

(3)

Subsection (1) does not apply to shares that are negotiable instruments or bearer shares.
Transfer of shares

65

(1)

Any transfer of a share that has not been issued through a securities centre, or for which no
share certificate has been issued in ownership or by way of security, will only be effective
against the creditors of the transferor if the limited liability company or the keeper of the
register of shareholders (see section 50(3)) has received notice of such transfer from the
transferor or the transferee.

(2)

Where a shareholder has transferred the same share to more than one transferee and the
share is governed by subsection (1), any subsequent transferee takes priority over prior
transferees once the limited liability company or the keeper of the register of shareholders
(see section 50(3)) has received notice of the transfer to the subsequent transferee, provided that the subsequent transferee acted in good faith when the company or the keeper of
the register of shareholders received the notice.

66

(1)

Where a share certificate is transferred in ownership or by way of security, the provisions of

section 14(1) and (2) of the Danish Debt Instruments Act (lov om gldsbreve) apply, with
such changes as are necessary. However, such provisions do not apply if a clear and unambiguous reservation has been made on the share certificate in accordance with the limited liability company's articles of association, stipulating, for instance, that the certificate is a
non-negotiable instrument. Any share certificate issued to bearer remains a bearer security
unless the owner's name is stated on the certificate, even if it is endorsed by the public limited company to the effect that the share is registered in the name of the holder.

(2)

The provisions of sections 24 and 25 of the Debt Instruments Act apply to dividend coupons.

26

70

(3)

Share certificates may be cancelled without a court order only when the articles of association of the limited liability company and the share certificate provide for such cancellation.
Notice of cancellation must be provided in the Commerce and Companies Agency's IT system
as follows:
1)

at least four weeks' notice for cancellation of share certificates that are non-negotiable
instruments; and

2)
(4)

at least six months' notice for cancellation of other share certificates.

The provisions of subsection (3) apply, with such changes as are necessary, to coupons and
renewal coupons (talons). Coupon sheets and the accompanying share certificates may be
cancelled without a court order unless otherwise provided by the articles of association.
Part 5
Restrictions on negotiability and redemption
Pre-emption rights

67

(1)

If the articles of association grant a pre-emption right to shareholders or others in the event
of a transfer of shares, the articles of association must include detailed rules on such preemption rights, including the time allowed for exercising those rights. If these provisions
lead to a price or terms that are obviously unfair, they may be set aside in whole or in part
by a court order.

(2)

For the purpose of the court proceedings (see subsection (1), second sentence), the parties
may rely on the rules in subsection (3) and have an expert appointed to assess whether the
price is obviously unfair and to fix an appropriate price.

(3)

If the articles of association do not include any provisions about calculating the price payable on the exercise of a pre-emption right, the price must, in the absence of agreement, be
fixed at the value of the shares as assessed by an expert appointed by the court with jurisdiction over the place where the limited liability company's registered office is situated. The
expert's opinion may be brought before the court. Such proceedings must be commenced
within three months of receipt of the expert opinion. All costs pertaining to the expert must
be paid by the shareholder requesting the expert opinion, but may be imposed on the company if the opinion differs significantly from the price and is used in whole or in part as a
basis for calculation.

(4)

Where more than one share is transferred, the pre-emption right cannot be exercised for only part of the shares unless authorised by the articles of association.
Consent to sale

68

(1)

If the articles of association make the transfer of shares subject to consent, a decision as to
consent must be made as soon as possible after receipt of a request for consent. The person

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71

requesting such consent must be notified of the decision as soon as possible. If no notification has been given within four weeks of receipt of the request, consent will be deemed to
have been given.
(2)

If the articles of association make the transfer of shares subject to the consent of the limited
liability company, the central governing body must make the decision, unless such decision
is to be made by the general meeting. The reason for any refusal of consent must be stated
in the notification (see subsection (1)).
Redemption

69

If the articles of association include provisions on redemption, such provisions must specify
the terms of redemption and the persons entitled to demand redemption. Section 67 applies
with such changes as are necessary. The shares held by a shareholder may be redeemed only in aggregate, unless otherwise provided by the articles of association.

70

(1)

Any shareholder holding more than nine-tenths of the shares in a limited liability company
and a corresponding share of the votes may demand that the other shareholders have their
shares redeemed by that shareholder. In this case, the other shareholders must be requested, under the rules governing notice for general meetings, to transfer their shares to the
shareholder within four weeks.

(2)

The terms of redemption and the basis used for determining the redemption price must be
set out in the request. It must also be stated in connection with the redemption that in the
event that no agreement can be reached on the redemption price, such price will be fixed
under the rules in section 67(3) by an expert appointed by the court with jurisdiction over
the place where the registered office of the limited liability company is situated. If the redemption is carried out for the purpose of a takeover bid under the rules in Part 8 of the
Danish Securities Trading Act, the rules in that Act on price determination apply to the redemption, unless a minority shareholder requests that the price be fixed by an expert. The
request must also include the information referred to in subsection (3), first sentence. Finally, the request must include a statement by the central governing body of the limited liability company on the general terms of redemption.

(3)

Where the expert opinion or a decision made pursuant to section 67(3) leads to a redemption price that is higher than that offered by the shareholder, the higher price will also be
valid for the holders of shares of the same class who have not requested an opinion. The
costs pertaining to the price determination are payable by the shareholder who has requested such determination. Where an opinion or decision leads to a redemption price that is
higher than that offered by the redeeming shareholder, the court that appointed the expert
may order the redeeming shareholder to pay the costs in whole or in part.

71

(1)

If an acquisition of shares in a limited liability company which has one or more shares admitted to trading on a regulated market in an EU/EEA Member State leads to redemption

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72

under section 70(1) or to an obligation to make a general offer under section 31(1) of the
Danish Securities Trading Act, the price determination rules provided for in the Securities
Trading Act apply, unless a minority shareholder requests that the price be fixed by an expert (see section 67(3)).
(2)

If the redemption is carried out for the purpose of a takeover bid (see section 70(2), third
sentence), the consideration for the redemption may be in the same form as specified in the
offeror's initial takeover bid, or it may be payable in cash. Minority shareholders are always
permitted to demand cash payment as consideration for redemption.

(3)

Any request for redemption in connection with a takeover bid (see section 70(2), third sentence) must be made within three months of expiry of the offer period stipulated in the offeror's takeover bid.

(4)

The Commerce and Companies Agency prescribes rules governing offeror redemptions of
shares which are held by the other shareholders, and also specify how share acquisitions are
to be determined in connection with a takeover bid (see section 70(2), third sentence).

72

(1)

If all of the shareholders have not transferred their shares to the redeeming shareholder
within the time limit provided for in section 70(1), they must be requested, by a statement
published in the Commerce and Companies Agency's IT system, to transfer their shares in
accordance with section 70, and must be given three months to do so.

(2)

The statement under subsection (1) must include the information referred to in section
70(2) and the date of any expert opinion or court order given under section 67(1). Finally, it
must be stated that the shares, after expiry of the time limit in subsection (1), will be registered in the name of the redeeming shareholder in the limited liability company's register of
shareholders, and that the right to demand an expert opinion will be forfeited on expiry of
this time limit.

(3)

Where any shares have not been transferred to the redeeming shareholder within the time
limit stipulated in the statement published in the Commerce and Companies Agency's IT system pursuant to subsection (1), the redeeming shareholder must, as soon as possible, without qualifications and in favour of the relevant shareholders, deposit the amount necessary
to redeem the shares that have not been transferred (see the Danish Escrow Account Act
(lov om skyldneres ret til at frigre sig ved deponering)).

(4)

Upon the deposit, the share certificates for the redeemed shares will be considered cancelled. The company's central governing body must ensure that the new share certificates
are endorsed to the effect that they replace the cancelled share certificates.

73

If a shareholder holds more than nine-tenths of the shares in a company and a corresponding share of the votes, each minority shareholder of the company may demand redemption

29

73

by that shareholder. Section 67(3), the second sentence of section 70(2), and subsection
(3), second and third sentences, apply with such changes as are necessary.
Amortisation
74

(1)

The articles of association of the limited liability company may include provisions for a reduction of the share capital by redemption of shares in accordance with existing applicable
rules.

(2)

In connection with a capital reduction under subsection (1), the shareholders may be paid
by the issue of bonds if so provided for in the articles of association.

(3)

Amortisation may be initiated by the central governing body in respect of shares subscribed
for after inclusion of the provisions on reduction in the articles of association. The central
governing body can make the necessary amendments to the articles of association.

75

Capital reductions by way of amortisation can be implemented without publication of a request in the Commerce and Companies Agency's IT system asking creditors of the limited liability company to file their claims against the company, provided that the reduction takes
place by way of cancellation of shares that have been fully paid up (see section 193).
Part 6
General meetings
Shareholders' rights to pass resolutions

76

(1)

The shareholders' rights to pass resolutions are exercised at the general meetings of the
limited liability company.

(2)

Shareholders can pass resolutions at a general meeting without complying with the requirements as to form and notice in this Act and the company's articles of association, provided
that all shareholders agree to do so (but see subsection (5)).

(3)

Resolutions made by shareholders at a general meeting can, in general, be passed without

complying with the rules on form and notice provided by this Act (but see subsection (5)). A
resolution to that effect must be passed by unanimous agreement, and rules that provide for
passing such resolutions must be set out in the articles of association. Section 106 applies
to any amendment to or abolition of such rules. However, where shareholders holding more
than 10% of the share capital so request, general meetings must be held by physical attendance.

(4)

The central governing body may determine that persons other than those specified in this
Act are entitled to attend general meetings, unless otherwise provided by the articles of association.

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74

(5)

The shareholders of state-owned public limited companies and public limited companies
whose shares are admitted to trading on a regulated market in an EU or EEA Member State
may not pass resolutions without complying with the rules on form and notice provided by
this Act (see subsections (2) and (3)). This also applies to public limited companies whose
general meetings must be open to the press by virtue of statute or an executive order.

(6)

General meetings of state-owned public limited companies must be open to the press.
Electronic general meetings

77

(1)

Unless otherwise provided by the company's articles of association, the central governing
body may determine that in addition to a right to physically attend general meetings, shareholders may be given the right to attend electronically, including using electronic voting that
does not require physical attendance at the meeting, so that the general meeting will be
partly electronic (see subsections (3) to (6)).

(2)

The general meeting may resolve to hold general meetings electronically without any opportunity for parties to physically attend, so that the meeting is held by electronic means alone
(see subsections (3) to (6)). A resolution to that effect must explain how electronic media
can be used to attend the general meeting. The resolution must be recorded in the company's articles of association. Section 106 applies to the resolution and to any amendments
made to it.

(3)

The central governing body must prescribe the requirements for electronic systems to be
used to conduct general meetings that are held electronically, in whole or in part. The notice
convening the general meeting must specify those requirements and explain how shareholders can register to attend the general meeting electronically and where they can find information about the procedure for attending.

(4)

General meetings may only be held electronically, in whole or part, if the central governing
body of the limited liability company ensures that the general meeting can be properly conducted. The system to be used must be set up in a manner that satisfies the requirements of
this Act for holding general meetings, including shareholder rights to attend, speak and vote
at general meetings. The system must also be able to reliably determine which shareholders
attend the general meeting, the capital and voting rights represented by them, and the outcome of voting.

(5)

If a public limited company has issued bearer shares without specifying a date of registration (see section 84), the notice convening the general meeting (see subsection (3)) must
also specify how the holders of such shares must establish their right to electronically attend
the general meeting.

(6)

All of the provisions in this Act that regulate the holding of general meetings apply, with any
necessary modifications, to general meetings conducted in whole or in part by electronic
means.

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75

Right to attend and vote, etc.

78

All shareholders are entitled to attend and speak at general meetings (but see section
84(1)).

79

If a share is jointly held by multiple shareholders, the rights attaching to the share may only
be exercised against the limited liability company by a proxy jointly appointed by such
shareholders.

80

(1)

All shareholders are entitled to attend general meetings by proxy.

(2)

The proxy must produce a written and dated instrument of proxy. Proxy appointments may
be revoked at any time. Notice of revocation must be given in writing and may be given to
the limited liability company. Shareholders can make and revoke proxy appointments electronically.

(3)

If a proxy has been appointed by more than one shareholder, the proxy may vote differently
on behalf of the different shareholders.

(4)

Management of the limited liability company can be appointed as proxy for terms no longer
than 12 months and only for the purpose of a specific general meeting for which the agenda
is known in advance.

(5)

Any public limited company whose shares are admitted to trading on a regulated market
must make hard copy or electronic proxy forms available to all shareholders entitled to vote
at general meetings and must offer the shareholders at least one method of notifying the
company of electronic proxy appointments. The appointment of a proxy, the notice of the
appointment to the public limited company, and the issue of any voting instructions to the
proxy can only be made subject to such formal requirements as are necessary and reasonable for the purpose of identifying the shareholder and the proxy as well as verifying the contents of the voting instructions. This also applies to the revocation of proxy appointments.

81

All shareholders and proxies may attend general meetings together with an adviser.

82

Shareholders' agreements are not binding on the limited liability company, or with regard to
resolutions passed at general meetings.

83

If a public limited company whose shares are admitted to trading on a regulated market has
designated a bank through which the company's shareholders may exercise their financial
rights, the company must notify the shareholders.

84

(1)

In public limited companies whose shares are admitted to trading on a regulated market, a
shareholder's right to attend a general meeting and to vote on their shares must be determined on the basis of the shares held by the shareholder at the date of registration. The
date of registration is one week before the date of the general meeting. The articles of association of a public limited company may provide that shareholders are required to notify the

32

76

company that they will attend a general meeting no later than three days before the date of
the meeting.
(2)

The shareholding of each individual shareholder must be determined at the date of registration, based on the number of shares held by that shareholder as registered in the register of
shareholders and on any notice of ownership received by the public limited company for the
purpose of registration in the register of shareholders, but not yet registered.

(3)

In public limited companies whose shares are not admitted to trading on a regulated market,
and in private limited companies, the articles of association may provide that subsections
(1) and (2) apply with such changes as are necessary.

85

Voting rights may not be exercised where they attach to shares held by a limited liability
company itself, or to shares in a parent company that are held by a subsidiary. Such shares
are excluded where the validity of any resolution or the exercise of any power is subject to
the consent of all shareholders or to a certain majority of votes of either the shares represented at the general meeting or of the entire share capital of the limited liability company.

86

A shareholder may not participate, on their own behalf, by proxy or acting as a proxy for
others, in any vote at a general meeting that relates to legal proceedings against the shareholder or relates to the shareholder's liability to the company. A shareholder may not participate in any vote relating to legal proceedings against others or relating to the liability of
others if that shareholder has a significant interest in the matter which may be contrary to
the interests of the limited liability company.
Time and place

87

General meetings must be held at the registered office of the limited liability company, unless the articles of association specify another place at which the meetings must or can be
held. If special circumstances require it, a general meeting may, in isolated cases, be held
elsewhere.

88

(1)

The annual general meeting must pass resolutions on the following:

1)

adoption of the annual report;

2)

appropriation of profit or loss as recorded in the adopted annual report;

3)

any change to a resolution about auditing the limited liability company's future annual
reports if the company is not subject to audit obligations under the Danish Financial
Statements Act or any other statute; and

4)

any other business to be transacted by the general meeting pursuant to the company's
articles of association.

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77

(2)

The annual general meeting must be held in time for the adopted annual report to reach the
Commerce and Companies Agency within the time limit specified in the Financial Statements
Act. The annual report must be submitted to the general meeting.
Extraordinary general meetings

89

(1)

Extraordinary general meetings must be held upon request from the central governing body,
the supervisory board or the auditor elected by the general meeting.

(2)

For private limited companies, any shareholder can request an extraordinary general meeting. Extraordinary general meetings to consider specific issues must be convened within two
weeks of receipt of a request to such effect.

(3)

For public limited companies, the articles of association may provide that shareholders that
hold 5% of the share capital or any smaller fraction of the capital and shareholders that are
so authorised under the articles can request an extraordinary general meeting in writing. Extraordinary general meetings to consider specific issues must be convened within two weeks
of receipt of a request to such effect.
Agenda

90

(1)

All shareholders are entitled to nominate specific issues for inclusion on the agenda for an
annual general meeting (but see subsection (2)).

(2)

In public limited companies, shareholders must submit a written request to the central governing body in order to nominate a specific issue for consideration at the annual general
meeting. Shareholders are entitled to have their nominated issues included on the agenda
for the general meeting where their request is received by the central governing body at
least six weeks before the date of the meeting. If the request is received less than six weeks
before the date of the general meeting, the central governing body must decide whether the
request has been made with enough time for the issues to be included on the agenda.

(3)

No later than eight weeks before the scheduled date for an annual general meeting, public
limited companies whose shares are admitted to trading on a regulated market must announce the date for the meeting as well as the deadline for any shareholder requests to include specific issues on the agenda, unless both dates are specified in the articles of association.

91

Any matter which is not on the agenda can only be determined by the general meeting if all
of the shareholders consent. However, at any time the annual general meeting can pass resolutions under section 88(1), resolutions to be passed at annual general meetings under the
articles of association, and resolutions to convene extraordinary general meetings to consider specific issues.

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Electronic communications
92

(1)

The general meeting may pass a resolution on electronic means of communication, enabling
the limited liability company and its shareholders to exchange documents electronically and
communicate by e-mail instead of sending and submitting documents in hard copy form under this Act (see subsections (2) and (3)). Electronic modes of communication may be used
by the limited liability company and its shareholders regardless of any requirements as to
form contained in the provisions that specifically govern the documents and notices (but see
subsection (5) and section 8c).

(2)

The resolution referred to in subsection (1) must specify which notices, etc. are covered by
the resolution as well as how the electronic modes of communication must or can be used.
The resolution must also state where the shareholders can find information about the requirements for the systems to be used and the procedures to be followed when communicating electronically.

(3)

The resolution made by the general meeting under subsections (1) and (2) must be included
in the articles of association (but see subsection (4)). Section 106 applies to the resolution
and to any amendments made to it.

(4)

Even if the general meeting has not resolved to introduce electronic communication between
the limited liability company and its shareholders under subsection (1), the company and
one or more shareholders can agree to communicate electronically.

(5)

The right to use electronic communication as set out in subsection (1) must not replace public notification of meetings or notices to be published in the Danish Official Gazette (the
Statstidende) or in the Commerce and Companies Agency's IT system where the limited liability company is required by statute to provide notices, etc. to its shareholders by publication of an advertisement or statement in the Official Gazette or in the Agency's IT system.
This does not apply to the circumstances outlined in section 95(3), second sentence.

(6)

For subsections (1) and (4), limited liability companies must request that the shareholders
recorded in the register of shareholders provide an electronic address to which notices, etc.
can be sent. The shareholders are responsible for ensuring that the company has their correct electronic address. The limited liability company must pay its own costs for electronic
communication.
Notice of general meetings

93

(1)

General meetings must be convened and organised by the central governing body.

(2)

If a limited liability company has no central governing body, or if the central governing body
fails to convene a general meeting required to be held by statute, by the articles of association or by a resolution of the company at a general meeting, such general meeting must be
convened by the Commerce and Companies Agency upon request from a member of the

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company's supreme or central governing body, the auditor elected by the general meeting, if
any (see section 144(1)), or a shareholder. The Agency may determine the agenda for the
general meeting.
(3)

General meetings convened by the Commerce and Companies Agency must be presided over
by a person authorised by the Agency for such purpose, and the central governing body of
the limited liability company must provide such person with the company's register of shareholders, minutes of general meetings, and audit records where such records must be kept
under the Danish Act on Approved Auditors (lov om godkendte revisorer) or any other statute, or where the auditor has agreed with the company to keep such records. All expenses
incidental to the general meeting must initially be paid for by the Commerce and Companies
Agency, but must be finally paid by the limited liability company.

(4)

Notwithstanding section 77, the Commerce and Companies Agency may decide that a general meeting that it convenes under subsection (2) of this section can only be attended in
person, or can be held as an electronic meeting in whole or in part, and that, notwithstanding section 87, the meeting must be held in the municipality in which the Agency is situated.

94

(1)

Notice of general meetings must be given no earlier than four weeks before the meeting
date, and no later than two weeks before the meeting date unless the articles of association
stipulate a longer period of notice. If the general meeting is adjourned to a later date that is
more than four weeks after the date of the meeting, notice of the adjourned meeting must
be provided.

(2)

In public limited companies whose shares are admitted to trading on a regulated market,
notice of general meetings must be given no earlier than five weeks before the meeting
date, and no later than three weeks before the meeting date unless the articles of association stipulate a longer period of notice (but see sections 339(4) and 343).

95

(1)

Notice must be given in accordance with the provisions in the articles of association.

(2)

The general meeting may resolve that notice must be provided on the limited liability company's website (but see subsection (3)). Such a resolution must be included in the company's articles of association. Section 106 applies to the resolution and any amendments made
to it.

(3)

In public limited companies, notice of general meetings must, where requested, be given in
writing to any shareholder registered in the register of shareholders. If the shares in a public
limited company can be issued to bearer, the notice must be published in the Commerce and
Companies Agency's IT system.

(4)

Regardless of whether notice is also given by other means, notice of a general meeting for a
public limited company whose shares are admitted to trading on a regulated market must be

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published on the company's website. The costs of the publication must be paid by the company.
96

(1)

Notices of general meetings must specify the time and place for the meeting as well as
agenda items covering the business to be dealt with at the meeting. If any proposed resolution to amend the articles of association is to be put forward for consideration at the general
meeting, the main contents of the resolution must be specified in the notice.

(2)

Notices of general meetings at which resolutions are to be passed in accordance with sections 77(2), 92(1) or (5), or section 107(1) or (2) must set out the full text of the proposed
resolution to amend the articles.

97

(1)

In public limited companies whose shares are admitted to trading on a regulated market, the
notice must include the following information in addition to that specified in section 96:
1)

the amount of the share capital and the voting rights of the shareholders;

2)

a clear and accurate description of the procedures to be observed by the shareholders in

order to attend and vote at the general meeting (see subsection (2));

3)

the date of registration (see section 84(1)), specifying that only persons who are shareholders at such date are entitled to attend and vote at the general meeting;

4)

where and how the full, unabridged texts of the documents referred to in section 99(1),
paragraphs 3 and 4, as well as the agenda of the meeting are available; and

5)
(2)

the website on which the information specified in section 99 will be made available.

A clear and accurate description of the procedures to be observed by the shareholders in order to attend and vote at the general meeting as provided by subsection (1), paragraph 2,
must include
1)

the shareholders' rights to ask questions, including a time limit, if applicable (see section 102(3));

2)

the procedure for voting by proxy, particularly the voting forms to be used, and the
means of communication accepted by the limited liability company in connection with
electronic notice of proxy appointments; and

3)
(3)

the procedures for voting by post or electronically.

In state-owned public limited companies, the notice of general meetings must include the
full text of all proposed resolutions to be submitted to the meeting and, in the case of extraordinary general meetings, also the reason for holding the meeting. The notice must be
published in the Commerce and Companies Agency's IT system at the same time or before it
is provided to the shareholders.

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98

In public limited companies, the agenda and the full text of any proposal to be submitted to
the general meeting and, in the case of the annual general meeting the annual report, must
be made available for inspection by the shareholders no later than two weeks before the
date of the meeting (but see section 99).

99

(1)

A public limited company whose shares are admitted to trading on a regulated market must,
for a consecutive period of three weeks beginning no later than three weeks before the general meeting, including the date of the meeting, make at least the following information
available to shareholders on the company's website:
1)

The notice convening the meeting.

2)

The aggregate number of shares and voting rights at the date of the notice, including
the aggregate number for each class of shares if the company's share capital is divided
into two or more classes.

3)

The documents to be submitted to the general meeting.

4)

The agenda and the full text of any proposals to be submitted to the general meeting.

5)

The forms to be used for voting by proxy and by post, if applicable, unless such forms
are sent directly to the shareholders. If, for technical reasons, such forms cannot be
made available over the internet, the limited liability company must specify on its website how they may be obtained in hard copy and must send the forms to any shareholder
who requests them. All costs involved must be paid by the company.

(2)

If notice of a general meeting under sections 339(4) and 343 is provided less than three
weeks before the date of the meeting, the time limit specified in subsection (1) will be reduced accordingly.
Conduct of general meetings

100

(1)

General meetings must be held in Danish (but see subsections (2) to (4)).

(2)

The general meeting may resolve by a simple majority of votes to hold the meeting in a language other than Danish, offering all participants simultaneous interpretation to and from
Danish. The resolution can be included in the articles of association without a separate resolution being passed by the general meeting to such effect.

(3)

The general meeting may resolve by a simple majority of votes to hold the meeting in Swedish, Norwegian or English without offering all participants simultaneous interpretation to
and from Danish. The resolution may be included in the articles of association without a
separate resolution being passed by the general meeting.

(4)

The general meeting may resolve that the meeting must be conducted in a language other
than Danish, Swedish, Norwegian or English without offering all participants simultaneous

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interpretation to and from Danish. A resolution to such effect must be included in the articles of association, and section 107(2), paragraph 6, and section 110 apply to the resolution
and any amendments made to it.
(5)

If it has been resolved to conduct the general meeting in a language other than Danish, the
meeting may resolve by a simple majority of votes that all future general meetings must be
conducted in Danish. The resolution may be included in the articles of association without a
separate resolution being passed by the general meeting. If a resolution to hold general
meetings in a language other than Danish is already included in the articles of association, a
resolution made under the first sentence of this subsection must specify whether the new
resolution is to be included in the articles of association or whether no provisions regarding
the language to be used at general meetings will be included in the articles of association.

(6)

All documents prepared for use by a general meeting at or after the general meeting must
be in Danish (but see subsections (7) and (8)).

(7)

The general meeting may resolve by a simple majority of votes that the documents referred
to in subsection (6) must be prepared in Swedish, Norwegian or English. Such resolution
may be included in the articles of association without a separate resolution being passed by
the general meeting.

(8)

The general meeting may resolve that the documents referred to in subsection (6) must be
prepared in a language other than Danish, Swedish, Norwegian or English. A resolution to
such effect must be included in the articles of association, and section 107(2), paragraph 7,
and section 110 apply to the resolution and to any amendments made to it.

101

(1)

A chairman of the general meeting, who may or may not be a shareholder, must be elected,
unless otherwise provided by the articles of association.

(2)

The chairman must preside over the general meeting and ensure that it is conducted properly and efficiently. The chairman has all powers necessary for that purpose, including the
right to manage discussions, identify matters to be voted on, decide when to close discussions, bring speeches to an end and, if necessary, expel participants from the general meeting.

(3)

Minutes recording the proceedings at general meetings must be kept and must be signed by
the chairman. All resolutions must be recorded in the limited liability company's minute
book.

(4)

No later than two weeks after the general meeting, the minutes of the meeting or a certified
copy of the minutes must be made available to the shareholders.

(5)

Public limited companies whose shares are admitted to trading on a regulated market must,
for every resolution passed, specify at least

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(6)

1)

the number of shares for which valid votes have been cast;

2)

the proportion of the share capital represented by such votes;

3)

the total number of valid votes;

4)

the number of votes in favour of and against each proposed resolution; and

5)

the number of abstentions, if relevant.

If none of the shareholders of a public limited company whose shares are admitted to trading on a regulated market request a complete account of the vote as provided in subsection
(5), only the result of the vote needs to be specified in order to establish that each resolution was passed by the required majority.

(7)

A public limited company whose shares are admitted to trading on a regulated market must
announce the results of all votes on its website no later than two weeks after the general
meeting.

(8)

State-owned public limited companies must file a certified copy of the minutes of general
meetings with the Commerce and Companies Agency on or before the date the minutes are
made available to the shareholders as provided in subsection (4).

102

(1)

Upon request from a shareholder and when deemed by the supreme governing body not to
cause any significant detriment to the limited liability company, the company's management
must disclose to the general meeting the information at hand about all matters of importance to the assessment of the annual report and the company's position in general, or to
any proposed resolution put forward for vote at the general meeting. The disclosure requirement also applies to the limited liability company's relationship with other group companies.

(2)

If the answer to a request requires information that is not at hand at the general meeting,
such information must be made available to the shareholders no later than two weeks after
the meeting and must also be sent to any shareholder upon request.

(3)

The central governing body may resolve that shareholders can ask questions about agenda
items or documents, etc. to be used for the general meeting, subject to a time limit stipulated in the articles of association. The central governing body can make the necessary
amendments to the articles of association

(4)

For public limited companies whose shares are admitted to trading on a regulated market
and state-owned public limited companies, the disclosure requirements under subsections
(1) and (2) also apply to questions submitted in writing by a shareholder within the three
months prior to the general meeting. The answer may be given in writing, in which case
both the question and answer must be made available to the shareholders at the beginning

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of the general meeting. No answer is required to be provided if the shareholder is not represented at the general meeting. Any questions that are the same may be answered together.
Questions will be deemed to be answered if the relevant information is made available on
the public limited company's website in the form of a 'Question and Answer' feature.
103

(1)

The auditor of the limited liability company elected by the general meeting, if any (see section 144(1)) is entitled to attend general meetings. The auditor of the limited liability company elected by the general meeting (see section 144(1)), if any, must attend general meetings if so requested by a member of the supreme or central governing body, or a shareholder.

(2)

At general meetings, the auditor elected by the limited liability company in general meeting
(see section 144(1)), if any, must answer questions about the annual report and similar
matters considered at the meeting.

(3)

Any auditor elected by the general meeting (see section 144(1)) is entitled to attend meetings of the supreme governing body where the annual report and similar matters are considered. The auditor must attend such meetings if so requested by any member of the supreme
governing body.

(4)

For public limited companies whose shares are admitted to trading on a regulated market
and state-owned public limited companies, the auditor elected by the company in general
meeting must attend the annual general meeting.
Votes

104

(1)

Each shareholder must vote on his shares in aggregate, unless otherwise provided by the articles of association (but see subsection (3)).

(2)

Shareholders may vote by post by casting their votes in writing before the general meeting.
In limited liability companies whose securities are not admitted to trading on a regulated
market in an EU/EEA member state this option may be derogated from in the articles of association of the limited liability company. Written votes can only be subject to requirements
and restrictions that are reasonably necessary to ensure identification of the shareholders.

(3)

For public limited companies, where a shareholder acts in a professional capacity on behalf
of other natural or legal persons (clients), that shareholder will be entitled to distinguish between the different shares and exercise the voting rights attaching to the different shares in
different ways.

105

Unless otherwise provided by this Act or the articles of association of the limited liability
company, all business transacted at general meetings must be decided by a simple majority
of votes. If the number of votes for and against is the same, the proposed resolution will not
be passed. Where votes involve electing people or casting only one vote against several options, these votes must be decided by a relative, simple majority of votes. Where a vote that

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involves electing people results in a tie, the tie must be decided by lot, unless otherwise
provided by the articles of association.
106

(1)

Any proposed resolution to amend the articles of association must be passed by at least twothirds of the votes cast as well as at least two-thirds of the share capital represented at the
general meeting (but see subsection (2)). Resolutions to amend the articles of association
must also fulfil any other requirements stipulated in the articles of association and comply
with the special rules in section 107.

(2)

Proposed resolutions to amend the articles of association under sections 74(3), 102(3),
175(2), 176(2), 247(1), 265(1), 282(1) and 302(1) cannot be passed by the general meeting.

107

(1)

Any proposed resolution to amend the articles of association and increase shareholder obligations to the limited liability company requires the unanimous agreement of all shareholders.

(2)

The following proposed resolutions to amend the articles of association must be passed by at
least nine-tenths of the votes cast as well as at least nine-tenths of the share capital represented at the general meeting:
1)

Resolutions to reduce shareholder rights to receive dividends or distribution of the company's assets, including subscriptions for shares at a favourable price, to the benefit of
parties other than the shareholders and the employees of the limited liability company
or its subsidiary.

2)

Resolutions to restrict the transferability of the shares or increase existing restrictions,

including the adoption of provisions that make share transfers subject to the consent of
the limited liability company or prevent any shareholder from holding shares that exceed a specific amount of the share capital.

3)

Resolutions to require shareholders to redeem their shares on equal terms, except on

dissolution of the company or in circumstances governed by Part 5 of this Act.

4)

Resolutions whereby shareholder rights to exercise voting rights in respect of their own
or other shareholders' shares is restricted to a specific part of the votes or the voting
share capital.

5)

Resolutions that the shareholders, in connection with a division of the company, will not
receive votes or shares in each of the transferee companies in the same proportion as in
the transferor company.

6)

Resolutions to hold general meetings in a language other than Danish, Swedish, Norwegian or English without providing for simultaneous interpretation to and from Danish for
all participants.

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7)

Resolutions to adopt a language other than Danish, Swedish, Norwegian or English for
internal documents, where internal documents means documents prepared for the company's own use in connection with or following general meetings.

(3)

If the limited liability company has more than one class of shares, any proposed amendments to the articles of association that alter the respective rights attaching to each of the
share classes, either by changing existing distinctions or creating new distinctions between
such rights, must be adopted by shareholders attending the general meeting who hold at
least two-thirds of the shares in the share class whose rights will be prejudiced. Void resolutions by general meetings.

108

The general meeting may not pass a resolution if it is clear that that resolution is likely to
give certain shareholders or others an undue advantage over other shareholders or the limited liability company.

109

(1)

Legal proceedings can be instituted by a shareholder or member of management if a resolution passed by the general meeting has not been lawfully passed or is contrary to this Act or
to the limited liability company's articles of association.

(2)

Legal proceedings must be instituted no later than three months after the date of the resolution, or the resolution will be deemed to be valid.

(3)

Subsection (2) does not apply where

1)

the resolution could not be passed lawfully even with the consent of all shareholders;

2)

this Act or the limited liability company's articles of association require the consent of
all or certain shareholders and such consent has not been obtained;

3)

there has been a serious failure to comply with the rules governing notice of general
meetings; or

4)

a shareholder who has instituted the proceedings after expiry of the time limit specified
in subsection (2), but within 24 months after the date of the resolution, can demonstrate reasonable grounds for the delay and the court, for this reason and in view of all
the circumstances, finds that it would be clearly unreasonable to apply subsection (2).

(4)

If the court finds that the resolution is subject to subsection (1), it must be amended or declared invalid by a court ruling. However, the resolution may only be amended if a claim is
made to such effect and the court is able to establish the proper contents of the resolution.
The ruling of the court also applies to shareholders who have not instituted proceedings.
Right of redemption

110

(1)

Shareholders who have opposed the amendments to the articles of association referred to in
section 107(2), paragraphs 1 to 4, 6 and 7, at the general meeting may demand that their

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shares be redeemed by making a written request to such effect no later than four weeks after the date of the general meeting.
(2)

However, if a shareholder has been asked to declare before the vote whether he wishes to
exercise the right of redemption under subsection (1), he must make that declaration at the
general meeting in order to receive that right.

(3)

On redemption, the limited liability company must buy the shareholder's shares at a price
corresponding to the value of the shares, which, in the absence of agreement, must be determined by experts appointed by the court with jurisdiction over the place where the limited
liability company's registered office is situated. The experts' costs must be paid by the
shareholder that requests the valuation, but may be imposed on the company if the valuation differs significantly from the price proposed by the company and the valuation is used in
whole or in part for the redemption. Either party may bring the expert opinion before the
court. Such proceedings must be commenced within three months of receipt of the expert
opinion.
Part 7
Management of the limited liability company, etc.
Choice of management structure

111

(1)

A limited liability company may adopt one of the following management structures:
1)

A management structure where the limited liability company is managed by a board of

directors responsible for overall and strategic management. The board of directors must
appoint an executive board to be responsible for the day-to-day management of the
company. The executive board must either consist of one or more persons who are also
members of the board of directors, or consist of persons who are not members of the
board of directors. In both cases, persons in charge of day-to-day management will be
designated as executive officers, and together they form the executive board of the limited liability company. The majority of the members of the board of directors of chairman or vice-chairman of the board of directors of that company.

2)

A management structure where the limited liability company is managed by an executive

board. In public limited companies, the executive board must be appointed by a supervisory board that oversees the executive board. No member of the executive board may
be a member of the supervisory board.

(2)

The board of directors or the supervisory board of a public limited company must have at
least three members.

(3)

Private limited companies in which the employees exercise their rights under section 140 to
elect members to serve on the supreme governing body must have a board of directors or a
supervisory board. If a private limited company has no board of directors or supervisory

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board, but is required to have one of these bodies under the first sentence of this subsection, any proposed resolution to amend the articles of association to the effect that the company must have a board of directors or a supervisory board will be deemed to have been
validly passed if it is approved by the vote of any one shareholder.
(4)

The provisions in this Act that govern members of the board of directors and the supervisory
board also apply to their alternate members.
General provisions on executive and supervisory functions

112

(1)

Members of management in a limited liability company must have full legal capacity and
cannot be under guardianship under section 5 of the Danish Guardianship Act or be in the
care of a surrogate decision-maker designated under section 7 of the Guardianship Act.

(2)

Executive officers in public limited shipping companies may be sole proprietorships or partnerships, provided that the proprietors or partners meet the requirements in subsection (1).

113

Members of the board of directors or the supervisory board and executive officers may not
engage in speculative transactions involving shares in the limited liability company or in limited liability companies in the same group.

114

For limited liability companies whose shares are admitted to trading on a regulated market
and state-owned public limited companies, the chairman of the board of directors or the supervisory board may not perform any duties for the limited liability company that are unrelated to his duties as chairman. However, the chairman of the board of directors may, where
special circumstances so require, perform any work which he is requested to perform by and
for the board of directors.
Duties of the board of directors

115

In limited liability companies that have a board of directors, the board must, in addition to
performing overall management duties and strategic management duties and ensuring proper organisation of the company's business, ensure that
1)

1. the bookkeeping and financial reporting procedures are satisfactory, having regard to
the circumstances of the limited liability company;

2)

2. adequate risk management and internal control procedures have been established;

3)

3. the board of directors receives ongoing information as necessary about the limited liability company's financial position;

4)

4. the executive board performs its duties properly and as directed by the board of directors; and that

5)

5. the financial resources of the limited liability company are adequate at all times, and
that the company has sufficient liquidity to meet its current and future liabilities as they

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fall due. The limited liability company is therefore required to continuously assess its financial position and ensure that the existing capital resources are adequate.
Duties of the supervisory board
116

In limited liability companies that have a supervisory board, the board must ensure that
1)

the bookkeeping and financial reporting procedures are satisfactory, having regard to
the circumstances of the limited liability company;

2)

adequate risk management and internal control procedures have been established;

3)

the supervisory board receives ongoing information as necessary about the limited liability company's financial position;

4)

the executive board performs its duties properly; and

5)

the financial resources of the limited liability company are adequate at all times, and
that the company has sufficient liquidity to meet its current and future liabilities as they
fall due. The limited liability company is therefore required to continuously assess its financial position and ensure that the existing capital resources are adequate.
Duties of the executive board

117

(1)

In limited liability companies that are managed under section 111(1), paragraph 1, the executive board is in charge of day-to-day management. The executive board must follow the
guidelines and directions issued by the board of directors. Day-to-day management does not
include decisions of an unusual nature or of major importance, having regard to the circumstances of the limited liability company. Such decisions may only be made by the executive
board if specifically authorised by the board of directors, unless it will cause considerable inconvenience to the limited liability company's activities to wait for authorisation by the
board of directors. If so, the board of directors must be notified of the decision as soon as
possible.

(2)

In limited liability companies falling within section 111(1), paragraph 2, the executive board
is responsible for overall, strategic and day-to-day management. The executive board must
also ensure proper organisation of the limited liability company's business.

118

(1)

The executive board must ensure that the limited liability company's bookkeeping complies
with the applicable statutory rules, and that its assets are properly managed.

(2)

The executive board must also ensure that the financial resources of the limited liability
company are adequate at all times, and that the company has sufficient liquidity to meet its
current and future liabilities as they fall due. The limited liability company is required to
continuously assess its financial position and ensure that the existing capital resources are
adequate.

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Loss of capital
119

If it is established that the equity of a limited liability company represents less than half of
the subscribed capital, the management of the company must ensure that a general meeting
is held within six months. However, regardless of the value of the company's subscribed
capital, the first sentence will apply to all cases where the company's equity falls below DKK
62,500. At the general meeting, the central governing body must report the financial position of the limited liability company and, if necessary, submit a proposal for measures that
should be taken, including a proposal for dissolution of the limited liability company.
Election of members of the board of directors and the supervisory board

120

(1)

In public limited companies, the majority of the members of the board of directors or the
supervisory board must be elected by the general meeting.

(2)

The articles of association may provide public authorities or other parties with the right to
appoint one or more members of the board of directors or the supervisory board.

(3)

Before holding elections for members of the board of directors or the supervisory board at
the general meeting, public limited companies must provide information on managerial posts
held by the candidates in other commercial enterprises, except for posts held in the public
limited company's own wholly owned subsidiaries. If a candidate is a member of management in both another parent company and in one or more of its wholly owned subsidiaries,
notwithstanding the first sentence, it will be sufficient to state the name of the parent company and the number of subsidiaries in which the candidate is a member of management.
The shareholders may deviate from this subsection by unanimous decision.

(4)

The members of the board of directors or supervisory board elected by the general meeting
hold office in the period specified in the articles of association. The members' term of office
expires with the closing of an annual general meeting held no later than four years after
their election.
Resignation of members of the board of directors and the supervisory board

121

(1)

Members of the board of directors or the supervisory board may resign at any time. Notice
of resignation must be given to the board of directors or the supervisory board of the limited
liability company and, if the member has not been elected by the general meeting, also to
the appointing party. Members of the board of directors or the supervisory board may be
removed at any time by the electing or appointing party.

(2)

If there is no alternate member to replace the member, the other members of the board of
directors or the supervisory board must arrange for the election of a new member to replace
the resigning member during the remainder of his term of office. This also applies if a member elected by the employees under section 140 or section 141 ceases to be employed by
the limited liability company or within the group. However, if the election is to be held at the
general meeting, it may be postponed until the next annual general meeting for the election

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of members of the board of directors or supervisory board, provided that the remaining
members and alternate members of the board of directors or the supervisory board can form
a quorum.
Election of chairman
122

The board of directors or the supervisory board of a public limited company elects its own
chairman, unless otherwise provided by the articles of association. In the event of a tied
vote, the election will be resolved by lot.
Meetings of the board of directors and the supervisory board

123

The chairman of the board of directors or the supervisory board of a public limited company
must ensure that the supreme governing body convenes meetings when necessary and that
all members are invited to attend. Any member of management, or the company's auditor
elected by the general meeting under section 144, can demand that the supreme governing
body be invited to attend. Executive officers, including executive officers who are not members of the board of directors or the supervisory board, have a right to attend and speak at
meetings of the board of directors or the supervisory board, unless otherwise determined in
each case by the board of directors or the supervisory board.
Quorum of the board of directors and the supervisory board

124

(1)

The board of directors or the supervisory board forms a quorum when more than half of its
members are represented, unless a higher number of members is required by the articles of
association. However, resolutions cannot be passed without all members being given, as far
as possible, access to participate in the transaction of the business.

(2)

If a member is absent, and an alternate member has been elected, the alternate member
must have the right to replace the member for as long as he is absent. Unless otherwise resolved by the board of directors or the supervisory board, or provided in the articles of association, in special cases members can grant a proxy to another member instead of calling an
alternate member if it is considered appropriate having regard to the issue to be discussed.

(3)

All resolutions by the board of directors or the supervisory board must be passed by a simple majority of votes, unless a special majority is required by the articles of association. It
may be stipulated in the articles of association that the chairman, or in his absence the vicechairman, casts the deciding vote in the event that there is a tied vote.

Meetings of the board of directors and the supervisory board by written procedure or electronic means
125

(1)

Meetings of the board of directors and the supervisory board may be held by written procedure to the extent that this does not prevent the board from performing its duties. Any
member of management may, however, demand an oral discussion. The provisions of this
Act that apply to meetings of the board of directors and the supervisory board also apply to
meetings by written procedure, subject to any necessary amendments.

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(2)

Meetings of the board of directors and the supervisory board may be held electronically to
the extent that this does not prevent the board from performing its duties. Any member of
management may, however, demand an oral discussion. The provisions of the Danish Act on
Public and Private Limited Companies that apply to meetings of the board of directors and
the supervisory board, and to electronic communications, also apply to meetings held electronically and to all communication for this purpose, subject to any necessary deviations.
Language of meetings of the board of directors and the supervisory board

126

(1)

Meetings of the board of directors or the supervisory board must be held in Danish (but see
subsections (2) and (3)).

(2)

Meetings of the board of directors or the supervisory board may, if so determined by the
majority, be held in a language other than Danish if all participants are at the same time offered simultaneous interpretation to and from Danish.

Any decision to hold meetings in a

language other than Danish without simultaneous interpretation must be unanimously

agreed by the members of the board of directors or the supervisory board.
(3)

Notwithstanding subsection (2), meetings of the board of directors and the supervisory
board may be held in Swedish, Norwegian or English without simultaneous interpretation if
that language is also the official group language as provided by the articles of association.

(4)

Where documents that are to be used for the purposes of carrying out the work of the board
of directors or the supervisory board are not prepared in Danish, any member of the board
of directors or the supervisory board may demand that such documents be translated into
Danish. This does not apply, however, if the documents are prepared in Swedish, Norwegian
or English, and such language is the official group language as provided by the company's
articles of association.
Voidable transactions and agreements with sole shareholders

127

(1)

Members of management in a limited liability company may not enter into any transaction
that is clearly capable of providing certain shareholders or others with an undue advantage
over other shareholders or the limited liability company. Members of management in the
limited liability company must not comply with any resolution passed by the general meeting
or any other governing body if that resolution is invalid or contravenes the law or the company's articles of association.

(2)

Agreements entered into between a sole shareholder and the limited liability company are
only valid if drafted in a manner that can subsequently be verified, except for agreements
made on usual terms in the ordinary course of business.

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Minutes of proceedings at meetings of the supreme governing body

128

(1)

If the supreme governing body is made up of more than one member, minutes must be taken to record the proceedings at its meetings, and those minutes must be signed by all members present.

(2)

Any member who dissents on a matter at the meeting is entitled to have his opinion entered
in the records of the meeting.
Audit records

129

The members of the supreme governing body must sign the records prepared by the auditor
if the auditor is required by the Danish Act on Registered and State-Authorised Public Accountants or any other statute to keep audit records, or if the auditor has kept such records
in accordance with an agreement with the limited liability company.
Rules of procedure for the board of directors and the supervisory board

130

(1)

If the board of directors or the supervisory board of a limited liability company is made up of
more than one member, rules of procedure to govern the performance of the board's duties
must be adopted.

(2)

For the purpose of drawing up the rules of procedure, the nature of the limited liability company's business and its needs must be taken into account. In this regard, the board of directors or the supervisory board should consider in particular whether the rules of procedure
should include provisions on the composition of the board, the division of responsibilities,
supervision of the executive board's day-to-day management, the keeping of books,
minutes, etc., any written and electronic meetings, the duty of confidentiality, alternate
members, accounting control, signing of audit records, and provisions to ensure that there
is the requisite basis for auditing.

(3)

Rules of procedure adopted by the board of directors or the supervisory board in stateowned public limited companies must be published in the Commerce and Companies Agency's IT system within four weeks of their adoption. The same time limit applies if a public
limited company converts to a state-owned public limited company under Part 20, or in the
event that changes are made to the rules of procedure for a state-owned public limited company.
Disqualification

131

No member of management may participate in the transaction of business that involves any
agreement between the limited liability company and that member, or legal proceedings
against that member, or the transaction of business that involves any agreement between
the limited liability company and a third party, or legal proceedings against a third party, if
the member has a material interest in such business and that material interest could conflict
with the interests of the limited liability company.

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Duty of confidentiality
132

Members of the board of directors or the supervisory board, executive officers, valuation experts and scrutinisers, including their assistants and alternates, may not make unauthorised
disclosure of any information gained in the performance of their duties.
Disclosure of information, etc. to the auditor

133

(1)

The management of a limited liability company must provide any auditor or scrutiniser who
is elected by the general meeting to make a declaration on the limited liability company's
situation with such information as is likely to influence the assessment of the limited liability
company and, if the limited liability company is a parent company, its group as defined by
the Danish Financial Statements Act.

(2)

The management of a limited liability company must provide any auditor or scrutiniser who
is elected by the general meeting to make a declaration on the limited liability company's
situation with access to make such examinations as he deems necessary to perform the
work, and must provide the auditor or scrutiniser with such information and assistance as he
deems necessary to perform the work.

(3)

The management of a Danish limited liability company, where that company is a subsidiary
in a group of companies, owes a similar duty to the auditor of the parent company.
Notification of group relations

134

The central governing body of a Danish parent company must notify the central governing
body of a subsidiary as soon as any group relationship has been established. The central
governing body of a Danish subsidiary must provide the parent company with such information as is necessary to assess the group's position and the results from its activities.
Right of representation and power to bind the company

135

(1)

Members of the board of directors and the executive board act on behalf of the limited liability company in relation to third parties.

(2)

The limited liability company is bound by agreements made on behalf of the company by the
entire central governing body, by a member of the board of directors, or by a member of the
executive board. Members of the supervisory board have no power to bind the limited liability company.

(3)

The power of each member of the board of directors and executive board to bind the company, as conferred by subsection (2), may be restricted by the articles of association so that it
can only be exercised by members acting jointly or by one or more specific members acting
jointly or alone. No other restrictions on the power to bind the company may be registered.

(4)

Notwithstanding subsection (1), where limited liability companies have a supervisory board,
the supervisory board may act on behalf of the company where legal action is brought

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against one or more members of the company's executive board. The supervisory board may
also act on behalf of the company where legal action is brought against the company by a
member of its executive board. The same applies where members of the executive board are
either disqualified or cannot represent the company for any other reason.

136

(5)

Power of procuration may only be granted by the central governing body.

(1)

Any agreement or commitment that is made on behalf of the limited liability company by
persons authorised to bind the company under section 135 will be binding on the limited liability company, unless
1)

the persons authorised to bind the company have not acted within the limitations of
their powers as provided by this Act;

2)

the agreement or commitment does not fall within the objects of the limited liability
company, and the company proves that the third party knew or should have known this;
or

3)

the person authorised to bind the company has exceeded his authority or has seriously
failed to act in the company's interests, and the third party knew or should have known
this.

(2)

It will not be sufficient evidence under subsection (1), paragraph 2, of this provision that the
limited liability company has published a statement of its objects, as provided by the articles
of association, in the Commerce and Companies Agency's IT system.

137

Where an election or appointment of members of the management of a limited liability company has been published in the Commerce and Companies Agency's IT system in accordance
with section 14, no defect in the election or appointment may be relied upon against any
third party, unless the limited liability company proves that the third party had knowledge of
that defect.
Remuneration for members of management

138

(1)

Members of management in a limited liability company may receive fixed or variable remuneration. The amount of remuneration may not exceed what is considered usual, taking into
account the nature and extent of the work, and what is considered reasonable with regard to
the limited liability company's financial position and, in the case of parent companies, the
group's financial position.

(2)

If a limited liability company is administered in bankruptcy, members of its management

must repay any variable remuneration received in the five-year period preceding the date of
presentation of the bankruptcy petition, even if they have acted in good faith, and provided
that the limited liability company was insolvent when the amount of the variable remuneration was fixed.

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139

(1)

Before a public limited company whose shares are admitted to trading on a regulated market
can enter into a specific agreement for incentive-based remuneration for a member of its
management, the limited liability company's supreme governing body must set general
guidelines for incentive-based remuneration for the company's management. The guidelines
must be considered and adopted by the limited liability company in general meeting.

(2)

If the general meeting has adopted guidelines for incentive-based remuneration for the limited liability company's management under subsection (1), a provision must be included in
the company's articles of association to that effect. Inclusion of the provision in the articles
of association is not subject to a separate resolution by the general meeting. As soon as
possible following their adoption by the general meeting, the guidelines must be made available to the public on the limited liability company's website, and must specify the date they
were adopted.

(3)

Specific agreements for incentive-based remuneration under subsection (1) may be entered
into the day after publication of the guidelines, as adopted, on the company's website (see
subsection (2)), and not before. When entering into specific incentive agreements, the existing guidelines, as adopted, must be observed.

(4)

Subsections (1) to (3) apply also to any agreements to renew or amend specific existing
agreements for incentive-based remuneration for members of the limited liability company's
management.

139a (1)

In state-owned public limited companies, companies whose shares, debt instruments or other securities are admitted to trading on a regulated market in an EU/EEA Member State, and
large limited liability companies (see subsection (2)):
1) the supreme governing body must specify target figures for the share of the underrepresented gender on the supreme governing body and
2) the central governing body must prepare a policy for the purpose of increasing the share
of the underrepresented gender on the limited liability company's other management levels
(but see subsections (3)-(6)).

(2)

Large limited liability companies are companies exceeding two of the following criteria for
two consecutive financial years:
1) a balance sheet total of DKK 143 million,
2) a net turnover of DKK 286 million, and
3) an average number of full-time employees of 250.

(3)

It is sufficient for parent companies preparing consolidated financial statements to specify

target figures and to prepare a policy (see subsection (1)) for the entire group.

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(4)

A subsidiary which is a part of a group may omit to specify target figures and to prepare a
policy (see subsection (1)) if the parent company specifies target figures and prepares a policy for the entire group.

(5)

When specifying target figures (see subsection (1), paragraph 1) state-owned public limited
companies are also subject to section 11(2) of the Danish Consolidation Act on Gender
Equality.

(6)

Limited liability companies which have employed less than 50 employees in the most recent
financial year may omit to prepare a policy for the purpose of increasing the share of the
underrepresented gender on their other management levels (see subsection (1), paragraph
2).
Part 8
Employee representation
Representation at company level

140

(1)

In limited liability companies that have employed an average of at least 35 employees for
the preceding three years, the employees are entitled to elect representatives and alternate
representatives to the company's supreme governing body, corresponding to half the number of the other management members. Employees of a company's foreign branch situated
in another EU/EEA member state are considered employees of the company. However, the
employees always have the right to elect at least two representatives with alternate members. If the number of representatives to be elected by the employees is not a whole number, it must be rounded up.

(2)

The employees are entitled to elect fewer representatives and alternate representatives if
the number that the employees are entitled to under subsection (1) cannot be elected.
Representation at group level

141

(1)

Section 140 also applies to the employees of a Danish parent company (see sections 6 and
7) and its subsidiaries registered in Denmark as well as their foreign branches

situated in

an EU/EEA member state.

(2)

If the parent company is subject to section 140, its employees are entitled to elect two representatives, with alternate representatives. The total number of employee representatives
elected to the parent company's supreme governing body must constitute half the number of
the other members, provided that the number of employee representatives is at least three.
The employees are entitled to elect a lesser number of representatives and alternate representatives if the number that the employees are entitled to under the first sentence cannot
be elected.

(3)

Subject to the rules on cross-border mergers and divisions in Part 16 of the Danish Act on
SEs (lov om SEselskaber), the parent company in general meeting may decide that the em-

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ployees of one or more foreign subsidiaries are eligible to be elected and are entitled to
vote. If the group has employees in Danish subsidiaries, those employees may elect at least
one representative at any time. If the employees of the Danish subsidiaries constitute more
than 10% of the total number of employees eligible to be elected, such employees may elect
at least two representatives. If the majority required for representation at group level as
provided in section 142 is not reached, but the majority of the Danish subsidiaries vote in
favour of group representation, employee representation will be deemed to have been
adopted by the employees of the Danish subsidiaries to the effect that elections for group
representatives will only be held in the Danish subsidiaries.
Election of employee representatives
142

A proposed resolution to elect board members under sections 140 and 141 cannot be adopted unless it is passed by at least half of the employees in the limited liability company and
its subsidiaries, respectively, unless the management and employees agree not to vote on
this. Notice of the resolution must be given to the supreme governing body in a manner that
can subsequently be verified.

143

The Commerce and Companies Agency may prescribe rules on the following:
1)

which persons are considered employees for the purpose of employee representation;

2)

calculation of the average number of employees under sections 140 and 141;

3)

the conduct for elections under sections 140 to 142, including rules to ensure secret ballot;

4)

derogation from any of the specific rules made under this section, where derogation is
by agreement between the management and employees;

5)

how the employees in limited liability companies and groups in which board members
have been elected under sections 140 and 141 must be informed about the company's
affairs;

6)

security of employment for employee representatives in management bodies, including

representatives elected by voluntary arrangements, and resolution of related disagreements;

7)

the consequences of any contravention of statute and rules made under statute;

8)

that the register of shareholders must also be made available to employee representatives in companies and parent companies in which no employees have been elected to
the board of directors under sections 140 and 141; and

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9)

requirements for providing notice of general meetings to the employees of the company
and the group, respectively, if the employees have notified the board of directors that
employee representatives are to be elected.
Part 9
Auditing and scrutiny
Auditing

144

(1)

If a limited liability company is subject to audit obligations under the Danish Financial
Statements Act or any other statute, or if the general meeting otherwise resolves that the
company's financial statements must be audited, the general meeting must elect one or
more approved auditors, and alternate auditors if applicable. Such resolution may be passed
by a simple majority of votes under section 105. The articles of association may also grant
other parties the right to appoint one or more additional auditors.

(2)

Any shareholder may request the Commerce and Companies Agency to appoint an additional
approved auditor to participate in the audit together with the other auditor(s) until the next
general meeting where
1)

shareholders holding no less than one-tenth of the capital have voted in favour of an
additional auditor at a general meeting whose agenda included the election of an auditor; and

2)
(3)

The request is made no later than two weeks after the date of the general meeting.

The Commerce and Companies Agency may appoint an auditor if a limited liability company
which is subject to audit obligations has no statutory auditor and a member of management
or a shareholder so requests. The appointment remains in force until a new auditor has been
elected by the general meeting.

(4)

Where an auditor is appointed under subsections (2) or (3), the appointment must be registered directly, without any application for registration. The Commerce and Companies Agency must determine the remuneration for the appointed auditor. Costs incidental to the statutory audit of the limited liability company's annual report are payable out of public funds,
but must be reimbursed by the company.

(5)

If the auditor is to express an opinion about the affairs of a limited liability company, the
auditor has the rights and obligations provided by this Act, unless a distinction has been
made by the company between the auditors elected by the general meeting to audit the financial statements as provided in subsection (1) and other auditors.

145

Any subsidiary in a group, as defined by the Danish Financial Statements Act, in which the
parent company is a state-owned public limited company or a business whose securities are
admitted to trading on a regulated market, must, where possible, elect the same auditor as

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the auditor elected by the parent company in general meeting. Where this is not possible,
the subsidiary must elect an auditor who is a partner of the auditor elected by the parent
company in general meeting, unless this is also not possible.
146

(1)

Auditors may be removed by the party that appointed them. An auditor elected to audit the
company's financial statements under section 144 may only be removed before his term of
office expires if such removal is based on reasonable grounds.

(2)

If an auditor elected by the general meeting (see section 144(1)) resigns or is removed from
office, or if an auditor's appointment is otherwise terminated before the auditor's term of office expires, the auditor must notify the Commerce and Companies Agency to such effect as
soon as possible. The notice must be accompanied by an adequate account of the reason for
the termination if this took place before expiry of the auditor's term. In companies whose
securities are admitted to trading on a regulated market, an auditor elected by the general
meeting must also notify the market of his resignation or removal as soon as possible in accordance with the provisions of the Danish Securities Trading Act.

(3)

If the auditor elected to audit the company's financial statements as provided in section
144(1) resigns or is removed from office, or if the auditor's appointment is otherwise terminated (see subsection (1)), and no alternate auditor has been elected to replace the auditor,
the central governing body must cause a new auditor to be elected as soon as possible in
accordance with section 144(1). An extraordinary general meeting must be convened to
elect a new auditor no later than two weeks after the company has been notified of the resignation or removal. However, in state-owned public limited companies and companies
whose securities are admitted to trading on a regulated market, the general meeting must
be convened no later than eight days after the company has been notified of the resignation
or removal.

147

(1)

The auditor elected to audit the company's financial statements as provided in section
144(1) must comply with any audit requirements made by the general meeting in so far as
such requirements are not contrary to statute, the company's articles of association or generally accepted auditing standards.

(2)

The auditor must also ensure that the company's management complies with its obligations
to draw up rules of procedure and prepare and keep books, records and minutes, and
whether the rules on the submission and signing of audit records are complied with.

(3)

If the auditor finds that the requirements referred to in subsection (2) are not fulfilled, the
auditor must prepare a separate declaration to that effect to accompany the annual report at
the general meeting.

148

Any changes with respect to an auditor that is elected under section 144 must be registered
in the Commerce and Companies Agency's IT system or submitted to the Agency for regis-

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tration (see section 9). If an auditor is replaced before expiry of his term of office, the provision of section 10(2) applies.
149

The auditor may demand that members of the company's management provide any information that is deemed to be of importance to the assessment of the company and, if the
company is a parent company, its group (see section 7). This also applies to members of the
management of a Danish company which is a subsidiary in a group as defined by the Danish
Financial Statements Act.
Scrutiny

150

(1)

Any shareholder may, at the annual general meeting or at a general meeting whose agenda
includes such issues, submit a proposal for scrutiny of the company's formation, of any specific matter relating to the administration of the company, or of certain financial statements.
If the proposal is adopted by a simple majority of votes, the general meeting must elect one
or more scrutinisers.

(2)

If the proposal is not adopted, but shareholders representing 25% of the share capital vote
in favour of the proposal, any shareholder may, no later than four weeks after the general
meeting, request that scrutinisers be appointed by the bankruptcy court with jurisdiction
over the place where the company's registered office is situated. The bankruptcy court must
provide the company's management and any auditor elected by the general meeting to audit
the company's financial statements (see section 144(1)) and, if relevant, the person whose
affairs are the subject-matter of the request, with the right to make a statement to the court
before it makes its decision. The request will only be allowed if the bankruptcy court finds it
to be based on reasonable grounds. The bankruptcy court determines the number of scrutinisers. The court's decisions are subject to appeal.

(3)

The provisions on independence in section 24 of the Danish Act on Registered and StateAuthorised Public Accountants apply, with such changes as are necessary, to scrutinisers
elected or appointed under subsections (1) and (2).

151

The scrutiniser may demand from the company's management any information deemed to be
of importance to the assessment of the company and, if the company is a parent company,
its group as defined by the Danish Financial Statements Act. This also applies to the management of a Danish company that is a subsidiary in a group as defined by the Financial
Statements Act.

152

(1)

The scrutinisers must submit a written report to the general meeting and are entitled to receive remuneration from the company. If the scrutinisers have been appointed by the bankruptcy court, their remuneration will be determined by the court.

(2)

No later than eight days before the date of any general meeting, the report prepared by the
scrutinisers must be made available for inspection by the shareholders.

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Part 10
Capital increases
153

(1)

(2)

The capital of a limited liability company may be increased by

1)

subscriptions for new shares;

2)

conversion of the company's reserves into share capital by the issue of bonus shares; or

3)

the issue of convertible debt instruments or warrants.

No new shares may be subscribed for at a discount or subject to any reservations.

Resolution by the general meeting to increase the capital

154

(1)

The general meeting may pass a resolution to increase the share capital in accordance with
the rules in this Part of the Act.

(2)

Any resolution under subsection (1) must be passed by the same majority required for
amendments to the articles of association.

155

(1)

The general meeting may authorise the central governing body to increase the capital by including a provision to this effect in the articles of association. The authorisation may be given for one or more periods of up to five years at a time.

(2)

The general meeting may also authorise the central governing body to issue convertible debt
instruments or warrants under section 169 by including a provision to this effect in the articles of association, provided that it also authorises the central governing body to implement
the capital increase required for this purpose (see subsection (1)). The authorisation may be
given for one or more periods of up to five years at a time.

(3)

In connection with any authorisation under subsections (1) and (2), the articles of association must specify as follows
1)

for which type of capital increase, as set out in this Part of the Act, the authorisation is
given;

2)

the expiry date for the period specified in subsection (1) or (2), second sentence;

3)

the maximum amount of the capital increase that may be implemented by the central
governing body; and

4)

provisions governing the matters referred to in section 158, paragraphs 5, 6, 9, 10 and

11.

(4)

If the capital can be increased in whole or in part by contribution of assets other than cash,
this must be stipulated in the articles of association. Also, any resolution made by the gen-

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eral meeting to depart from the existing shareholders' pre-emption rights under section 162
must be specified.
Procedural requirements for capital increases
156

(1)

Any proposal to increase capital in a public limited company must be made available to the
shareholders as prescribed in sections 98 and 99, and be submitted to the general meeting.

(2)

If the annual report for a public limited company for the last financial year is not going to be
under consideration by the same general meeting, the following documents must be submitted:
1)

the latest annual report as adopted;

2)

a report by the company's central governing body that includes information about
events of major importance to the company's position that have occurred after presentation of the annual report, unless such information may be detrimental to the company
because of special circumstances; and

3)

a declaration by the company's auditor about the report made by the central governing
body if the company's annual report is subject to audit obligations under the Danish Financial Statements Act or any other statute.

(3)

The shareholders may deviate from subsections (1) and (2) by unanimous agreement.
Requirements for the notice

157

(1)

In connection with an increase in capital for a public limited company, the notice of the general meeting must include information about the pre-emption rights of shareholders or others and instructions on how to exercise such rights.

(2)

In case of deviation from the shareholders' pre-emption rights under section 162, the reason
for the deviation and for the proposed subscription price must be stated in the notice.

(3)

The shareholders may agree to deviate from subsections (1) and (2).
The substance of the resolution

158

The resolution to increase capital by a subscription for new shares must specify
1)

the minimum and maximum amount by which the share capital may be increased;

2)

the subscription price and the size or number of the shares;

3)

when the new shares will confer on the holders a right to receive dividends and other
rights in the limited liability company;

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4)

the estimated costs of the capital increase that are payable by the limited liability company;

5)

the share class for the new shares if different classes exist or are contemplated;

6)

the pre-emption rights of the shareholders or others and any restrictions on the new
shareholders' pre-emption rights in the event of future increases (see section 162);

7)

the time allowed for subscription and a time limit that allows shareholders at least two
weeks from the date they are notified to exercise their pre-emption rights;

8)

the last day of payment for the shares and, where the allotment is not left to the central
governing body, the rules governing allotment in case of oversubscription of any shares
not subscribed for by the exercise of a pre-emption right;

9)

any restrictions on the negotiability of the new shares or any obligation on the new
shareholders to have their shares redeemed;

10) whether the new shares are negotiable instruments; and

11) whether the new shares will be registered shares or bearer shares.
159

(1)

If the company's central governing body exercises any authority under section 155, the
resolution must specify
1)

the minimum and maximum amount by which the share capital may be increased;

2)

the subscription price and the size or number of the shares;

3)

when the new shares will confer on the holders a right to receive dividends;

4)

the costs of the increase that are payable by the limited liability company;

5)

whether the new shares may be paid for by contribution of assets other than cash (see
section 160); or

6)
(2)

whether the new shares may be paid for by conversion of debt (see section 161).

Any resolution passed by the central governing body under subsection (1) is also subject to
sections 163 and 164.

(3)

The central governing body may make any amendments to the articles of association that
are necessary because of the capital increase.
Non-cash contributions or contributions by conversion of debt

160

If new shares can be paid for by contribution of assets other than cash, this must be specified in the resolution on the increase, and a valuation report must be prepared in accordance

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with sections 36 and 37. If the central governing body issues a declaration under section
38(2), it is not required to obtain a valuation report in connection with the contribution of
assets as set out in section 38(1). The central governing body must publish the declaration
in the Commerce and Companies Agency's IT system no later than two weeks after the date
of the resolution on the contribution (see section 9(3)). The balance sheet to be prepared
under section 36(3) must be prepared as a pre-acquisition balance sheet for the acquired
business.
161

(1)

If new shares can be paid for by conversion of debt, this must be specified in the resolution
on the increase.

(2)

The central governing body must explain the reason for and the point in time at which the
debt was incurred, as well as the reasons for the proposed conversion.

(3)

In public limited companies, the central governing body's explanation and any additional
documents must be made available to the shareholders as provided in sections 98 and 99
and must be submitted to the general meeting.

(4)

Subsection (2) may be departed from by agreement between the shareholders.

(5)

The shareholders may agree to depart from the requirement in subsection (3).
Right to proportionate subscription

162

(1)

In the event of a cash increase of the share capital, shareholders are entitled to subscribe
for new shares in proportion to their existing shareholdings. It may be stipulated in the articles of association that the pre-emption rights are non-transferable to any third party.

(2)

The general meeting may resolve, by the same majority of votes that is required to amend
the articles of association (see section 106), to depart from the pre-emption rights in subsection (1) for the benefit of any other persons.

(3)

If there are different share classes carrying different rights to vote and different rights to
receive dividends or other distributions from the company, it may be stipulated in the articles of association that holders of the same class of shares have a priority right to subscribe
for shares within their own share class. In this case, holders of shares of other classes may
exercise their pre-emption rights under subsection (1) only after such subscription.

(4)

The general meeting may resolve, by the same majority of votes that is required to amend
the articles of association (see section 106), to depart from the pre-emption rights in subsections (1) and (3) for the benefit of employees in the company or in any of its subsidiaries. With the same majority of votes, the general meeting may fix a favourable price for the
shares that are offered to the employees.

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(5)

However, a derogation from the shareholders' pre-emption rights which is greater than specified in the notice of the meeting can only be adopted by the general meeting with the consent of the shareholders whose rights are prejudiced.

(6)

If the company has more than one class of shares, any resolution affecting the legal rights
attaching to any of those classes will only be valid if it is adopted by shareholders attending
the general meeting who hold at least two-thirds of the shares in the share class whose
rights will be prejudiced.
Subscription for new shares

163

(1)

Any subscription for new shares must be in writing.

(2)

In connection with the subscription, the articles of association and the documents specified
in section 156 must be produced, unless it is resolved not to prepare such documents (see
section 156(3)). If the capital subscription falls within sections 160 and 161, the documents
referred to in these provisions must be produced upon subscription, unless it is resolved not
to prepare such documents.

(3)

The shareholders must be notified about the opportunity for subscription and the time allowed for exercising their pre-emption rights under the rules governing notices of general
meetings. In public limited companies where all the shareholders are known to the company,
the individual shareholders may instead be notified in writing.

164

Any resolution to amend the articles of association that requires a capital increase will lapse
if the prescribed minimum subscription amount for the capital increase has not been raised
within the time period stipulated in the resolution. In this case, any amount paid in for the
capital must be refunded as soon as possible.
Issue of bonus shares

165

(1)

The limited liability company may issue bonus shares by transferring amounts to the share
capital that have been recorded in the company's latest annual report, as adopted, as
1)

retained earnings; or

2)

reserves with the exception of any reserve under sections 35a and 35b of the Danish Financial Statements Act (but see subsection (2)).

(2)

For the issue of bonus shares, the company may also use
1)

any profit realised in the current financial year and not distributed, spent or tied up; or

2)

any distributable reserves accumulated or released in the current financial year.

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(3)

Any resolution passed under subsections (1) and (2) must specify the amount of the share
capital increase and the size and number of the shares. Section 158(1), paragraphs 3, 6 and
9 to 11, apply with such changes as are necessary.

(4)

The capital increase can only be implemented when the resolution has been registered.

(5)

If an application for registration of the bonus share issue is not filed within twelve months
after the resolution for the capital increase, the resolution and any resulting amendments to
the articles of association will be void.

166

(1)

If more than three years have passed since a bonus share issue was registered and not all
shares have been transferred to the transferees, the central governing body of the limited
liability company may request such transferee(s) to collect the shares within six months by
publishing a notice in the Commerce and Companies Agency's IT system.

(2)

If the time limit provided by subsection (1) has expired without any transferee having responded to the request, the central governing body may dispose of the shares at the shareholder's expense through a securities dealer (see section 4(1) of the Danish Securities Trading Act). The company may deduct its expenses for the publication of the notice and disposal
of the shares from the proceeds of the sale. Any sales proceeds not claimed within three
years after the sale will accrue to the limited liability company.
Issue of convertible debt instruments and warrants

167

(1)

The general meeting may resolve, by the same majority of votes that is required to amend
the articles of association, to issue convertible debt instruments or warrants if it also resolves at the same time to increase the capital as required (see section 154).

(2)

The resolution passed by the general meeting must specify the terms of the issue, including
the maximum amount of the capital increase that may be subscribed on the basis of the security and the class to which the new shares will belong.

(3)

A resolution passed by the general meeting under subsection (1) must also specify the rights
that will accrue to the holder if he has not converted the debt instrument or exercised the
warrant before the general meeting passes a resolution on one or more of the following
transactions:
1)

capital increase;

2)

capital reduction;

3)

issue of new warrants;

4)

issue of new convertible debt instruments;

5)

dissolution;

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(4)

6)

merger; or

7)

division.

The terms stipulated in any resolutions passed by the general meeting under subsections (2)
and (3) must be communicated to the holders of convertible debt instruments or warrants.

168

The full text of any resolution passed by the general meeting under section 167 must be included in the articles of association. When the time allowed for subscription for the capital
increase has expired, the company's central governing body may delete the provision.

169

(1)

If authorised under section 155(2), the central governing body may resolve to issue convertible debt instruments or warrants.

(2)

The resolution by the central governing body must specify the terms of the issue, including
1)

the maximum amount of the capital increase that may be subscribed on the basis of the
security;

2)

the time allowed for subscription;

3)

the class to which the new shares will belong;

4)

the time allowed for subscription and a time limit that allows shareholders at least two
weeks from the date they are notified to exercise their pre-emption rights;

(3)

5)

the time when the rights start accruing;

6)

the time for payment; and

7)

the size or number of the shares and the subscription price.

In its resolution under subsection (1), the central governing body must also specify the
rights that will accrue to the holder if he has not converted the debt instrument or exercised
the warrant before one of the following is implemented:
1)

a capital increase;

2)

a capital reduction;

3)

the issue of new warrants;

4)

the issue of new convertible debt instruments;

5)

dissolution;

6)

merger; or

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7)
(4)

division.

The terms specified in any resolutions made by the central governing body under subsections (2) and (3) and the authorisation of the central governing body under section 155(2)
must be communicated to holders of convertible debt instruments or warrants.

(5)

Section 159 also applies to any resolution by the central governing body to increase the capital by conversion of convertible debt instruments or by the exercise of warrants.

170

The full text of any resolution made by the central governing body under section 169 must
be included in the articles of association. The central governing body may make any
amendments to the articles of association that are necessary because of the resolution.

171

If the amount paid for a debt instrument is less than the nominal amount of the share(s) into which the debt instrument may be converted in accordance with the loan terms, the residual amount must be paid in accordance with section 33 on partial payment of the capital,
or be covered by the part of equity that is distributable for dividend purposes.
Terms governing registration of convertible debt instruments by a securities centre

172

The Commerce and Companies Agency may prescribe rules

1)

governing the registration of convertible debt instruments by a securities centre;

2)

providing for information to be delivered to a securities centre;

3)

requiring the company to pay all expenses involved with the issue of convertible debt
instruments through a securities centre and their registration and safe keeping, etc. by
an account-holding bank; and

4)

stipulating that section 63 is also to apply to convertible debt instruments.

Application for registration of a resolution to increase the capital

173

(1)

Any resolution by the general meeting or the central governing body to increase the capital
under this Part of the Act must be registered directly or an application for registration must
be filed with the Commerce and Companies Agency within two weeks after payment for the
shares has been made or the time limit for making such payment has expired.

(2)

Any resolution by the general meeting or the central governing body to issue convertible
debt instruments or warrants and to amend the articles of association accordingly under sections 168 and 170 must be registered or be the subject of an application for registration with
the Commerce and Companies Agency no later than two weeks after the resolution is
passed.

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174

(1)

Any registration or application for registration of a capital increase is subject to payment of

the share capital that is required to be paid up under section 33 of this Act or the articles of
association. Where a premium has been fixed, this must be paid up in full.

(2)

The new shares will confer on the holders a right to receive dividends and other rights in the
limited liability company from the date of registration of the capital increase, unless otherwise provided in the resolution for the increase. However, such rights accrue no later than
twelve months after the date of registration.

(3)

When registration is complete, the share capital is considered to have been increased by the
total amount of the capital increase.

175

(1)

No later than four weeks after the end of the financial year, the central governing body must
register or apply to register the amount of any capital increase that occurred during the year
if
1)

shares are subscribed for on the basis of convertible debt instruments or warrants;

2)

the time the resolution allows for subscription exceeds twelve months; and

3)

the prescribed minimum amount of the capital increase has been subscribed and paid up
(see section 33).

(2)

The central governing body may make any amendments to the articles of association that
are necessary because of the capital increase.

(3)

If the registration or application for registration under subsection (1) has not reached the
Commerce and Companies Agency within four weeks after expiry of the time allowed for
subscription, or if registration is refused, any amount already paid must be refunded (see
section 177(3)).

176

(1)

As soon as possible after expiry of the time limit provided for conversion of convertible debt
instruments or the exercise of warrants, the central governing body must register or apply
for registration of the amount of convertible debt instruments or the number of warrants
that have been converted into shares with the Commerce and Companies Agency. If the period allowed for exercise exceeds twelve months, the central governing body must make the
registration or file the application for registration under the rules in section 175.

(2)

The central governing body may make any amendments to the articles of association that
are necessary because of the capital increase.
Revocation of a resolution to increase the capital

177

(1)

Any resolution to increase the capital will lapse if registration is refused.

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(2)

A resolution will also lapse if it has not been registered or no application for registration has
been filed within twelve months after the date of the resolution.

(3)

If a resolution on the capital increase has not been registered, any amounts already paid
must be refunded as soon as possible without deduction for costs, and any assets other than
cash must be promptly returned.
Profit-sharing debt instruments

178

(1)

The general meeting may resolve, by a simple majority of votes (see section 105), to raise
loans against the issue of debt instruments carrying interest, the amount of which depends
in whole or in part on the dividend paid on the limited liability company's shares, or on the
profit for the year.

(2)

The general meeting may also authorise the central governing body to raise loans under
subsection (1). The authorisation may be given for one or more periods of up to five years
at a time.
Part 11
Capital outflow

179

(1)

(2)

The company's assets may only be distributed to its shareholders

1)

as dividends, based on the latest adopted financial statements (see section 180);

2)

as extraordinary dividends (see sections 182 and 183);

3)

in connection with capital reductions (see sections 185 to 193); or

4)

in connection with dissolution of the company (see Part 14).

The company's central governing body is responsible for ensuring that distributions do not
exceed a reasonable amount having regard to the company's financial position and, for parent companies, the group's financial position, and that no distribution is made to the detriment of the company or its creditors (see section 115, paragraph 5, and section 116, paragraph 5). The central governing body is also responsible for ensuring that reserves that cannot be distributed, as specified by statute or the company's articles of association, are covered.
Distribution of ordinary dividend

180

(1)

The general meeting must decide how to distribute, by dividend, the amount available for
distribution as recorded in the financial statements. The general meeting cannot decide to
distribute dividends of a higher amount than that proposed or accepted by the company's
central governing body.

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(2)

Dividends may only be distributed out of distributable reserves, which are amounts stated as
retained earnings in the company's latest adopted financial statements, and reserves that
are distributable under statute or the company's articles of association, less retained earnings.

181

If non-cash assets are distributed as dividends, a valuation report must be prepared (see
sections 36 and 37). The report must state that the amount of the dividend corresponds to
at least the value of the non-cash assets distributed. If the central governing body prepares
and files a declaration under section 38(2), it has no obligation to obtain a valuation report
in connection with the distribution of assets as set out in section 38(1). The central governing body must publish the declaration in the Commerce and Companies Agency's IT system
no later than two weeks after the date of the resolution on the distribution (see section
9(3)).
Distribution of extraordinary dividend

182

(1)

The general meeting may decide to distribute extraordinary dividends after the company has
presented at least one ordinary annual report. The general meeting cannot decide to distribute extraordinary dividends of a higher amount than that proposed or accepted by the company's central governing body.

(2)

The general meeting may authorise the central governing body to resolve to distribute extraordinary dividends after presentation of its first financial statements. The authority may
be subject to financial restrictions and time constraints.

(3)

Extraordinary dividends under subsections (1) and (2) may only be made up of the amounts
referred to in section 180(2) and profit for the current financial year up to the date of the
resolution on distribution if such profit has not been distributed, appropriated or tied up. Any
distributable reserves created or released in the current financial year may also be distributed as extraordinary dividends.

183

(1)

In public limited companies, any resolution on the distribution of extraordinary dividends

must be accompanied by a balance sheet. The central governing body must assess whether
the balance sheet from the latest annual report is adequate, or whether an interim balance
sheet showing that sufficient funds are available for distribution has to be prepared (but see
subsection (2)).

(2)

Notwithstanding subsection (1), public limited companies that pass a resolution on the distribution of extraordinary dividends more than six months after the balance sheet date as
set out in the company's latest adopted annual report must always prepare an interim balance sheet showing that sufficient funds are available for distribution.

(3)

In private limited companies, the central governing body must assess whether a resolution
under subsection (1) is to be accompanied by a balance sheet. However, private limited
companies that pass a resolution on the distribution of extraordinary dividends more than

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six months after the balance sheet date as set out in the company's latest adopted annual
report must always prepare an interim balance sheet showing that sufficient funds are available for distribution.
(4)

If an interim balance sheet is prepared under subsections (1) to (3), that balance sheet
must be audited by the company's auditor if the company is subject to audit obligations. The
interim balance sheet must be prepared in accordance with the rules on preparation of the
limited liability company's annual report. The date of the interim balance sheet may not be
more than six months before the date of the resolution to distribute extraordinary dividends.

(5)

If extraordinary dividends are distributed as non-cash dividends, a valuation report must be

prepared (see sections 36 and 37). The report must state that the amount of the dividend is
equal to or more than the value of the noncash asset(s) distributed. If the central governing
body prepares and files a declaration under section 38(2), it has no obligation to obtain a
valuation report in connection with the distribution of assets as set out in section 38(1).

(6)

The central governing body's resolution on the distribution of extraordinary dividends must
be recorded in the company's minute book. The interim balance sheet or the balance sheet
for the latest financial year must be included in the board of directors' minute book as an
appendix to the resolution.
Special disclosure requirements in connection with dividends

184

(1)

A public limited company that is subject to the rules issued under Part 8 of the Danish Securities Trading Act may not distribute the company's assets (see section 179) to the offeror or
parties related to the offeror within the first 12 months after the acquisition of the company.

(2)

However, notwithstanding subsection (1), distribution may be made if the offeror has disclosed information on the distribution and the detailed terms in the offer document prepared
under the applicable rules of the Securities Trading Act. However, such information need not
be given if the distribution does not exceed the overall improvement of the company's financial position after the date of acquisition, and if the offeror could not have foreseen the distribution when preparing the offer document.
Resolutions on capital reductions

185

The provisions of section 156 on the procedure to be followed in connection with resolutions
on capital increases apply, with such changes as are necessary, to resolutions on capital reductions in public limited companies.

186

Any resolution reducing the share capital must be passed by the general meeting by the
same majority of votes that is required to amend the articles of association.

187

(1)

In private limited companies, the general meeting may, by way of a provision in the articles
of association, authorise the central governing body to reduce the capital to a specified

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amount. In that case, the time limit prescribed in section 191 runs from the date of the
resolution to exercise the authority.
(2)

The request to creditors referred to in section 192 must be published no later than two
weeks after the date of the resolution by the central governing body to exercise the authority.

188

(1)

Resolutions on capital reductions must specify the amount by which the share capital is to
be reduced and for which of the following purposes that amount is to be used:

(2)

1)

payment of losses;

2)

distribution to shareholders; or

3)

transfer to a special reserve fund.

The resolution must state if a higher amount of the limited liability company's assets is to be
distributed than the amount of the reduction, specifying the premium, if applicable.

(3)

Only capital reductions for the purpose of distribution or transfer to a special reserve fund as
referred to in subsection (1), paragraphs 2 and 3, may be made at a discount.

189

(1)

The general meeting of a limited liability company may only pass a resolution to use the
capital reduction amount for distribution to the shareholders or for transfer to a special reserve fund (see section 188(1), paragraphs 2 and 3) if the central governing body submits
or approves a resolution to such effect.

(2)

Where the capital is reduced under subsection (1) at a price lower than the nominal value of
the shares, the balance, up to the nominal value of the shares, must be transferred to the
company's distributable reserves.

190

(1)

A valuation report (see sections 36 and 37) must be available at the date of the resolution
that reduces the capital if the reduction is implemented for the purpose of distributing noncash assets to the shareholders.

(2)

The declaration in the valuation report referred to in section 36(1), paragraph 4, must state
that at the date of the resolution, the capital reduction plus any premium corresponds to at
least the estimated value of the non-cash asset(s) to be distributed. If the central governing
body prepares and files a declaration under the provisions of section 38(2), it has no obligation to obtain a valuation report in connection with the distribution of assets as set out in
section 38(1). The central governing body must publish the declaration in the Commerce and
Companies Agency's IT system no later than two weeks after the date of the resolution on
the distribution (see section 9(3)).

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Registration of capital reductions

191

Resolutions on capital reductions must be registered directly or an application for registration must be filed (see section 9) no later than two weeks after the date of the resolution.
The resolution is invalid if no registration or application for registration is filed with the
Commerce and Companies Agency within such time limit.
Request to creditors

192

(1)

In connection with capital reductions, notice must be given to creditors of the limited liability
company, requesting them to file their claims against the company within four weeks. The
company's central governing body must make the request for the purpose of publication in
the Commerce and Companies Agency's IT system if the amount of the reduction is to be
used, in whole or in part, for

(2)

1)

distribution to the shareholders (see section 188(1), paragraph 2); or

2)

transfer to a special reserve fund (see section 188(1), paragraph 3).

No request to creditors needs to be made under subsection (1) if at the same time the capital is paid up by the same nominal amount, plus a premium, as the amount of the reduction.

(3)

Where capital reductions are for amortisation purposes (see section 74), the request to
creditors under subsection (1) must be published at least four weeks before the date of the
first capital reduction that is to be implemented in connection with amortisation under the
articles of association.
Implementation of capital reductions

193

(1)

Capital reductions are deemed to be finally implemented four weeks after the expiry of the
time limit for the filing of claims against the limited liability company under section 192, unless an application to register that the resolution has been changed or withdrawn has been
received by the Commerce and Companies Agency before the expiry of such time limit. The
first sentence does not apply to capital reductions for amortisation purposes (see section
74).

(2)

In accordance with section 9, the company's central governing body must, before the expiry
of the time limit prescribed in subsection (1), notify the Commerce and Companies Agency if
the capital reduction cannot be implemented in accordance with the information published
under section 192 or cannot justifiably be implemented (see section 115, paragraph 5, and
section 116, paragraph 5). In addition, if any claims filed and payable have not been paid in
full and adequate security has not been provided upon request for claims not past due or for
disputed claims, the capital reduction cannot be implemented, and the central governing
body must notify the Commerce and Companies Agency to such effect. Upon request from
either party, the Commerce and Companies Agency must decide whether the security offered
can be deemed adequate.

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(3)

If a private limited company has resolved to authorise its central governing body to reduce
the capital by up to a certain amount (see section 187), the capital reduction will only be
deemed to be final when it has been registered in the Commerce and Companies Agency's IT
system that such authority has been exercised.
Repayment

194

(1)

If any distribution has been made to the shareholders in contravention of the provisions of
this Act, the shareholders must repay the amount with interest accruing annually at the rate
fixed under section 5(1) and (2) of the Danish Act on Interest on Late Payment (lov om
renter ved forsinket betaling m.v.) plus 2%. However, dividends must only be repaid if
shareholders realised or ought to have realised that the distribution was illegal.

(2)

If the amount cannot be collected, or if the shareholder has no obligation to repay the
amount, the persons that participated in the resolution to make the payment or the implementation of the payment, or in the preparation or approval of the incorrect financial report
will be liable under the general law of damages.
Charitable gifts

195

The general meeting may resolve to give gifts for charitable or similar purposes out of the
limited liability company's funds if this is deemed reasonable, having regard to the purpose
of the gift, the company's financial position and the circumstances in general. For the purposes referred to in the first sentence, the central governing body may use amounts that are
insignificant taking into account the company's financial position.
Part 12
A company's own shares
Acquisition of own shares in ownership or by way of security

196

Limited liability companies may only acquire their own shares if they are fully paid up. The
shares may be acquired both in ownership and by way of security.
Acquisition of own shares for consideration

197

(1)

If a limited liability company acquires its own shares for consideration, such consideration
may only consist of the funds that may be distributed as extraordinary dividends under section 182(3). The company's holding of its own shares must be disregarded when assessing
whether the company satisfies the capital requirements specified in section 4.

(2)

A company's holding of its own shares can include shares acquired by a third party in its
own name, but at the company's expense.

198

(1)

An acquisition of a company's own shares for consideration cannot proceed without the central governing body of the limited liability company obtaining authority from the general
meeting (but see section 199).

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(2)

Such authority may only be given for a specified time, which may not exceed five years.

(3)

The authority must specify

1)

the maximum permitted value of the company's own shares; and

2)

the minimum and maximum amount that may be paid by the company as consideration
for the shares.

199

(1)

Where it is necessary in order to avoid significant and imminent detriment to the limited liability company, the central governing body may acquire the company's own shares on behalf
of the company for consideration under sections 196 to 198, without authority from the general meeting.

(2)

If the limited liability company has acquired its own shares under subsection (1), the central
governing body must notify the next general meeting of

200

1)

the reason for and the purpose of the acquisition;

2)

the number and value of the shares acquired;

3)

the proportion of the share capital represented by the acquired shares; and

4)

the consideration provided for the acquired shares.

Notwithstanding sections 196 to 198, limited liability companies may, directly or indirectly,
acquire their own shares
1)

1in connection with a reduction of the share capital under Part 11;

2)

in connection with a transfer of assets by merger, division or other universal succession;

3)

in satisfaction of a statutory takeover obligation of the company;

4)

in connection with the purchase of fully paid-up shares in a forced sale for the satisfaction of a claim held by the company.
Subsidiaries' acquisition of shares in parent companies

201

Sections 196 to 200 apply, with such changes as are necessary, to a subsidiary's acquisition
of shares in its parent company in ownership or by way of security.
Disposal of acquired shares

202

(1)

Shares acquired without consideration in accordance with section 196 and shares acquired in
accordance with section 200, paragraphs 2 to 4, must be disposed of as soon as possible
without detriment to the limited liability company (but see subsection (2)).

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(2)

The shares must be disposed of no later than three years after the acquisition, unless the
value of the limited liability company's and its subsidiaries' aggregate shareholding in the
company does not exceed the company's distributable reserves.

203

(1)

Shares acquired in ownership in contravention of sections 196 to 201 must be disposed of as

soon as possible and no later than six months after the acquisition.

(2)

If shares have been acquired by way of security in contravention of sections 196 to 201, the
security must be released as soon as possible and no later than six months after the acquisition.

204

If any shares have not been duly disposed of as provided by sections 202 and 203, the central governing body of the limited liability company must cause the share capital to be reduced by the value of such shares (see Part 11).
Subscription for own shares

205

(1)

Limited liability companies may not subscribe for their own shares.

(2)

Shares that are subscribed for by a third party in its own name, but at the company's expense, are deemed to be subscribed for at the third party's own expense.

(3)

Shares subscribed for in the company's name in contravention of subsection (1) are deemed
to be subscribed for by the promoters or, in case of a capital increase, by the members of
the company's management at their own expense, and they will be jointly and severally liable for the purchase price. However, this does not apply to promoters or members of the
company's management who can establish that they neither realised nor ought to have realised that the subscription for the shares was illegal.

(4)

Subsection (1) applies, with such changes as are necessary, to a company's subscription for
shares in its parent company. The shares in the parent company will be deemed to be subscribed for by the management of the subsidiary (see subsection (3)).
Part 13
Financial assistance using the limited liability company's own funds
Financing of purchase of own shares

206

(1)

A limited liability company may not, directly nor indirectly, advance funds, make loans or
provide security for a third party's acquisition of the limited liability company's shares or
shares in its parent company (but see subsection (2) and sections 213 and 214).

(2)

However, if the requirements in subsection (3) and sections 207 to 209 on approval by the
general meeting, reasonableness of the resolution, report by the central governing body and
arm's length terms are satisfied, a limited liability company may, directly or indirectly, ad-

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vance funds, make loans or provide security with a view to a third party's acquisition of the
company's shares or shares in its parent company.
(3)

The limited liability company's central governing body must ensure that any third party receiving financial assistance is credit rated (see subsection (2)).

207

(1)

Grants of financial assistance under section 206(2) are subject to approval by the general
meeting. For the purpose of a resolution by the general meeting, the company's central governing body must present a written report to the general meeting, including information
about

(2)

1)

the reason for the proposed financial assistance;

2)

the company's interest in entering into the transaction;

3)

the conditions on which the transaction is entered into;

4)

the consequences of the transaction for the company's liquidity and solvency; and

5)

the price to be paid by the third party for the shares.

The general meeting must pass the resolution required to approve the financial assistance
under subsection (1) by the same majority of votes that is required to amend the articles of
association (see section 106).

(3)

The report to be presented under subsection (1) must be published in the Commerce and
Companies Agency's IT system or be received by the Agency for the purpose of publication
under section 9 within two weeks after the date of approval by the general meeting

208

The total financial assistance granted by the limited liability company to third parties under
section 206(2) may at no time exceed what is reasonable having regard to the company's financial position. If the company is a parent company within the meaning of sections 6 and
7, the aggregate financial assistance may not exceed what is reasonable having regard to
the group's financial position. For this purpose, the limited liability company may only use
funds that can be distributed as dividends (see section 180, subsection (2)).

209

Where a third party acquires shares in the company with the financial assistance of a limited
liability company (see section 206, subsection (2)), such assistance must be granted at
arm's length. The same applies if a third party subscribes for shares under section 162 in
connection with an increase in the subscribed capital.

Financial assistance to parent companies, shareholders, members of management and others

210

(1)

A limited liability company cannot, directly or indirectly, advance funds, make loans or provide security to its shareholders or members of the management except as provided in sections 211 to 214. The same applies in relation to shareholders or members of management

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in the company's parent company or businesses other than parent companies that control
the company. The first sentence also applies to persons who, by marriage or lineal consanguinity, are related to a person falling within the first or second sentence or who have other
close affiliations to such person.
(2)

Notwithstanding subsection (1), a limited liability company may grant the financial assistance referred to in subsection (1) for the purpose of financing any purchase of its own
shares under the rules in sections 206 to 209.

211

(1)

A limited liability company may, directly or indirectly, advance funds, make loans or provide
security for the obligations of Danish and certain foreign parent companies.

(2)

The Commerce and Companies Agency prescribes more detailed rules specifying which foreign parent companies are subject to subsection (1).

212

Notwithstanding section 210, a limited liability company may, directly or indirectly, advance
funds, make loans or provide security to the persons specified in section 210 for the purpose
of usual business transactions.
Exception for banks, etc.

213

Sections 206 and 210 do not apply to banks or to mortgage loans granted by mortgage
credit institutions.
Exception for employees

214

(1)

Sections 206 and 210 do not apply to transactions for the acquisition of shares from, or the
transfer of shares to, employees of the company or any subsidiary.

(2)

Minutes of meetings held by the central governing body must include a note on any transaction falling within subsection (1).

(3)

Transactions falling within subsection (1) may only be entered into using funds that can be
distributed as dividends under section 180.
Repayment

215

(1)

If a limited liability company has granted financial assistance in contravention of sections

206 and 210, the amount must be returned to the company together with interest that accrues annually at the rate specified in section 5(1) and (2) of the Danish Interest Rates Act
(renteloven) with the addition of 2%, unless a higher rate of interest is agreed.

(2)

Where repayment is not possible, or where agreements for other financial assistance cannot
be terminated, the persons who have agreed to or continued any transactions in contravention of sections 206 and 210 will be liable for any loss suffered by the limited liability company.

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(3)

Any provision of security in contravention of sections 206 and 210 is binding on the company if the contracting party did not know that the security had been provided in contravention
of these provisions.
Part 14
Dissolution of limited liability companies
Dissolution by declaration

216

(1)

Limited liability companies that have paid all creditors may be dissolved by the company's
shareholders making a declaration to the Commerce and Companies Agency that all debts,
whether due or not, have been paid and that it has been resolved to dissolve the company.
The shareholders' names and addresses must be set out in the declaration.

(2)

The Commerce and Companies Agency may only register the dissolution if the declaration
under subsection (1) is received by the Agency no later than two weeks after the date it was
signed, and it is accompanied by a declaration from the Danish tax authorities that there is
no claim for direct taxes or indirect taxes against the limited liability company.

(3)

The company is dissolved when it has been removed from the Commerce and Companies
Agency's register of active companies.

(4)

The shareholders have personal, joint and several, and unlimited liability for the company's
debts existing at the date that the declaration was made, whether due or not due, or disputed. Any excess must be distributed to the shareholders.
Resolution to enter into liquidation

217

(1)

Unless otherwise provided by statute, any resolution voluntarily dissolving a limited liability
company by liquidation must be passed by the general meeting.

(2)

The resolution must be passed by the same majority of votes as that required to amend the
articles of association (see section 106). Where dissolution is prescribed by statute, by the
limited liability company's articles of association, or by the Commerce and Companies Agency under this Act, the resolution must be passed by a simple majority of votes (see section
105).
Election of liquidator

218

(1)

The general meeting elects one or more liquidators to liquidate the company. In the period
from the date of the resolution on voluntary dissolution (see section 217(1)) up to the date
of election of a liquidator, section 229(1) applies, with such changes as are necessary, to
any transactions made by management.

(2)

Shareholders holding at least 25% of the share capital are entitled to elect a liquidator at
the general meeting who will liquidate the company together with other liquidators elected
by the general meeting.

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219

(1)

One or more liquidators will replace management. The provisions of this Act on company
management also apply, with such changes as are necessary, to one or more liquidators.

(2)

Liquidators may be removed at any time by the governing body of the company or the authority that has elected the liquidator.

(3)

The provisions of this Act and the Danish Financial Statements Act on financial reporting,
auditing, general meetings, and the submission of annual reports to the Commerce and
Companies Agency apply, with such changes as are necessary, to companies in liquidation,
subject to the modifications provided by this Part of the Act.
Application for registration of liquidation

220

(1)

The liquidator must ensure that any application for registration of a resolution whereby the
company enters into liquidation reaches the Commerce and Companies Agency no later than
two weeks after the date of the resolution. Notice of the resolution must be sent to all
known creditors at the same time as the application for registration is sent to the Commerce
and Companies Agency.

(2)

A company that has entered into liquidation must keep its name with "i likvidation" (in English, in liquidation) added to it. Section 228(1) on registration applies.

(3)

When a limited liability company has resolved to enter into liquidation, no registrations may
be made with respect to the company, other than changes with respect to any auditor appointed by the bankruptcy court to audit the annual report and capital increases.
Request to creditors

221

(1)

Upon registration and publication in the Commerce and Companies Agency's IT system under
section 220(1), the company's creditors are requested to file their proofs of claim with the
liquidator within three months. At the time of applying for registration of the resolution on
liquidation under section 220(1), the liquidator must notify all the company's known creditors of the resolution.

(2)

The liquidator may not close and dissolve the estate until expiry of the three-month period
prescribed in subsection (1).

(3)

If a claim is not admitted as proved by a creditor, the creditor must be notified to such effect by registered post or by any other means of communication providing the same degree
of proof of receipt. The creditor must be notified that if he wishes to contest the decision not
to admit his claim, the matter must be brought before the bankruptcy court no later than
four weeks after dispatch of the letter or other communication.

(4)

Claims filed after the estate has been closed and dissolved must be paid out of funds not yet
distributed to the shareholders.

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Distribution of dividends and liquidation proceeds

222

(1)

The shareholders may agree to distribute dividends in a company in liquidation based on the
latest adopted annual report.

(2)

Dividend distributions under subsection (1) must be made in accordance with the general
rules on dividends and extraordinary dividends in sections 180 to 183 and 194.

223

(1)

Liquidation proceeds may not be distributed to shareholders until the time limit stipulated in
the request to creditors referred to in section 221(1) has expired and all debt to known
creditors has been paid (but see subsection (2)).

(2)

If adequate security is provided, an interim distribution may be made before the liquidation
is complete where the time limit for claims (see section 221(1)) has expired and creditor
claims, if any, have been paid. Shareholders can be requested to repay liquidation proceeds
distributed as an interim distribution under section 194.

224

(1)

When the liquidation proceeds have been distributed, administration of the estate is concluded, and the general meeting may pass a resolution on final liquidation. Administration of
the estate may not be concluded until any disputes under section 221(3) have been settled.

(2)

The liquidators' application for registration of the final liquidation accounts must reach the
Commerce and Companies Agency no later than two weeks after the accounts have been approved by the shareholders. The liquidation accounts must be annexed to the application for
registration. The liquidation accounts must be audited if the company is subject to audit obligations under the Danish Financial Statements Act or any other statute. The Commerce and
Companies Agency will then remove the company from the register.
Compulsory dissolution

225

(1)

The Commerce and Companies Agency may request the bankruptcy court to dissolve a limited liability company, if necessary under section 226, where
1)

the Agency has not duly received the company's audited annual report prepared in accordance with the Danish Financial Statements Act;

2)

the company does not have the management or registered office prescribed by this Act
or the company's articles of association;

3)

the company has failed to register an auditor for the company despite having audit obligations under the Financial Statements Act or any other statute;

4)

the company has failed to register an auditor for the company despite the general meeting having resolved that the company's annual report must be audited; or

5)

the company's management has failed to respond to claims for called-up share capital
that the company has been proven to be unable to satisfy.

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(2)

The Commerce and Companies Agency may prescribe a time limit within which the limited liability company must remedy a defect under subsection (1). If the defect is not remedied on
or before expiry of the time limit prescribed by the Agency, the Agency may decide that the
company must be compulsorily dissolved.

226

(1)

Where a limited liability company does not resolve to dissolve the company but is required
to do so by statute or the company's articles of association or by the Commerce and Companies Agency under the provisions of this Act (see section 217(2), second sentence), or if no
liquidator is elected, the Commerce and Companies Agency may request the bankruptcy
court with jurisdiction over the place where the company's registered office is situated to
dissolve the company.

(2)

Subsection (1) applies, with such changes as are necessary, to compulsory dissolution of a
company by court order under section 230.

227

(1)

The Commerce and Companies Agency's decision to request the bankruptcy court to dissolve
a limited liability company must be published in the Agency's IT system.

(2)

The limited liability company must keep its name with "under tvangsoplsning" (in English,
in the process of compulsory dissolution) added to it.

(3)

The bankruptcy court may appoint one or more liquidators. The bankruptcy court may also
appoint an auditor. The provisions on liquidation in this Part apply to compulsory dissolution,
always provided that the bankruptcy court or anyone authorised by the court will make decisions with respect to the company's affairs. The costs of dissolution will be paid out of public
funds, if necessary.

(4)

Upon conclusion of administration of the estate, the bankruptcy court must notify the Commerce and Companies Agency to such effect, and the Agency must register the dissolution of
the company in the Agency's IT system.

228

(1)

When the Commerce and Companies Agency has decided that a limited liability company
must be compulsorily dissolved, no registrations may be made with respect to the company,
other than changes with respect to any auditor appointed by the bankruptcy court to audit
the annual report.

(2)

Notwithstanding subsection (1), registration may be made when a company applies for a
discontinuation of proceedings at the bankruptcy court and resumption of the company's activities under section 232.

229

(1)

In the period from the date that the request for dissolution of the limited liability company is
filed with the bankruptcy court up to the point when a liquidator has been appointed, management may carry out any necessary transactions that are not to the detriment of the
company and its creditors.

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(2)

After appointment of a liquidator, the former members of management must provide the liquidator with any information that is required about the company's activities up to the date of
commencement of the liquidation procedure, including any information necessary for the liquidator's assessment of existing and future claims. For groups, this obligation also applies in
respect of the liquidator for the parent company.

(3)

The liquidator may request the bankruptcy court to summon former members of the company's management to a court meeting for the purpose of obtaining the information referred to
in subsection (2).
Compulsory dissolution by the court

230

Where any shareholders in a limited liability company have wilfully contributed to passing a
resolution by the general meeting that is in contravention of section 108, or have otherwise
abused the influence that they have over the company or contributed to a contravention of
this Act or the company's articles of association, the court may, upon request from shareholders representing no less than one-tenth of the share capital, order that the company be
dissolved if special grounds exist because of the duration of the abuse or other circumstances.
Resumption of business

231

(1)

The shareholders may resolve to resume the company's business in accordance with section
106 if distribution under section 223 has not commenced. It is a condition for the resumption that a management and an auditor, if applicable, be elected and a declaration be made
by a valuation expert (see section 37) that the required capital is available. The share capital must be reduced to the amount available. If the required share capital is subsequently
not available (see section 4(2)), the capital must be increased to at least the required
amount.

(2)

An application for registration of a resolution on resumption of business must be filed no later than two weeks after the date of the resolution. The application must be accompanied by
a declaration from an approved auditor that no loans, etc. have been advanced to the
shareholders in contravention of Part 13 of this Act.

232

(1)

Section 231 applies, with such changes as are necessary, where a company that is in the
process of compulsory dissolution by order of the bankruptcy court applies to the Commerce
and Companies Agency for discontinuation of the proceedings and resumption of the company's activities.

(2)

If the Commerce and Companies Agency has not received an application under subsection
(1) within three months after the Agency has requested the bankruptcy court to dissolve the
company, or if the company has been in compulsory dissolution within the past five years,
the company's activities cannot be resumed. The three-month time limit is suspended if reorganisation proceedings are commenced against the company.

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(3)

If a limited liability company is in the process of a compulsory dissolution, the resumption of

business is subject to the correction of the matters which resulted in the limited liability
company's compulsory dissolution. The correction must be made no later than at the same
time as the resumption decision (see section 231(1)). Documentation of the corrected issues
must be submitted no later than at the same time as the application (see subsection (1)).

(4)

If the bankruptcy court has appointed a liquidator, the resumption is subject to the liquidator's consent.

(5)

If the bankruptcy court has decided to dissolve a company (see section 230), a resumption
cannot take place.
Transition into reorganisation proceedings or bankruptcy

233

(1)

Only the central governing body or, if the company is in liquidation, the liquidator, may file a
petition for reorganisation proceedings or a petition in bankruptcy on behalf of the company.

(2)

If the liquidators consider that the creditors will not be satisfied in full in connection with the
liquidation, they must file a petition for reorganisation proceedings or a petition in bankruptcy.

(3)

Where a company is under compulsory dissolution under section 226, the liquidator must file
a petition for reorganisation proceedings or a petition in bankruptcy. If no liquidator has
been appointed, the bankruptcy court may issue an order for reorganisation or a bankruptcy
order of its own accord.

(4)

When a petition in bankruptcy has been filed, no registrations may be made with respect to
the limited liability company, other than changes with respect to any auditor elected.

(5)

Wjhen the administrator has taken over the management of a company, no registrations can
be made with respect to the company, other than changes with respect to any auditor appointed by the administrator or changes adopted by the general meeting with the consent of
the administrator.

234

(1)

A company that is subject to reorganisation proceedings must keep its name with "under
rekonstruktionsbehandling" (in English, under reorganisation) added to it.

(2)

A company that has started bankruptcy proceedings must keep its name with "under
konkurs" (in English, in bankruptcy) added to it. Section 228(1) also applies. The completion
of the bankruptcy proceedings must be registered in the Commerce and Companies Agency's
IT system, unless otherwise stipulated in the bankruptcy court's notice of completion.
Restoration to the register

235

(1)

The bankruptcy court may order that a limited liability company that has been deleted from
the register of active companies in the Commerce and Companies Agency's IT system follow-

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ing liquidation or compulsory dissolution (see sections 225 to 230) must be restored to the
register if additional funds become available for distribution. The bankruptcy court may also
order that the company be restored to the register if other circumstances provide grounds
for restoration.
(2)

The former liquidators will be responsible for administration of the estate. If this is not possible, the bankruptcy court or a liquidator appointed by the court will be responsible for administration of the estate.

(3)

An application for restoration and its completion must be received by the Commerce and
Companies Agency no later than two weeks after the date of the bankruptcy court's order on
restoration.
Part 15
Merger and division
Merger of limited liability companies

236

Under the provisions of this Part of the Act, a limited liability company may be dissolved
without liquidation by transferring its assets and liabilities as a whole to another limited liability company in return for consideration provided to the shareholders of the non-surviving
companies, a "merger by absorption". The same applies where two or more limited liability
companies merge into a new limited liability company, a "merger by formation of a new
company".
Merger plan

237

(1)

The central governing bodies for the existing limited liability companies that participate in
the merger must draw up and sign a joint merger plan (but see subsection (2)).

(2)

If the merger only involves private limited companies, the shareholders may agree that no
merger plan should be drawn up (but see section 248(2) and (3)).

(3)

If the merger involves public limited companies, the merger plan must include information
and provisions on
1)

the names and any secondary names of the limited liability companies, including whether the name or secondary name of a non-surviving company is to be adopted as a secondary name for the surviving company;

2)

the limited liability companies' registered offices;

3)

the consideration offered for the shares in a non-surviving company;

4)

the time from which any shares offered as consideration will confer on the holders a
right to receive dividends;

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5)

the rights in the surviving company that accrue to any holders of shares and debt instruments carrying special rights in the non-surviving company;

6)

any other measures taken for the benefit of holders of the shares and debt instruments
referred to in paragraph 5;

7)

registration of any shares offered as consideration and any delivery of share certificates;

8)

the time from which the rights and obligations of the non-surviving company are considered to have been transferred for accounting purposes (see subsection (4));

9)

any special benefits accruing to members of the limited liability companies' management; and

10) draft articles of association (see sections 28 and 29) if a new limited liability company is
formed by the merger.
(4)

Each of the existing limited liability companies must sign the merger plan by the end of the
financial year in which the merger takes effect for accounting purposes (see subsection (3),
paragraph 8). If this time limit is exceeded, notification that the Agency has received the
merger plan cannot be published and, accordingly, the merger cannot be adopted.
Merger statement

238

(1)

The central governing bodies for each of the existing limited liability companies participating
in the merger must draw up a written statement that provides explanations and reasons for
the merger plan (but see subsection (2)). The statement must include information about
how any consideration offered for shares in the non-surviving companies has been determined, including any particular difficulties in connection with such determination, and information about preparation of a valuation report if such report must be prepared under section
240.

(2)

The shareholders may agree that no merger statement should be drawn up.
Interim balance sheet

239

(1)

If the merger plan is signed more than six months after the end of the financial year to
which the limited liability company's most recent annual report relates, an interim balance
sheet must be prepared for the relevant limited liability company participating in the merger
(but see subsections (2) and (3)). The date of the interim balance sheet, which must be
prepared in accordance with the Danish Financial Statements Act, may not be more than
three months before the date that the merger plan was signed. The interim balance sheet
must be audited if the limited liability company is subject to audit obligations under the Financial Statements Act or any other statute.

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(2)

The shareholders may agree that no interim balance sheet should be prepared, notwithstanding that the merger plan (if any) has been signed more than six months after the end
of the financial year to which the most recent annual report of the company relates.

(3)

The provision in subsection (1) does not apply to limited liability companies whose securities
are admitted to trading on a regulated market in an EU/EEA member state and which have
made public a half-year report under the Financial Statements Act if the half-year report
contains audited financial statements for the company and the half-year report is made
available to the company's shareholders.
Valuation report on non-cash contributions

240

(1)

If a capital increase is implemented in the surviving public limited company in connection

with the merger, or if a new public limited company is formed by the merger, a report must
be obtained from a valuation expert (but see subsection (2)) to be appointed under section
37(1). Section 37(2) and (3) also applies to the valuation experts' activities in relation to all
of the merging limited liability companies.

(2)

The valuation report may be omitted if instead a statement by a valuation expert on the
merger plan (see section 241) or a declaration by valuation expert(s) on the creditors' position (see section 242) is prepared.

(3)

If a valuation report is to be prepared in connection with a merger, it must include

1)

a description of each contribution;

2)

information on the valuation method applied;

3)

a specification of the agreed consideration; and

4)

a declaration that the value of the contribution as assessed in the report is not less than
the agreed consideration, including any nominal value of the shares to be issued and
any premium on them.

(4)

The valuation report may not be drawn up more than three months before the date of the
merger resolution, if any (see section 245). If this time limit is exceeded, the merger cannot
be validly adopted.
Statement by valuation expert(s) on the merger plan

241

(1)

For each of the limited liability companies participating in the merger, one or more independent valuation experts must make a written statement on the merger plan, including the
consideration (see subsection (4)). The shareholders may decide, by unanimous agreement,
not to obtain a statement by a valuation expert on the merger plan.

(2)

The valuation experts must be appointed as specified in section 37(1). If the limited liability
companies participating in the merger decide to use one or more joint valuation experts, the

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valuation experts must, at the companies' request, be appointed by the bankruptcy court
that has jurisdiction over the place where the registered office of the surviving limited liability company is situated.
(3)

Section 37(2) and (3) also applies to the valuation experts' activities in relation to all the
merging limited liability companies.

(4)

The statement must include a declaration as to whether the consideration offered for the
shares in the nonsurviving company is fair and reasonable. The statement must specify the
method(s) used for determining the consideration and assess whether such methods are appropriate. The statement must also specify the values that result from each method and the
relative importance that should be attached to each individual method in connection with the
valuation. Where the valuation gives rise to particular difficulties, these should be included
in the statement.
Declaration by valuation expert(s) on the creditors' position

242

In addition to the statement referred to in section 241, the valuation experts must make a
declaration as to whether the creditors of each limited liability company can be considered to
be sufficiently protected after the merger. However, the shareholders may decide, by unanimous agreement, not to obtain a declaration by a valuation expert on the creditors' position
Opportunity for creditors to file their claims

243

(1)

If the valuation experts, with their declaration on the position of the creditors in the limited
liability company (see section 242), conclude that the creditors will not be sufficiently protected after the merger, or if no declaration has been made by a valuation expert on the
creditors' position, creditors whose claims arose prior to the Commerce and Companies
Agency's publication under section 244 may file their claims up to four weeks after the date
on which all of the existing limited liability companies participating in the merger passed the
resolution on the merger. However, no claims for which adequate security has been provided
may be filed.

(2)

A request may be made for repayment of claims filed if they are due, and adequate security
may be requested for claims filed that are not yet due.

(3)

Unless otherwise established, security under subsection (2) is not required if repayment of
the claims is secured by a statutory arrangement.

(4)

If the limited liability company and any creditors who have filed their claims disagree as to
whether security should be provided or whether the security offered is adequate, either party may, no later than two weeks after the claim is filed, bring the matter before the bankruptcy court that has jurisdiction over the place where the limited liability company's registered office is situated for a ruling on the issue.

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(5)

In the agreement on which the claim is based, creditors may not, with binding effect, waive
their rights to demand security under subsection (2).

(6)

If creditors have a right to file their claims, the implementation of the merger (see section
251) can only be registered upon expiry of the time allowed for filing such claims.

Filing of merger plan and declaration by valuation expert(s) on the creditors' position
244

(1)

A copy of the merger plan (if any) must be received by the Commerce and Companies Agency no later than four weeks after it is signed (but see section 237(2)). If this time limit is
exceeded, notification that the Agency has received the merger plan cannot be published
and, accordingly, the merger cannot be adopted. If valuation experts have made a declaration on the creditors' position (see section 242), this declaration may also be submitted to
the Commerce and Companies Agency in connection with filing of the merger plan.

(2)

The Commerce and Companies Agency must publish notification in its IT system that it has
received the documents referred to in subsection (1). If creditors have a right to file their
claims (see section 243), this must be stated in the Agency's notification.
Resolution to implement a merger

245

(1)

The resolution to implement a merger may be passed no earlier than four weeks after publication by the Commerce and Companies Agency of a notification that it has received the
merger plan and a declaration by the valuation experts on the creditors' position (but see
subsection (2)).

(2)

If the merger only involves private limited companies, and if the valuation experts, with
their declaration on the creditors' position under section 242, conclude that the creditors of
each private limited company will be adequately secured after the merger, the shareholders
may agree to disregard the time limit under subsection (1).

(3)

If the non-surviving limited liability company has reached the end of its financial year without the general meeting having yet approved the annual report for the accounting period
just ended, the general meeting must approve the annual report for this accounting period
on or before the date of the resolution to implement the merger.

(4)

Creditors must, upon request, be informed about the date on which it will be resolved to implement any merger.

(5)

The merger must be implemented in accordance with the merger plan if such plan has been
drawn up. If the merger is not adopted in accordance with any merger plan as published, the
proposal is considered to have lapsed.

(6)

If the following documents have been prepared, they must be made available for inspection
by the shareholders at the company's registered office or on the company's website no later
than four weeks before the date on which the resolution to implement a merger is to be

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passed, unless the shareholders agree that the documents should not be made available to
them before the general meeting:
1)

The merger plan.

2)

Annual reports for each existing limited liability company participating in the merger, as
adopted for the last three financial years or any shorter period in which the company
has existed.

(7)

3)

A merger statement.

4)

An interim balance sheet.

5)

A valuation report on non-cash contributions.

6)

The valuation experts' statements on the merger plan, including the consideration.

7)

The valuation experts' declaration on the creditors' position.

Shareholders must, upon request, be provided with access to the documents specified in
subsection (6), free of charge.

246

(1)

In a non-surviving limited liability company, the merger resolution must be passed by the
general meeting (but see subsection (2) and section 252). If the company is in liquidation, a
merger resolution may only be passed if the shareholders have not yet received any distributions, and if the general meeting resolves at the same time to suspend the liquidation
process. Accordingly, section 231 on resumption of business will not apply.

(2)

If a limited liability company is dissolved without liquidation by transferring its assets and liabilities as a whole to another limited liability company holding at least 90% of the share
capital in the non-surviving limited liability company, the merger resolution may be passed
by the central governing body of the non-surviving limited liability company (but see subsections (3) to (5)).

(3)

The resolution under subsection (2) must, however, be passed by the general meeting if
shareholders holding 5% of the share capital make a written request no later than two
weeks after notification is published that the merger plan has been received. The resolution
must also be passed by the general meeting of the non-surviving limited liability company if
so requested by the shareholders with the right to demand a general meeting under the articles of association (see section 89).

(4)

The central governing body must call a general meeting within two weeks of such request
being made.

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(5)

If the resolution is to be passed by the general meeting of the non-surviving limited liability
company, it must be passed by the majority required under section 106 and in accordance
with any other provisions in the articles of association that apply to dissolutions or mergers.

247

(1)

In the surviving limited liability company, the merger resolution must be passed by the central governing body, unless the general meeting is required to amend the articles of association for any purpose other than adopting a non-surviving limited liability company's name or
secondary name as the surviving limited liability company's secondary name (but see subsections (2) to (4)).

(2)

Shareholders holding 5% of the share capital, or shareholders with the right to demand a
general meeting under the articles of association (see section 89), may also make a written
request that the resolution be passed by the general meeting of the surviving limited liability
company if the request is made no later than two weeks after the Commerce and Companies
Agency publishes notification that it has received the merger plan.

(3)

The central governing body must call a general meeting within two weeks of such request
being made.

(4)

If the resolution is to be passed by the general meeting of the surviving limited liability
company, it must be passed by the majority required under section 106.

248

(1)

The central governing bodies of the existing limited liability companies participating in the
merger must inform any general meeting at which the resolution to implement the merger is
to be passed about any significant events, including any significant changes in assets and liabilities, that have occurred between the date the merger plan was signed and the date of
the general meeting.

(2)

If the merger only involves private limited companies, and if the shareholders have agreed
under section 237(2) that no merger plan should be drawn up, the following issues must be
addressed in connection with the adoption of the merger:
1)

the names and any secondary names of the private limited companies, including whether the name or secondary name of any non-surviving company is to be adopted as a
secondary name of the surviving company;

2)

the consideration offered for the shares in a non-surviving private limited company;

3)

the time from which any shares offered as consideration will confer on the holders a
right to receive dividends;

4)

the time from which the rights and obligations of a non-surviving private limited company are considered to have been transferred for accounting purposes; and

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5)

articles of association (see sections 28 and 29) if a new private limited company is
formed by the merger.

(3)

If the merger only involves private limited companies, and if the shareholders have agreed
under section 237(2) that no merger plan should be drawn up, identical resolutions must
have been passed by all of the existing private limited companies participating in the merger
with regard to the requirements in subsection (2). If this is not the case, the resolution to
implement the merger is considered to have lapsed.
Opportunity to claim compensation

249

(1)

The shareholders in the non-surviving limited liability company or companies may claim
compensation from the limited liability company if the consideration offered for the shares in
the non-surviving limited liability company or companies is not fair and reasonable, and if
they have made a reservation to this effect at the general meeting at which the merger
resolution was passed.

(2)

Proceedings pursuant to subsection (1) must be commenced within two weeks after the
merger is adopted by all of the merging limited liability companies.

(3)

If a reservation is made under subsection (1), the merger resolution may only be registered
after expiry of the time limit prescribed in subsection (2), unless the valuation experts, with
their statement on the merger plan and the consideration (see section 241), conclude that
the consideration offered for the shares in the non-surviving limited liability company or
companies is fair and reasonable.
Legal effects of a merger

250

(1)

The merger will be considered completed, and a non-surviving limited liability company will
be considered dissolved and its rights and obligations will be considered to have been transferred as a whole to the surviving limited liability company when:
1)

The resolution on the merger has been passed by all of the existing limited liability
companies participating in the merger.

2)

The claims filed by creditors under section 243 have been settled.

3)

The shareholders' claims for compensation under section 249 have been settled, or adequate security has been provided for the claims. If valuation experts have drawn up a
statement on the plan, including the consideration, and the statement is based on the
assumption that the consideration is fair and reasonable, the valuation experts must also have declared that their statement on the consideration is not disputed to any significant degree. The valuation experts determine whether the security is adequate.

4)

The requirements in subsection (5) concerning election of management and an auditor

have been satisfied.

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(2)

When the requirements specified in subsection (1) are satisfied, the shareholders in the nonsurviving limited liability company who receive shares as consideration become shareholders
in the surviving limited liability company.

(3)

Consideration cannot be offered for shares in a non-surviving limited liability company which
are owned by the merging limited liability companies.

(4)

Part 3 on formation will not apply if a merger results in a new limited liability company, unless stipulated in the provisions on mergers in sections 236 to 252. Part 10 will not apply to
capital increases in the surviving limited liability company which are based on the assets and
liabilities of a non-surviving limited liability company. Part 14 will not apply to a nonsurviving limited liability company which is dissolved as part of a merger.

(5)

If the merger results in a new limited liability company, and if the supreme governing body
and an auditor, if applicable, are not elected immediately after the adoption of the merger
by the general meeting, a general meeting for the election of management and an auditor, if
applicable, must be held in the new limited liability company within two weeks. The general
meeting must also decide whether the future financial statements of the limited liability
company are to be audited if the company is not subject to audit obligations under the Danish Financial Statements Act or any other statute.
Application for registration of a merger

251

(1)

For each limited liability company, the resolution adopting the merger must be registered
with, or an application for registration must be submitted to (see section 9), the Commerce
and Companies Agency. This must occur no later than two weeks after the resolution is
passed by all of the existing limited liability companies participating in the merger. The surviving limited liability company may register or apply for registration of the merger on behalf
of the limited liability companies. The registration or application for registration must be accompanied by the documents specified in section 245(6), paragraphs 3 to 7, if such documents have been prepared. Once adopted, the merger may only be registered when it has
taken legal effect under section 250(1).

(2)

The adopted merger must be registered directly or an application for registration must be
filed under section 9 within the time allowed for filing an annual report for the period in
which the merger takes legal effect (see section 237(3), paragraph 8), but not later than
one year after the Agency has published notification of receipt of the merger plan under section 244. If one of these time limits is exceeded, the merger resolution will be invalid, and
the merger plan prepared under section 237 will be considered to have lapsed.

(3)

If a limited liability company resulting from a merger enters into an agreement before it is
registered, and if the other party to the agreement is aware that the company is not registered, the other party may, unless otherwise agreed, terminate the agreement if no registration has been made with, or no application for registration has been received by, the Com-

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merce and Companies Agency by the end of the period provided in subsection (2), or if registration is refused. If the other contracting party was unaware that the limited liability company was not registered, the other party may terminate the agreement as long as the company remains unregistered. Section 41(1), second sentence, applies with such changes as
are necessary.
(4)

Sections 42 to 44 apply, with such changes as are necessary, where a public limited company resulting from a merger acquires assets from a shareholder known to the company during
the 24 months following registration of the company.
Vertical mergers between parent companies and wholly-owned subsidiaries

252

If a limited liability company is dissolved without liquidation by transferring its assets and liabilities as a whole to another limited liability company holding all of the shares in the nonsurviving company, a "vertical merger", the merger resolution may be passed by the central
governing body in the non-surviving limited liability company. Section 237(1), (2), (3), paragraphs 1, 2, 5, 6 and 8 to 10, and (4), section 239, sections 242-245, section 246(1), second and third sentences, sections 247 and 248 and sections 250 and 251 also apply to vertical mergers.

Transfer of the assets and liabilities of a limited liability company to the Danish Government
or a Danish municipality
253

If a limited liability company is dissolved without liquidation by transferring its assets and liabilities as a whole to the Danish Government or a Danish municipality, section 237(1) and
(3), section 238, section 244(1), first and second sentences, and subsection (2), first sentence, section 245(1) and (3) to (6), sections 246 and 249, section 250(1), paragraph 1,
and section 251(1) also apply.
Division of limited liability companies

254

(1)

The general meeting of a limited liability company may pass a resolution to divide the limited liability company. In connection with the division, the assets and liabilities are transferred as a whole to two or more existing or newly established public or private limited companies in exchange for consideration to the shareholders in the transferor limited liability
company. The general meeting may resolve, with the same majority of votes, to implement
a division, whereby the limited liability company transfers part of its assets and liabilities to
one or more existing or newly established limited liability companies. The transfer is not
subject to the consent of the creditors.

(2)

If any claim made by a creditor of a limited liability company participating in the division is
not satisfied, each of the other participating limited liability companies are jointly and severally liable for obligations that existed at the date of publication of the division plan, subject
to the maximum amount of the net value contributed or remaining in the individual limited
liability company at that time.

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(3)

If one or more of the transferee limited liability companies participating in a division are the
result of another division or merger which has not been implemented, this must be specified
in the division plan (see section 255). Any division into new transferee limited liability companies resulting from another division or merger must be implemented immediately after the
division or merger that results in the new limited liability companies (see section 269).
Division plan

255

(1)

The central governing bodies of the existing limited liability companies participating in the
division must draw up and sign a joint division plan (but see subsection (2)).

(2)

If the division involves private limited companies only, the shareholders may agree that no
division plan should be drawn up (but see section 266(2) and (3)).

(3)

If the division involves public limited companies, the division plan must include information
and provisions on
1)

the names and any secondary names of the limited liability companies, including whether the name or secondary name of the transferor limited liability company is to be
adopted as a secondary name of a transferee limited liability company;

2)

the limited liability companies' registered offices;

3)

an accurate description and distribution of the assets and liabilities that are to be transferred or to remain in each limited liability company participating in the division;

4)

the consideration offered to the shareholders in the transferor limited liability company;

5)

the distribution of the consideration, including shares in the transferee limited liability
companies, to the shareholders in the transferor limited liability company and the distribution criterion;

6)

the time from which any shares offered as consideration will confer on the holders a
right to receive dividends;

7)

the rights accruing in the transferee company to any holders of shares and debt instruments carrying special rights in the transferor company;

8)

any other measures taken for the benefit of holders of shares and debt instruments referred to in paragraph 7;

9)

registration of any shares offered as consideration and any delivery of share certificates;

10) the time from which the rights and obligations of the transferor company are considered
to have been transferred for accounting purposes (see subsection (4));

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11) any special benefits accruing to members of the limited liability companies' management; and
12) draft articles of association (see sections 28 and 29) if one or more new limited liability
companies are formed by the division.
(4)

For each of the existing limited liability companies, the division plan must be signed by the
end of the financial year in which the division takes effect for accounting purposes (see subsection (3), paragraph 10). If this time limit is exceeded, notification that the Commerce
and Companies Agency has received the division plan cannot be published and, accordingly,
the division cannot be adopted.

(5)

If not all of the assets are distributed by the division plan (see subsection (3), paragraph 3),
and their distribution cannot be determined by the plan, such assets or the value they represent will be distributed among the participating limited liability companies in proportion to
the net assets contributed or remaining in each limited liability company according to the division plan.

(6)

If not all liabilities are distributed by the division plan (see subsection (3), paragraph 3),
and their distribution cannot be determined by the plan, each of the participating limited liability companies are jointly and severally liable, subject to the maximum amount of the net
value contributed or remaining in each limited liability company. Such liabilities are distributed among the participating limited liability companies in proportion to the net assets contributed or remaining in each limited liability company according to the division plan.
Division statement

256

(1)

The central governing bodies of each of the existing limited liability companies participating
in the division must draw up a written statement that provides explanations and reasons for
the division plan (but see subsection (2)). The statement must include information about
how the consideration for the shares in the transferor limited liability company was determined, including any particular difficulties in connection with such determination, and information about a valuation report if such report must be prepared under section 258.

(2)

The shareholders may agree that no division statement should be prepared.

Interim balance sheet

257

(1)

If the division plan is signed more than six months after the end of the financial year to
which the limited liability company's most recent annual report relates, an interim balance
sheet must be prepared for the relevant limited liability company participating in the division
(but see subsections (2) and (3)). The date of the interim balance sheet, which must be
prepared in accordance with the Danish Financial Statements Act, may not be more than
three months before the date that the division plan was signed. The interim balance sheet

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must be audited if the limited liability company is subject to audit obligations under the Financial Statements Act or any other statute.
(2)

The shareholders may agree that no interim balance sheet should be prepared, notwithstanding that the division plan (if any) has been signed more than six months after the end
of the financial year to which the limited liability company's most recent annual report relates.

(3)

The provision in subsection (1) does not apply to limited liability companies whose securities
are admitted to trading on a regulated market in an EU/EEA member state and which have
made public a half-year report under the Financial Statements Act if the half-year report
contains audited financial statements for the company and the half-year report is made
available to the company's shareholders.
Valuation report on non-cash contributions

258

(1)

If capital increases are implemented in one or more of the transferee public limited companies in connection with the division, or if one or more new public limited companies are
formed by the division, a report must be obtained from a valuation expert (but see subsection (2)) to be appointed under section 37(1). Section 37(2) and (3) also applies to the valuation experts' activities in relation to all of the limited liability companies participating in
the division.

(2)

The valuation report may be omitted if instead a statement by valuation expert(s) on the division plan (see section 259) or a declaration by valuation expert(s) on the creditors' position (see section 260) is prepared.

(3)

If a valuation report is to be prepared in connection with a division, it must include

1)

a description of each contribution;

2)

information on the valuation method applied;

3)

a specification of the agreed consideration; and

4)

a declaration that the value of the contribution as assessed in the report is not less than
the agreed consideration, including any nominal value of the shares to be issued and
any premium on them.

(4)

The valuation report may not be drawn up more than three months before the date of the
division resolution, if any (see section 263). If this time limit is exceeded, the division cannot be validly adopted.
Statement by valuation expert(s) on the division plan

259

(1)

For each of the limited liability companies participating in the division, one or more independent valuation experts must make a written statement on the division plan, including the

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consideration (see subsection (4)). The shareholders may decide, by unanimous agreement,
not to obtain a statement by a valuation expert on the division plan.
(2)

The valuation experts must be appointed as specified in section 37(1). If the limited liability
companies participating in the division decide to use one or more joint valuation experts, the
valuation experts must, at the companies' request, be appointed by the bankruptcy court
that has jurisdiction over the place where the registered office of one of the transferee limited liability companies is situated.

(3)

Section 37(2) and (3) also applies to the valuation experts' activities in relation to all of the
limited liability companies participating in the division.

(4) The statement must include a declaration as to whether the consideration offered to the
shareholders in the transferor limited liability company is fair and reasonable. The statement
must specify the method(s) used for determining the consideration and assess whether such
methods are appropriate. The statement must also specify the values that result from each
method and the relative importance that should be attached to each individual method in
connection with the valuation. Where the valuation gives rise to particular difficulties, these
should be included in the statement.
Declaration by valuation expert(s) on the creditors' position
260

In addition to the statement referred to in section 259, the valuation experts must make a
declaration as to whether the creditors of each limited liability company can be considered to
be sufficiently protected after the division. However, the shareholders may decide, by unanimous agreement, not to obtain a declaration by a valuation expert on the creditors' position.
Opportunity for creditors to file their claims

261

(1)

If the valuation experts, with their declaration on the position of the creditors in the limited
liability company (see section 260), conclude that the creditors will not be sufficiently protected after the division, or if no declaration has been made by a valuation expert on the
creditors' position, creditors whose claims arose prior to the Commerce and Companies
Agency's publication under section 262 may file their claims up to four weeks after the date
on which all of the existing limited liability companies participating in the division passed the
resolution on the division. However, no claims for which adequate security has been provided may be filed.

(2)

A request may be made for repayment of claims filed if they are due, and adequate security
may be requested for claims filed that are not yet due.

(3)

Unless otherwise established, security under subsection (2) is not required if repayment of
the claims is secured by a statutory arrangement.

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(4)

If the limited liability company and any creditors who have filed their claims disagree as to
whether security should be provided or whether the security offered is adequate, either party may, no later than two weeks after the claim is filed, bring the matter before the bankruptcy court that has jurisdiction over the place where the limited liability company's registered office is situated for a ruling on the issue.

(5)

In the agreement on which the claim is based, creditors may not, with binding effect, waive
their rights to demand security under subsection (2).

(6)

If creditors have a right to file their claims, the implementation of the division (see section
269) can only be registered upon expiry of the time allowed in subsection (1) for filing such
claims.

Filing of division plan and declaration by valuation expert(s) on the creditors' position
262

(1)

A copy of the division plan (if any) must be received by the Commerce and Companies
Agency no later than four weeks after it is signed (but see section 255(2)). If this time limit
is exceeded, notification that the division plan has been received cannot be published and,
accordingly, the division cannot be adopted. If valuation experts have made a declaration on
the creditors' position (see section 260), this declaration may also be submitted to the
Commerce and Companies Agency in connection with filing of the division plan.

(2)

The Commerce and Companies Agency must publish notification in its IT system that it has
received the documents referred to in subsection (1). If creditors have a right to file their
claims (see section 261), this must be stated in the Agency's notification.
Resolution to implement a division

263

(1)

The resolution to implement a division may be passed no earlier than four weeks after publication by the Commerce and Companies Agency of a notification that it has received the division plan and a declaration by the valuation experts on the creditors' position (but see
subsection (2)).

(2)

If the division only involves private limited companies, and if the valuation experts, with
their declaration on the creditors' position under section 260, conclude that the creditors of
each private limited company will be adequately secured after the division, the shareholders
may agree to disregard the time limit under subsection (1).

(3)

If the transferor limited liability company is dissolved following the division, and if it has
reached the end of its financial year without the general meeting having yet approved the
annual report for the accounting period just ended, the general meeting must approve the
annual report for this accounting period on or before the date of the resolution to implement
the division.

(4)

Creditors must, upon request, be informed about the date on which it will be resolved to implement any division.

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(5)

The division must be implemented in accordance with the division plan if such a plan has
been drawn up. If the division is not adopted in accordance with any division plan as published, the proposal is considered to have lapsed.

(6)

If the following documents have been prepared, they must be made available for inspection
by the shareholders at the company's registered office or on the company's website no later
than four weeks before the date on which the resolution to implement a division is to be
passed, unless the shareholders agree that the documents should not be made available to
them before the general meeting:
1)

The division plan.

2)

Annual reports for each existing limited liability company that is participating in the division, as adopted for the last three financial years or any shorter period in which the
company has existed.

(7)

3)

A division statement.

4)

An interim balance sheet.

5)

A valuation report on non-cash contributions.

6)

The valuation experts' statements on the division plan, including the consideration.

7)

The valuation experts' declaration on the creditors' position.

Shareholders must, upon request, be provided with access to the documents specified in
subsection (6), free of charge

264

In the transferor limited liability company, the division resolution must be passed by the
general meeting with the majority required under sections 106 and 107 and in accordance
with any additional rules on dissolution and division provided by the articles of association
(but see section 270). If the company is in liquidation, a division resolution may only be
passed if the shareholders have not yet received any distributions, and if the general meeting resolves at the same time to suspend the liquidation process. Accordingly, section 231
on resumption of business will not apply.

265

(1)

In existing transferee limited liability companies, the division resolution must be passed by
the central governing body, unless the general meeting is required to amend the articles of
association for any purpose other than adopting the transferor limited liability company's
name or secondary name as the transferee limited liability company's secondary name (but
see subsection (2)).

(2)

Shareholders holding 5% of the share capital, or shareholders with the right to demand a
general meeting under the articles of association (see section 89), may also make a written
request that the resolution be passed by the general meeting of the existing transferee lim-

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ited liability companies if the request is made no later than two weeks after the Commerce
and Companies Agency publishes notification that it has received the division plan.
(3)

The central governing body must call a general meeting within two weeks of such request
being made.

(4)

If the resolution is to be passed by the general meeting of an existing transferee company,

it must be passed by the majority required under section 106.

266

(1)

The central governing bodies of the existing limited liability companies participating in the
division must inform any general meeting at which the resolution to implement the division
is to be passed about any significant events, including any significant changes in assets and
liabilities, that have occurred between the date the division plan was signed and the date of
the general meeting.

(2)

If the division only involves private limited companies, and if the shareholders have agreed
under section 255(2) that no division plan should be drawn up, the following issues must be
addressed in connection with adoption of the division:
1)

the names and any secondary names of the private limited companies, including whether the name or secondary name of the transferor company is to be adopted as a secondary name of a transferee company;

2)

distribution of the parts of the assets and liabilities that are transferred or that remain
in each of the limited liability companies involved in the division;

3)

the consideration offered for the shares in the transferor company;

4)

the time from which any shares offered as consideration will confer on the holders a
right to receive dividends;

5)

the time from which the rights and obligations of the transferor private limited company
are considered to have been transferred for accounting purposes; and

6)

articles of association (see sections 28 and 29) if a new private limited company is
formed by the division.

(3)

If the division only involves private limited companies, and if the shareholders have agreed
under section 255(2) that no division plan should be drawn up, identical resolutions must
have been passed by all of the existing private limited companies participating in the division in respect of the requirements in subsection (2). If this is not the case, the resolution to
implement the division is considered to have lapsed.

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Opportunity to claim compensation

267

(1)

The shareholders in the transferor limited liability company may claim compensation from
the limited liability company if the consideration offered for the shares in the transferor limited liability company is not fair and reasonable, and if they have made a reservation to this
effect at the general meeting at which the resolution to implement the division was passed.

(2)

Proceedings pursuant to subsection (1) must be commenced within two weeks after the division is adopted by all of the existing limited liability companies participating in the division.

(3)

If a reservation is made under subsection (1), the division resolution may only be registered
after expiry of the time limit prescribed in subsection (2), unless the valuation experts, with
their statement on the plan and the consideration (see section 259), conclude that the consideration offered for the shares in the transferor limited liability company is fair and reasonable.
Legal effects of a division

268

(1)

The division will be considered completed, and all rights and obligations of the transferor
limited liability company will be considered to have been transferred to the transferee limited liability companies when:
1)

The resolution on the division has been passed by all of the existing limited liability
companies participating in the division.

2)

The claims filed by creditors under section 261 have been settled.

3)

The shareholders' claims for compensation under section 267 have been settled, or adequate security has been provided for the claims. If valuation experts have drawn up a
statement on the plan, including the consideration, and the statement is based on the
assumption that the consideration is fair and reasonable, the valuation experts must also have declared that their statement on the consideration is not disputed to any significant degree. The valuation experts determine whether the security is adequate.

4)

The requirements in subsection (5) concerning election of management and an auditor

have been satisfied.

(2)

When the requirements specified in subsection (1) are satisfied, the shareholders in the
transferor limited liability company who receive shares as consideration become shareholders in one or more of the transferee limited liability companies.

(3)

Consideration cannot be offered for shares in the transferor company which are owned by
the limited liability companies participating in the division.

(4)

Part 3 on formation will not apply if a division results in a new limited liability company, unless otherwise provided by sections 254 to 270. Part 10 on capital increases will not apply to

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capital increases in the transferee limited liability companies affected by contributions of assets and liabilities from the transferor limited liability company. Part 11 on capital disposals
and Part 14 on dissolution will not apply if, as a result of the division, a capital reduction is
implemented in the transferor company, or this company is dissolved.
(5)

If the division results in a new limited liability company, and if the supreme governing body
and an auditor, if applicable, are not elected immediately after the adoption of the division
by the general meeting, a general meeting for the election of management and an auditor, if
applicable, must be held in the new limited liability company within two weeks. The general
meeting must also resolve whether the future financial statements of the limited liability
company are to be audited if the company is not subject to audit obligations under the Danish Financial Statements Act or any other statute.
Registration of implementation of a division

269

(1)

The division resolution must, for each company, be registered directly, or an application for
registration must be filed (see section 9), no later than two weeks after it is passed by all of
the existing limited liability companies participating in the division. Each of the transferee
limited liability companies may register the division on behalf of the participating limited liability companies. The registration or application for registration must be accompanied by the
documents specified in section 263(6), paragraphs 3 to 7. Once adopted, the division may
only be registered when it has taken legal effect under section 268(1).

(2)

The adopted division must be registered directly, or an application for registration must be
filed (see section 9), on or before expiry of the time limit for filing of the annual report covering the period in which the division takes legal effect (see section 255(3), paragraph 10),
but not later than one year after publication by the Agency of the notification that it has received the division plan under section 262. If any of these two time limits is exceeded, the
resolution implementing the division will be invalid, and the division plan prepared under
section 255 will be considered to have lapsed.

(3)

If a limited liability company resulting from a division enters into an agreement before it is
registered, and if the other party to the agreement is aware that the company is not registered, the other party may, unless otherwise agreed, terminate the agreement if no registration or application for registration has been received by the Commerce and Companies
Agency by the end of the period provided in subsection (2), or if registration is refused. If
the other contracting party was unaware that the limited liability company was not registered, the other party may terminate the agreement as long as the company remains unregistered. Section 41(1), second sentence, applies with such changes as are necessary.

(4)

Sections 42 to 44 apply, with such changes as are necessary, where a public limited company resulting from a division acquires assets from a shareholder that is known to the company during the 24 months following registration of the company.

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Simplified procedures for vertical divisions

270

(1)

Where all of the shares in the transferor limited liability company are held by the transferee
limited liability companies, a "vertical division", the division resolution can be passed by the
central governing body of the transferor company. Section 255(1), (2), (3), paragraphs 1 to
3, 7, 8 and 10 to 12, and (4), sections 256, 257 and 260-263, section 264, second and third
sentences, and sections 265, 266, 268 and 269 also apply to vertical divisions, with such
changes as are necessary.

(2)

If a division results in one or more new limited liability companies and the shares of such
companies are transferred to the shareholders of the transferor company in proportion to
their shares or votes in the transferor company, the provisions in sections 256, 257 and 259
and 266(1) do not apply.
Part 16
Cross-border mergers and divisions
Cross-border mergers

271

Limited liability companies that are subject to this Act may participate in cross-border mergers in which the other participating companies are also limited liability companies governed
by the laws of the EU or EEA Member States.
Merger plan

272

(1)

The central governing bodies for the existing limited liability companies that participate in
the merger must draw up and sign a joint merger plan, which must include information and
provisions on
1)

the corporate forms, names and registered offices of the participating limited liability
companies and of the surviving company;

2)

the consideration offered for the shares in the non-surviving limited liability company;

3)

the distribution of the consideration, including shares in the surviving limited liability
company, to the shareholders in the non-surviving limited liability companies, and the
distribution criterion;

4)

the likely impact of the cross-border merger on the number of employees in the participating limited liability companies;

5)

the time from which the shares offered as consideration will confer on the holders a
right to receive dividends, and a specification of any special conditions associated with
such rights;

6)

the time from which the rights and obligations of the non-surviving limited liability companies are considered to have been transferred for accounting purposes;

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7)

the rights accruing in the surviving limited liability company to any holders of shares
carrying special rights and any holders of other securities or shares, or the actions proposed to be taken for the benefit of such persons;

8)

any special benefits accruing to the valuation experts that make a statement on the
merger plan (see section 276) and to the members of the limited liability companies'
management;

9)

the articles of association of the surviving limited liability company;

10) information about the procedures under sections 311 to 317 for involving employees in
the determination of their rights to representation in the surviving limited liability company, if appropriate;
11) valuation of the assets and liabilities transferred to the surviving limited liability company; and
12) the dates of the merging limited liability companies' financial statements used to establish the conditions of the cross-border merger.
(2)

For each of the existing limited liability companies, the merger plan must be signed by the
end of the financial year in which the merger takes effect for accounting purposes (see subsection (1), paragraph 6). If this time limit is exceeded, notification that the Commerce and
Companies Agency has received the merger plan cannot be published and, accordingly, the
merger cannot be adopted.
Merger statement

273

The central governing bodies of each of the existing limited liability companies participating
in the merger must draw up a written statement that provides explanations and reasons for
the merger plan. The statement must include information about how the consideration offered for the shares in the non-surviving limited liability companies was determined, including any particular difficulties in connection with such determination, and information about
the preparation of the valuation report if such report must be prepared under section 275.
The statement must also include a description of the consequences of the cross-border merger for the shareholders, creditors and employees.
Interim balance sheet

274

(1)

If the merger plan is signed more than six months after the end of the financial year to
which the limited liability company's most recent annual report relates, an interim balance
sheet must be prepared for the relevant limited liability company participating in the merger
(but see subsection (2) and (3)). The date of the interim balance sheet, which must be prepared in accordance with the Danish Financial Statements Act, may not be more than three
months before the date that the merger plan was signed. The interim balance sheet must be

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audited if the limited liability company is subject to audit obligations under the Financial
Statements Act or any other statute.
(2)

The shareholders may agree that no interim balance sheet should be prepared, notwithstanding that the merger plan (if any) has been signed more than six months after the end
of the financial year to which the company's most recent annual report relates.

(3)

The provision in subsection (1) does not apply to limited liability companies whose securities
are admitted to trading on a regulated market in an EU/EEA member state and which have
made public a half-year report under the Financial Statements Act if the half-year report
contains audited financial statements for the company and the half-year report is made
available to the company's shareholders.
Valuation report on non-cash contributions

275

(1)

If a capital increase is implemented in the surviving public limited company in connection

with the merger, or if a new public limited company is formed by the merger, a report must
be obtained from a valuation expert (but see subsection (2)) to be appointed under section
37(1). Section 37(2) and (3) also applies to the valuation experts' activities in relation to all
of the merging limited liability companies.

(2)

The valuation report may be omitted if instead a statement by valuation expert(s) on the
merger plan (see section 276) or a declaration by valuation expert(s) on the creditors' position is prepared (see section 277).

(3)

If a valuation report is to be prepared in connection with a merger, it must include

1)

a description of each contribution;

2)

information on the valuation method applied;

3)

a specification of the agreed consideration; and

4)

a declaration that the value of the contribution as assessed in the report is not less than
the agreed consideration, including any nominal value of the shares to be issued and
any premium on them.

(4)

The valuation report may not be drawn up more than three months before the date of the
merger resolution, if any (see section 280). If this time limit is exceeded, the merger cannot
be validly adopted.
Statement by valuation expert(s) on the merger plan

276

(1)

For each of the limited liability companies participating in the merger, one or more independent valuation experts must make a written statement on the merger plan, including the
consideration (see subsection (4)). The shareholders may decide, by unanimous agreement,
not to obtain a statement by a valuation expert on the merger plan.

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(2)

The valuation experts must be appointed as specified in section 37(1). If the limited liability
companies participating in the merger decide to use one or more joint valuation experts, the
valuation experts must, at the companies' request, be appointed by the bankruptcy court
that has jurisdiction over the place where the registered office of the surviving limited liability company is situated.

(3)

Section 37(2) and (3) also applies to the valuation experts' activities in relation to all the
merging limited liability companies.

(4)

The statement must include a declaration as to whether the consideration offered for the
shares in the nonsurviving limited liability company is fair and reasonable. The statement
must specify the method(s) used for determining the consideration and assess whether such
methods are appropriate. The statement must also specify the values that result from each
method and the relative importance that should be attached to each individual method in
connection with the valuation. Where the valuation gives rise to particular difficulties, these
should be included in the statement.
Declaration by valuation expert(s) on the creditors' position

277

In addition to the statement referred to in section 276, the valuation experts must make a
declaration as to whether the creditors of each limited liability company can be considered to
be sufficiently protected after the merger. However, the shareholders may decide, by unanimous agreement, not to obtain a declaration by a valuation expert on the creditors' position.
Opportunity for creditors to file their claims

278

(1)

If the valuation experts, with their declaration on the position of the creditors in the limited
liability company (see section 277), conclude that the creditors will not be sufficiently protected after the merger, or if no declaration has been made by a valuation expert on the
creditors' position, creditors whose claims arose prior to the Commerce and Companies
Agency's publication under section 279 may file their claims up to four weeks after the date
that all of the existing limited liability companies participating in the merger passed the resolution on the merger. However, no claims for which adequate security has been provided
may be filed.

(2)

A request may be made for repayment of claims filed if they are due, and adequate security
may be requested for claims filed that are not yet due.

(3)

Unless otherwise established, security under subsection (2) is not required if repayment of
the claims is secured by a statutory arrangement.

(4)

If the limited liability company and any creditors who have filed their claims disagree as to
whether security should be provided or whether the security offered is adequate, either par-

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ty may, no later than two weeks after the company's registered office is situated for a ruling
on the issue.
(5)

In the agreement on which the claim is based, creditors may not, with binding effect, waive
their rights to demand security under subsection (2).

(6)

If creditors have a right to file their claims, the certificate on the merger resolution (see section 289) can only be issued upon expiry of the time allowed in subsection (1) for filing such
claims.

Filing of merger plan and declaration by valuation expert(s) on the creditors' position
279

(1)

A copy of the merger plan must be received by the Commerce and Companies Agency no
later than four weeks after it is signed. If this time limit is exceeded, notification that the
merger plan has been received cannot be published and, accordingly, the merger cannot be
adopted. If valuation experts have made a declaration on the creditors' position (see section
278), this declaration may also be submitted to the Commerce and Companies Agency in
connection with filing of the merger plan.

(2)

The Commerce and Companies Agency must publish notification in its IT system that it has
received the documents referred to in subsection (1). If creditors have a right to file their
claims (see section 278), this must be stated in the Agency's notification.
Resolution to implement a cross-border merger

280

(1)

The resolution to implement a merger may be passed no earlier than four weeks after publication by the Commerce and Companies Agency of a notification that it has received the
merger plan and a declaration by the valuation experts on the creditors' position.

(2)

If the non-surviving limited liability company has reached the end of its financial year without the general meeting having yet approved the annual report for the accounting period
just ended, the general meeting must approve the annual report for this accounting period
on or before the date of the resolution to implement the merger.

(3)

Creditors must, upon request, be informed about the date on which it will be resolved to implement any merger.

(4)

The merger must be implemented in accordance with the merger plan. If the merger is not
adopted in accordance with the merger plan as published, the proposal is considered to have
lapsed.

(5)

If the following documents have been prepared, they must be made available for inspection
by the shareholders at the company's registered office or on the company's website no later
than four weeks before the date on which the resolution to implement a merger is to be
passed, unless the shareholders agree that the documents should not be made available to
them before the general meeting (but see subsection (6)):

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1)

The merger plan.

2)

Annual reports for each existing limited liability company participating in the merger, as
adopted for the last three financial years or any shorter period in which the company
has existed.

(6)

3)

A merger statement.

4)

An interim balance sheet.

5)

A valuation report on non-cash contributions.

6)

The valuation experts' statements on the merger plan, including the consideration.

7)

The valuation experts' declaration on the position of the creditors.

Shareholders must, upon request, be provided with access to the documents specified in
subsection (5), free of charge.

(7)

In connection with a cross-border merger, the merger statement (see section 273) must also
be made available at the limited liability company's office for inspection by the employee
representatives or, in the absence of such employee representatives in the relevant limited
liability company, by the employees in general no later than four weeks before the date on
which the merger resolution is to be passed.

281

In a non-surviving limited liability company, the merger resolution must be passed by the
general meeting with the majority required under section 106 and in accordance with any
additional rules on dissolution and merger provided by the articles of association (but see
section 290). If the company is in liquidation, a merger resolution may only be passed if the
shareholders have not yet received any distributions, and if the general meeting resolves at
the same time to suspend the liquidation process. Accordingly, section 231 on resumption of
business will not apply.

282

(1)

In the surviving limited liability company, the merger resolution must be passed by the central governing body, unless the general meeting is required to amend the articles of association for any purpose other than adopting a non-surviving limited liability company's name or
secondary name as the surviving limited liability company's secondary name (but see subsections (2) to (4)).

(2)

Shareholders holding 5% of the share capital, or shareholders with the right to demand a
general meeting under the articles of association (see section 89), may also make a written
request that the resolution be passed by the general meeting of the surviving limited liability
company if the request is made no later than two weeks after the Commerce and Companies
Agency publishes notification that it has received the merger plan.

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(3)

The central governing body must call a general meeting within two weeks of such request
being made.

(4)

If the resolution is to be passed by the general meeting of the surviving limited liability
company, it must be passed by the majority required under section 106.

283

The central governing bodies of the existing limited liability companies participating in the
merger must inform any general meeting at which a resolution to implement a merger is to
be passed about any significant events, including any significant changes in assets and liabilities, that have occurred between the date the merger plan was signed and the date of the
general meeting.

284

If the resolution to implement a cross-border merger is to be passed by the general meeting, the general meeting may decide that that resolution is subject to its subsequent approval of the guidelines on employee participation.
Opportunity to claim compensation

285

(1)

The shareholders in the non-surviving limited liability company or companies may claim
compensation from the limited liability company if the consideration offered for the shares in
the non-surviving limited liability company or companies is not fair and reasonable, and if
they have made a reservation to this effect at the general meeting at which the merger
resolution was passed.

(2)

Proceedings pursuant to subsection (1) must be commenced within two weeks after the
merger is adopted by all of the limited liability companies participating in the merger.

(3)

If a reservation is made under subsection (1), the merger resolution may only be registered
after expiry of the two-week period prescribed in subsection (2), unless the valuation experts, with their statement on the plan (see section 276), conclude that the consideration
offered for the shares in the non-surviving limited liability company or companies is fair and
reasonable.
Opportunity to claim redemption

286

(1)

In connection with a cross-border merger, the shareholders in the non-surviving limited liability companies who opposed the merger at the general meeting may also demand redemption of their shares by the company by making a written request to this effect no later than
four weeks after the date of the general meeting. Section 109 applies with such changes as
are necessary.

(2)

The certificate to be issued under section 289 may only be issued when adequate security
has been provided for the value of the shares. Experts appointed by the court with jurisdiction over the place where the registered office of the limited liability company is situated determine whether the security is adequate. If the experts' finding is challenged before the

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court, this will not delay the Commerce and Companies Agency in issuing the certificate, unless otherwise determined by the court.
Formation, capital increases and dissolution in connection with a cross-border merger
287

(1)

Consideration cannot be offered for shares in a non-surviving limited liability company which
are owned by the merging limited liability companies.

(2)

Part 3 on formation will not apply if a merger results in a new limited liability company, unless stipulated in the provisions on cross-border mergers in sections 271 to 290. Part 10 on
capital increases will not apply to capital increases in the surviving limited liability company
which are based on the assets and liabilities of a non-surviving limited liability company.
Part 14 on dissolution will not apply to a non-surviving limited liability company which is dissolved as part of a merger.

(3)

If the merger results in the formation of a new limited liability company which is subject to
Danish law, and if the supreme governing body and an auditor, if applicable, are not elected
immediately after the adoption of the merger by the general meeting, a general meeting for
the election of management and an auditor, if applicable, must be held in the new limited liability company within two weeks. The general meeting must also decide whether the future
financial statements of the limited liability company are to be audited if the company is not
subject to audit obligations under the Danish Financial Statements Act or any other statute.
Application for registration of a cross-border merger

288

(1)

For each limited liability company, an application for registration of the merger resolution
must be received by the Commerce and Companies Agency no later than two weeks after the
resolution is passed by all of the existing limited liability companies participating in the merger. The surviving company may apply for registration of the merger on behalf of the limited
liability companies. The application for registration must be accompanied by the documents
specified in section 280, subsection (5), paragraphs 3 to 7, if such documents have been
prepared.

(2)

The application for registration of the merger must be received by the Commerce and Companies Agency within the time limit allowed for filing an annual report for the period in which
the merger takes effect for accounting purposes (see section 272(1), paragraph 6), but not
later than one year after publication by the Agency of notification that it has received the
merger plan under section 279. If one of these time limits is exceeded, the resolution implementing the merger will be invalid, and the merger plan prepared under section 272 will
be considered to have lapsed.

(3)

If a limited liability company resulting from a merger enters into an agreement before it is
registered, and if the other party to the agreement is aware that the company is not registered, the other party may, unless otherwise agreed, terminate the agreement if no application for registration has been received by the Commerce and Companies Agency by the end

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of the period provided in subsection (2), or if registration is refused. If the other contracting
party was unaware that the limited liability company was not registered, the other party
may terminate the agreement as long as the company remains unregistered. Section 41(1),
second sentence, applies with such changes as are necessary.
(4)

Sections 42 to 44 apply, with such changes as are necessary, where a public limited company that is formed as a result of a merger acquires assets from a shareholder known to the
company during the 24 months following registration of the company.
Issue of certificate

289

(1)

Upon receipt of an application for registration of a cross-border merger, the Commerce and
Companies Agency ensures that all actions and formalities that are necessary to implement
the merger have been taken or met. The Agency will issue a certificate to this effect to the
participating limited liability companies that are subject to Danish law. The certificate will be
issued as soon as possible after the following conditions are satisfied:
1)

The merger has been adopted by all of the existing limited liability companies participating in the merger that are subject to Danish law.

2)

The claims filed by creditors under section 278 have been settled.

3)

The shareholders' claims for compensation under section 285 have been settled, or adequate security has been provided for such claims. If valuation experts have drawn up a
statement on the plan, including the consideration, and the statement provides that the
consideration is fair and reasonable, the valuation experts must also have declared that
their statement on the consideration is not disputed to any significant degree. The valuation experts will determine whether the security is adequate.

4)

The shareholders' claims for redemption under section 286 have been settled.

5)

The requirements for the election of management and an auditor under section 287(3)
have been met.

6)
(2)

The requirement in section 316 on employee participation has been met.

If the surviving limited liability company participating in a cross-border merger will be subject to Danish law, the regulatory authorities that govern each of the participating foreign
limited liability companies must, for each company, submit a certificate to the Commerce
and Companies Agency for the purpose of registering the merger. The certificate serves as
conclusive evidence that all actions and formalities that are necessary to implement the
merger in the relevant country have been taken or met, and that the foreign regulatory authority will register the merger in respect of the nonsurviving company after receipt of a notification by the Commerce and Companies Agency. The certificate must be received by the

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Agency no later than six months after it is issued or it will be deemed invalid. Upon receipt
of certificates for all of the companies participating in the merger, the Commerce and Companies Agency will register the implementation of the cross-border merger with respect to
the surviving company, and notify all registers in which the other participating companies
are registered as soon as possible.
(3)

For a cross-border merger where the surviving limited liability company will be subject to
Danish law, the merger takes effect from the date that the Commerce and Companies Agency registers the merger.

(4)

If the surviving limited liability company participating in a cross-border merger will not be
subject to Danish law, the Commerce and Companies Agency will register the implementation of the merger in respect of the non-surviving limited liability companies that are subject
to Danish law when the Agency has received notification as provided in subsection (2) from
the competent regulatory authority governing the surviving limited liability company.

Vertical cross-border mergers between parent companies and wholly-owned subsidiaries

290

If a limited liability company is dissolved without liquidation by transferring its assets and liabilities as a whole to another limited liability company holding all of the shares in the nonsurviving limited liability company, a "vertical crossborder merger", the merger resolution
may be passed by the central governing body in the non-surviving limited liability company.
Section 272(1), paragraphs 1, 4 and 6-12, and (2), sections 273, 274 and 277 to 280, section 281(1), second and third sentences, sections 282 to 284 and sections 287 to 289 also
apply to vertical cross-border mergers.
Cross-border divisions

291

(1)

Limited liability companies that are subject to this Act may participate in cross-border divisions in which the other participating companies are also limited liability companies governed by the laws of one or more other EU or EEA Member States.

(2)

A cross-border division can only be implemented if the laws governing the other participating limited liability companies permit cross-border divisions. It is also a condition that any
right of participation enjoyed by the employees of the Danish transferor company will be
protected under the laws that will apply to the transferee limited liability company or companies after the division. If these conditions are not satisfied, a Danish limited liability company may not participate in any cross-border division.

(3)

If any claim raised by a creditor of a limited liability company participating in the division is
not satisfied, each of the other participating limited liability companies are jointly and severally liable for any obligations that existed at the date that the division plan was published,
up to the maximum amount of the net value contributed or remaining in the limited liability
company at that time.

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(4)

If one or more of the transferee limited liability companies participating in a division are the
result of another division or merger which has not been implemented, this must be specified
in the division plan (see section 292). Any division into new transferee limited liability companies resulting from another division or merger must be implemented immediately after the
division or merger that results in the new limited liability companies.
Division plan

292

(1)

The central governing bodies of the existing limited liability companies participating in the
division must draw up and sign a joint division plan, which must include information and
provisions on
1)

the corporate forms, names and registered offices of the participating limited liability
companies and of the transferee limited liability companies;

2)

an accurate description and distribution of the assets and liabilities that are to be transferred or to remain in each limited liability company participating in the division;

3)

the consideration offered to the shareholders in the transferor limited liability company;

4)

the distribution of the consideration, including shares in the transferee limited liability
companies, to the shareholders in the transferor limited liability company, and the distribution criterion;

5)

the likely impact of the cross-border division on the number of employees in the participating limited liability companies;

6)

the time from which the shares offered as consideration will confer on the holders a
right to receive dividends, and a specification of any special conditions associated with
such rights;

7)

the time from which the rights and obligations of the transferor limited liability company
are considered to have been transferred for accounting purposes;

8)

the rights accruing in the transferee limited liability company to any holders of shares
carrying special rights and any holders of other securities or shares, or the actions proposed to be taken for the benefit of such persons;

9)

any special benefits accruing to the valuation experts that make a statement on the division plan (see section 296) and to the members of the companies' management;

10) the articles of association of the surviving limited liability company;

11) information about the procedures under section 318 for involving employees in the determination of their rights to representation in the surviving limited liability company, if
appropriate;

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12) valuation of the assets and liabilities transferred to the transferee limited liability companies; and
13) the dates of the participating companies' financial statements used to establish the conditions of the crossborder division.
(2)

For each of the existing limited liability companies, the division plan must be signed by the
end of the financial year in which the division takes effect for accounting purposes (see subsection (1), paragraph 7). If this time limit is exceeded, notification that the Commerce and
Companies Agency has received the division plan cannot be published and, accordingly, the
division cannot be adopted.

(3)

If not all of the assets are distributed in the division plan (see subsection (1), paragraph 2),
and the distribution cannot be determined by interpreting the plan, such assets or the value
they represent will be distributed among the participating limited liability companies in proportion to the net assets contributed or remaining in each limited liability company according
to the division plan.

(4)

If not all of the liabilities are distributed in the division plan (see subsection (1), paragraph
2), and the distribution cannot be determined by interpreting the plan, each of the participating limited liability companies are jointly and severally liable, subject to the maximum
amount of the net value contributed or remaining in the individual limited liability company.
Such liabilities are distributed among the participating limited liability companies in proportion to the net assets contributed or remaining in each company according to the division
plan.
Division statement

293

The central governing bodies of each of the existing limited liability companies participating
in the division must draw up a written statement that provides explanations and reasons for
the division plan. The statement must include information about how the consideration offered for the shares in the transferor limited liability company was determined, including any
particular difficulties in connection with such determination, and information on preparation
of a valuation report if such report must be prepared under section 295. The statement must
also include a description of the consequences of the cross-border division for the shareholders, creditors and employees.
Interim balance sheet

294

(1)

If the division plan is signed more than six months after the end of the financial year to
which the limited liability company's most recent annual report relates, an interim balance
sheet must be prepared for the relevant limited liability company participating in the division
(but see subsection (2) and (3)). The date of the interim balance sheet, which must be prepared in accordance with the Danish Financial Statements Act, may not be more than three
months before the date that the division plan was signed. The interim balance sheet must be

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audited if the limited liability company is subject to audit obligations under the Financial
Statements Act or any other statute.
(2)

The shareholders may agree that no interim balance sheet should be prepared, notwithstanding that the division plan (if any) has been signed more than six months after the end
of the financial year to which the limited liability company's most recent annual report relates.

(3)

The provision in subsection (1) does not apply to limited liability companies whose securities
are admitted to trading on a regulated market in an EU/EEA member state and which have
made public a half-year report under the Financial Statements Act if the half-year report
contains audited financial statements for the company and the half-year report is made
available to the company's shareholders.
Valuation report on non-cash contributions

295

(1)

If a capital increase is implemented in one or more of the transferee public limited companies in connection with the division, or if one or more new public limited companies are
formed by the division, a report must be obtained from a valuation expert (but see subsection (2)) to be appointed under section 37(1). Section 37(2) and (3) also applies to the valuation experts' activities in relation to all of the limited liability companies participating in
the division.

(2)

The valuation report may be omitted if instead a statement by valuation expert(s) on the division plan (see section 296) or a declaration by valuation expert(s) on the creditors' position is prepared (see section 297).

(3)

If a valuation report is to be prepared in connection with a division, it must include

1)

a description of each contribution;

2)

information on the valuation method applied;

3)

a specification of the agreed consideration; and

4)

a declaration that the value of the contribution as assessed in the report is not less than
the agreed consideration, including any nominal value of the shares to be issued and
any premium on them.

(4)

The valuation report may not be drawn up more than three months before the date of the
division resolution, if any (see section 300). If this time limit is exceeded, the division cannot be validly adopted.
Statement by valuation expert(s) on the division plan

296

(1)

For each of the limited liability companies participating in the division, one or more independent valuation experts must make a written statement on the division plan, including the

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consideration (see subsection (4)). However, the shareholders may decide, by unanimous
agreement, not to obtain a statement by a valuation expert on the division plan.
(2)

The valuation experts must be appointed as specified in section 37(1). If the limited liability
companies participating in the division decide to use one or more joint valuation experts, the
valuation experts must, at the companies' request, be appointed by the bankruptcy court
that has jurisdiction over the place where the registered office of the surviving limited liability company is situated.

(3)

Section 37(2) and (3) also applies to the valuation experts' activities in relation to all of the
limited liability companies participating in the division.

(4)

The statement must include a declaration as to whether the consideration offered for the
shares in the transferor limited liability company is fair and reasonable. The statement must
specify the method(s) used for determining the consideration and assess whether such
methods are appropriate. The statement must also specify the values that result from each
method and the relative importance that should be attached to each individual method in
connection with the valuation. Where the valuation gives rise to particular difficulties, these
should be included in the statement.
Declaration by valuation expert(s) on the creditors' position

297

In addition to the statement referred to in section 296, the valuation experts must make a
declaration as to whether the creditors of each limited liability company are considered to be
sufficiently protected after the division. However, the shareholders may decide, by unanimous agreement, not to obtain a declaration by a valuation expert on the creditors' position.
Opportunity for creditors to file their claims

298

(1)

If the valuation experts, with their declaration on the position of the creditors in the limited
liability company (see section 297), conclude that the creditors will not be sufficiently protected after the division, or if no declaration has been made by a valuation expert on the
creditors' position, creditors whose claims arose prior to the Commerce and Companies
Agency's publication under section 299 may file their claims up to four weeks after the date
that all of the existing limited liability companies participating in the division passed the resolution on the division. However, no claims for which adequate security has been provided
may be filed.

(2)

A request may be made for repayment of claims filed if they are due, and adequate security
may be requested for claims filed that are not yet due.

(3)

Unless otherwise established, security under subsection (2) is not required if repayment of
the claims is secured by a statutory arrangement.

(4)

If the limited liability company and any creditors who have filed their claims disagree as to
whether security should be provided or whether the security offered is adequate, either par-

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ty may, no later than two weeks after the claim is filed, bring the matter before the bankruptcy court that has jurisdiction over the place where the limited liability company's registered office is situated for a ruling on the issue.
(5)

In the agreement on which the claim is based, creditors may not, with binding effect, waive
their rights to demand security under subsection (3).

(6)

If creditors have a right to file their claims, the certificate on the division resolution (see
section 309) can only be issued upon expiry of the time allowed in subsection (1) for filing
such claims.

Filing of division plan and declaration by valuation expert(s) on the creditors' position
299

(1)

A copy of the division plan must be received by the Commerce and Companies Agency no
later than four weeks after it is signed. If this time limit is exceeded, notification that the division plan has been received cannot be published and, accordingly, the division cannot be
adopted. If valuation experts have made a declaration on the creditors' position (see section
297), this declaration may also be submitted to the Commerce and Companies Agency in
connection with filing of the division plan.

(2)

The Commerce and Companies Agency must publish notification in its IT system that it has
received the documents referred to in subsection (1). If creditors have a right to file their
claims, this must be stated in the Agency's notification.
Resolution to implement a cross-border division

300

(1)

The resolution to implement a division may be passed no earlier than four weeks after publication by the Commerce and Companies Agency of a notification that it has received the division plan and any declaration by the valuation experts on the creditors' position.

(2)

If the transferor limited liability company is dissolved following the division, and if it has
reached the end of its financial year without the general meeting having yet approved the
annual report for the accounting period just ended, the general meeting must approve the
annual report for this accounting period on or before the date of the resolution to implement
the division.

(3)

Creditors must, upon request, be informed about the date on which it will be resolved to implement any division.

(4)

The division must be implemented in accordance with the division plan. If the division is not
adopted in accordance with the division plan, the proposal is considered to have lapsed.

(5)

If the following documents have been prepared, they must be made available for inspection
by the shareholders at the company's registered office or on the company's website no later
than four weeks before the date on which the resolution to implement a division is to be

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passed, unless the shareholders agree that the documents should not be made available to
them before the general meeting (but see subsection (7)):
1)

The division plan.

2)

Annual reports for each existing participating limited liability company, as adopted for
the last three financial years or any shorter period in which the company has existed.

(6)

3)

A division statement.

4)

An interim balance sheet.

5)

A valuation report on non-cash contributions.

6)

The valuation experts' statements on the division plan, including the consideration.

7)

The valuation experts' declaration on the creditors' position.

Shareholders must, upon request, be provided with access to the documents specified in
subsection (5), free of charge.

(7)

In connection with a cross-border division, the division statement (see section 293) must also be made available at the limited liability company's office for inspection by the employee
representatives or, in the absence of such employee representatives in the relevant limited
liability company, by the employees in general no later than four weeks before the date on
which the division resolution is to be passed.

301

In the transferor limited liability company, the division resolution must be passed by the
general meeting with the majority required under sections 106 and 107 and in accordance
with any additional rules on dissolutions and divisions provided by the articles of association
(but see section 310). If the company is in liquidation, a division resolution may only be
passed if the shareholders have not yet received any distributions, and if the general meeting resolves at the same time to suspend the liquidation process. Accordingly, section 231
on resumption of business will not apply.

302

(1)

In existing transferee limited liability companies, the division resolution must be passed by
the central governing body, unless the general meeting is required to amend the articles of
association for any purpose other than adopting the transferor limited liability company's
name or secondary name as the transferee limited liability company's secondary name (but
see subsections (2) to (4)).

(2)

Shareholders holding 5% of the share capital, or shareholders with the right to demand a
general meeting under the articles of association (see section 89), may also make a written
request that the resolution be passed by general meetings of the existing transferee limited
liability companies if the request is made no later than two weeks after the Commerce and
Companies Agency publishes notification that it has received the division plan.

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(3)

The central governing body must call a general meeting within two weeks of such request
being made.

(4)

If the resolution is to be passed by the general meeting of an existing transferee limited liability company, it must be passed by the majority required under section 106.

303

The central governing bodies of the existing limited liability companies participating in the
division must inform any general meeting at which a resolution to implement a division is to
be passed about any significant events, including any significant changes in assets and liabilities, that have occurred between the date the division plan was signed and the date of
the general meeting.

304

If the resolution to implement a cross-border division is to be passed by the general meeting, the general meeting may decide that that resolution is subject to its subsequent approval of the guidelines on employee participation.
Opportunity to claim compensation

305

(1)

The shareholders in the transferor limited liability company may claim compensation from
the limited liability company if the consideration offered for the shares in the transferor limited liability company is not fair and reasonable, and if they have made a reservation to this
effect at the general meeting at which the division resolution was passed.

(2)

Proceedings pursuant to subsection (1) must be commenced within two weeks after the division is adopted by all of the existing limited liability companies participating in the division.

(3)

If a reservation is made under subsection (1), the division resolution may only be registered
after expiry of the two-week period prescribed in subsection (2), unless the valuation experts, with their statement on the plan and the consideration (see section 296), conclude
that the consideration offered for the shares in the transferor limited liability company is fair
and reasonable.
Opportunity to claim redemption

306

(1)

In connection with a cross-border division, the shareholders in the transferor limited liability
company who opposed the division at the general meeting may also demand redemption of
their shares by the company by making a written request to this effect no later than four
weeks after the date of the general meeting. Section 110 applies with such changes as are
necessary.

(2)

The certificate to be issued under section 309 may only be issued when adequate security
has been provided for the value of the shares. Experts appointed by the court with jurisdiction over the place where the registered office of the limited liability company is situated determine whether the security is adequate. If the experts' finding is challenged before the
court, this will not delay the Commerce and Companies Agency in issuing the certificate, unless otherwise determined by the court.

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Formation, capital increases and capital reduction in connection with a cross-border division
307

(1)

Consideration cannot be offered for shares in the transferor limited liability company which
are owned by the limited liability companies participating in the division.

(2)

Part 3 on formation will not apply if the division results in a new limited liability company,
unless stipulated in the provisions on cross-border divisions in sections 291 to 310. Part 10
on capital increases will not apply to capital increases in the transferee limited liability companies which are based on the assets and liabilities of the transferor limited liability company. Part 11 on capital disposals and Part 14 on dissolution will not apply if, as a result of the
division, a capital reduction is implemented in the transferor limited liability company or the
company is dissolved.

(3)

If the division results in the formation of a new limited liability company which is subject to
Danish law, and if the supreme governing body and an auditor, if applicable, are not elected
immediately after the adoption of the division by the general meeting, a general meeting for
the election of management and an auditor, if applicable, must be held by the new limited
liability company within two weeks. The general meeting must also decide whether the future financial statements of the limited liability company are to be audited if the company is
not subject to audit obligations under the Danish Financial Statements Act or any other statute.
Application for registration of a cross-border division

308

(1)

For each limited liability company, an application for registration of the division resolution
must be received by the Commerce and Companies Agency no later than two weeks after the
resolution is passed by all of the existing limited liability companies participating in the division. Each of the transferee limited liability companies may apply for registration of the division on behalf of the limited liability companies. The application for registration must be accompanied by the documents specified in section 300(5), paragraphs 3 to 7, if such documents have been prepared.

(2)

The application for registration of the division must be received by the Commerce and Companies Agency within the time allowed for filing an annual report for the period in which the
division takes effect for accounting purposes (see section 292(1), paragraph 7), but not later than one year after publication by the Agency of notification that it has received the division plan under section 299. If one of these two time limits is exceeded, the resolution implementing the division will be invalid, and the division plan prepared under section 292 will
be considered to have lapsed.

(3)

If a limited liability company resulting from a division enters into an agreement before it is
registered, and if the other party to the agreement is aware that the company is not registered, the other party may, unless otherwise agreed, terminate the agreement if no application for registration has been received by the Commerce and Companies Agency by the end
of the period provided in subsection (2), or if registration is refused. If the other contracting

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party was unaware that the limited liability company was not registered, the other party
may terminate the agreement as long as the company remains unregistered. Section 41(1),
second sentence, also applies to divisions, with such changes as are necessary.
(4)

Sections 42 to 44 apply, with such changes as are necessary, where a limited liability company that is the result of a division acquires assets from a shareholder known to the company during the 24 months following registration of the company.
Issue of certificate

309

(1)

Upon receipt of an application for registration of a cross-border division, the Commerce and
Companies Agency ensures that all actions and formalities that are necessary to implement
the division have been taken or met. The Agency will issue a certificate to this effect to the
participating limited liability companies that are subject to Danish law. The certificate will be
issued as soon as possible after the following conditions are satisfied:
1)

The division has been adopted by all of the existing limited liability companies participating in the division that are subject to Danish law.

2)

The claims filed by creditors under section 298 have been settled.

3)

The shareholders' claims for compensation under section 305 have been settled, or adequate security has been provided for such claims. If valuation experts have drawn up a
statement on the plan, including the consideration, and the statement provides that the
consideration is fair and reasonable, the valuation experts must also have declared that
their statement on the consideration is not disputed to any significant degree. The valuation experts will determine whether the security is adequate.

4)

The shareholders' claims for redemption under section 306 have been settled.

5)

The requirements for the election of management and an auditor in section 307(3) have
been met.

6)

The requirement in section 316(1) (see section 318) on employee participation has been
met.

(2)

If one or more of the transferee limited liability companies participating in a cross-border division will be subject to Danish law, the regulatory authorities that govern each of the participating foreign limited liability companies must, for each company, submit a certificate to
the Commerce and Companies Agency for the purpose of registering the division. The certificate serves as conclusive evidence that all actions and formalities that are necessary to implement the division in the relevant country have been taken or met, and that the foreign
regulatory authority will register the division in respect of the other participating companies
after receipt of a notification by the Commerce and Companies Agency. The certificate must
be received by the Agency no later than six months after it is issued or it will be deemed in-

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valid. Upon receipt of certificates for all of the other limited liability companies participating
in the division, the Commerce and Companies Agency will register the implementation of the
cross-border division with respect to the transferee limited liability companies that are to be
subject to Danish law, and notify all registers in which the other participating limited liability
companies are registered as soon as possible.
(3)

For a cross-border division where one or more of the transferee limited liability companies
will not be subject to Danish law, the division takes effect for these limited liability companies from the date that the Commerce and Companies Agency registers the division.

(4)

If the transferee limited liability companies participating in a cross-border division will not
be subject to Danish law, the Commerce and Companies Agency will register the implementation of the cross-border division in respect of the transferor limited liability company if
that company is subject to Danish law. The Agency will make the registration when it has
received notification as provided in subsection (2) from the competent regulatory authorities
governing the transferee limited liability companies.
Vertical cross-border divisions

310

Where all of the shares in the transferor limited liability company are held by the transferee
limited liability companies, a "vertical cross-border division", the division resolution can be
passed by the central governing body of the transferor limited liability company. Section
292(1), paragraphs 1, 2, 5 and 7 to 13, and (2) to (4), sections 293, 294and 297 to 300,
section 301, second and third sentences, and sections 302 to 304 and 307 to 308 also apply
to vertical cross-border divisions, with such changes as are necessary.
Employee participation in cross-border mergers

311

(1)

For cross-border mergers (see section 271) in which the surviving limited liability company
will be subject to Danish law, section 140 applies, unless
1)

it does not result in at least the same level of employee participation as operated in the
relevant merging limited liability companies, measured by reference to the proportion of
employee representatives among the members of the administrative or supervisory bodies, committees or management groups, including the company's profit units, which
have rules on employee participation;

2)

it does not provide employees in establishments of the limited liability company resulting from the cross-border division that are situated in other Member States with the
same entitlement to exercise participation rights as is enjoyed by the employees in
Denmark; or

3)

in the six months before publication of the notification of the cross-border merger plan
(see section 137(1)), the average number of employees covered by an employee partic-

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ipation system is more than 500 in at least one of the merging limited liability companies.

312

(2)

If section 140 applies, sections 313 to 316 will not apply.

(1)

If section 140 does not apply (see section 311), section 2(4) to (6) and (11), section 33,
section 15(1), (2), paragraph 1, and (3), section 17, paragraphs 1, 7 and 8, and sections 41
to 43 of the Danish Act on the Involvement of Employees in SEs (lov om medarbejderindflydelse i SE-selskaber), and sections 313 to 316 of this Act will apply.

(2)

Under section 313(1) of this Act, section 15(4) and (5), section 33(2), section 34 and sections 36 to 40 of the Act on the Involvement of Employees in SEs may also apply.

(3)

If the provisions in the Act on the Involvement of Employees in SEs apply, section 120(1)
and sections 140 to 143 in this Act will not apply.

(4)

If the surviving limited liability company in any cross-border merger will be subject to the
laws of another EU or EEA Member State, and if, for the purpose of the merger, rules are
applied that are based on the Council Directive supplementing the Statute for a European
company (SE) with regard to the involvement of employees, section 2(4) to (6) and (11) and
sections 3, 9, 36 to 39 and 41 to 43 of the Act on the Involvement of Employees in SEs and
section 368 of this Act apply to the participating limited liability companies and the affected
subsidiaries that are subject to Danish law and to establishments of the surviving limited liability company, participating limited liability companies or affected subsidiaries, where
these establishments are situated in Denmark.

313

(1)

Section 15(4) and (5), section 33(2) and sections 34 and 36 to 40 of the Danish Act on the
Involvement of Employees in SEs only apply if one or more of the participating limited liability companies had an employee participation system before the merger, and if
1)

the participating limited liability companies' competent bodies and the special negotiating body agree to apply these provisions;

2)

no agreement has been made in the period provided for under section 12 of the Act on
the Involvement of Employees in SEs, and the participating limited liability companies'
competent bodies elect to apply these provisions and thus continue with the registration
(but see subsection (2)); or

3)

the participating limited liability companies' competent bodies elect to apply these provisions without prior negotiations with the special negotiating body.

(2)

In the situation referred to in subsection (1), paragraph 2, the application of section 15(4)
and (5), section 33(2) and sections 34 and 36 to 40 of the Act on the Involvement of Employees in SEs is also subject to the special negotiating body passing a resolution to this effect if, before the merger, less than one-third of the total number of employees in all of the

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participating limited liability companies were subject to one or more employee participation
systems.
(3)

In the situations referred to in subsection (1), paragraphs 1 and 2, the proportion of employee representatives serving on management bodies may not exceed the number provided
for in section 140 of this Act.

314

Where section 15(4) and (5), section 33(2) and sections 34 and 36 to 40 of the Danish Act
on the Involvement of Employees in SEs (see section 313(1) of this Act) apply, the special
negotiating body determines
1)

how the seats on the board of directors or supervisory board are to be allocated between the members representing employees in states where the Council Directive supplementing the Statute for a European company with regard to the involvement of employees applies; or

2)

how the employees in the surviving limited liability company can recommend or oppose
the appointment of members of the board of directors or supervisory board having regard to the number of employees employed in each state.

315

The special negotiating body may, with no less than two-thirds of the votes from members
representing no less than two-thirds of the employees employed in at least two countries,
decide not to engage in negotiations or to break off negotiations and instead rely on the
rules in section 140 on employee participation in management bodies.

316

If section 140 does not apply (see section 311(1)), the cross-border merger may only be
registered if an employee participation agreement has been entered into under section 17,
paragraphs 1, 7 and 8, of the Danish Act on the Involvement of Employees in SEs (see section 312(1) or section 313(1), paragraph 1, of this Act), or if a resolution has been passed
under section 313(1), paragraph 3, or section 315 of this Act, or if the period provided for in
section 12 of the Act on the Involvement of Employees in SEs (see section 313(1), paragraph 2, of this Act) has expired without any agreement having been made.
Subsequent national mergers and divisions

317

Sections 311 to 316 on employee participation in cross-border mergers apply, with such
changes as are necessary, if the surviving limited liability company in any cross-border merger participates in a national merger or division during the three years following the merger.
Employee participation in cross-border divisions

318

Sections 311 to 317 on employee participation in cross-border mergers apply, with such
changes as are necessary, to cross-border divisions.

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Part 17
Conversion
Conversion of a private limited company into a public limited company
319

(1)

The shareholders may, with the same majority required to amend the articles of association,
resolve to convert a private limited company into a public limited company. Before passing
the resolution on conversion, the shareholders must be advised of any valuation report prepared in accordance with sections 36 to 38. Sections 42 to 44 apply, with such changes as
are necessary, to acquisitions after the resolution on conversion has been passed. The conversion may be implemented without the consent of creditors.

(2)

Notice of the adopted conversion must be sent to all shareholders who did not participate in
passing the resolution no later than two weeks after the date of the resolution.

320

Conversion of a private limited company into a public limited company will be deemed implemented when the company's articles of association have been amended to comply with
the requirements for public limited companies and when the conversion has been registered
in the Commerce and Companies Agency's IT system.
Conversion of a public limited company into a private limited company

321

(1)

The general meeting may, with the same majority required to amend the articles of association, resolve to convert a public limited company into a private limited company. The conversion may be implemented without the consent of creditors.

(2)

Notice of the adopted conversion must be sent to all shareholders who did not participate in
passing the resolution no later than two weeks after the date of the resolution.

322

Conversion of a public limited company into a private limited company will be deemed implemented when the company's articles of association have been amended to comply with
the requirements for private limited companies and when the conversion has been registered
in the Commerce and Companies Agency's IT system.
Conversion of a public limited company into a limited partnership company

323

(1)

The general meeting may, with the same majority required to amend the articles of association, resolve to convert a public limited company into a limited partnership company. The
conversion may be implemented without the consent of creditors.

(2)

Notice of the adopted conversion must be sent to all registered shareholders and to the new
fully liable partners no later than two weeks after the date of the resolution.

(3)

Conversion of a public limited company into a limited partnership company will be deemed
implemented when the company's articles of association have been amended to comply with
the requirements for limited partnership companies and when the conversion has been registered in the Commerce and Companies Agency's IT system.

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Conversion of a limited partnership company into a public limited company

324

(1)

The general meeting may, with the same majority required to amend the articles of association, and with the consent of the fully liable partners, resolve to convert a limited partnership company into a public limited company. The conversion may be implemented without
the consent of creditors. Before passing the resolution on conversion, the general meeting
must be advised of any valuation report prepared in accordance with sections 36 to 38. Sections 42 to 44 apply, with such changes as are necessary, to acquisitions after the resolution
on conversion has been passed.

(2)

Notice of the adopted conversion must be sent to all partners who did not participate in
passing the resolution no later than two weeks after the date of the resolution.

(3)

Conversion of a limited partnership company into a public limited company will be deemed
implemented when the company's articles of association have been amended to comply with
the requirements for public limited companies and when the conversion has been registered
in the Commerce and Companies Agency's IT system.

(4)

When a limited partnership company has been converted into a public limited company, the
fully liable partner remains liable for obligations incurred by the company before the conversion.
Conversion of a co-operative society into a public limited company

325

In a co-operative society with limited liability, the body authorised to amend the articles of
association may resolve to convert the society into a public limited company (see sections
326 to 337). The conversion may be implemented without the consent of creditors.
Conversion plan

326

(1)

The central governing body of the co-operative society must prepare and sign a conversion
plan. The conversion plan must include the following information and provisions:
1)

the name and any secondary name of the co-operative society before and after the conversion;

2)

the registered office of the co-operative society;

3)

the consideration offered to the members;

4)

the time from which the shares in the public limited company will confer on the holders
a right to receive dividends;

5)

the rights accruing in the public limited company to any holders of ownership interests
and debt instruments that enjoyed special rights in the co-operative society before the
conversion;

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6)

any other measures taken for the benefit of holders of ownership interests and debt instruments as referred to in paragraph 5;

7)

registration of the shares provided as consideration and delivery of share certificates, if

any;

8)

the time from which the conversion must be deemed effective for accounting purposes
(see subsection (2));

9)

any special benefits accruing to members of the company's management in connection

with the conversion; and

10) draft articles of association (see sections 28 and 29) for the public limited company after the conversion.
(2)

The conversion plan must be signed before the end of the financial year in which the conversion takes effect for accounting purposes (see subsection (1), paragraph 8). If this time limit
is exceeded, notification that the conversion plan has been received cannot be published
and, accordingly, the conversion cannot be adopted.
Conversion statement

327

(1)

The central governing body of the co-operative society must draw up a written statement
that provides explanations and reasons for the conversion plan. The statement must include
information about how the consideration to members was determined, including any particular difficulties in connection with such determination.

(2)

The members may agree that a conversion statement should not be prepared.
Interim balance sheet

328

(1)

If the conversion plan is signed more than six months after the end of the financial year to
which the cooperative society's most recent annual report relates, an interim balance sheet
must be prepared (but see subsection (2)). The date of the interim balance sheet, which
must be prepared in accordance with the Danish Financial Statements Act, may not be more
than three months before the date that the conversion plan was signed. The interim balance
sheet must be audited if the company is subject to audit obligations under the Financial
Statements Act or any other

(2)

The members may agree that no interim balance sheet should be prepared, notwithstanding
that the conversion plan has been signed more than six months after the end of the financial
year to which the most recent annual report of the co-operative society relates.
Valuation report on non-cash contributions

329

(1)

In connection with the conversion, a report must be obtained from a valuation expert to be
appointed under section 37(1). Section 37(2) and (3) applies, with such changes as are nec-

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essary, to the valuation experts' activities in relation to the co-operative society that is to be
converted.
(2)

The valuation report must include

1)

a description of each contribution;

2)

information on the valuation method applied;

3)

a specification of the agreed consideration; and

4)

a declaration that the value of the contribution as assessed in the report is not less than
the agreed consideration, including any nominal value of the shares to be issued and
any premium on them.

(3)

The valuation report may not be drawn up more than three months before the date of the
conversion resolution, if any (see section 334). If this time limit is exceeded, the conversion
cannot be validly adopted.
Statement by valuation expert(s) on the conversion plan

330

(1)

One or more independent valuation experts must make a written statement on the conversion plan, including the consideration (see subsection (4)). The members of the co-operative
society may decide, by unanimous agreement, not to obtain a statement by a valuation expert on the conversion plan.

(2)

The valuation experts must be appointed as specified in section 37(1).

(3)

Section 37(2) and (3) applies, with such changes as are necessary, to the valuation experts'
activities in relation to the co-operative society that is to be converted.

(4)

The statement must include a declaration as to whether the consideration offered to the
members of the cooperative society is fair and reasonable. The statement must specify the
method(s) used for determining the consideration and assess whether such methods are appropriate. The statement must also specify the values that result from each method and the
relative importance that should be attached to each individual method in connection with the
valuation. Where the valuation gives rise to particular difficulties, these must be included in
the statement.
Declaration by valuation expert(s) on the creditors' position

331

In addition to the statement referred to in section 330, the valuation experts must make a
declaration as to whether the creditors of the co-operative society can be considered to be
sufficiently protected after the conversion. However, the members may decide, by unanimous agreement, not to obtain a declaration by a valuation expert on the creditors' position.

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Opportunity for creditors to file their claims

332

(1)

If the valuation experts, with their declaration on the position of the creditors (see section
331), conclude that the creditors will not be sufficiently protected after the conversion, or if
no declaration has been made by a valuation expert on the creditors' position, creditors
whose claims arose prior to the Commerce and Companies Agency's publication under section 333 may file their claims up to four weeks after the date that the members passed the
resolution on the conversion. However, no claim for which adequate security has been provided may be filed.

(2)

A request may be made for repayment of claims filed if they are due, and adequate security
may be requested for claims filed that are not yet due.

(3)

Unless otherwise established, security under subsection (2) is not required if repayment of
the claims is secured by a statutory arrangement.

(4)

If the co-operative society and any creditors who have filed their claims disagree as to
whether security should be provided or whether the security offered is adequate, either party may, no later than two weeks after the claim is filed, bring the matter before the bankruptcy court that has jurisdiction over the place where co-operative society's registered office is situated for a ruling on the issue.

(5)

In the agreement on which the claim is based, creditors may not, with binding effect, waive
the right to demand security under subsection (2).

(6)

If creditors have a right to file their claims, the implementation of the conversion (see section 337) can only be registered upon expiry of the time allowed in subsection (1) for filing
such claims.

Filing of conversion plan and declaration by valuation expert(s) on the creditors' position
333

(1)

A copy of the conversion plan must be received by the Commerce and Companies Agency no
later than four weeks after it is signed. If this time limit is exceeded, notification that the
conversion plan has been received cannot be published and, accordingly, the conversion
cannot be adopted. If valuation experts have made a declaration on the creditors' position
(see section 331), this declaration may also be submitted to the Commerce and Companies
Agency in connection with filing of the conversion plan.

(2)

The Commerce and Companies Agency must publish notification in its IT system that it has
received the documents referred to in subsection (1). If the creditors have a right to file
their claims (see section 332), this must be stated in the Agency's notification.
Resolution to implement a conversion

334

(1)

The resolution to implement a conversion may be passed no earlier than four weeks after
publication by the Commerce and Companies Agency of a notification that it has received the

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conversion plan and a declaration by the valuation experts on the creditors' position. If the
valuation experts' declaration on the creditors' position (see section 331) provides that the
creditors of the co-operative society will be adequately secured after the conversion, the
members of the co-operative society may agree to derogate from the four-week period.
(2)

Creditors must, upon request, be informed about the date on which it will be resolved to implement any conversion.

(3)

The conversion must be implemented in accordance with the conversion plan. If the conversion is not adopted in accordance with the conversion plan as published, the proposal is considered to have lapsed.

(4)

If the following documents have been prepared, they must be made available for inspection
by the members of the co-operative society at the co-operative society's registered office or
on the website no later than four weeks before the date on which the resolution to implement the conversion is to be passed, unless the members agree that the documents should
not be made available to them before the general meeting:
1)

The conversion plan.

2)

Annual reports for the co-operative society, as adopted for the last three financial years
or any shorter period in which the society has existed.

(5)

3)

A conversion statement.

4)

An interim balance sheet.

5)

A valuation report on non-cash contributions.

6)

The valuation experts' statements on the conversion plan, including the consideration.

7)

The valuation experts' declaration on the creditors' position.

Members of the co-operative society must, upon request, be provided with access to the
documents specified in subsection (4), free of charge.

335

(1)

The resolution on conversion must be passed by the body authorised to amend the articles
of association. The resolution must be passed by the same majority required for resolutions
to dissolve the co-operative society and by not less than four-fifths of the members of the
co-operative society or their votes where voting is based on shareholdings, revenue or the
like. If the co-operative society is in liquidation, a conversion resolution may only be passed
if the members have not yet received any distributions, and if the members resolve at the
same time to suspend the liquidation process.

(2)

The central governing body of the co-operative society must inform the meeting at which the
resolution to implement the conversion is to be passed about any significant events, includ-

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ing any significant changes in assets and liabilities, that have occurred after the conversion
plan was signed.
(3)

Notice of the conversion must be provided to all members of the co-operative society within
two weeks after the date of the resolution.

(4)

If the supreme management and an auditor, if applicable, are not elected immediately after
it has been resolved to implement the conversion, a general meeting to elect the supreme
management and an auditor, if applicable, must be held no later than two weeks after the
date of the resolution. In connection with the conversion or at the subsequent general meeting, the members of the co-operative society must resolve whether the society's future financial statements are to be audited if the society is not subject to audit obligations under
the Danish Financial Statements Act or any other statute.
Opportunity to claim compensation

336

(1)

The members of the co-operative society may claim compensation from the society if the
consideration offered to the members is not fair and reasonable, and if they have made a
reservation to this effect at the meeting at which the conversion resolution was passed.

(2)

Proceedings pursuant to subsection (1) must be commenced within two weeks after the conversion is adopted.

(3)

If a reservation is made under subsection (1), the implementation of the conversion may only be registered after expiry of the two-week time limit prescribed in subsection (2), unless
the valuation experts, with their statement on the plan and the consideration (see section
330), conclude that the consideration offered to the members of the cooperative society is
fair and reasonable.
Registration of implementation of a conversion

337

(1)

The implementation of the conversion must be registered or an application for registration

must be filed (see section 9) no later than two weeks after the date on which the resolution
to implement the conversion is passed by the members of the co-operative society. The registration or application for registration must be accompanied by the documents specified in
section 334(4), paragraphs 3 to 7, if such documents have been prepared.

(2)

The implementation of the conversion must be registered or an application for registration

must be filed (see section 9) on or before expiry of the time limit for filing of the annual report covering the period in which the conversion takes legal effect (see section 326(1), paragraph 8), but not later than one year after the Commerce and Companies Agency publishes
notification of the conversion plan under section 333. If one of these two time limits is exceeded, the resolution implementing the conversion will be invalid, and the conversion plan
prepared under section 326 will be considered to have lapsed.

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(3)

The conversion of a co-operative society into a public limited company may be registered
when:
1)

The members of the co-operative society have passed a resolution on the conversion
(see section 335(1)).

2)

The claims filed by creditors under section 332 have been settled.

3)

The requirements for the election of management and an auditor under section 335(4)
have been met.

4)

The members' claims for compensation under section 336 have been settled, unless adequate security has been provided for such claims. If valuation experts have drawn up a
statement on the plan, including the consideration, and the statement is based on the
assumption that the consideration is fair and reasonable, the valuation experts must also have declared that their statement on the consideration is not disputed to any significant degree. The valuation experts determine whether the security is adequate.

(4)

Conversion of a co-operative society into a public limited company will be deemed implemented when the society's articles of association have been amended to comply with the requirements for public limited companies and when the conversion has been registered in the
Commerce and Companies Agency's IT system.

(5)

No registration may be made in the register of shareholders and no share certificates, if applicable, may be delivered until the conversion has been registered.

(6)

If all those entitled to be registered in the company's register of shareholders have not
made a request to such effect three years after the conversion, the central governing body
may, by publication of a notification in the Commerce and Companies Agency's IT system,
request the relevant shareholders to contact the company within six months. Where the
company has not been contacted by expiry of the time limit, the board of directors may dispose of the shares at the shareholder's expense. The company may deduct its expenses of
publishing the notification and any sale expenses from the sales proceeds. Any sales proceeds not claimed within three years after the sale will accrue to the company.

(7)

Sections 42 to 44 apply, with such changes as are necessary, if the converted limited liability company acquires assets from a shareholder who is known to the company during a period of up to 24 months after registration of the conversion.

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Part 18
Takeover bids in public limited companies whose shares are admitted to trading on
a regulated market or an alternative market place
338

The provisions of this Part apply to public limited companies that have one or more share
classes with voting rights and are admitted to trading on a regulated market or an alternative market place in an EU or EEA Member State (but see section 340(4)).
Special approval from the general meeting

339

(1)

The general meeting may resolve to introduce a procedure whereby the central governing
body of a public limited company whose shares are the subject of a takeover bid (see Part 8
of the Danish Securities Trading Act) must obtain the approval of the general meeting before
taking any action that may hinder or frustrate a takeover bid, other than resolving to seek
alternative bids.

(2)

The general meeting must pass the resolution under subsection (1) in accordance with the
requirements for a majority in section 106(1). The resolution must also comply with any
other rules prescribed by the public limited company's articles of association under section
106(1). This also applies to any subsequent amendments to the resolution.

(3)

The approval of the general meeting prescribed by subsection (1) is required from the time
the offeror announces his intention to bid until the result of the bid is available and has been
made public under the provisions of Part 8 of the Securities Trading Act, or the bid has
lapsed. Accordingly, the approval of the general meeting must be obtained irrespective of
whether it was resolved to take the relevant action before the central governing body received notice of the takeover bid.

(4)

In order to obtain the general meeting's approval for any action referred to in subsection
(1), the central governing body of the public limited company may convene the general
meeting by providing at least two weeks' notice, notwithstanding section 94(2) and any
longer period of notice prescribed by the articles of association.

(5)

If the general meeting of a public limited company has introduced a procedure whereby the
approval of the general meeting must be obtained as specified in subsection (1), the general
meeting may resolve that that procedure only applies if the company's shares are made the
subject of a bid from a company in an EU or EEA Member State that has introduced a similar
procedure or is directly or indirectly controlled by a parent company (see sections 6 and 7)
that has introduced a similar procedure.

(6)

The public limited company must give notice as soon as possible about the resolution made
by the general meeting to introduce a procedure as specified in subsection (1). Notice must
be provided to the Commerce and Companies Agency and the supervisory authorities in any
EU or EEA Member State in which the company's shares are admitted to trading on a regu-

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lated market or an alternative market place, or in which admission to trading has been applied for. Information about the resolution made by the general meeting must be published
in the Commerce and Companies Agency's IT system.
Suspension of special rights
340

(1)

The general meeting may resolve to introduce a procedure whereby special rights or restrictions attaching to shareholdings in the public limited company or attaching to individual
shares will be suspended if the company's shares become the subject of a takeover bid (see
Part 8 of the Danish Securities Trading Act).

(2)

The general meeting must pass the resolution under subsection (1) in accordance with the
requirements for a majority in section 106(1). The resolution must also comply with any
other rules prescribed by the public limited company's articles of association under section
106(1). If the public limited company has more than one share class, the resolution must also satisfy the majority requirements prescribed by section 107(3). These requirements also
apply to any subsequent amendments to the resolution.

(3)

The public limited company must give notice as soon as possible about the resolution made
by the general meeting to introduce such a procedure. Notice must be provided to the Commerce and Companies Agency and the supervisory authorities in any EU or EEA Member
State in which the company's shares are admitted to trading on a regulated market or an alternative market place, or in which admission to trading has been applied for. Information
about the resolution of the general meeting must be published in the Commerce and Companies Agency's IT system.

(4)

Subsections (1) to (3) do not apply to public limited companies in which the Danish State
holds voting shares that have special rights that are compatible with the EC Treaty.
Legal effects of suspension

341

(1)

As a result of the resolution of the general meeting on suspension under section 340(1), any
restrictions on the right to transfer or acquire shares prescribed by the public limited company's articles of association or by agreement cannot be enforced against the offeror during
the time allowed for acceptance of the bid (but see section 342(1)). If the offeror has stipulated any special conditions in the offer document, the restrictions are suspended until the
offeror has decided, in accordance with the offer document, whether the bid can be completed.

(2)

At the general meeting referred to in section 339, a resolution on suspension under section
340(1) has the effect
1)

that any restrictions on voting rights prescribed by the public limited company's articles
of association or by agreement cannot be enforced (but see section 342(2)); and

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2)

that any share that is given greater voting weight by the public limited company's articles of association (see section 46(1)) or by agreement only carries voting rights in proportion to its share of the aggregate voting share capital (but see section 342(2)).

(3)

At the general meeting referred to in section 343, a resolution on suspension under section
340(1) has the effect
1)

that any restrictions on voting rights prescribed by the public limited company's articles
of association or by agreement cannot be enforced (but see section 342(2));

2)

that any share that is given greater voting weight by the public limited company's articles of association (see section 46(1)) or by agreement only carries voting rights in proportion to its share of the aggregate voting share capital (but see section 342(2)); and

3)

that special rights conferred on certain shareholders to appoint members of management under the public limited company's articles of association cannot be enforced.

(4)

The general meeting may resolve that subsections (1) to (3) only apply if the public limited
company's shares become the subject of a bid from a public limited company in an EU or
EEA Member State that has passed a similar resolution on suspension or is directly or indirectly controlled by a parent company that has passed a similar resolution on the suspension
of special rights or restrictions attaching to shareholdings or to individual shares.

342

(1)

Any agreement restricting the right to transfer or acquire shares that is made before 31
March 2004 may, notwithstanding section 340(1), be enforced against an offeror.

(2)

Any agreement on the exercise of voting rights that is made before 31 March 2004 may,
notwithstanding section 340(1), be enforced at the general meetings referred to in sections
339 and 343.

Amendments to the articles of association following a successful takeover bid

343

Where an offeror has acquired 75% or more of the voting capital in a public limited company, and that company has passed a resolution on suspension under section 340(1), the offeror may require the central governing body to convene a general meeting after the expiry of
the bid for the purpose of amending the articles of association and appointing or replacing
management members. This first general meeting may only be convened with at least two
weeks' notice, notwithstanding section 94(2) and any longer notice period prescribed by the
articles of association.
Compensation to certain shareholders

344

(1)

Where companies have passed a resolution on suspension under section 340(1) and the offeror's bid is successful and effected, the offeror must pay compensation to any shareholders that suffer economic loss because special rights or restrictions attaching to sharehold-

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ings or to individual shares under the public limited company's articles of association cannot
be enforced (see section 341, subsections (1) to (3)).
(2)

The offeror's bid document must detail the compensation to be provided by the offeror to
the shareholders, and the basis for calculating that compensation. The amount of the compensation must be based on the market value of the relevant shares.

(3)

If an agreement cannot be reached on the amount of compensation, it must be determined

by experts appointed by the court that has jurisdiction over the place where the public limited company's registered office is situated. The decision made by the experts may be
brought before the court. Such proceedings must be commenced within three months of receipt of the experts' determination of the compensation amount.

(4)

Shareholders are also entitled to compensation under subsections (1) to (3) if, during the
period between 31 March 2004 and 26 June 2005, they entered into an agreement for special rights or restrictions, and those rights or restrictions cannot be enforced because of a
takeover bid (see section 341(1) to (3)).
Part 19
Branches of foreign limited liability companies

345

(1)

Foreign public limited companies, limited partnership companies, private limited companies,
and companies with a similar corporate form that are resident in an EU or EEA Member State
may operate via a branch in Denmark.

(2)

Other foreign public limited companies, limited partnership companies, private limited companies, and companies with a similar corporate form may operate via a branch in Denmark if
so authorised by an international agreement, or if the Commerce and Companies Agency
considers that Danish limited liability companies are provided with a reciprocal right in the
foreign company's home country, or the Agency otherwise grants permission.

346

(1)

The branch must be managed by one or more branch managers.

(2)

Branch managers must be legally competent and not subject to guardianship under section 5
of the Danish Guardianship Act, and no surrogate decision-maker may have been designated
for the manager under section 7 of the Guardianship Act. The provisions of this Act regarding members of management generally apply, with such changes as are necessary, to branch
managers.

(3)

The branch is bound by the signature or joint signatures of one or more branch managers.
Branch managers may grant power of procuration.

347

(1)

A branch must have a name and may have secondary names (see section 3). A branch name
must include the company's name with the word "filial" (in English, branch) added to it, and
clearly indicate the nationality of the foreign company.

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(2)

On all letters and other business papers, including electronic messages, and on its website,
if any, a branch must state its name, registered office, Central Business Register (CVR)
number, and the name of any register and the registration number of the limited liability
company in its home country. If the amount of the share capital is stated on these documents, both the subscribed and the paid-up capital must be stated.

348

The limited liability company is subject to Danish law and to the jurisdiction of the Danish
courts for all legal matters arising out of its business activities in Denmark.

349

(1)

The establishment of a branch must be registered in the Commerce and Companies Agency's
IT system or an application for registration must be filed with the Agency. Part 2 applies,
with such changes as are necessary.

(2)

The branch may not commence any activities until registration is complete or an application
for registration has been filed. If registration is refused, or an existing branch is deregistered (see section 350), the branch may not continue its business in Denmark.

(3)

If bankruptcy proceedings, reorganisation proceedings or similar proceedings have been

commenced against the foreign company, this must be registered in the Commerce and
Companies Agency's IT system or an application for registration must be filed with the Agency no later than two weeks after the commencement of proceedings. Information about the
status of the foreign company must be added to the company's name (see section 347(1)).

350

(1)

A branch must be deleted from the Commerce and Companies Agency's IT system if
1)

the company deletes the branch or applies to have the branch deleted;

2)

the branch has no branch manager and this defect is not remedied before the expiry of
a time limit set by the Commerce and Companies Agency;

3)

the branch manager has failed to file the foreign company's audited annual report, if
applicable, with the Commerce and Companies Agency in accordance with sections 143
and 144 of the Danish Financial Statements Act, and this defect is not remedied by the
expiry of a time limit set by the Agency; or

4)

where the company is not resident in an EU or EEA Member State, a branch creditor establishes that his claim cannot be satisfied out of the company's assets in Denmark.

(2)

If it appears that the matter that provided the basis for deletion from the IT system no longer exists after deletion, the Commerce and Companies Agency may re-register the branch
upon request from the foreign company. The Commerce and Companies Agency may prescribe rules about the re-registration of branches.

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(3)

In the circumstances referred to in subsection (1), paragraph 4, the foreign company may
not establish a new branch, and the branch may not be re-registered, until the creditor has
either been paid in full or has consented to the establishment of a new branch.
Part 20
State-owned public limited companies
Definition, etc.

351

The rules governing public limited companies and the special rules governing state-owned
public limited companies as provided by this Act (but see sections 352 and 353) apply to
state-owned public limited companies.

352

(1)

The special rules in this Act governing state-owned public limited companies do not apply to
public limited companies that are subsidiaries of state-owned public limited companies.

(2)

State-owned public limited companies whose shares are admitted to trading on a regulated
market in an EU or EEA Member State are exempted from the special rules in this Act governing state-owned public limited companies.

353

The Commerce and Companies Agency may prescribe rules that exempt state-owned public
limited companies from the special rules under this Act where it is necessary to ensure consistency with the corresponding rules applicable to limited liability companies whose securities are admitted to trading on a regulated market in an EU or EEA Member State.
Special disclosure requirements, etc.

354

State-owned public limited companies must notify the Commerce and Companies Agency as
soon as possible about any significant matters relating to the company that can be assumed
to affect the company's future, or its employees, shareholders or creditors. Parent companies (see sections 6 and 7) must give notice of significant matters relating to the group that
can be assumed to affect the group's future, or its employees, shareholders or creditors.

355

The Commerce and Companies Agency prescribes rules on the publication of notices under
section 354 and other documents, etc. that state-owned public limited companies are required to publish in the Agency's IT system under this Act.

356

A state-owned public limited company must publish its articles of association and annual reports on its website.

357

(1)

The board of directors or the supervisory board of a state-owned public limited company
must oversee the establishment of guidelines to ensure that the company complies with the
special rules governing state-owned public limited companies in this Act and in the Danish
Financial Statements Act.

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(2)

The Commerce and Companies Agency may compel the company to send any guidelines established under subsection (1) to the Agency.
Part 21
Limited partnership companies

358

The rules of this Act governing public limited companies also apply to limited partnership
companies, subject to any necessary modifications.

359

Limited partnership companies have an obligation and an exclusive right to include the
words "kommanditaktieselskab" or "partnerselskab" (in English, limited partnership company), or the abbreviation "P/S" in their name.

360

(1)

In addition to the information required to be included for public limited companies, the
memorandum of association of a limited partnership company must include the following information:
1)

The full name(s), address(es) and Central Business Register (CVR) number(s), if applicable, of the fully liable partner(s).

2)

Whether the fully liable partner(s) is/are liable to make contributions and if so, the
amount of each individual contribution. If the contribution has not been paid in full, the
rules governing payment must be stated. If non-monetary contributions are made, the
basis for the valuation must be detailed.

3)

Any provisions contained in the articles of association regarding the level of influence
held by the fully liable partner(s) over the company's affairs, and their share(s) in the
profits or losses.

(2)

In addition to the information listed in sections 28 and 29, the articles of association of a
limited partnership company must prescribe rules governing the legal relationship between
the shareholders and the fully liable partners.
Part 22
Damages, forced transfer, etc.

361

(1)

Promoters and members of management who, in the performance of their duties, have intentionally or negligently caused damage to the limited liability company are liable to pay
damages. The same applies where the damage is caused to shareholders or any third party.

(2)

Subsection (1) imposes similar liability for damages upon valuation experts, keepers of the
register of shareholders and scrutinisers.

(3)

If an auditing firm has been elected auditor, both the auditing firm and the auditor performing the audit are liable in damages.

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362

(1)

Shareholders must provide compensation for any losses that they cause to the company,
other shareholders or third parties through intentional acts or omissions, or gross negligence.

(2)

If any shareholder has, intentionally or by gross negligence, caused a loss to the company,
other shareholders, the company's creditors or other third parties, and there is a risk of continued abuse, the court may order that shareholder to redeem the shares belonging to the
shareholder who suffers a loss at a reasonable price which is to be fixed with regard to the
company's financial position and the circumstances of the case.

(3)

If any shareholder has, intentionally or by gross negligence, caused a loss to the company,
other shareholders or any third party, and there is a risk of continued abuse, the court may
order that shareholder to sell his shares to the other shareholders or the company at a reasonable price which is to be fixed with regard to the company's financial position and the
circumstances of the case.

363

(1)

Damages and compensation under sections 361 and 362 may be reduced if it is considered
reasonable having regard to the degree of fault, the amount of the loss and other circumstances of the case.

(2)

If multiple persons are liable, they will be jointly and severally liable in damages. However,
any person whose liability is reduced under subsection (1) is only liable for the reduced
amount. If any of the liable persons have paid the damages amount, they have a right to receive contribution from each of the other liable persons with regard to the degree of fault attributable to each individual and the circumstances of the case.

364

(1)

Any resolution that the limited liability company should take legal action against its promoters, members of management, valuation experts, auditors, scrutinisers, keepers of the register of shareholders or shareholders under sections 361 and 362 must be passed by the
general meeting.

(2)

Proceedings may be commenced notwithstanding any previous resolutions by the general

meeting granting exemption from liability or waiving the right to take legal action if the information about the resolution or about the subject-matter of the proceedings which was
provided to the general meeting before the resolution was passed was not essentially correct
or complete.

(3)

If shareholders that represent no less than one-tenth of the share capital oppose any resolution to grant exemption from liability or waive the right to take legal action, any shareholder
can commence legal proceedings to recover damages for the limited liability company from
the person(s) liable for the loss suffered. Shareholders who commence such proceedings
must pay the legal costs involved, but may have such costs reimbursed by the company to
the extent that they do not exceed the amount recovered by the company as a result of the
proceedings.

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(4)

If the company is declared bankrupt, and the date of presentation of the bankruptcy petition
is no later than 24 months after the date on which the general meeting resolved to grant
exemption from liability or waive the right to take legal action, the bankrupt estate may,
however, bring an action for damages without regard to the resolution made by the general
meeting.

365

(1)

Legal action pursuant to section 364(3) must be taken no later than six months after the
date of the resolution by the general meeting that granted exemption from liability or
waived the right to take legal action. If a scrutiny procedure has been initiated under section
150, action must be brought within six months of completion of the scrutiny.

(2)

Legal action pursuant to section 364(4) must be taken no later than three months after the
date of the limited liability company being declared bankrupt.
Part 23
Penalty provisions, etc.

366

(1)

In the absence of a more severe penalty under any other statute, any contravention of the
rules of this Act regarding registrations in the Commerce and Companies Agency's IT system
or the submission of applications for registration, valuation reports under section 43 or notices to the Agency is punishable by a fine.

(2)

Where members of the management of a limited liability company or the liquidator, or the
manager of a foreign limited liability company's branch fails to meet, in a timely manner,
their obligations to the Commerce and Companies Agency under this Act or in accordance
with provisions made under this Act, the Agency may, by way of sanction, impose fines that
accrue on a daily or weekly basis.

367

(1)

Contraventions of section 1(3), sections 2, 10 and 15, section 24(2), section 30, section
32(2) and (3), section 33(4), section 38(2), section 42(1), section 44(1), section 50(1), section 51(1), (2) and (6), section 52, section 53(1) and (2), sections 54 to 56, 58 to 61, 89,
98 and 99, section 101(3), (4), (7) and (8), sections 108 and 113 to 119, section 120(3),
sections 123, 125, 127 to 134, 138 and 139, section 139a(1), paragraph 1, section 160,
third sentence, section 179(2), section 180, section 181, third sentence, section 182(3),
section 190(2), third sentence, section 192(1), section 193(2), sections 196, 198 and 202 to
204, section 205(1), section 206, section 207(3), section 210, section 214(2) and (3), section 215(1), section 218(2), section 227(2), sections 228 and 234, section 339(6), section
340(3), section 347, section 349(2) and (3), and sections 354, 356, 357 and 359 are punishable by a fine. If a company continues to participate in transactions that contravene section 206 or section 210, it will be subject to punishment by a fine.

(2)

In the absence of a more severe penalty under any other statute, any person who wrongfully
discloses or uses a password or other means of access to attend or electronically participate
in an electronic meeting of the board of directors (see section 125(2)) or an electronic gen-

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eral meeting (see section 77(1) or (2)), including electronic voting, will be punished by a fine.
(3)

In the absence of a more severe penalty under any other statute, any person who wrongfully
discloses or uses a password or other means of access to read, modify or send electronic
messages, etc. falling within the provisions on electronic communication in section 92 will be
punished by a fine.

(4)

Regulations issued pursuant to section 4(3), section 12(1) and (2), section 55(3), section
57, section 71(4), section 143, section 172, section 244(3), section 262(3), section 279(3),
section 299(3), section 333(3) and section 372(1) may provide for punishment by a fine for
contraventions of those regulations.

368

(1)

Any contravention of section 312, section 313 and section 318 (see section 3, section 36(4),
section 37, section 38, second sentence, and section 39) of the Danish Act on the Involvement of Employees in SEs is punishable by a fine.

(2)

In the absence of a more severe penalty under any other statute, any person disclosing information which is confidential within the meaning of section 312 and section 318 (see section 41(1)) of the Act on the Involvement of Employees in SEs will be punished by a fine.

(3)

Any person who makes false representations to the employees or their representatives before or after a crossborder merger or division (see Part 16), whether intentionally or because
of gross negligence, and those representations are of major importance to the employees'
participation in the surviving company, will be subject to punishment by a fine.

369

Companies, etc. (legal persons) may incur criminal liability under the rules in Part 5 of the
Danish Penal Code (straffeloven).
Part 24
Right to complain

370

The Danish Minister for Economic and Business Affairs may prescribe rules governing complaints about decisions made pursuant to this Act, including rules stipulating that complaints
may not be filed with any other administrative authority.

371

(1)

Decisions made by the Commerce and Companies Agency under this Act or regulations issued pursuant to the Act may be brought before the Danish Company Appeals Board
(Erhvervsankenvnet) within four weeks after being communicated to the relevant party
(but see subsection (2)).

(2)

Decisions of the Commerce and Companies Agency with respect to failure to comply with
time limits under section 40(1), section 165(5), section 177(2), section 191, section 225(2)
and section 231(2), the setting of deadlines under section 16(1) and section 17(2), and decisions pursuant to section 93(2) to (4), section 225(1), section 226, section 232(2), section

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350(1), paragraphs 2 to 4, and decisions made under regulations issued under section 8a
cannot be brought before any higher administrative authority.
Part 25
Commencement
372

(1)

The Danish Minister for Economic and Business Affairs fixes the date of commencement of
this Act. The Minister may also determine that different parts of the Act will enter into force
at different times, and prescribe rules that derogate from the provisions in this Act that require adjustments to the Commerce and Companies Agency's IT system in respect of registration and publication, until all necessary adjustments to the IT system have been completed. The Minister may also lay down rules that derogate from the provisions of the Act that
depend on adjustments of the Commerce and Companies Agency's IT' system as regards
registration and publication until the required adjustments of the IT system have been completed. The Minister is authorised to repeal the Danish Public Companies Act (lov om aktieselskaber), see Consolidated Act no. 649 of 15 June 2006, as amended, and the Danish Private Companies Act (lov om anpartsselskaber), see Consolidated Act no. 650 of 15 June
2006, as amended.

(2)

The Minister for Economic and Business Affairs may prescribe rules providing for special
transitional arrangements for companies, including affected employees, falling within the Act
and for governing bodies, including their duties.

373

(1)

All applications for registration made under the Danish Public Companies Act or the Danish
Private Companies Act which reach the Commerce and Companies Agency before the date of
commencement of this Act will be considered according to the rules applicable until the date
of commencement.

(2)

All executive orders, rules and regulations issued pursuant to this Act and all information
registered, including articles of association and authorisations of the company's management, permissions given, approvals, etc. will remain in force until changed, withdrawn, expired or terminated under the provisions of this Act.

374

The Minister for Economic and Business Affairs will review this Companies Act or parts of it
two years after the date of commencement of the provisions in section 4.

375

This Act does not apply in Greenland and the Faroe Islands, but may by Royal Decree be extended to Greenland subject to such modifications as may be required by special local conditions.

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Made at Christiansborg Palace, 12 June 2009

By Our Royal Hand and Seal
MARGRETHE R.
/ Lene Espersen

Official notes
1)

The Act contains provisions implementing parts of Council Directive 1968/151/EEC of 9 March 1968 as regards
disclosure requirements in respect of certain types of companies (the Official Journal of the European Communities 1968 no. L065, p. 8), as amended most recently by Directive 2003/58/EC of the European Parliament and of
the Council of 15 July 2003 (the Official Journal of the European Communities 2003 no. L 221, p. 13), parts of
Council Directive 1977/91/EEC of 13 December 1976 as regards the formation of public limited liability companies
and the maintenance and alteration of their capital (the Official Journal of the European Communities 1977 no. L
26, p. 1), as amended most recently by Directive 2006/68/EC of the European Parliament and of the Council of 6
September 2006 (the Official Journal of the European Communities 2006 no. L 264, p. 32), parts of Council Directive 1978/660/EEC of 25 July 1978 on the annual accounts of certain types of companies (the Official Journal
of the European Communities 1978 no. L 222, p. 11), as amended most recently by Directive 2003/51/EC of the
European Parliament and of the Council of 18 June 2003 (the Official Journal of the European Communities 2003
no. L 178, p. 16), parts of Council Directive 1978/855/EEC of 9 October 1978 concerning mergers of public limited
liability companies (the Official Journal of the European Communities 1978 no. L 295, p. 36), parts of Council Directive 1982/891/EEC of 17 December 1982 concerning the division of public limited liability companies (the Official Journal of the European Communities 1982 no. L 378, p. 47), parts of Council Directive 1983/349/EEC of 13
June 1983 on consolidated accounts (the Official Journal of the European Communities 1983 no. L 193, p. 1), as
amended most recently by Directive 2003/51/EC of the European Parliament and of the Council of 18 June 2003
(the Official Journal of the European Communities 2003 no. L 178, p. 16), parts of Council Directive
1984/253/EEC of 10 April 1984 on the approval of persons responsible for carrying out the statutory audits of accounting documents (the Official Journal of the European Communities 1984 no. L 126, p. 20), parts of Council Directive 1988/627/EEC of 12 December 1988 on the information to be published when a major holding in a listed
company is acquired or disposed of (the Official Journal of the European Communities 1988 no. L 348, p. 62),
parts of Council Directive 1989/666/EEC of 21 December 1989 concerning disclosure requirements in respect of
branches opened in a Member State by certain types of company governed by the law of another State (the Official Journal of the European Communities 1989 no. L 395, p. 36), parts of Council Company Law Directive
1989/667/EEC of 21 December 1989 on single-member private limited-liability companies (the Official Journal of
the European Communities 1989 no. L 395, p. 40), parts of Directive 2004/25/EC of the European Parliament and
of the Council of 21 April 2004 on takeover bids (the Official Journal of the European Communities 2004 no. L
142, p. 12), parts of Directive 2005/56/EC of the European Parliament and of the Council of 26 October 2005 (the
Official Journal of the European Communities 2005 no. L 310, p. 1) on cross-border mergers of limited liability
companies, parts of Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 (the Official Journal of the European Communities 2007 no. L 184, p. 17) on the exercise of certain rights of shareholders in listed companies, and parts of Directive 2007/63/EC of the European Parliament and of the Council of 13
November 2007 (the Official Journal of the European Communities 2007 no. L 300, p. 48), amending Council Di-

144

188

rectives 78/855/EEC and 82/891/EEC as regards the requirement of an independent expert's report on the occasion of merger or division of public limited liability companies.

Editorial note
Part of Act no. 470 of 12 June 2009 on Public and Private Limited Companies (the Danish Companies Act) came
into effect with Executive Order no. 172 of 22 February 2010 on partial commencement of the Danish Act on Public and Private Limited Companies (the Danish Companies Act).

145

189

Consolidated Act no. 323 of 11 April 2011

The Danish Financial Statements Act
as amended by Act no. 341 of 27 April 2011, Act no. 477 of 30 May 2012, Act no. 546 of 18 June 2012, Act no.
1231 of 18 December 2012, Act no. 1232 of 18 December 2012, Act no. 1287 of 19 December 2012 and Act
no. 1383 of 23 December 2012

Future amendments: Act no. 516 of 12 June 2009

PART I
Scope, basic requirements, etc.

Chapter 1
Scope, etc.
Enterprises covered
1

(1)

This Act shall apply to all commercial enterprises, but see subsection (3).

(2)

For the purpose of this Act, an enterprise shall be deemed to be commercial if it supplies or
provides goods, rights, funds, services or the like for which it normally receives consideration. However, an enterprise shall always be regarded as commercial if it is covered by the
Danish Companies Act, the Danish Act on Commercial Foundations, the Danish Act on Certain Commercial Enterprises or if the enterprise is otherwise a commercial enterprise in accordance with existing legislation. This shall apply whether or not the enterprises are exempt from the requirements of the aforesaid Acts, in full or in part.

(3)

The Act does not apply to enterprises

1)

covered by accounting and reporting rules prescribed by or in accordance with the legislation applicable to financial enterprises,

2)

covered by the Danish Act on State Accounting, or

3)

solely covered by accounting and reporting rules laid down in or in pursuance of the
Danish Act on Local Government Management.
The annual report

(1)

For each financial year, the enterprises mentioned in section 3(1) shall present financial
statements in pursuance of this Act. Unless otherwise provided by sections 18, 22, 78, 102
or 109, the financial statements shall be supplemented with
1)

financial statements for a group managed by the enterprise (consolidated financial

statements),

190

2)

a management's review for the enterprise and for any group managed by the enterprise
and

3)

a statement by the executive and supervisory boards on the annual report.

(2)

In addition, the enterprise may include any supplementary reports, see section 14.

(3)

The financial statements, reports and endorsements provided for in subsections (1) and (2)
shall be jointly designated "annual report".

(4)

Financial statements prepared by an enterprise for its own use shall not be deemed to constitute an annual report under this Act. Any financial statements presented by an enterprise
which are not deemed to constitute an annual report for the purpose of this Act shall not be
designated an annual report, and the appearance of any such financial statements, in form
as well as in substance, shall prevent the financial statements being mistaken for such an
annual report.
Types of business organisation covered

(1)

Unless exempt in pursuance of the rules set out in sections 4-6, the following commercial
enterprises shall present an annual report in pursuance of the rules laid down in this Act:
1)

public limited companies, partner companies (limited partnership companies) and private limited companies,

2)

partnerships and limited partnerships in which all partners and general partners respectively are
a) public limited companies, partner companies (limited partnership companies), private limited companies or companies in a similar form of corporate organisation, or
b) partnerships or limited partnerships in which all partners and general partners respectively are covered by paragraph a) above,

3)

commercial foundations, see the Danish Act on Commercial Foundations, section 1(2),
but see subsections (3)-(5),

4)

enterprises with limited liability covered by the Danish Act on Certain Commercial Enterprises, section 3 (enterprises and societies with limited liability) and section 4 (cooperative societies with limited liability) unless the enterprise is exempt under section 4
of this Act, and

5)
(2)

European co-operative societies (SCE-companies).

Where an enterprise covered by this Act which is not under an obligation to present an annual report in accordance with subsection (1) voluntarily elects to present an annual report

191

not intended solely for the enterprise's own use, it shall, as a minimum, follow the rules for
reporting class A, see section 7(1), paragraph 1).
Exemption for enterprises covered by the Danish Act on Certain Commercial Enterprises
4

(1)

Enterprises covered by the Danish Act on Certain Commercial Enterprises section 3 (enterprises and societies with limited liability) and section 4 (co-operative societies with limited
liability) may decide not to present an annual report in pursuance of this Act, but see subsections (4)-(6), if the enterprise does not exceed two of the following limits as at the balance sheet date in two consecutive financial years:
1)

a balance sheet total of DKK 7 million,

2)

revenue of DKK 14 million, and

3)

an average number of 10 full-time employees in the course of the financial year.

(2)

Section 7(3) shall apply in connection with the calculation of the amounts in subsection (1).

(3)

Where an enterprise elects to make use of the exception provided for in subsection (1), it
shall submit an exemption statement to the Danish Commerce and Companies Agency in
pursuance of section 145.

(4)

However, the exception provided for in subsection (1) shall not apply to any enterprise
which is the parent of a group for which it is required to present consolidated financial
statements in pursuance of this Act, see section 7(4).

(5)

Where an enterprise covered by the exception in subsection (1) elects to present an annual
report not intended for the enterprise's own use, the enterprise shall, as a minimum, follow
the rules for reporting class A, see section 7(1), paragraph 1).

(6)

Where the enterprise wishes to have an annual report which has been presented voluntarily
in pursuance of subsection (5) published in the Danish Commerce and Companies Agency,
the enterprise shall submit the exemption statement referred to in subsection (3) to the
Agency. However, the exemption statement is not required to be submitted if the enterprise
elects to have the annual report be subject to the rules for reporting class B, see section
7(1), paragraph 2).
Exemption for certain partnerships and limited partnerships

(1)

A partnership or a limited partnership covered by section 3(1), paragraph 2), may omit to
present an annual report and instead submit an exemption statement in pursuance of section 146(1) if
1)

its financial statements by full consolidation, proportionate consolidation or recognition

and measurement under the equity method form part of consolidated financial statements presented by a partner or a general partner or by one of their parents in-stead,

192

2)

the partner or the general partner is domiciled in Denmark or comes under the legislation in another EU Member State or in an EEA Member State,

3)

the consolidated financial statements have been prepared in accordance with the rules
of this Act or, if the partner, general partner or the parent in question is not Danish, in
accordance with the rules of Council Directive 83/349/EEC as amended, and the consolidated financial statements have been audited and published in accordance with the said
rules, and

4)

it is disclosed in the consolidated financial statements in question that the partnership

or the limited partnership respectively has omitted to present an annual report in pursuance of this section.

(2)

A partnership or a limited partnership covered by section 3(1), paragraph 2), may omit to
present an annual report itself and instead submit an exemption statement in pursuance of
section 146(2) if
1)

one of the enterprise's partners or general partners respectively is domiciled in Denmark

and

2)

the partner or general partner presents the annual report for the partnership or limited
partnership and arranges for the annual report to be audited and published in accordance with the rules of this Act together with its own annual report in a joint annual report or as two separate annual reports.

(3)

A partnership or a limited partnership covered by section 3(1), paragraph 2), in which no

partner or general partner is domiciled in Denmark may omit to present an annual report itself and instead submit an exemption statement in pursuance of section 146(3) if
1)

a partner or a general partner respectively comes under the legislation in an EU/EEA

Member State and

2)

the partner or general partner presents the annual report for the partnership or limited
partnership and arranges for the annual report to be audited and published in accordance with the legislation referred to in paragraph 1) together with its own annual report
in a joint annual report or as two separate annual reports.

(4)

Partnerships and limited partnerships using the exceptions provided for in subsections (2)
and (3) shall, on request, disclose to any person the name and CVR number or other registration number as well as the registered office of the enterprise having presented the annual
report.

193

Exemption for subsidiaries without activity

6

(1)

A subsidiary which has not carried on any activity during the financial year may omit to present an annual report for the year in question and instead submit an exemption statement in
pursuance of section 146(4) if
1)

the subsidiary's financial statements by full consolidation or by recognition and measurement under the equity method form part of consolidated financial statements presented by a parent or by a higher-ranking parent instead,

2)

the parent or the higher-ranking parent comes under the legislation in an EU/EEA Member State,

3)

the consolidated financial statements have been prepared in accordance with the provisions of this Act or, if the parent in question is not Danish, in accordance with the provisions of Council Directive 83/349/EEC as amended, and the consolidated financial
statements have been audited and published in accordance with the said provisions,

4)

all the subsidiary's owners have accepted the procedure for the financial year in question,

5)

the parent has declared that it guarantees the subsidiary's commitments until submission by the subsidiary of an annual report for a subsequent financial year and receipt
and publication of such annual report in accordance with the provisions of Chapters 19
and 20, and

6)

it is disclosed in the consolidated financial statements in question that the subsidiary

has omitted to present an annual report in pursuance of this section.

(2)

An enterprise is deemed to be without any activity in the financial year if it does not carry
on any commercial activities, whether directly or indirectly, does not hold any investments
in another enterprise and has not undertaken any risks.
Reporting classes

(1)

The provisions governing the preparation of annual reports laid down in this Act are divided
into reporting classes A, B, C and D, see Parts II-V. In determining the reporting class to be
followed by an enterprise the following shall apply:
1)

Enterprises covered by the Act which are not required to present an annual report in
pursuance of section 3(1), but which voluntarily present an annual report, see section
3(2), shall, as a minimum, follow the rules for reporting class A as set out in Part II.

2)

Small enterprises required to present an annual report in pursuance of section 3(1)

shall, as a minimum, follow the rules for reporting class B as set out in Part III.

194

3)

Medium-sized and large enterprises required to present an annual report in pursuance of

section 3(1) shall, as a minimum, follow the rules for reporting class C as set out in Part
IV.

4)

State-owned public limited companies and companies with equity investments, instruments of debt or other securities admitted to trading on a regulated market in an
EU/EEA Member State and which are under an obligation to present an annual report in
pursuance of section 3(1), shall, irrespective of their size, follow the rules for reporting
class D as set out in Part V, but see section 7a.

(2)

In determining the reporting class to be followed by an enterprise the following limits shall
be applied:
1)

Small enterprises:
Enterprises not exceeding two of the following limits as at the balance sheet date in two
consecutive financial years:

2)

a)

A balance sheet total of DKK 36 million,

b)

revenue of DKK 72 million, and

c)

an average number of 50 full-time employees during the financial year.

Medium-sized enterprises:
Enterprises which are not small enterprises and which do not exceed two of the following limits as at the balance sheet date in two consecutive financial years:

3)

a)

A balance sheet total of DKK 143 million,

b)

revenue of DKK 286 million, and

c)

an average number of 250 full-time employees during the financial year.

Large enterprises:
Enterprises which are not small or medium-sized enterprises.

(3)

The following shall apply in connection with the calculation of the limits set out in subsection
(2):
1)

The balance sheet total is the total of all assets.

2)

Revenue is defined in Schedule 1, C, no. 11. If an accounting period is shorter or longer

than 12 months, revenue is increased or reduced on a proportionate basis so that an
amount is arrived at that is equivalent to the amount for a 12-month period.

195

3)

As far as possible, the average number of full-time employees shall be calculated in accordance with the rules laid down in pursuance of section 143 of the Danish Companies
Act.

(4)

Notwithstanding subsection (1), parents of groups required to present consolidated financial

statements in accordance with section 109 shall in their annual report, as a minimum, follow
the rules for reporting class C, unless required, as a minimum, to follow the rules for reporting class D in accordance with subsection (1), paragraph 4). If a parent fails to submit consolidated financial statements in accordance with sections 111 or 112, the parent may, however, in its annual report follow the rules for reporting class B, if it complies with the conditions in subsection 2, paragraph 1).

(5)

Instead of following the rules provided for in the part to be followed by the enterprise, as a
minimum, in accordance with subsections (1) and (4), the enterprise may elect systematically and consistently to follow all or some of the rules provided for in one or more subsequent parts (reporting classes).
Exceptions for subsidiaries of state-owned public limited companies

7a

The special provisions of this Act on state-owned public limited companies do not apply to
public limited companies that are subsidiaries of state-owned public limited companies.
Chapter 2
Management's responsibility for the presentation of the annual report

(1)

The management of the enterprise, see Schedule 1, A, no. 5, shall present an annual report
for the enterprise.

(2)

Each individual member of the responsible management bodies shall be responsible for ensuring that the annual report is prepared in accordance with the legislation and any further
accounting and reporting requirements provided for by articles of associations or by agreement. In connection with the preparation of the annual report, the said members shall also
observe the standards applying to the enterprise, see sections 136 and 137. Further, each
individual member shall be responsible for ensuring that the annual report may be audited
and approved in time if auditing is required. Each individual member of the supreme governing body shall be responsible for ensuring that the annual report is submitted to the Danish
Commerce and Companies Agency within the time limits stipulated in the Act.

(1)

When the annual report has been prepared, it shall be signed by all members of the competent management bodies and their signatures shall be dated. They shall affix their signatures to a statement by the executive and supervisory boards on the annual report, stating
1)

whether the annual report has been presented in accordance with the requirements provided for by legislation and any standards as well as any requirements provided for by
articles of association or by agreement, and

196

2)

whether the financial statements and any consolidated financial statements give a true
and fair view of the enterprise's and the group's assets, liabilities and equity, financial
position and results for the year.

(2)

The statement by the executive and supervisory boards on the annual report for companies
with securities admitted to trading on a regulated market in an EU/EEA Member State and
for state-owned public limited companies shall contain information on whether the management's review contains a true and fair report of the development in the activities of the enterprise and, if consolidated financial statements have been prepared, the activities of the
group, and the financial affairs, the results for the year and the financial position of the enterprise as well as the financial position of the enterprises comprised by the consolidated financial statements. Furthermore, the executive and supervisory board shall state whether
the management's review contains a description of the most important risks and elements of
uncertainty which the enterprise and, if consolidated financial statements have been prepared, the group face. The statement by the executive and supervisory boards on the annual
report for such enterprises shall also contain information on the names and functions in relation to the enterprise of each member of the responsible management bodies.

(3)

The provision in subsection (2) shall not apply to enterprises which only issue instruments of
debt which are admitted to trading on a regulated market in an EU/EEA Member State and
whose nominal value per unit amounts to minimum EUR 50,000 or whose nominal value per
unit on the date of issue equals minimum EUR 50,000 when the instruments of debt are issued in another currency than EUR.

(4)

If the annual report has not been audited, see section 135(1), second sentence, the members of the competent management bodies shall state in the statement by the executive and
supervisory boards on the annual report whether the enterprise meets such requirements.

(5)

If the management has added supplementary reports to the annual report, the members of
the competent management bodies shall state in the statement by the executive and supervisory boards on the annual report whether the report gives a true and fair report in accordance with generally accepted guidelines for such reports.

10

Even if a member of the management disagrees with an annual report in full or in part or
has objections to the annual report being approved with the contents decided upon, the
member is not entitled to omit to sign the annual report. However, such member of the
management may state his or her objections giving specific and adequate grounds in connection with his or her signature and the statement by the executive and supervisory boards
on the annual report.

197

Chapter 2a
Information on decision not to conduct audit in the next financial year
10a

In connection with the statement by the executive and supervisory boards on the annual report, see section 9, it shall be stated if the general meeting or the corresponding body of
approval in an enterprise that fulfils the conditions in section 135(1), second sentence, has
decided that the financial statements for the next financial year are not to be audited.
Chapter 3
Basic requirements for the annual report
True and fair view

11

(1)

The financial statements and any consolidated financial statements must give a true and fair
view of the enterprise's and the group's assets and liabilities, financial position and results
for the year and. The management's review shall contain a true and fair report of the issues
which the review concerns.

(2)

If the application of the provisions of this Act is not sufficient to give a true and fair view in
accordance with subsection (1), further disclosure must be made in the financial statements
and the consolidated financial statements respectively.

(3)

If, in special cases, the application of the provisions set out in sections 19-21, 23-76, 79101, 103-107 and 115-134 of this Act conflicts with the requirement of subsection (1) first
sentence , the provisions shall be derogated from so that the requirement can be met. Any
such derogation shall be disclosed in the notes for each financial year, giving specific and
adequate grounds and indicating the effect, including, if possible, the effect in terms of
amounts, of the derogation on the assets, liabilities and equity, financial position and the results of the enterprise and the group respectively.

(4)

The requirements in subsections (1)-(3) shall apply correspondingly when standards are
used that have been issued within the framework of this Act, see section 136.
Quality requirements

12

(1)

In order for the financial statements and the consolidated financial statements to give a true
and fair view and in order for the management's review to include a true and fair report in
accordance with section 11, the provisions of subsections (2) and (3) must be complied with.

(2)

The annual report must be prepared so as to support users of financial statements in their
economic decisions. Such users are private individuals, enterprises, organisations and public
authorities, etc., whose economic decisions must normally be expected to be affected by an
annual report, including present and prospective owners of the enterprise, creditors, employees, customers, alliance partners, the local community and authorities providing government grants and fiscal authorities. The decisions in question concern

198

(3)

1)

investment of the user's own resources,

2)

the management's administration of the funds of the enterprise and

3)

distribution of the funds of the enterprise.

The annual report must be prepared so as to disclose information about matters which are
normally relevant to users, see subsection (2). The information disclosed must also be reliable in relation to users' normal expectations.
Basic assumptions

13

(1)

The annual report shall be prepared in accordance with the basic assumptions set out below:
1)

It must be prepared in a clear and understandable manner (clarity).

2)

The substance of transaction rather than formalities without any real content must be
accounted for (substance over form).

3)

All relevant matters must be included in the annual report unless they are insignificant
(materiality). But where several insignificant matters are deemed to be significant when
combined, they must be included.

4)

The operation of an activity is based on a going concern assumption unless it is to be

discontinued or it is assumed that it will not be possible to be continued. If an activity is
discontinued, classification and presentation as well as recognition and measurement
must be adjusted accordingly.

5)

Any change in value must be shown irrespective of the effect on equity and income
statement (neutrality).

6)

Transactions, events and changes in value must be recognised when occurring irrespective of the time of payment (accrual basis).

7)

Methods of recognition and measurement basis must be applied uniformly to the same
category of matters (consistency).

8)

Each transaction, event and change in value must be recognised and measured individually, and individual matters must not be offset against each other (gross presentation).

9)

The opening balance sheet for the financial year must be equivalent to the closing balance sheet for the previous financial year (formal consistency).

(2)

Financial year, presentation and classification, method of consolidation, method of recognition and measurement basis as well as the monetary unit applied must not be changed from
period to period (actual consistency). However, a change may be made if this results in a
more true and fair view being given, or if the change is necessary in order to comply with

10

199

new rules in case of a transition to a new reporting class, statutory amendments, new orders
or regulations in pursuance of an Act or in case of new standards pursuant to section 136.
(3)

The provisions in subsection (1), paragraphs 6)-9), and subsection (2) may be derogated
from in special cases. In such cases, section 11(3), second sentence, shall apply correspondingly.

14

(1)

Any supplementary reports on, for example, the enterprise's social responsibility, knowledge
and know-how and employee conditions, environmental issues and ethical objectives and follow-up on such matters must give a true and fair report in accordance with generally accepted guidelines for such reports. Such reports must meet the quality requirements in section 12(3) and the basic assumptions set out in section 13(1) and (2) subject to the special
terms required by the nature of the case.

(2)

The methods and measurement basis used for the preparation of the supplementary reports
must be disclosed in the reports.

15

(1)

The financial year must comprise 12 months, which must always begin and end on a specific
date of the year. The subsequent financial year shall begin the day after the balance sheet
date of the previous financial year.

(2)

The first accounting period may comprise a period which is shorter or longer than 12
months, subject however to a maximum of 18 months.

(3)

If the financial year is changed, the period of transition shall not exceed 12 months. However, the period of transition may comprise up to 18 months if it is necessary to change the financial year in order to achieve the same financial year in several enter-prises in the event
of
1)

the establishment of a consolidated group

2)

the establishment of participation in the joint management of another enterprise, or

3)

a merger.
Application of the period of transition of up to 18 months described in the second sentence implies that the relevant situation has been established within the period of transition, unless it has been impossible for the enterprise to change the financial year within that period due to circumstances beyond its control.

(4)

The resolution to change the financial year shall be made so early that particulars of such
change is received by the Danish Commerce and Companies Agency no later than five
months from expiry of the financial year which it is desired be changed, but no later than
five months from expiry of the period of transition. As far as state-owned public companies
and companies with securities admitted to trading on a regulated market in an EU/EEA

11

200

Member State are concerned, the time limit is, however, four months. If particulars are received after expiry of the time limit mentioned in the first or second sentence, registration
will be denied.
(5)

Parents and subsidiaries must ensure that the subsidiaries have the same financial year as
the parent unless this is not possible due to circumstances beyond the control of the parent
and the subsidiary.

16

Recognition, measurement and disclosure in monetary units must be denominated in Danish

kroner (DKK) or in EUR. The enterprise may, however, instead decide to denominate the
amounts in other foreign currencies which are relevant to the enterprise or the enterprise's
group respectively.
Chapter 4
Order, etc. of the elements of the annual report

17

(1)

The annual report must contain the elements prescribed for each reporting class, see sections 18, 22, 78 and 102, as well as equivalent elements for consolidated financial statements. The accounting policies must be disclosed together in one place. The statement of
changes in equity may be placed as a separate statement or in the notes.

(2)

The management's review for the parent and the group may be combined if the information
which differs for the parent and the group is stated separately in the combined review.

(3)

Supplementary reports attached to the annual report must be placed separately in the annual report after the compulsory elements.
PART II
Reporting class A
Chapter 5
Preparation of the annual report
General provisions

18

An enterprise presenting an annual report in accordance with the rules of reporting class A
shall, as a minimum, prepare an annual report consisting of a statement by the executive
and supervisory boards on the annual report, a balance sheet, an income statement and
notes, including a statement of accounting policies. If a state-authorised or registered public
accountant has signed an auditors' report or a declaration on the annual report, the report
or declaration shall be included in the annual report. The provisions of sections 11-17 shall
apply.

12

201

Classification and presentation

19

(1)

The enterprise shall include the assets and liabilities to be recognised for the reporting class
as well as the equity in an opening balance sheet as at the date of commencement of the
enterprise's activities. Unless otherwise provided by legislation, the enterprise's activities
shall be deemed to have commenced on the date of formation or on an earlier date from
which a commercial activity is to be included in the enterprise.

(2)

The items in the income statement shall be classified in accordance with the nature of the
enterprise and the extent of its activities. The balance sheet shall, as a minimum, show the
relevant principal items and items preceded by a Roman numeral as listed in Schedule 2,
format 1. The statements shall, moreover, show any items necessary in order to show the
capital contributed by owners of the enterprise and their respective shares of the profit or
loss.

(3)

Recognised transactions which do not concern the business activities shall be classified so
that they are clearly shown separately from the business activities in the balance sheet and
the income statement.
Recognition and measurement

20

(1)

The enterprise's assets and liabilities and income and expenses shall be recognised and
measured systematically and consistently in accordance with generally accepted guidelines
in view of the nature and scope of the enterprise.

(2)

An enterprise owned personally by one or more owners may omit to recognise such of the
owner's assets and liabilities as do not concern the business activities.
Disclosure

21

(1)

The enterprise shall account for the methods of recognition and measurement basis (valuation) used for the items in all the elements of the annual report.

(2)

The enterprise shall separately disclose

1)

contingent liabilities,

2)

assets charged or otherwise provided as security

3)

interest on equity contributions,

4)

the amounts distributed to owners of or other equity participants in the enterprise,

5)

how losses have been covered, and

6)

whether distributions have been made in cash or otherwise.

13

202

(3)

An enterprise owned personally by a sole owner or jointly by spouses, and where the owner
or the spouses respectively own assets, liabilities, contingent liabilities or charges which do
not concern the commercial activities, shall separately disclose
1)

whether it omits to recognise the assets and liabilities in question,

2)

whether it omits to recognise or disclose the contingent liabilities in question,

3)

whether it omits to disclose the charges in question, and

4)

how the property relations of the owner and his or her spouse have been taken into account.
PART III
Reporting class B
Chapter 6
Preparation of the annual report
General provisions

22

(1)

An enterprise covered by reporting class B shall prepare an annual report consisting, as a

minimum, of a statement by the executive and supervisory boards on the annual report, a
balance sheet, an income statement, notes, including disclosure of accounting policies, and a
statement of changes in equity, as well as a possible management's review, see section 77.
If an auditor has issued an auditors' report or another declaration on the annual report, see
sections 135 and 135a, the auditors' report or the declaration shall form part of the annual
report. In addition to the provisions of sections 11-17, sections 19(1) and (3), section 20(2)
and sections 23-77 shall apply, but see section 137 concerning the possibility of filing an
annual report in accordance with international accounting standards.

(2)

If a parent's information is the same as the group's information, the parent may omit to disclose the information in its own financial statements and management's review.

(3)

The first time an enterprise formally covered by reporting class A presents an annual report
in accordance with the rules in reporting class B, the following special terms are available to
the enterprise:
1)

On recognition of assets which, in accordance with the rules in reporting class A, were
not to be recognised or were to be recognised on a different measurement basis than in
reporting class B, the value of the asset as at the balance sheet date of the previous
year may be regarded as cost. The method of recognition and measurement basis for
the assets in the previous year shall be disclosed in the notes.

14

203

2)

For items in the financial statements affected by changes in methods of recognition and
measurement basis, comparative figures in accordance with section 24 for periods preceding the financial year may be stated in accordance with the methods used until then.
Classification and presentation
General provisions

23

(1)

The balance sheet and income statement must be presented schematically in accordance
with Schedule 2, formats 1 or 2 and 3 or 4.

(2)

The items must be stated separately and in the order stated in the formats. Items preceded
by Arabic numerals (1, 2, 3, etc.) may be divided up. New Arabic numerals may be added if
their content is not covered by an existing item.

(3)

Items preceded by Arabic numerals may be aggregated if this improves clarity.

(4)

Presentation and designation of items preceded by Arabic numerals must be adjusted where
required by the special nature of the enterprise.

(5)

The Danish Commerce and Companies Agency may amend Schedule 2, for example by prescribing special tables or formats, where required for enterprises, the structure and item requirements of which are not met by the statutory rules on adjustment of tables and formats
or due to changes in market conditions or international standards.

24

(1)

The corresponding amounts for the previous financial year shall be stated for each item in
the balance sheet and income statement. If the items are not directly comparable with the
items of the previous year, the latter must be restated. However, the enterprise may omit to
restate comparative figures if the non-comparability is due to changes in the activities of the
enterprise.

(2)

Items in the balance sheet and in the income statement not containing any amounts are only to be included if the financial statements for the previous year contain such an items.

(3)

Subsections (1) and (2) shall apply correspondingly to disclosures in the notes where comparative figures are prescribed by this Act.
Balance sheet

25

The balance sheet consists of recognised assets, recognised liabilities, including provisions,
and equity, which constitutes the difference between the said assets and liabilities. Liabilities
and equity shall mean the sum total of equity and recognised liabilities.

26

(1)

Receivables under current assets falling due for payment more than one year after the end
of the financial year shall be deemed to be long-term. They must be classified separately for
each item preceded by an Arabic numeral unless equivalent information is disclosed in the
notes.

15

204

(2)

Prepayments from customers may be offset, if this is clearly disclosed, in the asset item "Inventories" or in the item "Contract work in progress" respectively where such prepayments
concern the said items.

(3)

Liabilities falling due for payment within one year from the end of the financial year are
short-term. Other liabilities are long-term. The liabilities must be classified in accordance
with these criteria for each item preceded by an Arabic numeral unless equivalent information is disclosed in the notes.

27

(1)

Expenses incurred on or before the balance sheet date, but concerning subsequent years,
must be classified as prepayments. Income concerning the financial year, but not falling due
for payment until after the balance sheet date must be classified as receivables.

(2)

Payments received on or before the balance sheet date, but concerning income in subsequent financial years, must be classified as deferred income. Expenses concerning the financial year, but not to be paid until subsequent years, must be classified as liabilities other
than provisions.
Income statement

28
29

The income statement consists of recognised income and expenses.

(1)

The costs incurred in production in order to generate the revenue is recognised in the item
"Costs of sales" in the income statement classified by function.

(2)

The items "Costs of sales", "Distribution costs" and "Administrative expenses" in the income
statement classified by function include depreciation, amortisation and impairment of assets
as well as staff costs relating to the said functions.

30

Income and expenses originating from events that do not fall within the ordinary activities
and are therefore not expected to be recurring must be classified as extraordinary income
and expenses.

31

The management's recommendation for a resolution on the enterprise's distribution of profit

or cover of loss must be stated in conjunction with the income statement, but see section
56(3), second sentence, and as a separate item in equity under "Retained earnings", see
Schedule 2, format 1 or 2, but see section 48.

32

(1)

The enterprise may aggregate the following items and instead add an item designated
"Gross profit" or "Gross loss":
1)

Items nos. 1-5 in Schedule 2, format 3 and

2)

items nos. 1-3 and 6 in Schedule 2, format 4.

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205

(2)

Section 11(2) shall not apply to items which have been aggregated in accordance with subsection (1).

(3)

Comparative figures, see section 24, for the items in question may be omitted in the first
year in which the enterprise no longer combines the items under subsection (1).
Chapter 7
Recognition and measurement
General provisions

33

(1)

An asset must be recognised in the balance sheet if it is probable that future economic
benefits will flow to the enterprise and the value of the asset can be measured reliably. Irrespective of the definition of assets in Schedule 1, C, no. 1, the enterprise may omit to recognise assets not owned by the enterprise even if the enterprise incurs all the material risks
and has all the advantages of the ownership of the assets. The enterprise may also omit to
recognise development projects and internally generated intellectual property rights such as
patents, licences, trademarks and similar rights. The enterprise may not recognise any other
internally generated intangible assets.

(2)

A liability must be recognised in the balance sheet if it is probable that future economic benefits will flow out of the enterprise and the value of the liability can be measured reliably.

(3)

On recognition and measurement of assets and liabilities, all matters must be taken into
consideration, including foreseeable risks and losses, arising before the time at which the
annual report is prepared and proving or disproving matters arising on or be-fore the balance sheet date.

34

The enterprise may recognise equity investments in enterprises by proportionate consolidation, see section 124, if it manages such enterprises jointly with one or more other enterprises and it is fully liable for all or for only a proportionate share of the jointly controlled
enterprise's liabilities. The enterprise shall include the items in the jointly controlled enterprise's financial statements as a share proportionate to its ownership interest of the jointly
controlled enterprise's equity. The enterprise shall recognise and measure the items in accordance with its own accounting policies.

35
35a

(Repealed)
(1)

Public limited companies and private limited companies and partner companies that grant
loans, provision of security or other financial assistance under sections 206(2) and 214(1) of
the Danish Companies Act must reclassify an amount that is equal to the loan, the provision
of security or the financial assistance from the item Retained earnings or another item under
Capital and reserves that can be used for dividend to the item Reserve for loans and provision of security. This reserve cannot be eliminated by the undertaking's loss or be reduced

17

206

in any other way, but the reserve must be reduced or dissolved to the extent that the loan,
the provision of security or the financial assistance is reduced or ceases.
(2)

The provision of security that has been made in contravention of sections 206 and 210 of
the Danish Companies Act is comprised by subsection (1) if the provision of security is binding on the company, see section 215(3) of the Danish Companies Act.

35b

(1)

Public limited companies and private limited companies and partner companies in which the
subscribed contributed capital is not fully paid up must
1)

recognise non-paid up contributed capital as a receivable, see the definition of assets in

Schedule 1, C, no. 1, see subsection (2); or

2)

irrespective of the definition of assets in Schedule 1, C, no. 1, deduct an amount that is

the equivalent of non-paid up contributed capital clearly from the contributed capital,
see subsection (3).

(2)

In case of a gross presentation, see subsection 1, no. 1, the undertaking must reclassify an
amount that is the equivalent of non-paid up contributed capital from the item Retained
earnings or another item that can be used for dividend under Capital and Reserves to the
item Reserve for non-paid up contributed capital. This reserve cannot be eliminated by the
undertaking's loss or be reduced in any other way, but the reserve must be reduced or dissolved to the extent that contributed capital is paid to the undertaking.

(3)

In case of a net presentation, see subsection 1, no. 2, the undertaking must reclassify an
amount that is the equivalent of non-paid up contributed capital from the item Retained
earnings or another item that can be used for dividend under Capital and Reserves to the
item Reserve for non-paid up contributed capital. This reserve cannot be eliminated by the
undertaking's loss or be reduced in any other way, but the reserve must be reduced or dissolved to the extent that the contributed capital is paid to the undertaking.

36

Assets and liabilities must be measured at cost on initial recognition. Subsequent to initial
recognition, assets must be measured at cost and liabilities at net realisable value unless
otherwise provided by this Act.

37

(1)

Subsequent to initial recognition, the enterprise shall adjust financial assets on a continuing
basis, but see subsection (2), and shall also adjust financial liabilities held for trading or
constituting derivative financial instruments to fair value. This value shall be measured at
the selling price ascertainable for the assets or financial liabilities in question in an active
market. If the selling price cannot be immediately ascertained for the assets or liabilities,
they shall be measured on the basis of the market prices for the individual component parts
of the asset or liability. If there is no active market for such elements either, the fair value
must, in so far as possible, be measured at an approximate selling price by means of the
relevant value in use for the asset or liability if such value can be calculated by means of

18

207

generally accepted valuation models and techniques. If an approximate selling price cannot
be calculated, the asset or liability must be measured at cost.
(2)

Subsequent to initial recognition, the enterprise shall continuously adjust the following to
amortised cost:
1)

Loans and receivables arising from the enterprise's own activities to the extent that they
do not form part of a trading portfolio,

2)

other financial assets which are not derivative financial instruments and that are held to
maturity and

3)
(3)

financial liabilities except for those mentioned in subsection (1), first sentence.

The provisions of subsections (1) and (2) shall not apply to

1)

investments in subsidiaries,

2)

investments in jointly controlled enterprises and in associates,

3)

treasury shares, and

4)

other financial instruments which the Danish Commerce and Companies Agency has exempted from the provisions of subsection (1) or (2) by order.

38

(1)

Enterprises which, as their principal activity, carry out investment activities may after the
initial recognition on a current basis adjust the assets listed in subsection 2 within such investment activity and related financial liabilities to the fair value.

(2)

The provision in subsection 1 shall apply to investments in financial assets, investment

properties, raw materials and similar assets and to specific categories of investment activities and the related financial liabilities. The application may be undertaken with regard to all
investment assets or with regard to specific categories of investment assets as well as the
financial commitments connected thereto.

(3)

Enterprises whose principal activity is to biologically transform living animals or plants for
sale, conversion, consumption or breeding of further animals and plants, may subsequent to
initial recognition continuously adjust the said assets to the fair value.

(4)

The provisions of section 37(1), second to fourth sentences, shall apply to subsections (1)
and (3).

39

(1)

On translation of balance sheet items from a foreign currency into the monetary unit of the
annual report, the exchange rate at the balance sheet date shall be used for monetary assets and liabilities. The exchange rate at the transaction date shall be used for other items
in the balance sheet and for transactions. For assets and liabilities which have been reval-

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208

ued, written down or adjusted upwards or downwards respectively, however, the exchange
rate at the time of the revaluation shall be used.
(2)

If an activity for which financial statements are prepared in a foreign currency is not recognised in the enterprise's cash flows on a continuing basis, balance sheet items must be
translated at the exchange rate at the balance sheet date. The difference shall be recognised
directly in equity.
Fixed assets

40

The cost of fixed assets must comprise all expenses incurred in connection with the acquisition until the time at which the asset is ready for use or expenses directly attributable to the
asset produced. In addition, interest on capital borrowed to finance the production and concerning the production period may be included in the cost.

41

(1)

The enterprise may elect to revalue property, plant and equipment and investments in subsidiaries and associates to fair value. Intangible assets shall not be re-valued.

(2)

The provisions of section 37(1), second to fourth sentences, shall apply, however, to the effect that the replacement cost or net realisable value may be used if an approximate selling
price cannot be arrived at.

(3)

An amount equivalent to the revaluation shall be included directly in the item "Revaluation
reserve" under equity. This reserve shall not be eliminated with the enterprise's loss or be
otherwise reduced, see however the next sentence. The reserve must be dissolved or reduced to the extent that the assets re-valued

42

(1)

1)

are realised or no longer used in the activity,

2)

are written down for impairment because of a lower recoverable amount, see section 42,

3)

are connected with deferred tax for which provisions are to be made, see section 47, or

4)

are reversed because of changed accounting estimate, see section 52.

Fixed assets which are not continuously adjusted to fair value in accordance with sections 37
or 38 must be written down to a lower recoverable amount.

(2)

If it is not possible to fix a recoverable amount for the individual asset, all assets must be
measured together in the smallest group of assets for which a reliable recoverable amount
can be fixed by an overall valuation. A write-down of such a group of assets must be distributed systematically on the individual assets.

43

(1)

Cost, fair value or recoverable amount for intangible assets and property plant and equipment with a limited useful life must be reduced by amortisation or depreciation aiming at
ensuring systematic amortisation or depreciation of the assets over their useful lives. How-

20

209

ever, this shall not apply to assets being continuously adjusted to their fair values in pursuance of section 38.
(2)

Amortisation or depreciation shall be calculated with due consideration for the estimated residual value after the end of the useful life, measured in terms of the value at the time of
commencement of the useful life.

(3)

Notwithstanding subsection (1), intangible assets shall not be amortised over a period exceeding 20 years.

43a

(1)

The enterprise may recognise equity investments in subsidiaries and associates at the equity
value of the said enterprises. The enterprise shall then apply the equity value to all subsidiaries or to all associates or to both categories of enterprises under the provisions in subsections (2)-(5), but see subsection (6).

(2)

The enterprise shall recognise and measure the accounting equity value in accordance with
its own accounting policy.

(3)

The provisions of sections 119-121 on consolidated financial statements shall apply equally.
However, elimination in relation to associates shall only apply proportionately to the ownership share. Section 116(2) shall apply equally. If a subsidiary prepares consolidated financial
statements, such financial statements shall be used as the basis. If the subsidiary enters its
equity investments in subsidiaries and associates at the accounting equity value, such values may be used as the basis.

(4)

The enterprise shall revalue or write down the value of the equity investments by the results
of the subsidiaries and the associates as well as any changes in their accounting equity value not included in their results. The results of the subsidiaries and associates and any
changes in equity value that are not included in their results must be recognised in proportion to the shares equivalent to the equity investments.

(5)

An amount equivalent to the total net revaluation, see subsection (4), must be included in
the item "Net revaluation reserve according to the equity method" under equity. The reserve
may not be recognised at a negative amount. This reserve may be eliminated by the enterprise's loss, but may not be reduced in any other way. The reserve shall, however, be dissolved or reduced to the extent that the equity investments revalued

(6)

1)

are realised or

2)

are reversed because of a change in the accounting estimate, see section 52(1).

An enterprise may omit to apply the equity method for investments in a subsidiary covered
by section 114(2), paragraphs 1)-3), or in an associate if the necessary information is not
known. In that case, the equity investments are measured at cost, see section 36. Equity investments in enterprises covered by section 114(2), paragraph 3), may, however, be meas-

21

210

ured at fair value in accordance with section 37(1), second to fourth sentences. Furthermore, adjustment may be made for an associate in accordance with subsection (4) on the
basis of the latest financial statements for the associate even if its financial year deviates
from that of the enterprise.
Current assets
44

The cost of current assets must contain the expenses incurred in connection with the acquisition or directly attributable to the asset produced. Distribution costs shall not be included
in cost. In addition, interest on capital borrowed to finance the production of goods and concerning the production period may be included in the cost.

45

The cost of inventories may be calculated on the basis of weighted average prices, the "firstin-first-out" (FIFO) method or a similar method reflecting the value of the physical inventories at the balance sheet date.

46

(1)

Inventories may be revalued to replacement cost. Other current assets which are not continuously adjusted to fair value in accordance with sections 37 or 38 may be revalued to fair
value. The provisions of section 37(1), second to fourth sentences, and section 41(3) shall
apply.

(2)

Current assets which are not continuously adjusted to fair value in accordance with sections
37 or 38 must be written down to a lower net realisable value.
Provisions

47

(1)

Liabilities which are uncertain in terms of amount or timing shall be recognised in the balance sheet and the income statement as provisions. Deferred tax, guarantee commitments
and pension liabilities incumbent on the enterprise must be included.

(2)

Provisions may be measured at fair value. The provisions of section 37(1), second to fourth
sentences, shall apply.
Liabilities other than provisions

48

Notwithstanding the definition of liabilities, see Schedule 1, C, no. 5, the enterprise may
recognise the management's recommendation for dividends as a liability under the item
"Proposed dividend for the year".
Income statement

49

(1)

All income shall be recognised in the income statement as earned, but the enterprise may
omit to recognise income on the percentage of completion method as the work is carried
out. Income in accordance with section 37(1) and (2) and section 38(1) and (3) shall at all
times be regarded as earned. The following must also be recognised in the income statement:

22

211

1)

shares of profit or loss stemming from subsidiaries or associates respectively measured

at equity value, see section 43a, as separate items,

2)

all expenses, including depreciation, amortisation, impairment losses, downward adjustments and provisions for liabilities and

3)

reversals of amounts previously recognised in the income statement as a result of

changed accounting estimate, see section 52(1).

(2)

Amounts arising as a result of the following shall not be recognised in the income statement,
but shall be recognised directly in equity:
1)

Revaluation in accordance with sections 41 and 46, reversal of such revaluation and reclassification of amounts as provisions stemming from such revaluation,

2)

income and expenses in connection with acquisition and sale of treasury shares to the
extent that the shares are not recognised in the balance sheet,

3)

income and expenses originating from assets and liabilities used by the enterprise solely
to secure the value of such assets and liabilities as the enterprise expects to receive or
assume and the reversal of such amounts,

4)

differences occurring in connection with the translation of balance sheet items in activities not continuously recognised in the enterprise's cash flows, see section 39(2),

5)

changes of methods of recognition and measurement basis respectively as well as of the

monetary unit used, see section 13(2), and

6)
(3)

reversal due to fundamental errors, see section 52(2).

Contributions and distributions made as part of funding, reversal of contributed capital and
distribution of profit to the owners respectively shall not be recognised in the in-come
statement, but shall be recognised directly in equity.

50

Notwithstanding the provision against offsetting laid down in section 13(1), paragraph 8),
income and expenses originating from assets and liabilities, the value of which is effectively
hedged by other assets and liabilities, may be offset against income and expenses originating from the hedging transactions.
Change of accounting policies

51

(1)

If the enterprise changes its methods of recognition, measurement basis or the monetary
unit used, the items in the financial statements affected thereby must be changed in accordance with the new methods or basis by recognition directly in the equity at the beginning of
the financial year. Comparative figures must also be changed in accordance with the new
methods.

23

212

(2)

If the enterprise changes its methods of recognition in order to be able to revalue assets,
the resulting revaluation surpluses must be treated in accordance with section 41(3) and be
recognised directly in equity.

(3)

As for undertakings that have previously presented the annual report in accordance with another set of rules than this Act, the Danish Commerce and Companies Agency may stipulate
rules that deviate from subsections (1) and (2) to the extent necessary in order to ease the
transition to the application of this Act.
Change of accounting estimates and errors

52

(1)

If amounts recognised for a previous financial year are changed as a result of a changed accounting estimate, the effect of such change must be treated in the same way as the original
estimate. Amortisation and depreciation from previous financial years shall not be reversed.

(2)

If the financial statements for a previous financial year were so incorrect that the financial
statements would not have given a true and fair view (fundamental errors), the amount of
the correction must be recognised directly in equity at the beginning of the financial year,
and the comparative figures for previous years must be restated.
Chapter 8
Disclosure
Disclosure in the notes
Accounting policies

53

(1)

The methods of recognition and measurement basis (valuation) used for the items in the
balance sheet, income statement, notes and management's review must be disclosed. Furthermore, the reporting class in accordance with which the enterprise presents its annual
report must be disclosed. If the amounts are denominated in any other currency than Danish
kroner or euro, see section 16, second sentence, the exchange rate of the relevant currency
compared to Danish kroner as on the balance sheet date must be indicated and the corresponding exchange rate as on the previous year's balance sheet date.

(2)

The statement of the relevant items must, as a minimum, show:

1)

The methods of recognition and measurement basis for assets and liabilities, including
whether interest is included in cost, and the methods and bases used for revaluations,
write-downs, depreciation and amortisation as well as upward and downward adjustments. The information disclosed must include the following:
a)

For financial assets and liabilities measured at value in use or amortised cost, the
assumptions on which the chosen calculation method has been based must be disclosed.

24

213

b)

For investment assets and biological assets measured at fair value pursuant to section 38, the assumptions on which the chosen calculation method has been based
must be disclosed.

c)

Method of amortisation and depreciation, estimated residual value and useful life in
connection with amortisation or depreciation of assets. If the period of amortisation
for intangible assets exceeds 5 years, this must be disclosed, and specific and adequate grounds must be given.

d)

Methods of recognition and measurement of revenue irrespective of whether the enterprise omits to state the net turnover, see section 32.

2)

The methods of translation of foreign currencies into the monetary unit chosen.

3)

The methods in accordance with section 50 of hedging the value of assets and liabilities
and the methods of hedging such assets and liabilities as the enterprise expects to receive or assume respectively.

4)

If recommendation of dividend is recognised as a liability in accordance with section 48.

5)

The treatment by co-operative enterprises of additional payments from and repayments

to members.

54

If accounting estimates are changed, see section 52, the changed estimates must be explained and the monetary effect on assets, liabilities and equity, the financial position and
the results must be disclosed in so far as possible. The same shall apply if recognition and
measurement of assets and liabilities are changed as a result of errors, including fundamental errors.

55

(1)

If the composition of the enterprise's activities has changed during the financial year, information must be provided which will make a year-on-year comparison of the enterprise possible. However, the information may be omitted if the comparative figures for the balance
sheet and the income statement are restated for the changes occurring during the financial
year.

(2)

If amounts for the financial year and for the previous year cannot be compared or if the
amounts are restated, the non-comparability or the restatement respectively must be disclosed, and specific and adequate grounds must be given.
Changes in equity

56

(1)

The enterprise shall disclose any movements in the equity in a statement of changes in equity in summary form, see subsections (2) and (3) or in a complete statement of changes in
equity, see subsection (4). The contents of the movements in the statement of changes in
equity in accordance with subsections (2) and (3) or (4) shall appear from the designation or
the notes.

25

214

(2)

The statement of changes in equity in summary form shall disclose the following for the total
equity:

(3)

1)

the total equity at the beginning of the financial year,

2)

additions during the financial year

3)

disposals during the financial year

4)

the total equity as at the end of the financial year

The statement in accordance with subsection (2) shall specify the additions and disposals in
respect of the item "Revaluation reserve" as well as amounts recognised directly in equity
under section 49(2), paragraphs 3) and 4). The management's proposed resolution regarding appropriation of profits or payment of losses shall be specified in the statement if not
disclosed in connection with the income statement, see section 31.

(4)

The complete statement of changes in equity shall contain the information specified in subsection (2) for each item under equity. For the contributed capital, the disclosure mentioned
in subsection (2) must be disclosed for the 4 previous financial years if there have been
changes in the item during this period.
Assets

57

(Repealed).

58

If the enterprise revalues or writes down assets which are not continuously adjusted to fair
value, see sections 37 and 38, the following amounts must be disclosed:
1)

For fixed assets, the difference between the value of the individual revalued items and
the value of the item if the revaluation had not been made.

59

2)

The reversals for the year of revaluations and writedowns on current assets.

3)

The writedowns for the year of current assets exceeding normal writedowns.

If the enterprise recognises interest expense as part of the cost of assets, the interest
amount must be disclosed for each item.

60

If the enterprise has decided to recognise assets not owned by the enterprise, the recognised assets not owned by the enterprise and the value at which they have been recognised
must be disclosed.

61

(Repealed)

62

Co-operative enterprises shall state the overall additional payments from or repayments to
their members.

26

215

Liabilities and contingent liabilities

63

Any part of the enterprise's total debt falling due for payment more than 5 years after the
balance sheet date shall be disclosed.

64

(1)

The enterprise shall disclose its contingent liabilities. This includes stating the amounts for
pension liabilities, recourse and non-recourse guarantee commitments, discounted bills of
exchange and any other contingent liabilities not recognised in the balance sheet. Such disclosure shall be made for each category.

(2)

If the enterprise has entered into leases, the liabilities under such leases shall be disclosed
separately unless recognised in the balance sheet.

(3)

The liabilities referred to in subsections (1) and (2) vis--vis a parent and a parent's other
subsidiaries shall be disclosed separately, specified for each category.

(4)

Where assets have been charged or otherwise provided as security, this shall be disclosed by
the enterprise, stating the overall extent of such charges and the overall carrying amount of
the assets charged.

65

(Repealed)
Classification

66

Where items preceded by Arabic numerals which have been aggregated to improve clarity
such items must be stated separately in the notes. The equivalent amounts for the previous
financial year must be stated.

67

If assets, liabilities or equity fall within more than one item in the formats, see Schedule 2,
format 1 or 2, its connection with other items must be disclosed in the notes or in connection with the items.
Related parties, etc.

68

(Repealed)

69

(Repealed)

70

If a commercial foundation is connected to a commercial enterprise or another foundation by

way of a provision in the articles of association or in an agreement, any such connection
must be disclosed.

71

The enterprise shall disclose the name and domicile of the parents preparing consolidated financial statements for the largest and the smallest group respectively in which the enterprise is a subsidiary. It shall also disclose the place at which the consolidated financial
statements of the non-Danish parents in question may be obtained.

27

216

72

(1)

The enterprise shall disclose the name, registered office and legal form for each subsidiary
and associate as well as for each partnership or limited partnership in which the enterprise
is a partner or a general partner.

(2)

(3)

The enterprise shall also provide the following information for each subsidiary and associate:
1)

share owned by the enterprise, and

2)

equity and results in accordance with the latest approved annual report.

The information on equity and results in accordance with subsection (2), paragraph 2), may
be omitted if
1)

the subsidiary or associate is not required to publish an annual report, and the enterprise owns less than 50 per cent of equity,

2)

the financial statements of the subsidiary or associate are included in the enterprise's
consolidated financial statements by consolidation, or

3)

the enterprise recognises the equity investments in the subsidiary or associate at its
value under the equity method.

(4)

The disclosure in subsection (1) may be omitted if it is likely to cause considerable damage
to the enterprise itself or to the enterprises mentioned in subsection (1). Any such omission
for this reason must be disclosed.

73

(1)

If a public limited company, a private limited company, a partner company (limited partnership company) or a commercial foundation has an outstanding account against members of
the management, the enterprise shall state the sum of any such outstanding accounts specified for each management category. The main terms must be stated for each category, including the interest rate and the amounts repaid during the year. If a loan has been raised
and repaid during the year, this must be disclosed separately.

(2)

Subsection (1) shall apply correspondingly to any security provided in favour of the above
group of persons.

(3)

Subsections (1) and (2) shall apply correspondingly to members of the management of parents.

(4)

Subsections (1)-(3) shall apply correspondingly to persons who are particularly closely connected to the management members in question.

74

Public limited companies which are required to keep a special register of shareholdings in
the company in accordance with sections 28 a and 28 b of the Danish Companies Act shall
disclose the identity of each of the parties entered in the special register at the time of the

28

217

presentation of the annual report stating the full name and address or, for enterprises, the
registered office.
Contributed capital, etc.
75

(1)

If the contributed capital in a public limited company or a private limited company consists
of several classes of shares, these must be specified. The number of shares and their nominal value must be stated for each class. For public limited companies, the number of shares
and the nominal value must be disclosed in any case.

(2)

The actual expenses incurred in connection with the formation of a public limited company
and in connection with an increase in the share capital must be disclosed in the next annual
report.

76

(1)

If an enterprise holds treasury shares, it shall disclose

1)

the number and nominal value, stating the percentage of the contributed capital of
treasury shares held by the enterprise,

2)

the number and nominal value, stating the percentage of the contributed capital of
treasury shares acquired or sold in the financial year as well as the overall purchase
price and selling price respectively, and

3)
(2)

the reason for the acquisitions of treasury shares in the financial year.

Equivalent information must be disclosed for treasury shares acquired by the enterprise as
security.
The most important activities of the enterprise

76a

A description of the most important activities of the enterprise shall be given. If the enterprise prepares a management's review, see section 77, the description can form part of the
management's review.
Management's review

77

If the activities and the financial affairs of the enterprise have been materially changed, the
financial statements shall be supplemented with a management's review that gives an account of such changes.

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PART IV
Reporting class C
Chapter 9
Preparation of the annual report
General provisions
78

(1)

An enterprise covered by reporting class C shall prepare an annual report, consisting, as a

minimum, of a statement by the executive and supervisory boards on the annual report, a
balance sheet, an income statement, a cash flow statement, notes, including disclosure of
accounting policies, and a statement of changes in equity as well as a management's review.
When the financial statements and any consolidated financial statements have been audited,
the auditor's report etc., shall form part of the annual report, see section 135(1) and (5). In
addition to the rules in sections 11-17, section 19(1) and (3) and section 20(2) shall apply.
Furthermore, the rules in sections 23-76 and 79-101 shall apply. In case of any conflict between the rules in sections 23-76 and the rules in sections 79-101, the rules in sections 79101 shall take precedence. If the enterprise wishes to submit an annual report in accordance
with international accounting standards, section 137 shall apply.

(2)

If the information to be disclosed by a parent is the same as the information to be disclosed

by the group, the parent may omit to disclose the information in its own financial statements
and management's review.

(3)

When an enterprise formerly covered by reporting class A or B first presents an annual report in accordance with the rules in reporting class C, the following special terms are available to the enterprise:
1)

In connection with the recognition of expenses only indirectly attributable to a fixed or

current asset produced, see section 82, the enterprise need only add such indirect expenses to assets produced from or after the financial year.

2)

Intangible assets in the form of development projects, see section 83, may be recognised in such a manner that only matters arising from or after the financial year are included.

3)

Assets not owned by the enterprise, see section 83 a, may be recognised in such a
manner that only matters arising as of the financial year are included.

4)

Recognition on the percentage of completion method, see section 83 b, may take place
in such a manner that only matters arising as of the financial year are included.

5)

For items in the financial statements affected by changes in methods of recognition and
measurement basis, comparative figures in accordance with sections 24 and 101(1),

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paragraph 2), for periods preceding the financial year may be stated in accordance with
the methods used so far.
Classification and presentation
79

The income statement must be presented in accordance with Schedule 2, format 5 or 6.

80

The enterprise shall disclose any activities (discontinuing operations) to be sold, closed down
or abandoned in accordance with an overall plan, provided such activities can be separated
from the other activities. The disclosure must, in so far as possible, include amounts by
which the discontinuing operations are included in the items "Revenue", "Net profit or loss
for the year", "Fixed assets" and "Current assets", see however section 81, regarding revenue.

81

Section 32 on exemptions from disclosure of revenue, etc. shall not apply to large enterprises. Such enterprises shall therefore show the revenue in the income statement as well as
items nos. 2-5 listed in Schedule 2, format 5, or items nos. 2, 3 and 6 listed in Schedule 2,
format 6.
Chapter 10
Recognition and measurement
Balance sheet

82

In the cost of the fixed and current assets produced by the enterprise, see sections 40 and
44, the enterprise shall recognise the expenses indirectly attributable to the product in
question if such expenses relate to the production period.

83

Large enterprises shall recognise development projects intended to develop a specific product or a specific process to be produced by or used in the production of the enterprise. This
shall include patents, licences and other intangible assets resulting from a development project.

83a

The enterprise shall recognise assets not owned by the enterprise when the enterprise incurs
all the material risks and has all the advantages of the ownership of the assets.
Income statement

83b

Enterprises that, under an agreement, perform contract work or provide services for the account of a third party shall recognise revenue and costs concurrently with the performance
of the work on the percentage of completion method.

84

(Repealed).

85

(Repealed).

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Cash flow statement

86

(1)

Receipts and payments must be recognised in the cash flow statement at the time of payment regardless of when they are recognised in the income statement or balance sheet.

(2)

The cash flow statement must, as a minimum, show the cash flows for the period distributed
on operating, investing and financing activities. Furthermore, the cash flow statement must
show separately any changes in cash and cash equivalents for the financial year and the
cash and cash equivalents as at the beginning and end of the period.

(3)

The equivalent amounts for the items in the previous financial year must be stated. If the
items are not directly comparable with the items of the previous year, the latter must be restated. However, the enterprise may omit to restate comparative figures if any noncomparability is due to changes in the enterprise's activities. Any items in the cash flow
statement not containing any amount for the financial year shall only be included if the previous annual report contains any such items.

(4)

An enterprise may omit to prepare a cash flow statement itself if such statement is contained in a cash flow statement for the group.
Chapter 11
Disclosure
Disclosure in the notes
Accounting policies

87

In addition to the information required in section 53, the disclosure of accounting policies
must provide the following information:
1)

Methods of recognition and measurement basis for indirect costs of production recognised under assets.

2)

Methods of recognition and measurement basis for investments in subsidiaries and associates.

3)

Methods of recognition and measurement basis for the cash flow statement, including
disclosure of what the enterprise defines as cash or cash equivalents. It must be disclosed separately if the enterprise has omitted to prepare a cash flow statement in pursuance of section 86(4).

4)

Methods of stating key figures and financial ratios included in the management' review.
Changes in equity

87a

The enterprise shall prepare a complete statement of changes in equity in accordance with
section 56(4), see subsection (1), second sentence.

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Assets
88

(1)

Cost, revaluations as well as writedowns for impairment, amortisation and depreciation must
be disclosed for each item under fixed assets as follows:
1)

Cost:
a)

Cost at the end of the previous financial year without revaluations, impairment losses, amortisation and depreciation,

2)

3)

b)

additions during the year, including improvements,

c)

disposals during the year,

d)

transfers to other items during the year, and

e)

total cost at the balance sheet date.

Revaluations:
a)

Revaluations as at the end of the previous financial year,

b)

revaluations for the year,

c)

reversals for the year of revaluations made in previous years, and

d)

the total revaluations at the balance sheet date.

Writedowns for impairment, amortisation and depreciation:

a)

Impairment losses, amortisation and depreciation as at the end of the previous financial year,

b)

impairment losses for the year,

c)

amortisation and depreciation for the year,

d)

impairment losses, amortisation and depreciation for the year on sold and scrapped
assets,

e)

reversals for the year of impairment losses for previous years and reversal of the
overall amortisation, depreciation and impairment losses on assets sold or removed
from operations during the year, and

f)

the overall amortisation, depreciation and impairment losses at the balance sheet
date.

(2)

Subsection (1) shall apply, mutatis mutandis, to each item under property, plant and equipment which is being adjusted on a continuing basis, see section 38.

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89

(1)

The enterprise shall explain prepayments in the balance sheet, see section 27(1).

(2)

If the replacement cost of inventories deviates from the cost stated in accordance with sections 44, 45 and 82, the enterprise shall disclose the difference for each item.

90

(Repealed)

90a

The enterprise shall disclose which recognised assets that are not owned by the enterprise
and at which value they have been recognised, see section 83a.

90b

Large enterprises shall disclose the nature and value of the contingent assets of the enterprise.
Liabilities

91

The enterprise shall explain

92

1)

deferred income in the balance sheet, see section 27(2); and

2)

provisions, see section 47.

For each item under liabilities other than provisions, information must be disclosed about
the part of the liability falling due for payment more than 5 years after the balance sheet
date.

93

(1)

If the enterprise has raised loans against the issue of convertible instruments of debt, the
outstanding amount, the securitisation price and the deadline fixed for securitisation into
equity investments must be stated for each loan. If loans have been raised against bonds or
other interest-bearing instruments of debt, the rate of which interest depends fully or partly
on the dividend declared by enterprise or the profit for the year, the outstanding amount
and the agreed interest rate must be stated for each loan.

(2)

If a creditor has stated that he is willing to subordinate his claim to rank after all the enterprise's other creditors regarding satisfaction of their outstanding accounts against the enterprise, the outstanding amount, the due date and any special terms for the subordination
must be stated in respect of each liability covered by the subordination.
Contingent liabilities, etc.

94

If the enterprise has charged or otherwise provided security against assets, the enterprise
shall state the extent of such security and the carrying amount of charged assets, specifically for the individual items.

94a

The enterprise shall disclose arrangements which are not recognised in the balance sheet,
including use of enterprises or activities for a specific financial, legal, tax or accounting purpose if information in this regard is necessary for the assessment of the enterprise's financial position.

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(2)

The information provided for under subsection (1) shall include the nature of and the business purpose of the arrangements. Large enterprises shall also disclose the risks and advantages which are related to the arrangements and the financial effect thereof.
Income statement

95

96

The enterprise shall explain

(1)

1)

extraordinary income and expenses, see section 30, and

2)

income and expenses originating from a change in accounting estimate, see section 52.

Large enterprises shall state the distribution of net turnover on business segments and geographical segments, if the business segments respectively the geographical segments are
divergent. In connection with the distribution, the manner in which sales of the goods and
services forming part of the enterprise's ordinary activities are organised should be considered. The statements can be omitted if they may inflict considerable damage on the enterprise. The omission shall be motivated. Section 11(2) shall not apply to information omitted
in accordance with sentence 3.

(2)

A large enterprise shall state the overall fees for the financial year for the firm of auditors
performing the statutory audit and for the subsidiaries of the firm of auditors. Such statement shall specify the fee for the statutory audit of the financial statements, fee for other
reports and statements validated by the auditor, fee for tax consultancy and fee for other
services. For the amounts dealt with in the first sentence, the equivalent amounts for the
previous financial year must be stated.

(3)

An enterprise may omit disclosure pursuant to subsection (2) if the enterprise's financial
statements by full consolidation form part of consolidated financial statements in which the
information is disclosed for the group as a whole and the consolidated statements have been
prepared by a parent which is subject to the legislation of an EU/EEA Member State.
Related parties, etc.

97

The enterprise shall separately state the overall security provided, see section 94, for any
subsidiaries and the overall security provided for any other group enterprises.

98

The enterprise shall disclose information in accordance with section 76 pertaining to any equity investments in the enterprise owned or held as security by the subsidiaries or acquired
or sold by the subsidiaries in the financial year.

98a

(1)

The enterprise shall state the average number of employees in the financial year.

(2)

The enterprise's staff costs must be specified in salaries, pensions and other costs for social
security, unless it appears from the income statement.

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(3)

The corresponding information and amounts, see subsections (1) and (2), for the previous
financial year shall be indicated.

98b

(1)

The enterprise shall indicate the total remuneration etc. during the financial year to present
and former members of the management for their managerial function distributed on each
managerial body and, where a managerial body has not been appointed, for the owners. Furthermore the enterprise shall submit information about the total pension commitments to
the mentioned parties. If special incentive programmes for members of the management
have been stipulated, information shall be provided as to which category of members of the
management it applies to, which services are comprised by the programme and what is necessary to be able to evaluate the value of it.

(2)

Similar information and amounts for the previous financial year shall be indicated.

(3)

If the information according to subsection (1) will result in amounts being indicated in respect of an individual member of a management category, such amounts may instead
1)

be indicated as a total for two categories or

2)

be left out if only one category receives remuneration etc., pension or a special incentive programme.

98c

(1)

The enterprise shall disclose transactions with related parties, see subsection (2), if the
transactions have not been concluded on an arm's length basis. The information shall include
the amount of such transactions, the nature of the relationship with the related party and
other information regarding the transactions that are necessary in order to understand the
financial position of the enterprise.

(2)

Related parties shall be defined in accordance with the definition in the international accounting standard IAS 24 as passed by the Commission pursuant to the regulation of the European Parliament and of the Council on application of international accounting standards
and subsequent changes in the definition to be passed by the Commission in accordance
with the regulation above.

(3)

The information in subsection (1) may be omitted if the transactions have been entered into
by the enterprise and one or more of the enterprise's wholly-owned subsidiaries.

(4)

Information on specific transactions provided for under subsection (1) may be grouped according to their nature unless specific information is necessary in order to understand the
effects of transactions with related parties on the enterprise's financial position.

(5)

In addition to the information mentioned in subsection (1), first sentence, the enterprise
shall disclose the related parties with decisive influence on the enterprise. The information
shall include name, address, in respect of enterprises, their registered office and the basis of
the decisive influence.

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The management's review

99

(1)

The management's review shall

1)

describe the principal activities of the enterprise,

2)

describe any uncertainty connected with recognition or measurement, stating amounts

where possible,

3)

describe any unusual matters affecting the recognition or measurement, stating

amounts where possible,

4)

account for the development in the activities and financial affairs of the enterprise

5)

mention any significant events occurring after the end of the financial year.

6)

describe the enterprise's expected development, including special assumptions and uncertain factors on which the management has based its description,

7)

describe the enterprise's knowledge and know-how resources if they are of special importance to its future performance,

8)

describe the special risks apart from any generally occurring risks in the enterprise's
trade or industry, including any business risks and financial risks likely to affect the enterprise,

9)

describe the enterprise's impact on the external environment and measures to prevent,
reduce or remedy any damage to the environment,

10) describe research and development activities in or for the enterprise and mention
branches abroad.
(2)

To the extent it is necessary in order to understand the development, result and financial
position of the enterprise, large enterprises must furthermore supplement the review in accordance with subsection (1), paragraph 4), with information about non-financial circumstances relevant to the specific activities, including information on environmental and staff
matters.

99a

(1)

Large undertakings shall supplement the management's review with a corporate social responsibility (CSR) statement, see subsections (2)-(8). A CSR statement means that undertakings voluntarily integrate human rights, social issues, environmental and climate issues
and anti-corruption considerations into their business strategy and business activities. If the
undertaking does not have any CSR policies, such information must be given in the management's review.

(2)

The statement must contain information about:

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1)

The enterprise's policies for corporate social responsibility, including any standards,
guidelines or principles for corporate social responsibility which the enterprise applies.

2)

How the enterprise puts its policies for corporate social responsibility into practice, including any systems or procedures to this effect.

3)

The enterprise's assessment of what has been achieved as a result of the enterprise's
work with corporate social responsibility in the financial year and if the enterprise has
any expectations for the future work.

(3)

If the enterprise has policies for respecting human rights and for reducing the impact on the
climate of the enterprise's activities, the statement under subsection (1) shall contain express information about such policies. If the enterprise has such policies, subsection (2) also
applies. If the enterprise does not have such policies, such information must be given in the
management's review.

(4)

The report shall be made in addition to the management's review. However, the enterprise
may choose to publish the report.
1)

in a supplementary report to the annual report, see section 14, to which reference is
made in the management's review, see section 5, first sentence, or

2)

on the enterprise's website to which reference is made in the management's review, see
section 5, second sentence.

(5)

The Danish Commerce and Companies Agency lays down rules for publication of the report
of corporate social responsibility in a supplementary report to the annual report and the auditor's duties in relation to the information disclosed in such a report see section 4, paragraph 1). The Danish Commerce and Companies lays down rules for publication of the report
on corporate social responsibility on the enterprise's website, including rules regarding the
enterprise's update of the information on the website and the auditor's duties in connection
with the information which is published on the website, see section 4, paragraph 2)

(6)

For enterprises that prepare consolidated financial statements it will be sufficient that the information provided for under sections (1)-(3) is published for the group as a whole.

(7)

A subsidiary that is part of a group may omit to include information in its own management's review if
1)

the parent meets the disclosure requirements pursuant to subsections (1)-(3) for the
entire group; or

2)

the parent has prepared a progress report in connection with accession to the UN's
Global Compact or the UN's Principles for Responsible Investment.

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(8)

An enterprise that has prepared a progress report in connection with accession to the UN's
Global Impact or the UN's Principles for Responsible Investment may omit to disclose the information that is stated in subsections (1) and (2). This also applies to the information to be
submitted under subsection (3) if the progress report covers human rights and climate. In
the management's review the enterprise shall state that the enterprise applies this exemption and state where the report is publicly available.

99b

(1)

Large enterprises which have specified target figures for the share of the underrepresented
gender in the supreme government body shall report on the status for achieving the specified target figure, including on why the enterprise has not, if this is the case, achieved the
specified target figure, but see subsection (3). Section 99a(4)-(8) also applies to the report.

(2)

Large enterprises which are obliged to prepare a policy for the purpose of increasing the
share of the underrepresented gender in the enterprise's other management levels shall report on the policy, but see subsection (4). Section 99a(2)-(8) also applies.

(3)

If one of the genders is not underrepresented in the supreme governing body, it is sufficient
to provide such information in the management's review. Section 99a(4) also applies to the
report.

(4)

If one of the genders is not underrepresented on the enterprise's other management levels,
it is sufficient to provide such information in the management's review. Section 99a(4) also
applies to the report.

100

The management's review shall describe the profit or loss for the year compared with the
expected development according to the latest published annual report, giving reasons for
any deviations therefrom.

101

(1)

The management's review must contain a statement showing

1)

the revenue for the year, the profit or loss from ordinary operating activities, the results
from net financials, the results from extraordinary items, net profit or loss for the year,
the balance sheet total, investments in property, plant and equipment, equity and any
such key figures and financial ratios as are necessary in view of the enterprise's affairs
and circumstances, and

2)
(2)

the figures referred to in paragraph 1) for the four previous financial years.

The provisions in section 24(1), second and third sentences, and section 55(1) and (2) shall
apply correspondingly to the statement provided for by subsection (1), see however subsection (3). For medium-sized enterprises, section 32 shall apply to the revenue in subsection
(1), paragraph 1).

(3)

Irrespective of subsection (2) a medium-sized enterprise may, however, omit adjusting

comparative figures in respect of the second to the fourth previous financial years in the re-

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view in accordance with subsection (1), if the enterprise has changed its accounting practices. In that case, information to that effect must be provided in connection with the review
with an overall statement as to what effect the changed accounting practices will have on
the comparative figures.
(4)

An enterprise that is a parent in a group may omit to present the review specified in subsection (1) in the financial statements if the enterprise presents consolidated financial statements in which a review as specified in subsection (1) is given for the group.
PART V
Reporting class D
Chapter 12
Preparation of the annual report
General provisions

102

(1)

An enterprise covered by reporting class D shall prepare an annual report consisting, as a

minimum, of a statement by the executive and supervisory boards on the annual report, a
balance sheet, an income statement, notes, including disclosure of accounting policies, and a
statement of changes in equity as well as a management's review. When financial statements and any consolidated financial statements have been audited, the auditor's report,
etc. shall form part of the annual report, see section 135(1) and (5). The rules in sections
11-17, section 19(1) and (3), section 20(2) and sections 23-76, sections 79-95, section
96(1) and (2), sections 97-101 and 103-108 shall apply, but see section 137. In case of any
conflict between the rules in sections 23-76 and the rules in sections 79-95, 96(1) and (2)
and sections 97-101, the rules in sections 79-95, section 96(1) and (2) and sections 97-101
shall take precedence. In case of any conflict between the rules in sections 23-76 or sections
79-95, section 96(1) and (2) and sections 97-101 and the rules in sections 103-108, the
rules in sections 103-108 shall however take precedence. Where the rules in sections 79-95,
section 96(1) and (2) and sections 97-101 contain differences in the requirements in respect
of medium-sized and large enterprises, an enterprise comprised by reporting class D shall
observe the rules for large enterprises irrespective of the size of the enterprise.

(2)

State-owned public limited companies that have securities admitted for trading on a regulated market in an EU/EEA Member State must follow the rules for undertakings that have securities admitted for trading on a regulated market in an EU/EEA Member State where such
rules deviate from the provisions for state-owned public limited companies of this Act.

(3)

If a parent's disclosures are the same as the group's disclosures, the parent may omit to
disclose the information in its own financial statements and management's review.

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Classification and presentation

103

Notwithstanding the size of the enterprise, the income statement must show revenue as well
as items nos. 2-5 listed in Schedule 2, format 5, or items nos. 2, 3 and 6 listed in Schedule
2, format 6.
Disclosures

104

The enterprise shall disclose the full name and address, for enterprises the registered office,
and the exact ownership interest and voting share for any party holding shares in the enterprise if the voting rights attached to the shares amount to a minimum of 5 per cent of the
voting rights of the share capital, or their nominal value amounts to a minimum of 5 per
cent of the share capital, but not less than DKK 100,000.

105

Where not all the subsidiaries' annual reports are audited by at least one of the parent's auditors, one of their non-Danish partners or by a reputable international firm of auditors, this
shall be disclosed by the parent.

106

Notwithstanding section 98 b (3), the enterprise shall disclose the information referred to in
section 98 b (1) and (2) about remuneration, etc. to members of the management.

106a (1)

In addition to the information in section 96(1) the enterprise shall state the break-down of
business segments and geographical segments, if the business segments respectively the
geographical segments are reciprocal divergent, of:
1)

the income or loss from ordinary activities before financial income and costs,

2)

the sum of the assets used in connection with the company's primary revenue-creating
activities and

3)

the sum of the liabilities that have arisen due to the company's primary revenuecreating activities.

(2)

The distribution in subsection (1) is to be shown for the one among the two dimensions of
segments, business or geography that is the primary in the company's internal organisation
and management structure and its internal financial reporting system to the supreme management of the undertaking.

(3)

An enterprise which is a parent company in a group may omit stating the information mentioned in subsections (1) and (2) in the annual accounts if the enterprise is filing consolidated financial statements in which segment information is provided according to subsections
(1) and (2).
Management's review

107

(1)

Any managerial posts held by the members of the management in other undertakings shall
be disclosed, except for the public limited company's own wholly-owned subsidiaries. If the

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relevant person is a member of the management in both another parent and in one or several of its 100% owned subsidiaries, it is, irrespective of sentence 1, sufficient to state the
name of this parent and the number of its subsidiaries in which the person in question is a
member of the management.
(2)

If information about the expected development has been published during the year, the information provided for in section 100 shall be given in relation to the most recently published description.

107a

A company with one or several share classes with attached voting rights admitted to trading
on a regulated market in an EU/EEA Member State shall supplement the management's review with information creating transparency in respect of the circumstances of the company
for the purpose of furthering free trade of the company's shares.
The information shall include the following:
1)

Circumstances concerning capital structure and ownership structure of the company, including
a)

the number of shares with attached voting rights and nominal values of such shares,

b)

the ratio of shares with attached voting rights not admitted to trading on a regulated
market in an EU/EEA Member State,

c)

specification of the various share classes, as stated in section 75(1), if the company
has several share classes, and

d)

information about ownership structure and share of votes etc. as stated in section
104.

2)

3)

Information known to the company in respect of:

a)

rights and obligations attached to each class of shares,

b)

restrictions in the negotiability of the shares and

c)

restrictions on voting rights.

Rules on appointment and replacement of members of the company's supreme governing body and amendment of the company's articles of association.

4)

The powers of the management, in particular in respect of the option to issue shares,
see section 155 of the Companies Act, or of acquiring own shares, see section 198 of
the Companies Act.

5)

Material agreements entered into by the company come into effect, are amended or expire if the controlling interest over the company is changed due to implementation of a

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takeover bid and the effects thereof. Information according to the first sentence may,
however, be omitted if publication of such information may seriously damage the company, unless the company is expressly obliged to disclose such information according to
other legislation. Omission of information according to the second sentence must be
mentioned.
6)

Agreements between the company and its management or employees according to which
they receive compensation if they retire or are discharged without a valid reason or if
their positions are abolished as a consequence of a takeover bid.

(2)

Companies comprised by subsection (1) may omit to submit information according to section
75(1) and section 104 in the notes.

107b

A company with securities admitted to trading on a regulated market in an EU/EEA Member

State shall include a report on corporate governance which shall contain the following:
1)

Information on whether or not the company is covered by a code of corporate governance and if so with reference to the code by which the company is covered.

2)

Statement on whether or not the code in paragraph 1) above is publicly available.

3)

Statement on which parts of the code in paragraph 1) above the company deviates from
and the reasons for this deviation if the company has decided to deviate from parts of
the code.

4)

Statement of the reasons for why the company does not apply the code in paragraph 1)
above if the company has decided not to apply the code.

5)

Reference to any other codes of corporate governance which the company has decided
to apply in addition to or instead of the code in paragraph 1) above or which the company applies voluntarily stating the same information as stated in paragraphs 2) and 3).

6)

Description of the main elements of the company's internal supervisory control and risk
management systems in connection with the process of financial reporting.

7)

Description of the composition of the company's management bodies and their committees and the function of these committees.

(2)

A company which is subject to subsection (1) and which only has other securities than
shares admitted to trading on a regulated market in an EU/EEA Member State may omit to
disclose the information stated in subsection (1), paragraphs 1)-5) and 7) unless the company concerned has shares admitted to trading in a multilateral trading facility in an EU/EEA
Member State. The first sentence shall not apply to state-owned public limited companies.

(3)

The statement provided for under subsection (1) shall be given together with the information stated in section 107a in the management's review, but see subsection (4).

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(4)

The Danish Commerce and Companies Agency may decide that the statement provided for
under subsection (1) shall be excluded from the management's review if the management's
review contains a reference to the enterprise's website, on which the report has been made
public. The Danish Commerce and Companies Agency lays down detailed rules in this regard,
including on the enterprise's update of the information on the website and the auditor's duties in connection with the information which is published on the website.

107c

State-owned public limited companies shall include a report regarding corporate governance
which shall contain the following:
1)

Information on whether or not the company applies a code of corporate governance or if

not how the company in general views good corporate governance.

2)

Statement on where the code in paragraph 1) above is publicly available.

3)

Statement on which parts of the code in paragraph 1) above the company deviates from
and the reasons for this deviation if the company has decided to deviate from parts of
the code.

4)

Statement of any other codes of corporate governance which the company has decided
to apply in addition to the code in paragraph 1) above stating the same information as
stated in paragraphs 2) and 3).

(2)

Section 107b(1), paragraphs 6) and 7), shall also apply to state-owned public limited companies. Furthermore, section 107b(4) shall apply to such companies.
Special rules for state-owned public limited companies

108

The Minister for Economic and Business Affairs is authorised to lay down provisions granting
exemptions from the special rules applicable to state-owned public limited companies where
necessary to ensure parity between such rules and the equivalent rules laid down for companies with securities admitted to trading on a regulated market in an EU/EEA Member
State.
PART VI
Consolidated financial statements and accounting for mergers, etc.
Chapter 13
Obligation to present consolidated financial statements

109

(1)

Parents covered by section 3(1) shall present consolidated financial statements in accordance with the rules set out in chapter 14, see however section 137, unless otherwise provided by sections 110-112.

(2)

The exception in section 110 shall not apply to parents covered by reporting class D or if a
subsidiary of the parent in question is covered by reporting class D. The exception in section

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112 does not apply to parent companies with securities admitted to trading on a regulated
market in an EU/EEA Member State.
110

(1)

A parent may omit to present consolidated financial statements, but see section 109(2), if
the consolidated enterprises between them do not exceed two of the following limits at the
balance sheet date:

(2)

1)

A balance sheet total of DKK 36 million,

2)

revenue of DKK 72 million, and

3)

an average of 50 full-time employees during the financial year.

The calculation rules in section 7(3) shall apply correspondingly to the overall group, provided that the balance sheet total and revenue are calculated as the sum of all of the consolidated enterprises' balance sheet totals and revenue respectively. The same shall apply to
the average number of full-time employees during the financial year.

(3)

The right to apply the provision of subsection (1) shall only be changed if, at the balance
sheet day, the enterprises between them have exceeded or no longer exceed two of the
three limits in two consecutive financial years.

111

(1)

A parent whose subsidiaries are all left out of the consolidation in pursuance of section 114
may omit to prepare consolidated financial statements.

(2)

In addition, a parent which is a commercial foundation may omit to prepare consolidated financial statements if
1)

the fund has only one subsidiary

2)

the fund itself carries on only limited business activities, and

3)

the fund does not have any receivables from the subsidiary and has not provided any
security for the subsidiary other than convertible instruments of debt and unpaid dividend or distribution.

(3)

Moreover, a parent company that is a commercial foundation may omit to prepare a consolidated financial statement if
1)

the foundation has several subsidiaries and one of such subsidiaries prepares a consolidated financial statement in which the commercial parent foundation is omitted,

2)

the consolidated financial statement has been prepared in accordance with the Financial
Statements Act, Council Directive 1983/34/349/EEC as amended or in accordance with
rules at least equal to the rules for consolidated financial statements laid down in the
said Directive and such consolidated financial statements have been audited by persons

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who are authorised in accordance with the national legislation applicable to the subsidiary that has prepared the consolidated financial statement,
3)

the foundation itself only carries on limited business activities,

4)

the foundation does not have any outstanding accounts against any of its subsidiaries or
has provided security for any of its subsidiaries except for convertible instruments of
debt and unpaid dividends,

5)

it is stated in the annual report of the foundation that according to such exception the
foundation has omitted to prepare a consolidated financial statement, and

6)

the foundation submits the audited consolidated financial statement specified in paragraph 1 together with its own annual report to the Danish Commerce and Companies
Agency.

112

(1)

A parent may omit to present consolidated financial statements, see however section
109(2), if it is itself a subsidiary of a higher-ranking parent coming under the legislation in
another EU/EEA Member State, and if
1)

the higher-ranking parent

a)

holds at least 90 per cent of the equity investments in the lower-ranking parent and
the minority owners have approved vis--vis the senior management of this parent
that it does not present consolidated financial statements, or

b)

holds less than 90 per cent of the equity investments in the lower-ranking parent
and if, at least six months before the end of the financial year, the senior management of this enterprise has not received any demand from minority owners holding
at least 10 per cent of the contributed capital for the presentation of consolidated financial statements, and

2)

the higher-ranking parent prepares consolidated financial statements in accordance with

the legislation in the Member State to which the higher-ranking parent belongs, and the
consolidated financial statements have been audited by persons who are authorised auditors in accordance with the legislation of such Member State.

(2)

A parent may also omit to present consolidated financial statements, see however section
109(2), if it is itself a subsidiary of a higher-ranking parent coming within the legislation in a
country not covered by the legislation referred to in subsection (1), and if
1)

at least six months at least before the end of the financial year, the lower-ranking
parent's senior management has not received any demand from minority owners for the
presentation of consolidated financial statements, and

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2)

the higher-ranking parent shall prepare consolidated financial statements in accordance

with Council Directive 1983/349/EEC as amended or in accordance with rules at least
equal to the rules for consolidated financial statements laid down in the said Directive
and such consolidated financial statements are audited by persons who are authorised in
accordance with the national legislation applicable to the higher-ranking parent.

(3)

For the exemptions referred to in subsections (1) and (2), it is further required that
1)

the lower-ranking parent's own financial statements and its subsidiaries' financial
statements are included in the consolidated financial statements of the higher-ranking
parent by full consolidation or by recognition and measurement under the equity method, but see section 114,

2)

the lower-ranking parent discloses in its financial statements that, in pursuance of subsection (1) or subsection (2) respectively, it has not prepared its own consolidated financial statements and discloses the name, registered office and, if applicable, CVR
number or other registration number of the higher-ranking parent, and

3)

the lower-ranking parent submits to the Danish Commerce and Companies Agency the
consolidated financial statements referred to in subsection (1) and subsection (2) respectively as well as any information required by the Agency, see section 147.

113

(1)

If a parent is entitled to omit to present consolidated financial statements, but nevertheless

presents such financial statements that are not solely intended for the enterprise's own use,
the provisions on consolidated financial statements in chapter 14 shall apply. However, the
parent may apply the rules governing financial statements in reporting class B to the consolidated financial statements if it might have omitted to present consolidated financial statements in accordance with section 110. However, in the consolidated financial statement the
equity investments in associates shall be recognised and measured at the equity values of
such enterprises by applying the provisions in section 43 a (2), subsections (2)-(6).
Chapter 14
Contents of consolidated financial statements
Scope of consolidated financial statements

114

(1)

Unless otherwise provided by this section, all consolidated enterprises' financial statements
must be included in the consolidated financial statements by full consolidation.

(2)

A consolidated enterprise may be excluded from consolidation if

1)

it is a subsidiary, and significant and permanent obstacles considerably restrict the

parent's exercise of its rights to the subsidiary's assets or management,

2)

it is a subsidiary, and the necessary information cannot be obtained within a reasonable

time or without disproportionately large expenses,

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3)

it is a subsidiary not previously included in the consolidated financial statements by consolidation, and the parent holds the investments in the subsidiary solely with a view to a
subsequent transfer thereof, or

4)

it is an operating parent foundation carrying on only limited business activities, and it

does not have outstanding accounts against any of its subsidiaries and has not provided
security for any of its subsidiaries except for convertible instruments of debt and unpaid
dividends.
General requirements for consolidated financial statements
(Consolidation)

115

The consolidated financial statements must show the consolidated enterprises' assets, liabilities and equity, the financial position and the results as if they were one single enterprise.

116

(1)

The consolidated financial statements must have the same balance sheet date as the
parent's financial statements.

(2)

If a consolidated subsidiary's balance sheet date is three months or less before the parent's
balance sheet date, the subsidiary may be included in the consolidation on the basis of its
financial statements. If a consolidated subsidiary's balance sheet date is more than three
months before the parent's balance sheet date, the subsidiary must be included in the consolidated financial statements on the basis of special financial statements prepared as at the
parent's balance sheet date in accordance with the provisions of this Act.
Combination

117

(1)

On consolidation, the financial statements are combined by adding together uniform income
and expenses, assets, liabilities and equity. Any adjustments must be made which are necessary due to the special factors pertaining to consolidated financial statements as distinct
from financial statements.

(2)

Consolidated enterprises for which the group connection has been established during the financial year may only be included in the consolidation to the extent of income and expenses
pertaining to any transactions and other matters arising after the date at which the group
connection was established.

(3)

Consolidated enterprises for which the group connection is terminated during the financial
year may only be included in the consolidation to the extent of income and expenses pertaining to any transactions and other matters arising up to the date at which the group connection was terminated.
Classification

118

(1)

The balance sheet, income statement and cash flow statement in the consolidated financial
statements must be presented in accordance with the rules for financial statements in re-

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porting class C, see section 78, unless otherwise provided by the second sentence or subsections (2)-(4). If the parent is under an obligation to follow the rules for financial statements
in reporting class D, see section 102, the consolidated financial statements must also follow
such rules unless otherwise provided by subsections (2)-(4).
(2)

Investments in, receivables from or payables to non-consolidated subsidiaries and associates

shall be stated as separate items in the balance sheet of the consolidated financial statements.

(3)

The consolidated equity may be presented in such a way that only any such items are shown
as are necessary to give a true and fair view as stipulated in section 11(1).

(4)

The minority interests' proportionate share of the subsidiaries' equity shall be entered as a
separate principal item between "Equity" and "Liabilities". The minority interests' proportionate share of the subsidiaries' profit or loss shall be entered as a separate item in the income statement.
Recognition and measurement

119

(1)

The assets, liabilities and equity, income and expenses covered by the consolidation shall be
recognised and measured in accordance with uniform methods in pursuance of the rules for
financial statements in reporting class C, see sections 33-52, 78 and 82-83 b. However, equity investments in associates shall be recognised and measured according to the equity
value method, see section 43 a (2)-(6).

(2)

In so far as possible, the same methods of recognition and measurement basis must be used
in the consolidated financial statements as in the parent's financial statements. If consolidated subsidiaries use other methods and bases in their own financial statements, new financial statements must be prepared for the consolidated financial statements in which the
methods of recognition and measurement basis used are in accordance with the methods
and bases used in the consolidated financial statements.
Elimination

120

(1)

The following items must be eliminated:

1)

Receivables and payables between the consolidated enterprises,

2)

income and expenses resulting from transactions between the consolidated enterprises
and

3)

gains and losses resulting from transactions between the consolidated enterprises which
are included in the carrying amount of the items.

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(2)

The provision in subsection (1), paragraph 3), may be derogated from in special cases if the
transaction has been made on normal terms on an active market and the elimination would
moreover entail disproportionately high expenses.
Group establishment

121

(1)

Unless otherwise stated, the establishment of a group connection between two enterprises
shall be treated in accordance with the purchase method, see section 122.

(2)

If, in connection with the establishment of the group connection, the two enterprises are
both subject to a parent in a group connection or are both subject to the control of same interest, the group establishment may be treated in accordance with the uniting of interests
method, see section 123.

(3)

The uniting of interests method in accordance with section 123 may also be applied if, in
connection with the establishment of the group connection, the parent
1)

has the same fair value as the subsidiary,

2)

holds at least 90 per cent of the voting rights and of the nominal value of the contributed capital of the acquiree and

3)

has acquired the holding by means of a scheme which implies that

a)

neither the previous owners together nor the owners having equity investments in
exchange for their rights in the subsidiary together will acquire control of the parent,

b)

the previous owners and the owners having received equity investments under the
scheme in exchange for their rights in the subsidiary must have the same rights, and

c)

the cash consideration will not exceed 10 per cent of the nominal value of the equity
investments received.
Acquisition

122

(1)

If the group connection is established by the acquisition of an enterprise, the assets and liabilities in the acquiree at the date of acquisition shall be included and measured at fair value
in the consolidated financial statements, whether or not they had been included in the enterprise's balance sheet prior to the acquisition. In this connection, estimated restructuring
expenses in the acquiree must be recognised as provisions.

(2)

The consolidated enterprises' investments in a consolidated subsidiary measured at cost

shall be eliminated at the consolidated enterprises' proportionate share of the net assets of
the subsidiary, measured at fair value, see. subsection (1). The elimination shall be effected
at the time of the establishment of the group.

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(3)

A positive balance resulting from the elimination in accordance with subsection (2) shall be
treated as goodwill, see section 43. A negative balance resulting from the elimination in accordance with subsection (2) shall be recognised as a separate item under deferred income
with a suitable designation. The said amount shall be recognised in the income statement in
line with the realisation of the circumstances which are the cause of the balance, but over a
maximum period of 20 years.

(4)

Equity investments in a parent held by a consolidated enterprise shall not be eliminated, but
shall be treated as treasury shares.
Uniting of interests

123

In accordance with the uniting of interests method, the consolidated financial statements
shall be presented for the period in which the uniting of interests occurs as if the enterprises
had been combined starting from the earliest accounting period forming part of the financial
statements. The difference between the amount paid as contributed capital and any premium plus any cash consideration and the equity value of the subsidiary must in a clear manner be added to or deducted from the reserves that may be used to cover losses.
Proportionate consolidation

124

(1)

An enterprise managed by the enterprise with one or more other enterprises may be included in the consolidated financial statements by proportionate consolidation.

(2)

The items in the jointly controlled enterprise shall be included on a proportionate basis with
the consolidated enterprises' share of the enterprise's equity and results. Moreover, the
rules on consolidation, etc. in sections 115-122 shall apply, mutatis mutandis.
Disclosure in the notes
Disclosure of accounting policies

125

(1)

The disclosure of the accounting policies and the notes in the consolidated financial statements must provide information about the group as if the consolidated enterprises were one
single enterprise. Sections 53-55 and 87 shall apply correspondingly to the information
about the group disclosed in the consolidated financial statements. Instead of information
about the individual enterprise's amounts, the consolidated enterprises' amounts are shown
in aggregate, consolidated in accordance with the methods applicable to the consolidated financial statements.

(2)

The disclosure of accounting policies must also show all cases of the following:
1)

Any exclusion of a consolidated enterprise giving specific and adequate grounds.

2)

Any balance sheet date for a consolidated subsidiary which is different from that of the
parent, see section 116(2), first sentence. If any important events have occurred be-

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tween the two balance sheet dates affecting the subsidiary's assets, liabilities and equity, its financial position and results, it must be explained.
3)

The use of any methods of recognition and measurement basis other than those used in
the parent's financial statements giving specific and adequate grounds for using other
methods.

4)
(3)

Failure to eliminate in accordance with section 120(2).

In a separate part of the statement of accounting policies, it must be disclosed:

1)

If the enterprise has used the exception in section 114(2), paragraph 4). In that case,
the consolidated results and equity must be disclosed.

2)

The remaining positive and negative balances in accordance with sections 122 and 123
as well as the methods used in connection with the calculation thereof. Any changes in
the balances compared with the previous year must be explained.
Other disclosures in the notes

126

(1)

The following requirements shall apply correspondingly to the consolidated financial statements:
1)

Disclosures of contingent liabilities, etc., see sections 64, 94 and 94a,

2)

disclosures of related parties, etc., see section 71, section 98a and section 98c(1),(2)
and (4),

3)

disclosures of own equity investments, see section 76(1), paragraph 1),

4)

statement of the changes in equity, see section 87a,

5)

disclosures of fixed assets, see section 88,

6)

disclosures of contingent assets, see section 90b,

7)

disclosures of liabilities, see section 92,

8)

disclosures of the division of the net revenues on business segments and geographical
segments, see section 96(1), and

9)
(2)

disclosures of auditors' fees, see section 96(2).

The requirement in section 73 for disclosure of information about outstanding accounts

against and security with and for members of the management and security provided for
them and the requirement for information about remuneration etc. in section 98 b shall apply correspondingly to the overall amounts paid collectively by the group companies to the
categories of members of the management and enterprise owners of the parent.

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(3)

The requirement in section 106 shall apply correspondingly to disclosures of benefits in accordance with section 98b, see the above subsection (2), if the parent is covered by reporting class D. Furthermore, the requirement in section 106a shall apply correspondingly if the
parent is covered by reporting class D.

(4)

Information must be disclosed about the change in the minority interests' proportionate
share of the subsidiaries' equity.

127

(1)

For each of the consolidated subsidiaries and non-consolidated subsidiaries respectively, the
following must be disclosed
1)

name and registered office,

2)

the share of the equity which is held by the consolidated enterprises overall,

3)

the basis of the group connection, see Schedule 1, B, no. 4, unless it follows from the
said no. 4, paragraph 1) (the majority of the voting rights), and the consolidated enterprises' share of the subsidiary's contributed capital and voting rights is the same,

4)

specific and adequate grounds if the enterprise has been excluded from the consolidation, see section 114(2), and

5)
(2)

whether the capital elimination method described in section 123 has been applied.

For each associate, the following must be disclosed

1)

name and registered office,

2)

the share of the equity which is held by the consolidated enterprises overall, and

3)

whether the enterprise has been recognised and measured under other methods than
the equity method, see section 119(1), second sentence, see section 43a(6).

(3)

For each enterprise whose financial statements form part of a proportionate consolidation in
accordance with section 124 the following must be disclosed

(4)

1)

name and registered office,

2)

the share of the equity which is held by the consolidated enterprises overall, and

3)

the basis for the joint management.

The disclosures in subsections (1)-(3) may be left out if they may cause considerable damage to the enterprise itself or to the enterprises mentioned in subsections (1)-(3). Any nondisclosure of information on these grounds must be disclosed.

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Management's review
128

(1)

The management's review of the group must provide information about the group as if the
consolidated enterprises together were one single enterprise. Instead of information about
the individual enterprise's amounts, the consolidated enterprises' amounts must be shown in
aggregate, consolidated in accordance with the same methods that apply to the consolidated
financial statements.

(2)

The provisions on the management's review, see sections 99-101, shall apply correspondingly, but see subsection (4). If the parent is covered by the rules in reporting class D, section
107, section 107b(1), paragraph 6) and (3) and (4) shall apply mutatis mutandis to the consolidated financial statements, but see subsection (4). The information provided for under
section 99(1), paragraph 11), may be omitted.

(3)

The first time that a parent which has omitted to present consolidated financial statements
pursuant to sections 110-112 presents consolidated financial statements the enterprise may
notwithstanding the provision in section 101(1), paragraph 2), omit to present comparative
figures for the 2-4 preceding financial years.

(4)

The management's reviews of the parent and the group may be combined if it is possible
without difficulties to find any disclosures required by this Act which have not become superfluous as a result of the consolidation, but see section 22(2), section 78(2) and section
102(3). The information provided for under section 107b for the parent and under section
107b(1), paragraph 6) for the group shall be disclosed together. The first sentence shall apply mutatis mutandis to state-owned public limited companies, see section 107c.
Chapter 15
Accounting for mergers, etc.

129

(1)

To the extent that, in accordance with legislation or agreement, a statement is prepared of

the consolidation of combining enterprises' assets, liabilities and equity (the joint balance
sheet of the combining enterprises), the provisions in sections 115-123, except for section
118(3), shall apply correspondingly to the opening balance sheet for the combined enterprise, the acquirer and the enterprise formed by the merger. The rules for the parent shall
apply to the acquirer, and the rules for subsidiaries shall apply to the acquiree.

(2)

Unless otherwise stipulated by legislation or agreement, the joint balance sheet of the combining enterprises must consist of the opening balance sheet of the combined enterprise, the
acquirer or the enterprise formed by the merger supplemented by closing balance sheets of
the combining enterprises and statements of any changes made necessary by the merger, or
any transactions to be made as a result of the merger agreement. The opening balance
sheet shall be supplemented by any notes necessary to give a true and fair view of the acquirer or the enterprise formed by the merger as well as any supplementary reports provided for by the merger agreement.

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130

The provisions of section 129 shall apply correspondingly to enterprises' acquisition of assets
and liabilities in connection with a demerger with any such adjustments as may follow from
the special nature of the demerger.
PART VII

Interim financial reports for state-owned public limited companies and companies with securities admitted to trading on a regulated market in an EU/EEA Member State
Chapter 16
Preparation of interim financial report for state-owned public limited companies
General provisions
131

(1)

State-owned public limited companies shall prepare an interim report covering the first six
months of the corporation's financial year. If the state-owned public limited company is a
parent, the interim report must be prepared as if the consolidated enter-prises were a single
enterprise.

(2)

A state-owned public limited company may also prepare equivalent reports for periods other
than a six-month period.
Recognition and measurement

132

(1)

The interim report must be prepared on the basis of the same basic requirements as the annual report, see chapter 3.

(2)

The interim report must contain disclosures about the past six-month period equivalent to
the disclosures required in accordance with section 101(1), paragraph 1). The equivalent
figures for the same period of the previous financial year must be stated next to each figure.
Section 24(1), second and third sentences, and section 55 shall apply correspondingly.

133

(Repealed)
Management's review

134

The interim report must contain the following information:

1)

An account of the development in the company's activities and affairs,

2)

an account of the company's projected development,

3)

an account of any special assumptions used by the company's management as a basis

for the statement of the projected development, and

4)

information about important decisions made by the company's supreme management

during the six-month period in question.

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Chapter 16a
Preparation of interim financial report for companies with securities admitted to trading on a
regulated market in an EU/EEA Member State
134a

The Danish Commerce and Companies Agency may lay down rules to the effect that companies comprised by reporting class D with securities admitted to trading on a regulated market in an EU/EEA Member State must prepare an interim financial report for the first six
months of each financial year (interim report). In that connection, the Agency may lay down
rules about the content of the interim report and about the manner in which the information
contained in it should be presented. Further, it may be stipulated that interim financial reports prepared voluntarily for a period of less than six months should be prepared according
to the same rules as those applicable to interim reports.
(2)

Furthermore, provisions may be laid down in respect of interim financial reports prepared by
companies comprised by reporting class A with securities admitted to trading on a regulated
market in an EU/EEA Member State.

(3)

The provisions in subsections (1) and (2) shall not apply to enterprises that only issue instruments of debt admitted to trading on a regulated market an EU/EEA Member State and
whose nominal value per unit amounts to minimum EUR 50,000 or whose nominal value per
unit on the date of issue equals minimum EUR 50,000 when the instruments of debt are issued in another currency than EUR.
PART VIII
Auditing, etc. of the annual report
Chapter 17
Auditing, etc.

135

(1)

An enterprise which is under an obligation to prepare an annual report in accordance with

the rules for reporting class B, C or D must have its financial statements and any consolidated financial statements audited by one or more auditors, but see the third sentence. An enterprise that falls within reporting class B, may select to have the audit under the first sentence performed under the Danish Business Authority's review standard for small enterprises, bur see subsections (2) and (3). An enterprise subject to reporting class B may omit to
have its financial statements audited if the enterprise does not exceed two of the following
limits in two consecutive financial years, but see subsections (2) and (3):
1)

A balance sheet total of DKK 4 million,

2)

revenue of DKK 8 million and

3)

an average number of 12 full-time employees in the course of the financial year.

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(2)

The provision in subsection (1), second sentence, and the exception in subsection (1), third
sentence, shall not apply to commercial foundations, see section 3(1), paragraph 3).

(3)

The provision in subsection (1), second sentence, and the exception in subsection (1), third
sentence, shall not apply to enterprises that hold equity investments in other enterprises
and that exert significant influence on one or several of such enterprises' operational or financial management if the enterprise and the enterprises in which it holds equity investments and on which it exerts significant influence together exceed at the time of the balance
sheet for two consecutive financial years two of the limits in section 7(2), paragraph 1) and
subsection (1), paragraphs 1-3) respectively. The calculation rules in section 110 also apply
to the calculation under the first sentence.

(4)

Section 7(3) shall apply to the calculation of the limits in subsection (1), third sentence.

(5)

If legislation allows that information which must be stated in the financial statements or the
consolidated financial statements may alternatively be stated in other documents etc. to
which reference is made in the financial statements or the consolidated financial statements,
the duty of audit under subsection (1), first sentence, covers the information in question
contained in such documents etc. The duty of audit under subsection (1), first sentence,
shall not comprise the management's review and the supplementary reports forming part of
the annual report, see. section 2(1) and (2). The auditor shall, however, make a representation on whether the information in the management's review is in accordance with the financial statements and any consolidated financial statements. Subsections (2) and (3) shall apply to information which is stated in the management's review and to information which under this Act or rules which have been issued under this Act is alternatively published in other
places to which reference is made in the management's review. The Danish Commerce and
Companies Agency may demand audit of any supplementary reports that are part of the annual report for all or some of the enterprises comprised by reporting classes C and D.

(6)

The exception in subsection (1), third sentence, cannot be applied by an enterprise if the
enterprise or its sole proprietor or any person who has the controlling interest of the enterprise accepts a fine notice or, as part of criminal proceedings, is found guilty of violating
company legislation, accounting legislation or tax and duty legislation. An enterprise cannot
apply the exception in subsection (1), third sentence, if an affiliated enterprise accepts a fine notice or, as part of criminal proceedings, is found guilty of violating company legislation,
accounting legislation or tax and duty legislation. In such cases the financial statements of
the enterprise for the following 3 financial years shall be audited. The Danish Business Authority may extend the period of auditing the financial statements by up to 2 financial years.

(7)

If the Danish Business Authority finds significant misstatements or omissions under company
legislation or accounting legislation in the examination of the annual report under section
159, the Authority may decide that the exception in subsection (1), third sentence, cannot
be applied by the enterprise in the current and the two following financial years. The Author-

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ity may, however, at any time decide that the exception cannot be applied if a loan has been
granted which is subject to the company legislation's prohibition against loans to owners and
management and it is a loan of a not insignificant amount or repeated violations of the company legislation's prohibition. At the same time the Authority may decide that the enterprise
cannot apply the provision in subsection (1), second sentence. The Danish Business Authority may in specific matters decide to extend the period of auditing the financial statements
by a further financial year.
135a

Only state-authorised public accountants or registered public accountants may audit financial statements and consolidated financial statements subject to the duty of audit in section
135(1), third sentence, and make a representation on the management review etc., see
135(5), third and fourth sentences. The provision in the first sentence applies mutatis mutandis if an enterprise that is exempted from the duty of audit under section 135(1), second
sentence, elects to audit its financial statements or elects to have an auditor perform other
work that results in the issue of a statement to the annual report.
(2)

When auditing annual reports which shall be prepared in accordance with the rules for reporting class D, at least one auditor must be a state-authorised public accountant.
PART IX
Accounting regulation in Denmark
Chapter 18
Organisation for the issue of
Accounting standards, etc.

136

(1)

The Danish Commerce and Companies Agency is responsible for ensuring that standards are
prepared where necessary to elaborate on and supplement this Act. Within the framework of
Council Directives 78/660/EEC and 83/349/EEC as amended, the standards may specify the
exceptions from provisions which are covered by the derogation obligation under section
11(3), and where derogation is deemed to be necessary for the practical and expedient application of the provisions. The standards must specify the categories of enterprises which
are entitled or required to follow the standards.

(2)

The Danish Commerce and Companies Agency may enter into an agreement with one or
more independent organisations under which the said organisations are to handle all or any
part of the tasks provided for under section 136(1). The Danish Commerce and Companies
Agency may lay down specific provisions for the performance and organisation of the work,
including provisions for public authorities' rights to state their opinion on or approve the
standards before they are implemented. The Danish Commerce and Companies Agency may
direct an organisation with which an agreement has been concluded, see paragraph 1), to
prepare special standards in the area if a need for adjustment arises.

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(3)

The Danish Commerce and Companies Agency may set up an Accounting Council with which
the Agency may consult about general accounting issues and which may assist the Agency
with the tasks mentioned in subsection (1). The secretarial function will be handled by the
Danish Commerce and Companies Agency.

137

Enterprises which are not obliged to use the international accounting standards, see the
Regulation of the European Parliament and of the Council, on application of international accounting standards, may voluntarily choose to prepare financial statements or consolidated
financial statements pursuant to the standards stated, but see subsection (2).
(2)

Companies with securities listed for trade on a regulated market in an EU/EEA Member State
and which only prepare financial statements shall, however, apply the standards mentioned
in subsection (1) in the financial statements.

(3)

Enterprises which in accordance with subsections (1) or (2) follow the standards mentioned
in subsection (1) must follow all approved standards. Where the provisions of this Act regulate the same circumstances as the standards, these enterprises shall use the standards instead of the provisions of the Act.

(4)

The Danish Commerce and Companies Agency may stipulate rules necessary for application
in Denmark of the Regulation mentioned in subsection (1).
PART X
Publication and examination of the annual report, etc.
Chapter 19
Submission to the Danish Commerce and Companies Agency
Submission of the annual report

138

(1)

Without undue delay after approval, all enterprises covered by reporting classes B, C and D
shall submit the approved annual report to the Danish Commerce and Companies Agency,
see 3(1) and 7. The Agency must be in receipt of the annual report within a time limit of 5
months after the end of the financial year, subject to a time limit of 4 months for enterprises
covered by reporting class D. The Danish Commerce and Companies Agency may deviate
from the time limit fixed in the second sentence and fix a longer time limit for undertakings
subject to reporting classes B and C that submit the annual report electronically in accordance with rules issued under section 153a(1). No further exemption may be granted from
the said time limits, but see sections 140 and 141.

(2)

The annual report submitted must, as a minimum, contain the compulsory elements for each
reporting class as well as a possible auditor's report or another declaration from an auditor,
see sections 135(1) and (5) and 135a(1). If the enterprise wishes to have supplementary
reports published as mentioned in section 2(2), any reports must be submitted together with
the compulsory elements of the annual report, so that the compulsory elements and the

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supplementary reports together will constitute one document called the "annual report", but
see subsection (3).
(3)

Green accounts (environmental report) which the enterprise is under an obligation to submit
or submits voluntarily to the Danish Commerce and Companies Agency for publication in accordance with the rules of the environmental legislation may be submitted as part of the annual report or the green accounts may be submitted separately to the Agency at the enterprise's own option.

(4)

Annual reports and any other documents to be submitted to the Agency in accordance with
this Act must be drafted in Danish, but see section 157.

(5)

If an enterprise voluntarily submits an annual report in accordance with section 4(6), first
sentence, and if such annual report has been audited, the enterprise shall ensure that the
auditor's report is included in the document.

(6)

If the Agency has announced that an annual report is accessible to the general public in accordance with section 154, such annual report may not be replaced by a new annual report
except with the consent of the Agency.
Submission for enterprises in the course of liquidation or reorganisation

139

(1)

Enterprises in the course of liquidation shall continue to submit an annual report to the
Agency in accordance with section 138 until the liquidation has been concluded with the dissolution of the enterprise.

(2)

In addition, the enterprise shall submit closing liquidation financial statements to the Danish
Commerce and Companies Agency where prescribed in the legislation applying specifically to
the enterprise.

140

(1)

For enterprises that are subject to reorganisation proceedings in accordance with the Danish
Insolvency Act, the Danish Commerce and Companies Agency may permit that, notwithstanding the time limit set out in section 138(1), second sentence, the annual report need
only be submitted in time for it to be received by the Agency within a time limit of 1 month
after the end of the reorganisation period. If the said time limit is exceeded, sections 150152 shall apply correspondingly, and the charge will be payable from 1 month after the end
of the reconstruction period.

(2)

If bankruptcy proceedings are commenced for the enterprise, the provisions of section 141
shall apply.

141

(1)

For enterprises being administered in bankruptcy, no annual report is to be submitted to the

Danish Commerce and Companies Agency.

(2)

If the enterprise resumes its activities, it shall submit annual reports for the period from the
balance sheet date of the latest annual report submitted to the end of the enterprise's latest

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financial year prior to the termination of the bankruptcy proceedings in time for such annual
reports to be received by the Agency within 1 month after the termination of the bankruptcy
proceedings. Instead of the annual reports referred to in the first sentence, the Agency may
grant permission for the enterprise to submit an opening balance sheet prepared as at the
date of the termination of the bankruptcy proceedings. Financial statements and any consolidated financial statements which are included in the annual reports specified in the first
sentence and the opening balance sheet specified in the second sentence shall be audited if
the enterprise is subject to the duty of audit, see section 135(1), first sentence. If the enterprise is exempted from the duty of audit, sections 9(4), 10a and 135a(1), second sentence, shall apply mutatis mutandis. If the time limit for submission specified in the first
sentence hereof is exceeded, sections 150-152 shall apply mutatis mutandis and the charge
will be payable from 1 month after the termination of the bankruptcy proceedings.
142

Any procedures to reorganise an enterprise other than the procedures listed in sections 140
and 141 shall not exempt the enterprise from its obligation to submit an annual report before the expiry of the time limit specified in section 138(1).
Submission for non-Danish enterprises with a branch in Denmark

143

(1)

The branch manager of a branch registered with the Danish Commerce and Companies
Agency as a branch of a non-Danish enterprise shall submit the non-Danish enterprise's audited annual report in time for it to be received by the Agency within a time limit of 5
months after the end of the financial year. No exemption may be granted from the said time
limit. The financial statements of the branch may not be submitted instead.

(2)

The annual report submitted must, as a minimum, be presented as prepared and published
in accordance with the rules in the State which the enterprise comes under.

(3)

The annual report for a non-Danish enterprise which comes under the legislation in an
EU/EEA Member State may be submitted unaided if the audit has been omitted in accordance with the legislation applying to the enterprise.

144

(1)

If the non-Danish enterprise is a subsidiary, the branch manager may submit the parent
company's consolidated financial statements to the Danish Commerce and Companies Agency in accordance with section 146(5) instead of the annual report referred to in section 143
if
1)

both the subsidiary and the parent come under the legislation in an EU/EEA Member
State,

2)

the consolidated financial statements have been prepared in accordance with Council Directive 83/349/EEC as amended on consolidated financial statements and have been audited and published in accordance with said rules, but see section 143(3),

3)

the omission is in accordance with the legislation applying to the enterprise,

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4)

the financial statements of the enterprise and its subsidiaries are included in the
parent's consolidated financial statements by full consolidation or by recognition and
measurement under the equity method,

5)

all the owners have accepted the procedure for the financial year in question,

6)

the parent has declared that it guarantees the enterprise's commitments until publication of the revocation of the guarantee subject to a time limit of not less than 3 months
or publication of the deregistration or cancellation of the branch from the Agency's register subject to an equivalent time limit, and

7)

the parent discloses in its annual report that the subsidiary has omitted to prepare its
own annual report, specifying the exemption provision applied.

(2)

If the non-Danish enterprise does not come under any legislation mentioned in subsection
(1), the branch manager may submit the parent's consolidated financial statements to the
Danish Commerce and Companies Agency in accordance with section 146(5) instead of the
non-Danish enterprise's annual report if
1)

the consolidated financial statements have been prepared in accordance with the Directive referred to in subsection (1), paragraph 2), or in accordance with rules which
are, as a minimum, equal to the rules in the said Directive, and the consolidated financial statements have been audited by persons authorised to do so in pursuance of the
national legislation which the parent comes under, and

2)

the conditions in subsection (1), paragraphs 3)-7), have been met.

Submission of exemption statement, etc. for enterprises making use of the exemptions in sections 4-6, 112 and 144
145

(1)

Enterprises making use of the exemption in section 4 shall submit an exemption statement
in which the management

(2)

1)

states that the exemption in question has been applied, and

2)

guarantees that the conditions for applying the exemption have been met.

An exemption statement must be submitted for each financial year. The Danish Commerce
and Companies Agency must be in receipt of the statement before the expiry of the time
limit specified in section 138(1), second sentence. If the time limit is exceeded, sections
150-152 shall apply correspondingly.

146

(1)

Enterprises that make use of the exemption in section 5(1) shall submit an exemption
statement to the Danish Commerce and Companies Agency in accordance with section 145
supplemented with
1)

the consolidated financial statements referred to in section 5(1),

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2)

reference to the consolidated financial statements contained in an annual report, which

the Agency has received for publication, or

3)

officially certified documentation to the effect that the consolidated financial statements
have been published in accordance with the legislation applying to the non-Danish enterprise.

(2)

Enterprises making use of the exemption in section 5(2) shall submit an exemption statement to the Agency in accordance with section 145 supplemented with
1)

the annual report referred to in section 5(2), or

2)

reference to the annual report of which the enterprise's financial statements form part
and which the Agency has received for publication.

(3)

Enterprises making use of the exemption in section 5(3) shall submit an exemption statement to the Agency in accordance with section 145 accompanied by
1)

the annual report referred to in section 5(3), or

2)

officially certified documentation to the effect that the annual report has been published
in accordance with the legislation applying to the non-Danish enterprise.

(4)

Enterprises making use of the exemption in section 6(1) shall submit an exemption statement to the Agency in accordance with section 145 supplemented with
1)

the consolidated financial statements referred to in section 6(1), or

2)

reference to the consolidated financial statements contained in an annual report which

the Agency has received for publication.
In addition, the statements mentioned in section 6(1), paragraphs 4) and 5), must be
submitted. The latter statement is only to be submitted for the first financial year in
which the exemption is used.

(5)

If the exemptions in section 144 are used, the branch manager must submit an exemption
statement to the Danish Commerce and Companies Agency in accordance with section 145
supplemented with
1)

the consolidated financial statements referred to in section 144(1) or (2), and

2)

the statements referred to in section 144(1), paragraphs 5) and 6). The latter statement
is only to be submitted for the first financial year in which the exemption is used.

147

An enterprise submitting consolidated financial statements for a higher-ranking parent in the

group in accordance with section 112 shall submit any further information required by the
Agency for the purpose of publication; no information may be required other than the infor-

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mation required to be contained in consolidated financial statements in accordance with this

Act, but see section 160.
State-owned public limited companies' submission of interim financial reports
148

(1)

A state-owned public limited company shall submit its interim financial report in time for it
to be received by the Danish Commerce and Companies Agency within 2 months after the
end of the 6-month period in question.

(2)

If a state-owned public limited company fails to submit an interim financial report, the Agency may impose default fines in accordance with section 162(1), paragraph 1).

Submission of interim financial reports for companies with securities admitted to trading on a
regulated market in an EU/EEA Member State
148a

The Danish Commerce and Companies Agency may lay down rules on filing with and publication in the Danish Commerce and Companies Agency of interim financial reports for companies with securities admitted to trading on a regulated market in an EU/EEA Member State.
The same applies to interim financial reports prepared voluntarily for a period of less than
six months, see section 134a(1). Further, the Agency may stipulate that members of the
management of the enterprise may be subject to penalty payments in case of failure to
submit interim financial reports in accordance with sentence 1 or 2.
The enterprise's own publication of the annual report

149

(1)

If the enterprise itself publishes the annual report in its entirety, such publication must be in
the form, layout and wording in which the report has been audited, whether by statutory or
voluntary auditing.

(2)

If the enterprise publishes an incomplete annual report, the material published must clearly
state that the annual report has been condensed and that the complete annual report is
available at the Danish Commerce and Companies Agency or, if this is not the case, that the
annual report has not been submitted to the Agency. The auditor's report does not have to
form part of a condensed publication, but it must be clearly stated in the publication if the
auditor has made any qualifications or has provided the auditor's report with supplementary
information.

149a

In cases where legislation allows that information which must be disclosed in the annual report may alternatively be stated in documents etc. other than the annual report, such documents etc. must be available to the users of the financial statements at the same time as
the annual report.
Non-receipt or late receipt of the annual report or exemption statement

150

(1)

If an annual report or an exemption statement has not been received by the Danish Commerce and Companies Agency by the expiry of the time limit specified in section 138(1),
second sentence, the Agency will send a letter of demand to the supreme management of

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the enterprise at the address of the enterprise requesting submission of the enterprise's annual report or exemption statement. An equivalent letter of demand will be sent to the
branch manager if the annual report or exemption statement for a non-Danish enterprise
with a registered branch in Denmark has not been received by the expiry of the time limit
specified in section 143(1).
(2)

A time limit of 8 working days from the date of the letter for submission of the annual report
will be specified in the letter of demand. If the annual report or the exemption statement is
received by the Agency before the expiry of such time limit, the Agency will take no further
action as a result of the delay.

(3)

A further time limit of 4 weeks from the date of the letter will also be specified in the letter
of demand. If the annual report or the exemption statement has not been received before
the expiry of this time limit, the Agency may subsequently decide to request the Bankruptcy
Court to dissolve the enterprise in accordance with the insolvency legislation applicable to
the enterprise. If the letter of demand concerns a branch of a non-Danish enterprise, the
Agency may decide to strike the branch off the register in accordance with the legislation
applying to the branch in this respect if the annual report has not been received before the
expiry of the time limit specified in the first sentence. If the annual report or the exemption
statement for a partnership or a limited partnership, see section 3(1), no. 2, has not been
received before the expiry of the deadline specified in the first sentence, the Danish Commerce and Companies Agency may decide to delete the registration of the partnership or the
limited partnership in the Agency's register of active companies in accordance with the provisions to such effect in the Danish Act on Certain Commercial Enterprises.

151

(1)

If the annual report or the exemption statement is received after the expiry of the time limit
of 8 working days from the date of the letter of demand, see section 150(2), the Danish
Commerce and Companies Agency will impose a charge on each member of the enterprise's
supreme management or each branch manager respectively.

(2)

The charge will be payable from the expiry of the time limit specified in section 138(1), second sentence.

(3)

The charge will amount to DKK 500 per member of the management or branch manager respectively for the first month or part of a month, a total of DKK 2,000 for the second month
or part of a month and a total of DKK 3,000 for the third month or part of a month. The
charge shall not exceed an amount of DKK 3,000 per member of the management or branch
manager respectively.

(4)

The total charge will be reduced to the extent of any default fines paid for the same period
by the member of the management or branch manager in question in accordance with section 162(1), paragraph 1), for failing to submit an annual report or an exemption statement.

(5)

Charges imposed under subsection (3) will accrue to the Treasury.

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152

(1)

In exceptional circumstances, the Danish Commerce and Companies Agency may exempt a
member of the management or a branch manager from payment of a charge under section
151, in full or in part, if the person in question can prove to the Agency that he or she had
sought to expedite the submission, etc., and that he or she is therefore not to blame for the
delay.

(2)

It shall not in itself exempt a member of the management from liability that the actionable
conduct was committed by the enterprise's employees, consultants, advisers or the like.
Calculation of time limits

153

(1)

If the Act or rules and regulations that are issued under the Act stipulate that an act must
be carried out no later than a certain number of days, weeks, months or years after a specific event has taken place, the time limit for carrying out such act is calculated from the
day after such event, see subsections (2)-(4).

(2)

If the time limit, see subsection 1, is stated in weeks, the time limit for carrying out the act
shall expire on the day of the week on which the event took place.

(3)

If the deadline, see subsection (1), is stated in months, the time limit for carrying out the
act shall expire on the day of the month on which the event took place. If the event took
place on the last day of a month, or if the time limit expires on a date of the month which
does not exist, the time limit shall always expire on the last day of the month irrespective of
the number of days in the specific month.

(4)

If the time limit, see subsection (1), is stated in years, the time limit for carrying out the act
shall expire on the anniversary of the event.

(5)

If the time limit expires during a weekend, on a public holiday, Constitution Day, 24 December or 31 December, the act must be carried out no later than on the next working day.

Chapter 19a
Communication
153 a (1)

The Danish Business Authority may lay down rules to the effect that written communication
to and from the Authority about matters covered by this Act or rules issued under this Act
must be digital.

(2)

The Danish Business Authority may lay down more specific rules on digital communication,
including on use of specific IT systems, particular digital formats and digital signature etc.

(3)

Digital communication is considered received when it is available to the addressee.

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155 b (1)

The Danish Business Authority may lay down rules to the effect that the Authority may issue
decisions and other documents under this Act or under rules issued under this Act without
signature, by automatically or similarly reproduced signature or by use of a technique that
ensures precise identification of the party that has issued the decision or the document.
Such decisions and documents are compared with decisions and documents provided with a
personal signature.

(2)

The Danish Business Authority may lay down rules to the effect that decisions and other
documents that are exclusively made or issued on the basis of electronic data processing
may be issued merely with an indication that the Danish Business Authority is the sender.

(3)

Where this Act or rules issued under this Act requires a document issued by others than the
Danish Business Authority to be signed, such requirement may be satisfied by use of a technique that ensures precise identification of the party that has issued the document, but see
subsection (2). Such documents are compared with documents provided with a personal signature.

(4)

The Danish Business Authority may lay down detailed rules about deviation from the signature requirements. It may be laid down that requirements about a personal signature cannot
be deviated from in relation to specific types of documents.
Chapter 20
Publication
Further rules on submission and publication, etc.

Extended public access to the documents of state-owned public limited companies

Publication
154

(1)

The Danish Commerce and Companies Agency gives immediate notice of the receipt of the
annual reports, any exemption statements, etc. submitted instead of such reports, closing
liquidation financial statements as well as interim reports of state-owned public limited companies.

(2)

The documents are accessible to the general public.

Further rules on submission and publication, etc.

155

(1)

The Danish Commerce and Companies Agency determines the rules on the filing of annual
reports and exemption statements etc. that are filed instead and closing liquidation financial
statements, see section 139(2), and on the filing of interim financial reports for state-owned
public limited companies, see section 148, and for undertakings that have securities that are
admitted to trading on a regulated market in an EU/EEA Member State, see section 148 a.

155 a

(Repealed).

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155 b (1) The Agency will lay down rules on the publication of annual reports and exemption statements, etc. submitted instead of such reports and closing liquidation financial statements as
well as the publication of interim financial reports for state-owned public limited companies
and undertakings which have securities that are listed for trading on a regulated market in
an EU/EEA Member State.
(2) The Agency may lay down rules governing users' access via electronic media to documents
that are published by the Agency.
(3) The Agency will lay down rules on the restatement of published annual reports and the consequences thereof.
156

(1)

The Danish Commerce and Companies Agency may lay down rules on payment for copies of
documents, etc. which are accessible to the public under this Act, for use of the Agency's
computer system, for certain services for which no prices have been fixed and for reminders,
etc. in connection with late payment.

(2)

The Agency may lay down rules for payment of an annual fee for administration of this Act
and the associated control activities, for the administration of the rules provided for under
company law concerning loss of capital and loans to owners and any other violation of the
law in connection with the examination of annual reports and for the administration of the
issue of accounting standards and approval of international standards, see section 136.

(3)

The Danish Business Authority may lay down rules to the effect that companies with securities admitted to trading on a regulated market in an EU/EEA Member State shall pay an annual fee for the monitoring activities related to the Act, see section 159a. More detailed
rules may be laid down about the size and charging of the fee and about payment for reminders due to late payment.

157

(1)

The Danish Commerce and Companies Agency may decide that certain documents are to be
exempt from the requirement that documents must be drafted in Danish. Furthermore, following an evaluation of whether publication is capable of achieving its purpose, the Agency
may grant specific exemptions from the requirement that documents must be drafted in
Danish, making it a condition that the enterprise submits certified translations of documents
at a later time if the Agency finds it necessary.

(2)

The Danish Commerce and Companies Agency may lay down rules regarding the languages
in which companies with securities admitted to trading on a regulated market in an EU/EEA
Member State shall file with the Danish Commerce and Companies Agency annual reports
and interim financial reports and other documents which are subject to this Act.

(3)

If legal proceedings regarding the contents of an annual report or other documents to be

submitted to the Danish Commerce and Companies Agency under this Act are instituted before a court in Denmark, the responsibility for paying the costs for translating the annual re-

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port or documents for the purpose of the legal proceedings shall be decided under Danish
law.
Extended public access to the documents of state-owned public limited companies
158

No later than 14 days before the date of the General Meeting, state-owned public limited
companies shall send a copy of the corporation's annual report to any representatives of the
press requesting such copy and shall make copies of the report available to any third party
upon request at the company's head office.
Chapter 21
Examination of annual reports, etc.
Test checks

159

(1)

The Danish Commerce and Companies Agency shall, through random sampling, select and
check received annual reports and any declarations from an auditor, exemption statements,
etc. submitted instead of annual reports as well as interim re-ports for state-owned public
limited companies and interim financial reports for companies with securities admitted to
trading on a regulated market in an EU/EEA Member State in order to ascertain any obvious
violations of provisions of or under this Act, the Danish Bookkeeping Act, the Danish Companies Act, the SE-companies Act, the Council's Regulation on the Statute for the European
Company (SE), the Danish Act on Certain Commercial Enterprises, the Danish Act on SCEcompanies, Council Regulation on the Statute for a European Cooperative Society (SCE), the
Danish Act on Commercial Foundations and the Danish Act on Approved Auditors and Audit
Firms. If the annual report has been presented in accordance with the international accounting standards, see section 137, the Danish Commerce and Companies Agency shall also examine whether the annual report has been presented in accordance with the standards. As
far as companies with securities admitted to trading on a regulated market in the EU/EEA
Member State are concerned, the Danish FSA shall supervise compliance with standards and
rules in respect of financial information in annual reports and interim financial reports, see
section 159a.

(2)

The Agency may also apply other criteria for the selection of annual reports, etc. for checking.

Supervision of the annual reports and interim financial reports of companies with securities
admitted to trading on a regulated market in an EU/EEA Member State
159a

The Danish FSA will ensure companies with securities admitted to trading on a regulated
market in an EU/EEA Member State compliance with the standards and rules for financial information in annual reports and interim financial reports as mentioned in subsections (2)
and (3). In respect of cases concerning companies subject to this Act the Danish Business
Authority will assume the duties of the Danish FSA, see section 83(2) and (3) of the Securities Trading etc. Act. The Danish Financial Council will ensure the compliance of the first

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sentence with the powers delegated to the Council under section 345 of the Financial Business Act.
(2)

The supervisory authority under subsection (1) will ensure that annual reports and interim
financial reports submitted by companies with securities admitted for trading on a regulated
market in an EU/EEA Member State comprised by reporting class D comply with the rules for
financial information in the international accounting standards, see the Council's regulation
on application of international accounting standards and section 137 of this Act as well as
rules in or laid down in accordance with this Act.

(3)

Supervision under subsection (1) shall also include annual reports and interim financial reports prepared by companies with securities listed on a regulated market in an EU/EEA
Member State comprised by reporting class A when the annual report and financial interim
report are not exclusively used for the enterprise's own use, see section 3(2).

(4)

Supervision under subsections (1)-(3) does not include observance of deadlines etc. for the
purposes of publication in the Danish Commerce and Companies Agency.

(5)

In connection with supervision pursuant to subsections (2) and (3), the supervisory authority, see subsection (1), shall exercise the powers delegated to the Danish Business Authority
in sections 160 and 161 and section 162(1), paragraphs 2) and 3), and (2), see section
83(2) in the Securities Trading etc. Act. Further the supervisory authority, see subsection
(1), shall exercise the powers delegated to the Danish FSA in section 83(3) of the Securities
Trading etc. Act.

(6)

If a company with securities admitted to trading on a regulated market in an EU/EEA Member State does not comply with its obligation according to this Act, the supervisory authority, see subsection (1), may order the enterprise in question to remedy such a situation, including order it to publish changed or supplementary information. If it is found to be expedient, the supervisory authority, see subsection (1), may publish the information in question
itself or publish the order. The supervisory authority, see subsection (1) may furthermore
suspend or delist the affected securities from admission to trade on a regulated market
place in Denmark. If the enterprise fails to comply with an order in accordance with the first
sentence, the members of the enterprise's management may as a coercive measure be ordered by the supervisory authority, see subsection (1) to pay daily or weekly default fines.

(7)

The default fines which accrue to the Treasury may be collected by the debt collecting authorities by statutory debt collection and by withholding tax in pay, etc. in accordance with
the rules on collection of personal taxes in the Danish Tax at Source Act.

(8)

The debt collecting authorities may waive claims under subsection (6) pursuant to the rules
in the Danish Debt Collection Act.

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Request for information

160

The Danish Commerce and Companies Agency may demand from the enterprise, its management or its auditor any information necessary to determine whether there has been a violation of the legislation referred to in section 159(1) and of the enterprise's articles of association or whether a violation has been discontinued. Furthermore the Danish Commerce
and Companies Agency may request that the enterprise, its management or its auditor provide the information necessary to establish whether annual reports presented in accordance
with the international accounting standards have been presented in accordance with the
standards, see section 137.
Reactions to violations

161

In order to ensure that the legislation listed in section 159(1) is complied with, the Danish
Commerce and Companies Agency may
1)

provide guidance

2)

issue reprimands for any violations, and

3)

order any errors to be corrected and violations to be discontinued and make decisions as
specified in section 135(6), third sentence, and subsection (7).
PART XI
Default fines. Right of appeal. Penalties. Commencement
Chapter 22
Default fines

162

(1)

The Danish Commerce and Companies Agency may impose daily or weekly fines on the
members of the enterprise's management if they fail to
1)

submit documents as and when required in accordance with sections 138-148 or provisions laid down in pursuance of this Act,

(2)

2)

comply with a request for disclosures in accordance with section 160, or

3)

comply with an order by the Agency in accordance with section 161, paragraph 3).

Default fines may also be imposed on the enterprise's auditor if he or she fails to provide information in accordance with section 160.

(3)

Default fines will accrue to the Treasury.

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Chapter 23
Right of appeal
163

(1)

Decisions made by the Danish Commerce and Companies Agency under the Act, any order
issued in pursuance of the Act, accounting standards in accordance with sections 136 and
137 and the Council's Regulation on use of international accounting standards may be
brought before the Danish Commerce and Companies Appeals Board within 4 weeks after
notification to the party, but see subsections (2) and (3).

(2)

Decisions made under section 150(3) and sections 159 and 160 and refusals of applications
for extensions of time limits shall not be brought before a higher administrative authority.

(3)

Decisions made by the Danish Business Authority under regulations issued under section
153a cannot be brought before another administrative authority.

(4)

Decisions made under section 159a may, except for decisions in accordance with section
160, see section 159a(5), be brought before the Danish Commerce and Companies Appeals
Board no later than four weeks from communication of the decision to the relevant party,
see section 88(1) in the Securities Trading etc. Act.

Chapter 24
Penalties
164

(1)

Any violation of sections 4-6, 8-16, 18-134, 137(2) and (3) and 158 and article 4 in the
Council's Regulation on use of international accounting standards shall be punishable by a
fine, unless the Danish Criminal Code provides for more severe punishment. The same applies if an enterprise which has decided to use international ac-counting standards in accordance with section 137(1) violates rules in the standards or in section 137(3).

(2)

Unless the Danish Criminal Code provides more severe punishment, the members of the responsible management body of the enterprise, see section 8, are punishable by a fine if they
omit to have the financial statements or any consolidated financial accounts audited without
the provisions to such effect in section 135(1), third sentence, having been fulfilled, or if
they have let a person who does not comply with the terms for making declarations in section 135a make a declaration on the financial statements or consolidated financial statements. A person who has given a statement on an annual report without fulfilling the terms
to such effect in section 135a shall receive the same punishment.

(3)

Companies, etc. (legal persons) may incur criminal liability subject to the provisions of Part
5 of the Danish Criminal Code.

(4)

In rules and regulations issued in pursuance of the Act, it may be stipulated that any violation of the provisions in such rules or regulations shall be punishable by a fine.

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(5)

The Danish Commerce and Companies Agency may stipulate by order that any violation of
rules or regulations in accounting standards issued in pursuance of section 136(1) shall be
punishable by a fine.

(6)

Anyone who does not comply with an order from the supervisory authority, see section
159a(1), or submits incorrect or misleading information to this authority be punished by a
fine if no stricter penalty applies according to other legislation.
Chapter 25
Commencement and transitional rules

165

(1)

This Act shall enter into force on 1 January 2002 with effect for financial years beginning on
or after 1 January 2002, but see .subsections (3)-(6).

(2)

Concurrently, the Danish Act on Certain Companies' Presentation of Financial statements,

etc., see Consolidation Act no. 526 of 17 June 1996, shall be repealed, but see subsections
(3) and (6).

(3)

For financial years beginning before 1 January 2002, the existing rules in the Danish Act on
Certain Companies' Presentation of Financial statements, etc., see Consolidation Act no. 526
of 17 June 1996, shall, however, remain in force, subject to the modifications provided for
by section 169 of this Act. However, the time limit for submissions stipulated in section
138(1) of this Act shall apply if an accounting period beginning be-fore 1 January 2002 ends
after 31 December 2002.

(4)

For financial years which both begin and end in 2002, the annual report or the exemption
statement must be received by the Agency within 6 months after the end of the financial
year (5 months for state-owned public limited companies and listed companies). If the time
limit in the first sentence is exceeded, the provisions for imposing charges in sections 150152 shall apply correspondingly. For commercial foundations and for enterprises submitting
exemption statements, the provisions of sections 150-152 shall, however, only apply to financial years ending on or after 1 January 2003.

(5)

The Minister of Economic and Business Affairs will fix the date of commencement for section
37 of the Act.

(6)

Notwithstanding subsection (2), the requirement that there must be two auditors in stateowned public limited companies and listed limited liability companies, see section 61c(1) of
the Danish Act on Certain Companies' Presentation of Financial statements, etc., see Consolidation Act no. 526 of 17 June 1996, shall remain in force for financial years beginning on or
before 31 December 2004.

166

(1)

Any changes in methods of recognition and measurement basis which are necessary as a result of the adoption of this Act must be made in accordance with the rules in section 51, but
see subsections (2)-(4).

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262

(2)

Any changes in the methods of recognition of intangible assets in the form of goodwill, internally generated rights and development projects, see sections 33, 83 and 122, may be
made so that only matters occurring from and after the financial year will be recognised in
accordance with the new rules.

(3)

Changes in the methods of recognition of expenses which are only indirectly attributable to a
manufactured fixed asset or current asset, see section 82, may be made so that indirect expenses are only recognised in the cost of assets manufactured starting from the financial
year.

(4)

For periods preceding the financial year beginning on 1 January 2002 or thereafter, the enterprise may omit to restate comparative figures for any items in the financial statements
which are affected by changes in methods of recognition and measurement basis in pursuance of subsection (1). Any such omission must be disclosed in accordance with section
55(2).

(5)

The Danish Commerce and Companies Agency may derogate from the transitional provisions
of this Act and lay down further transitional provisions where necessary to ease administrative burdens in connection with the switch to the application of the rules provided for under
this Act.

167

When an enterprise first changes the monetary unit used, see section 16, this may be done
without observing the conditions set out in section 13(2). However, the enterprise must
meet the disclosure requirements in section 11(3), second sentence, see section 13(3).

168

(1)

If an enterprise wishes to apply the provisions of this Act to a financial year beginning before 1 January 2002, this must be done systematically, consistently and to the effect that
the annual report, as a minimum, gives a true and fair view in accordance with section 11(1)
of this Act on a level with what was given in the latest financial statements, etc., see section
4(2) of the Danish Act on Certain Companies' Presentation of Annual Accounts, etc., see
Consolidation Act no. 526 of 17 June 1996. However, the provision of section 37 shall not be
applied until it has been put into force by the Minister for Economic and Business Affairs, see
section 165(5).

(2)

Notwithstanding subsection (1), the provision of section 6 may only be applied to financial
years beginning on 1 January 2002 or thereafter.

169

(Omitted)

170

The Act shall not extend to the Faroe Islands and Greenland, but may, by Royal Decree, become effective in full or in part for the said provinces subject to any deviations required by
the specific conditions affecting the Faroe Islands or Greenland.

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263

Schedule 1
Definitions
In this Act, the terms below shall be understood as follows
A General
1

Equity investments:
Investments in public limited companies (shares), in private limited companies (shares) and
in the equity of other enterprises.

Minority interests:
Equity investments in consolidated enterprises that are owned by parties other than the consolidated enterprises.

Monetary items:
Cash and cash equivalents as well as assets and liabilities, including provisions, that are settled in fixed or determinable amounts of money.

State-owned public limited companies:

Public limited companies covered by section 2 a of the Danish Companies Act, in accordance
with which a public limited company is a state-owned public limited company if the connection between the Danish Government and the company is similar to that of a parent company and a subsidiary.

The undertaking's management:

The members of the management bodies in charge of the supreme management and the
day-to-day management under the acts, articles of association, agreements or customs that
apply to the undertaking. In undertakings that have a supervisory body or a supervisory
board, the supervisory body or the supervisory board is comprised by the provisions that
apply to the supreme governing body. If the undertaking does not have a separate governing body, the personally responsible owners are jointly considered to constitute the management body.

Owner:
A shareholder in a public limited company, a shareholder in a private limited company or
other parties that hold equity investments in an enterprise.

Contributed capital:

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264

Capital that the owners have contributed to the enterprise. In public limited companies and
private limited companies, the contributed capital is the share capital.
B. Groups
1

Group:
A parent company and all its subsidiaries.

Parent company:
An undertaking that has a controlling interest in one or several subsidiaries.
A subsidiary may only have one direct parent company. If several undertakings fulfil one or
several of the criteria specified in 4., it is only the undertaking that is actually able to exercise the controlling interest to control the undertaking's financial and operating decisions
that is deemed to be the parent company.

Subsidiary:
An undertaking that is subject to a controlling interest of a parent company.

Controlling interest in respect of a subsidiary:

Controlling interest is the right to control a subsidiary's financial and operational decisions.
Controlling interest in respect of a subsidiary exists when the parent company directly or indirectly through a subsidiary owns more than half of the voting rights in an undertaking unless it can be demonstrated in special circumstances that such ownership does not constitute
a controlling interest.
If a parent company does not own more than half of the voting rights in an undertaking,
controlling interest exists if the parent company has
1)

a right of disposal of more than half of the voting rights by virtue of an agreement with
other investors;

2)

the authority to control the financial and operational issues in an undertaking in accordance with regulation or agreement;

3)

the authority to appoint or remove the majority of the members of the supreme governing body and such body holds the controlling interest in the undertaking; or has

4)

a right of disposal in respect of the actual number of votes at the general meeting or in
a corresponding body and thus has the actual controlling interest in the undertaking.

The existence and the effect of potential voting rights, including subscription rights and call
options of shares that can currently be exercised or converted, must be taken into consider-

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265

ation when assessing whether the undertaking has the power to control another undertaking's financial and operational decisions.
The voting rights relating to shares held by the subsidiary itself or its subsidiary are disregarded when calculating the voting rights in a subsidiary.
5

Associate
An enterprise which is not a subsidiary, but in which another enterprise and its subsidiaries
exercise significant influence in making operating and financial decisions. An enterprise is
presumed to exercise significant influence if the enterprise and its subsidiaries together hold
20 per cent or more of the voting rights.

Group enterprise:
An enterprise's subsidiary, its parent and the latter's subsidiary.
C. The elements of the annual report

Assets:
Resources controlled by an enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise.

Fixed assets:
Assets that are intended for permanent ownership or use by the enterprise.

Current assets:
Assets that are not fixed assets.

Financial assets:
Any asset that is:
1)

cash and cash equivalents,

2)

a contractual right to receive cash or another financial asset from a third party,

3)

a contractual right to exchange financial instruments with a third party under conditions
that are potentially favourable, or

4)
5

an equity instrument of another enterprise.

Liabilities:

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266

Present obligations of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits.
6

Financial liabilities:
Any liability that is:
1)

a contractual obligation to deliver cash and cash equivalents or another financial asset
to a third party, or

2)

a contractual obligation to exchange financial instruments with a third party under conditions that are potentially unfavourable.

Provisions:
Liabilities that are uncertain in terms of amount or timing and that concern the financial
year or a previous year.

Contingent assets:
A possible asset that exists at the balance sheet date as a result of past events and that
may result in future economic benefits, but where the existence of the assets can only be
confirmed by one or more uncertain future events not wholly within the control of the enterprise.

Contingent liabilities:
1)

a possible obligation that exists at the balance sheet date as a result of past events and
that may result in the outflow of future economic benefits, but where the existence of
the obligation can only be confirmed by one or more uncertain future events not wholly
within the control of the enterprise, or

2)

a possible obligation that exists at the balance sheet date as a result of past events, but
where it is not probable that an outflow of resources embodying economic benefits will
be required to settle the obligation, or

3)
10

obligations, the amount of which cannot be measured with sufficient reliability.

Income:
Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in the equity, other
than those relating to contributions from owners.

11

Revenue:

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267

The selling price of products and services, etc. sold in the course of the company's ordinary
activities less price reductions, VAT and other taxes that are directly connected to the sales
amount.
12

Expenses:
Decreases in economic benefits during the accounting period in the form of outflows or depletion of assets and incurrences of liabilities that result in a decrease in equity, other than
those relating to distributions to owners.
D. Measurement basis, etc.

Amortised cost:
The amount at which the financial asset or liability was measured at initial recognition
1)

minus principal repayments

2)

plus or minus the cumulative amortisation of any difference between the initial amount
and the maturity amount, and

3)
2

minus any write-down for impairment or uncollectability.

Fair value:
The amount for which an asset could be exchanged or a liability settled between parties in
an arm's length transaction.

Replacement cost:
The replacement cost of an asset is the current acquisition cost payable for a similar asset at
the balance sheet date.

Recoverable amount:
The recoverable amount of an asset is the higher of that asset's value in use and its selling
price less expected costs of disposal.

Value in use:
The value in use of an asset is the present value of estimated future cash flows expected to
arise from the continuing use of the asset.
The value in use of a liability is the present value of future cash outflows payable during the
life of the liability.

Cost:

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268

The cost of an asset is the amount of the consideration given to acquire that asset whether
it was acquired from an external party or internally generated. The cost of a liability is the
amount received as consideration for that liability.
7

Net realisable value:

The net realisable value of an asset is the sum of the future cash flows which the asset is
expected to generate at the balance sheet date in the ordinary course of business. The net
realisable value of a liability is the sum of the future cash flows from the enterprise during
the life of the liability.

The percentage of completion method:

The percentage of completion method is a method of revenue recognition according to which
income and costs are recognised in the income statement as the work is completed. When
the percentage of completion method is used, the work in progress in the balance sheet is
measured at the calculated market value of the part of the work that has been completed.
The selling price of work in progress is the proportionate part of the contractual price or the
calculated selling price respectively that has been earned for the part of the total contractual
work performed as at the balance sheet date.

Selling price:
The selling price of an asset is the price obtainable from the sale of that asset at the balance
sheet date. The selling price of a liability is the price payable to settle that liability at the
balance sheet date.
Schedule 2
Formats for balance sheets and income statements
1. Format for balance sheet in account form
(reporting classes B, C and D)
ASSETS
FIXED ASSETS

Intangible assets
1)

Completed development projects, including concessions, patents, trademarks and similar rights that originate from development projects

2)

Acquired concessions, patents, licences, trademarks and similar rights

3)

Goodwill

4)

Development projects in progress and prepayments for intangible assets

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II

Property, plant and equipment

1)

Land and buildings

2)

Plant and machinery

3)

Other fixtures and fittings, tools and equipment

4)

Property, plant and equipment in progress and prepayments for property, plant and
equipment

III

Investments
1)

Investments in group enterprises

2)

Receivables from group enterprises

3)

Investments in associates

4)

Receivables from associates

5)

Other investments

6)

Other receivables

7)

Treasury shares

8)

Receivables from owners and management

CURRENT ASSETS

II

Inventories
1)

Raw materials and consumables

2)

Work in progress

3)

Manufactured goods and goods for resale

4)

Prepayments for goods

Receivables
1)

Trade receivables

2)

Contract work in progress

3)

Receivables from group enterprises

4)

Receivables from associates

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270

III

IV

5)

Other receivables

6)

Contributed capital in arrears

7)

Receivables from owners and management

8)

Prepayments

Investments
1)

Investments in group enterprises

2)

Treasury shares

3)

Other investments

Cash
LIABILITIES AND EQUITY
EQUITY

Contributed capital

II.

Share premium

III
IV

Revaluation reserve
Other reserves
1)

Reserve for net revaluation according to the equity method

2)

Reserve for treasury shares

3)

Reserve for loans and provision of security

4)

Reserve for non-paid share capital

5)

Other statutory reserves

6)

Reserves according to the articles of association

7)

Other reserves

Retained earnings
PROVISIONS
1)

Provision for pensions and similar liabilities

2)

Provision for deferred tax

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271

3)

Other provisions
LIABILITIES OTHER THAN PROVISIONS (SHORT- AND LONG-TERM)

1)

Mortgage debt

2)

Other debt raised by the issuance of bonds

3)

Other credit institutions

4)

Convertible and profit-sharing debt instruments

5)

Prepayments received from customers

6)

Trade payables

7)

Payables to group enterprises

8)

Payables to associates

9)

Income taxes

10) Other payables

11) Deferred income
12) Proposed dividend for the year
2. Format for balance sheet in report form
(reporting classes B, C and D)
FIXED ASSETS
I

Intangible assets
1)

Completed development projects, including concessions, patents, trademarks and similar rights that originate from development projects

II

2)

Acquired concessions, patents, licences, trademarks and similar rights

3)

Goodwill

4)

Development projects in progress and prepayments for intangible assets

Property, plant and equipment

1)

Land and buildings

2)

Plant and machinery

3)

Other fixtures and fittings, tools and equipment

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272

4)

Property, plant and equipment in progress and prepayments for property, plant and
equipment

III

Investments
1)

Investments in group enterprises

2)

Receivables from group enterprises

3)

Investments in associates

4)

Receivables from associates

5)

Other investments

6)

Other receivables

7)

Treasury shares

8)

Receivables from owners and management

CURRENT ASSETS

II

Inventories
1)

Raw materials and consumables

2)

Work in progress

3)

Manufactured goods and goods for resale

4)

Prepayments for goods

Receivables
1)

Trade receivables

2)

Contract work in progress

3)

Receivables from group enterprises

4)

Receivables from associates

5)

Other receivables

6)

Contributed capital in arrears

7)

Receivables from owners and management

8)

Prepayments

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273

III

IV

Investments
1)

Investments in group enterprises

2)

Treasury shares

3)

Other investments

Cash
SHORT-TERM LIABILITIES OTHER THAN PROVISIONS

Mortgage debt

Other debt raised by the issuance of bonds

Other credit institutions

Convertible and profit-sharing debt instruments

Prepayments received from customers

Trade payables

Payables to group enterprises

Payables to associates

Income taxes

10

Other payables

11

Deferred income

12

Proposed dividend for the year

CURRENT ASSETS LESS SHORT-TERM LIABILITIES OTHER THAN PROVISIONS
TOTAL ASSETS LESS SHORT-TERM LIABILITIES OTHER THAN PROVISIONS
LONG-TERM LIABILITIES OTHER THAN PROVISIONS

Mortgage debt

Other debt raised by the issuance of bonds

Other credit institutions

Convertible and profit-sharing debt instruments

Prepayments received from customers, Prepayments received from trade debtors

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274

Trade payables

Payables to group enterprises

Payables to associates

Income taxes

10

Other payables

11

Deferred income
PROVISIONS

Provision for pensions and similar liabilities

Provision for deferred tax

Other provisions
EQUITY

Contributed capital

II

Share premium

III

Revaluation reserve

IV

Other reserves

1)

Reserve for net revaluation according to the equity method

2)

Reserve for treasury shares

3)

Reserve for loans and provision of security

4)

Reserve for non-paid share capital

5)

Other statutory reserves

6)

Reserves according to the articles of association

7)

Other reserves

Retained earnings
3. Format for income statement in report form, classified by nature
(reporting class B)

(* next to an item indicates that the item may be aggregated, see section 32. Gross profit/Gross loss in
the brackets must then be stated instead)

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275

Revenue *

Change in inventories of finished goods and work in progress *

Work performed for own account and capitalised *

Other operating income *

External expenses *
a)

Raw materials and consumables used *

b)

Other external expenses *

(Gross profit/Gross loss)

6

Staff costs
a)

Wages and salaries

b)

Pensions

c)

Other social security costs

Depreciation, amortisation and impairment losses; property, plant and equipment as well as
intangible assets

Writedowns of current assets other than current financial assets

Other operating expenses

10

Income from investments in group enterprises and associates

a)

Income from investments in group enterprises

b)

Income from investments in associates

11

Income from other investments and receivables that are fixed assets

12

Other financial income from group enterprises

13

Other financial income

14

Impairment of financial assets

15

Other financial expenses

a)

Financial expenses arising from group enterprises

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276

b)

Other financial expenses

16

Profit or loss from ordinary activities before tax

17

Extraordinary income

18

Extraordinary expenses

19

Extraordinary profit or loss before tax

20

Tax on net profit or loss for the year

21

Other taxes

22

Net profit or loss for the year

4. Format for income statement in report form, classified by function
(reporting class B)

(* next to the item indicates that the item may be aggregated, see section 32. Gross profit/Gross loss
in the brackets must then be stated instead)
1

Revenue *

Cost of sales *

Gross margin *
(Gross profit/Gross loss)

Distribution costs

Administrative expenses

Other operating income*

Other operating expenses

Income from investments in group enterprises and associates

a)

Income from investments in group enterprises

b)

Income from investments in associates

Income from other investments and receivables that are fixed assets

10

Other financial income from group enterprises

11

Other financial income

12

Impairment of financial assets

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277

13

Other financial expenses

a)

Financial expenses arising from group enterprises

b)

Other financial expenses

14

Profit or loss from ordinary activities before tax

15

Extraordinary income

16

Extraordinary expenses

17

Extraordinary profit or loss before tax

18

Tax on net profit or loss for the year

19

Other taxes

20

Net profit or loss for the year

5. Format for income statement in report form, classified by nature
(reporting classes C and D)

(* next to the item indicates that medium-sized enterprises may aggregated the item, see section 32.
Gross profit/Gross loss in the brackets must then be stated instead)
1

Revenue *

Change in inventories of finished goods and work in progress *

Work performed for own account and capitalised *

Other operating income *

External expenses *
a)

Raw materials and consumables used *

b)

Other external expenses *

(Gross profit/Gross loss)

Staff costs
a)

Wages and salaries

b)

Pensions

c)

Other social security costs

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278

Depreciation, amortisation and impairment losses; property, plant and equipment as well as
intangible assets

Writedowns of current assets other than current financial assets

Other operating expenses

10

Income from investments in group enterprises and associates

a)

Income from investments in group enterprises

b)

Income from investments in associates

11

Income from other investments and receivables that are fixed assets

12

Other financial income from group enterprises

13

Other financial income

14

Impairment of financial assets

15

Other financial expenses

a)

Financial expenses arising from group enterprises

b)

Other financial expenses

16

Profit or loss before tax and extraordinary items

17

Tax on profit or loss from ordinary activities

18

Profit or loss from ordinary activities after tax

19

Extraordinary income

20

Extraordinary expenses

21

Extraordinary profit or loss before tax

22

Tax on extraordinary profit or loss

23

Extraordinary profit or loss after tax

24

Other taxes

25

Net profit or loss for the year

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279

6. Format for income statement in report form, classified by function

(reporting classes C and D)
(* next to the item indicates that medium-sized enterprises may aggregate the item, see section 32.
Gross profit/Gross loss in the brackets must then be stated instead)
1

Revenue *

Cost of sales

Gross margin *
(Gross profit/Gross loss)

Distribution costs

Administrative expenses

Other operating income*

Other operating expenses

Income from investments in group enterprises and associates

a)

Income from investments in group enterprises

b)

Income from investments in associates

Income from other investments and receivables that are fixed assets

10

Other financial income from group enterprises

11

Other financial income

12

Impairment of financial assets

13

Other financial expenses

a)

Financial expenses arising from group enterprises

b)

Other financial expenses

14

Profit or loss before tax and extraordinary items

15

Tax on profit or loss from ordinary activities

16

Profit or loss from ordinary activities after tax

17

Extraordinary income

18

Extraordinary expenses

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280

19

Extraordinary profit or loss before tax

20

Tax on extraordinary profit or loss

21

Extraordinary profit or loss after tax

22

Other taxes

23

Net profit or loss for the year

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281

This translation was partly carried out by the professional translation agency GlobalDenmark Translations on behalf of the Danish Financial Supervisory Authority, and updated by Plesner's state-authorised
translators. The text is to be regarded as an unofficial translation based on the latest official consolidated Act. Only the Danish document has legal validity.

Securities Trading Act etc.1

This Act shall include provisions implementing Directive 98/26 of 19 May 1998 of the European Par-liament and of
the Council on settlement finality in payment and securities settlement systems, Official Journal 1998, no. L 166,
p. 45 (the Finality Directive), parts of Directive 2000/64/EC of 7 November 2000, Official Journal 2000, no. L 290,
p. 27 amending Council Directives 85/611/EEC, 92/49/EEC, 92/96/EEC and 93/22/EEC (exchange of information
with third countries), parts off Directives 79/279/EEC, 80/390/EEC, 82/121/EEC and 88/627/EEC which are now
consolidated in Directive 2001/34/EC of 28 May 2001 of the European Parliament and of the Council on the admission of securities to official stock exchange listing and on information to be published on those securities, Official
Journal 2001, no. L 184, p. 1 (Consolidated Admission and Reporting Directive), Directive 2002/47/EC of 14 June
2002 of the European Parliament and of the Council on financial collateral arrangements, Official Journal 2002,
no. L 168, p. 43 (Collateral Directive), Directive 2003/6/EC of 28 January 2003 of the European Parliament and of
the Council on insider dealing and market manipulation (market abuse), Official Journal 2003, no. L 96, p. 16
(Market Abuse Directive), parts of Directive 2003/71/EC of 4 November 2003 of the European Parliament and of
the Council on the prospectus to be published when securities are offered to the public or admitted to trading and
amending Directive 2001/34/EC, Official Journal 2003, no. L 345, p. 64 (Prospectus Directive), Commission Directive 2003/124/EC of 22 December 2003 implementing Directive 2003/6/EC of the European Parliament and of
the Council as regards the definition and public disclosure of inside information and the definition of market manipulation, Official Journal 2003, no. L 339, p. 70, Commission Directive 2004/72/EC of 29 April 2004 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards accepted market practices, the
definition of inside information in relation to derivatives on commodities, the drawing up of lists of insiders, the
notification of managers' transactions and the notification of suspicious transactions, Official Journal 2004, no. L
162, p. 70, parts of Directive 2004/25/EC of the European Parliament and of the Council on takeover bids, Official
Journal 2004, no. L 142, p. 12 (Takeover Directive), parts of Directive 2004/109/EC of 15 December 2004 of the
European Parliament and of the Council on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive
2001/34/EC, Official Journal 2004, no. L 390, p. 38 (Transparency Directive), parts of Directive 2004/39/EC of 21
April 2004 of the European Parliament and of the Council on markets in financial instruments amending Council
Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and
repealing Council Directive 93/22/EEC, Official Journal 2004, no. L 145, p. 1 (MiFID Directive), parts of Directive
2006/31/EC of 5 April 2006 of the European Parliament and of the Council amending directive 2004/39/EC on
markets in financial instruments, as regards certain deadlines, Official Journal 2006, no. L 114, p. 60 (Postponement Directive), Directive 2009/44/EC of 6 May 2009 of the European Parliament and of the Council amending Directive 98/26/EC on settlement finality in payment and securities settlement systems and Directive 2002/47/EC
on financial collateral arrangements as regards linked systems and credit claims, Official Journal 2009, no. L 146,
p. 37, parts of Directive 2010/73/EC of24 November 2010 of the European Parliament and of the Council amending Directives 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted
to trading and 2004/109/EC on the harmonisation of transparency requirements in relation to information about
issuers whose securities are admitted to trading on a regulated market, Official Journal 2010, no. L 327, p. 1
(amending the Prospectus Directive) and Regulation no. 1031/2010/EU of 12 November 2010 of the European
Parliament and of the Council on the timing, administration and other aspects of auctioning of greenhouse gas
emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing
a scheme for greenhouse gas emission allowances trading within the Community.

282

Consolidating Act no. 219 of 20 February 2013 on securities trading etc

Future amendments: Act no. 1171 of 19 December 2003, Act no. 155 of 28 February 2012 and Act no.
1287 of 19 December 2012

Introductory provisions
Part 1
Securities trading
1

(1) This Act shall apply to securities trading.

(2) Securities trading shall mean
1)

public offering of securities,

2)

purchase and sale of securities for own or third party's account,

3)

transmission of purchase and sale of securities,

4)

professional advice with respect to securities,

5)

portfolio management, and

6)

issue underwriting.

(3) This Act shall also apply to the operation of regulated markets and multilateral trading facilities, clearing activities, book-entry activities, etc. and designated payment systems.
(4) Section 87(1) and (8) shall apply correspondingly for service suppliers and sub-suppliers to
outsourcing undertakings, see section 2c, nos. 3 and 4.
1a

(Repealed).

(1) The provisions of this Act with respect to securities shall apply to the following instruments:
1)

Negotiable securities (except for payment instruments) that can be traded on the capital
market, including
a)

shares in companies and other securities equivalent to shares in companies, partnerships and other businesses, and share certificates,

b)

bonds and other debt instruments, including certificates for such securities, and

c)

any other securities of which securities as mentioned in a) or b) can be acquired or

sold, or give rise to a cash settlement, the amount of which is fixed with securities,

283

currencies, interest rates or returns, commodities indexes and other indexes and
targets as reference,
2)

money market instruments, including treasury bills, certificates of deposits and commercial papers, with the exception of payment instruments,

3)

units in collective investment schemes covered by the Investment Associations and Special-Purpose Associations as well as and Other Collective Investment Schemes, etc. Act,
as well as holdings in other collective investment undertakings,

4)

options, financial-futures, swaps, Forward Rate Agreements (FRAs), and any other derivative agreement concerning securities, currencies, interest rates or returns, or other
derivatives, financial indexes or financial targets which can be subject to physical or
cash settlements,

5)

options, futures, swaps, Forward Rate Agreements (FRAs), and any other derivative
agreement concerning commodities for cash settlement, or which can be settled in cash
if one of the parties so wishes (for other reasons than breach or termination),

6)

options, futures, swaps, and any other derivative agreement concerning commodities for
physical settlement, if traded on a regulated market or a multilateral trading facility,

7)

options, futures, swaps, forward contracts or any other derivative agreement concerning
commodities not covered by no. 6 and which can be physically settled, and have no
commercial purpose, and which have characteristics similar to other derivative financial
instruments, taking into consideration whether they are cleared and settled through
acknowledged clearing institutions or are covered by regular determination of a margin,

8)

Credit derivatives,

9)

financial contracts for difference (CDFs),

10) options, futures, swaps, Forward Interest-Rate Agreements (FRAs) and any other derivative agreement regarding climatic variables, freight rates, emissions allowances or inflation rates, or other official financial statistics for cash settlement, or which can be
settled in cash if one of the parties so wish (for other reasons than breach or termination) and any other derivative agreement concerning assets, rights, obligations, indexes
and targets not covered by nos. 1 to 9, and which have characteristics similar to other
derivative financial instruments, taking into consideration whether they are traded on a
regulated market or through a multilateral trading facility, cleared and settled through
acknowledged clearing institutions or are covered by regular determination of a margin,
and
11) negotiable mortgage deeds on real property or chattels.

284

(2) The Danish FSA may lay down regulations to the effect that specified instruments not mentioned in subsection (1) be covered by all or part of the regulations on securities of this Act.
2a

(1) "Equity securities" shall, in part 6 of this Act and in regulations issued pursuant to section
23(7) and (8) and section 24(2), mean shares and other negotiable securities equivalent to
shares as well as any other type of negotiable securities giving the right to acquire any of
the aforementioned securities as a consequence of their being converted or the rights conferred by them being exercised, provided that securities of the latter type are issued by the
issuer of the underlying shares or by an entity belonging to the group of the said issuer.
(2) "Non-equity securities" shall, in part 6 of this Act and in regulations issued pursuant to section 23(7) and (8) and section 24(2), mean all securities other than those mentioned in subsection (1).

2b

"Offering of securities to the public" shall, in this Act, mean any communication to natural
and legal persons in any form and by any means, presenting sufficient information on the
terms of the offer and the securities to be offered, so as to enable an investor to decide to
purchase or subscribe to these securities.

2c

(1) For the purposes of this Act the following definitions shall apply:
1)

Outsourcing: Delegation to a supplier by an undertaking of significant areas of activity,

which are subject to supervision by the Danish FSA.

2)

Outsourcing undertaking: An undertaking covered by section 7(1) which outsources activities to a service supplier.

3)

Service supplier: An undertaking that performs outsourced tasks for the outsourcing undertaking.

4)

Chain outsourcing: Outsourcing by a service supplier of tasks, which the service supplier
is to perform in accordance with an agreement with the outsourcing undertaking, to a
sub-supplier and the sub-supplier's possible chain outsourcing of the tasks to the next
link in the chain of sub-suppliers as well as possible chain outsourcing to other links in
the chain of sub-suppliers.

(1) All securities transactions shall be carried out fairly and in conformity with good securities
trading practices. The Danish FSA may order that matters which are contrary to the 1st sentence be rectified.
(2) The Minister for Economic and Business Affairs shall lay down more detailed regulations on
good securities trading practices.
(3) The Consumer Ombudsman may institute legal proceedings regarding violations of regulations on good securities trading practices, see subsection (1), and regulations issued pursu-

285

ant to subsection (2), including legal proceedings on prohibitions and orders, compensation
and recovery of amounts demanded unlawfully. The provisions of section 20, section 22(2),
section 23(1), section 27(1) and section 28 of the Marketing Practices Act shall apply correspondingly to legal proceedings which the Consumer Ombudsman wishes to institute in pursuance of the provision of the 1st sentence. The Consumer Ombudsman may be appointed
as group representative in group actions, see Part 23a of the Administration of Justice Act.
(4) The Danish FSA shall notify the Consumer Ombudsman, if the Danish FSA becomes aware of
a possibility that the clients of an undertaking may have suffered losses as a result of the
undertaking having not complied with subsection (1) or regulations issued in pursuance of
subsection (2).
(5) Notwithstanding section 84a, the Consumer Ombudsman shall have access to all information
in proceedings by the Danish FSA covered by subsection (1).
Part 1a
Communication
3a

(1) The Minister for Business and Growth may lay down regulations to effect that written communication to and from the Danish FSA, the Minister for Business and Growth and the Danish Business Authority about matters covered by this Act or regulations issued pursuant to
this Act shall be made electronically.
(2) The Minister for Business and Growth may lay down detailed regulations about electronic
communication, including the use of specific IT systems, particular electronic formats and
digital signatures etc.
(3) Electronic communication shall be considered received when it is available to the addressee.

3b

(1) The Minister for Business and Growth may lay down regulations that authorities, see section
3a(1), may make decisions and issue other documents under this Act or under regulations
issued pursuant to this Act without signature, with an automatically or similarly reproduced
signature or by use of a technique that ensures precise identification of the party that has
made

the decision or issued the document. Such decisions and documents shall have the

same status as decisions and documents provided with a personal signature.

(2) The Minister for Business and Growth may lay down regulations to effect that decisions and
other documents that are exclusively made or issued on the basis of electronic data processing may be issued merely with the name of the relevant authority as the sender.
3c

(1) If it is required by this Act or by regulations issued pursuant to this Act that a document issued by others than an authority, see section 3a(1), must be signed, such requirement may
be satisfied by use of a technique that ensures precise identification of the party that has issued the document, but see subsection (2). Such documents shall be considered equal to
documents provided with a personal signature.

286

(2) The Minister for Business and Growth may lay down detailed regulations regarding deviation
from the signature requirements. It may be laid down that requirements about a personal
signature cannot be deviated from in relation to specific types of documents.
Part 2
Securities dealers
4

(1) For the purposes of this Act, a "securities dealer" shall mean
1)

financial undertakings licensed as banks, to the extent that such undertakings are licensed under section 9(1) of the Financial Business Act, and financial undertakings licensed as investment firms,

2)

financial undertakings licensed as mortgage-credit institution or investment management company to the extent that such undertakings are licensed under section 9(1) of
the Financial Business Act,

3)

credit institutions, investment companies and management companies, which have been
granted a licence in another Member State of the European Union or a country with
which the Union has entered into an agreement for the financial area, if such institution
or company legally carries out securities trading either through a branch or by providing
services in Denmark, see sections 30 and 31 respectively of the Financial Business Act,
and

4)

credit institutions and investment companies, which have been granted a licence in another Member State of the European Union with which the Union has not entered into an
agreement for the financial area, if such institution or company legally carries out securities trading either through a branch or by providing services in Denmark, see sections
1(3) and 33 respectively of the Financial Business Act.

(2) The Danish FSA may lay down regulations to the effect that the provisions of this Act regarding the obligations of a securities dealer shall also apply to foreign credit institutions
and investment companies that are not covered by section 1, no. 3 or 4, and that, pursuant
to section 20(4), have been accepted as members of a regulated market, or that, in pursuance of section 64(3), have entered into participation agreements with a central securities
depository.
4a

(Repealed).

(Repealed).

(Repealend).

287

Part 3
Common provisions
7

(1) For the purposes of this Act the following definitions shall apply:
1)

an "operator" shall mean a limited company operating on a regulated market,

2)

a "clearing centre" shall mean a limited company carrying out securities clearing activities with a licence pursuant to section 8, and

3)

a "central securities depository" shall mean a limited company carrying out book-entry
activities.

(2) The undertakings mentioned in subsection (1) shall have a board of directors and a board of
management, but see subsections (3) and (4).
(3) Provisions regarding the board of directors or members hereof in section 12(1) and section
12d(5), shall, for SEs (Societas Europea) with a two-tier management system, only apply
with the changes necessary to the supervisory organ or members thereof.
(4) Provisions regarding the board of directors or members hereof and provisions regarding the
management in section 9; section 12a(1) and (3); section 12c; section 12d(1)-(3); 12e(2),
section 13; section 15(3), section 28a(2); section 37(1), 1st sentence; section 60(4); section 84b(2), no. 2, and subsection (3); section 87(1); section 95(1); and section 96(1) shall,
for SEs with a two-tier management system in addition to the management body, also apply
to the supervisory organ or members thereof with the changes necessary.
(5) The time limits fixed in or pursuant to this Act shall take effect from the day following the
day when the event triggering the time limit occurred. This shall apply to calculation of time
limits involving days, weeks, months and years.
(6) Where the time limit is indicated in weeks, said time limit shall expire on the day in the
week when the event triggering the time limit occurred, see. subsection (5).
(7) If the time limit is indicated in months it shall expire on the day in the month when the
event triggering the time limit occurred, see subsection (5). If the day when the event triggering the time limit occurred is the last day of a month, or if the time limit expires on a
date which does not exist, the time limit shall always expire on the last day of the month, irrespective of its length.
(8) If a time limit expires during a weekend, on a holiday, 5 June, 24 December or on 31 December, the time limit shall be extended to the next business day.
7a

(1) For the purposes of this Act, a designated payment system" shall mean a payment system
registered pursuant to section 57a(1), 1st sentence.

288

(2) For the purposes of this Act, a company that operates an alternative market place shall
mean a company that operates a multilateral trading facility as an alternative market place,
see section 17(2, 2nd and 3rd sentences.
(3) For the purposes of this Act, a foreign clearing centre" shall mean an undertaking approved
under section 8a.
8

(1) Activities covered by section 7(1), and an operator operating a multilateral trading facility
on a regulated market may not be commenced until the Danish FSA has granted a licence
herefor. The securities clearing activities carried out by Danmarks Nationalbank (Denmark's
central bank) shall not be covered by the 1st sentence.
(2) Conditions for such licence shall be
1)

that the activities are carried out by a limited company designated with the Danish
Business Authority,

2)

that the company has a share capital of no less than DKK 8 million as regards operators
of regulated markets, and no less than DKK 40 million as regards clearing centres and
central securities depositories,

3)

that the company has submitted the required information, including an operating plan,
organisational charts, procedures and control and safeguard arrangements,

4)

that the members of the applicant's board of directors and board of management satisfy
the requirements of section 9, and

5)

that the owners of qualifying interests meet the requirements of sections 10 and 10a.

(3) As regards a central securities depository, the licence shall also be conditional upon the central securities depository having capital resources, see section 82.
(4) Licences of clearing centres shall also be conditional upon the prevailing regulations and
participation agreements of the relevant clearing centre containing provisions laid down pursuant to section 57c.
(5) In the event that the Danish FSA refuses an application for a licence, the applicant shall be
notified, with a reason for refusal, no later than six months following receipt of the application or, if the application is incomplete, no later than six months after the applicant has
submitted the information necessary to make the decision. At all events, a decision shall be
made no later than 12 months after receipt of the application. If the Danish FSA has not
made a decision on a full and complete application for a licence no later than six months after receipt of the application, the company may bring the matter before a court.
8a

(1) A foreign clearing centre may, pursuant to subsections (3) or (4) become licensed as an approved foreign clearing centre, for clearing securities traded between securities dealers

289

where at least one of these securities dealers have been granted a licence for securities
trading in Denmark, see section 9 of the Financial Business Act and where such trading
takes place on a regulated market, an alternative market place or at a multilateral trading
facility in Denmark.
(2) A foreign clearing centre may not commence the activities described in subsection (1) until
the Danish FSA has granted a licence herefor under subsections (3) or (4).
(3) The Danish FSA shall approve the securities clearing activities of a foreign clearing centre in
another Member State of the European Union or a country with which the Union has entered
into an agreement for the financial area for carrying out clearing activities in Denmark as an
approved foreign clearing centre, unless the Danish FSA can prove that a licence involves a
risk that a regulated market or an alternative market place will not function appropriately,
or that the financial markets otherwise will not function in a safe, efficient and technically
responsible manner.
(4) The Danish FSA shall approve that a foreign clearing centre which has been granted a licence to carry out securities clearing activities in a country outside the European Union, with
which the Union has not entered into an agreement for the financial area may carry out
clearing activities in Denmark as an approved foreign clearing centre, if the Danish FSA has
proven that the securities clearing can be carried out in an otherwise safe, efficient and
technically responsible manner for the Danish financial markets.
(5) In the evaluation pursuant to sections 3 and 4, the Danish FSA shall take into account legislation and supervision by which the clearing centre is covered in its home country. The Danish FSA shall also consider whether participants and investors are protected to a similar extent as in securities clearing in a clearing centre licensed pursuant to section 8 of this Act.
The Danish FSA shall also consider whether the applicant has appropriate procedures and
controls in place to counter if a participant is not able to meet his obligations in connection
with securities clearing. The Danish FSA also shall also take into account whether the applicant's IT systems and IT procedures are suitable in relation to ensuring effective and secure
securities clearing, and whether the applicant can expect compliance with his obligations
pursuant to this Act and regulations laid down pursuant to this Act.
(6) The Danish FSA shall be responsible for notifying a decision no later than three months after
receipt of an application containing the information necessary in order to make a decision.
At all events, a decision shall be made no later than six months after receipt of the application. If the Danish FSA has not made its decision no later than three months after receipt of
a complete application for approval, the foreign clearing centre may bring the case before
the courts.
(7) The Danish FSA may stipulate requirements for approval pursuant to subsections (3) or (4).
The Danish FSA may also stipulate supplementary requirements for licence in issue. The ap-

290

proved foreign clearing centre, shall, in such cases, be subject to a time limit for informing
when such supplementary terms shall be complied with.
(8) The Danish FSA may lay down more detailed regulations regarding the information to be
provided by undertakings in connection with submission of an application for approval pursuant to subsections (3) and (4), regarding ongoing disclosure obligations and reporting requirements for approved foreign clearing centres, regarding requirements for cooperating
with home country supervision and regarding other conditions relevant for the securities
clearing.
8b

(1) A foreign operator who has been granted a licence to operate a regulated market or a multilateral trading facility in another Member State of the European Union or in a country with
which the Union has entered into an agreement for the financial area, may permit remote
members; participants or users in Denmark, to gain access to the regulated market or the
multilateral trading facility if the Danish FSA has received notification hereof from the supervisory authorities in the home country of the operator.
(2) A foreign operator may obtain a licence from the Danish FSA to operate a regulated market
or a multilateral trading facility in Denmark, if the operator is established in another Member
State of the European Union or in a country with which the Union has entered into an
agreement for the financial area, and if the competent authority in the home country of the
operator has granted the operator a licence and supervises the operator in accordance with
legislation in the operator's home country in which Title III of Directive 2004/39/EC (the MiFID Directive) has been implemented. The licence may be granted if the operator complies
with the conditions laid down in section 8(2), with the changes necessary. The requirements
for the Danish FSA laid down in section 8(5) shall apply to the processing of the application.
(3) For foreign operators which have been granted a licence pursuant to subsection (2), this Act
shall apply to the operator and its activities in Denmark.

8c

(1) A regulated market may be granted a licence in Denmark as an auction platform pursuant to
Commission Regulation no. 1031/2010 of 12 November 2010 (CO2 Auction Regulation).
(2) A licence pursuant to subsection (1) shall be conditional upon compliance by the regulated
market and its operator with Parts 3 and 4 of this Act with the changes necessary.
(3) If the operator of the regulated market is not established in Denmark, licence may be granted pursuant to subsection (1), provided that
1)

the regulated market complies with the requirements laid down in Parts 3 and 4 of this
Act with the changes necessary, and

2)

the operator is established in another Member State of the European Union or in a country with which the Union has entered into an agreement for the financial area, and the
competent authority in the home country of the operator has granted the operator a li-

10

291

cence and supervises the operator in compliance with the legislation of the home country, according to which Title III of Directive 2004/39/EC (the MiFID Directive) has been
implemented.
(4) An operator may be licensed to operate a regulated market that is licensed as an auction
platform pursuant to Commission Regulation no. 1031/2010 of 12 November 2010 (CO2
Auction Regulation) in another Member State of the European Union or in a country with
which the Union has entered into an agreement for the financial area, provided that
1)

the operator complies with the requirements laid down in Parts 3 and 4 of this Act with
the changes necessary, and

2)

the competent authority in the home country of the regulated market grants the regulated market a licence pursuant to Commission Regulation no. 1031/2010 of 12 November 2010 (CO2 Auction Regulation) and supervises the regulated market in accordance
with the legislation of the home country, according to which Title III of Directive
2004/39/EC (the MiFID Directive) has been implemented.

(5) If the Danish FSA refuses an application for a licence, the applicant shall be notified of reasons within six months of receipt of the application or, should the application be incomplete,
within six months of the applicant sending the information required for the decision. At all
events, a decision shall be made no later than twelve months after receipt of the application.
If the Danish FSA has not made its decision no later than six months after receipt of a complete application for a licence, the applicant may bring the case before the courts.
9

(1) A member of the board of directors or board of management of a company covered by section 7(1) shall have appropriate experience in carrying out his duties and responsibilities in
the undertaking in question.
(2) A member of the board of directors or board of management of a company covered by section 7(1) shall comply with the following:
1)

Shall not, at present or in the future, be held criminally liable for violation of the Criminal Code, financial legislation, or other relevant legislation, if such violation entails a
risk that the person in question may fail to carry out his duties and responsibilities adequately.

2)

Shall not have filed for financial reconstruction, have filed for bankruptcy or debt restructuring, or be under financial reconstruction, bankruptcy proceedings or debt restructuring.

3)

Shall not have behaved or behave such that there is reason to assume that the person
in question will not perform his duties or responsibilities adequately. In the assessment
of whether a member of the board of directors or board of management behaves or has

11

292

behaved inadequately, emphasis will be on maintaining confidence in the financial sector.

(3) Members of the board of directors or board of management of an undertaking covered by
section 7(1) shall submit information to the Danish FSA on the circumstances mentioned in
subsection (2) in connection with their appointment to the management of the undertaking,
and if the circumstances subsequently change.
(4) The person(s) who actually manages an already approved operator of the activities of a regulated market in accordance with the regulations in the Directive on markets in financial instruments (the MiFID Directive) shall be assumed to comply with the requirements in subsection (1) in connection with an application for a licence to operate on a regulated market.
10

(1) Any natural or legal person or natural or legal persons acting together who intend directly or
indirectly to acquire a qualifying interest, see section 5(3) of the Financial Business Act, in a
company covered by section 7(1) shall apply to the Danish FSA in advance for approval of
the intended acquisition. The same shall apply to an increase in the qualifying interest
which, after the acquisition, results in the interest equalling or exceeding a limit of 20%,
33% or 50% respectively of the share capital or voting rights, or results in company covered
by section 7(1) becoming a subsidiary undertaking.
(2) The Danish FSA shall confirm in writing, and no later than after two business days, receipt of
the application, see subsection (1). The same shall apply correspondingly for receipt of material pursuant to subsection (4).
(3) From the date of the written confirmation of receipt of the application, see subsection (2),
and receipt of all documents required to be enclosed with the application, the Danish FSA
shall have an assessment period of 60 business days to carry out the assessment mentioned
in section 10a. At the same time as confirming receipt of the application, see subsection (2),
the Danish FSA shall notify the intended acquirer of the date on which the assessment period expires.
(4) Up to the fiftieth business day in the assessment period the Danish FSA may request any
further information necessary for the assessment. The request shall be in writing. The first
time such a request is submitted, the assessment period shall be interrupted for the period
between the date of the request and the receipt of a reply to this. Such interruption may
not, however, exceed 20 business days, but see subsection (5).
(5) The Danish FSA may extend the interruption of the assessment period mentioned in subsection (4) by up to ten business days, provided
1)

the intended acquirer is domiciled or subject to legislation in a country outside the European Union with which the Union has not entered into an agreement for the financial
area, or

12

293

2)

the intended acquirer is a natural or legal person who has not been granted a licence to
carry out the activities mentioned in sections 7-11 or section 308 of the Financial Business Act or the activities mentioned in section 16 of this Act in Denmark, in another
Member State of the European Union or in a country with which the Union has entered
into an agreement for the financial area.

(6) If the Danish FSA refuses an application for approval of the intended acquisition, this shall
be explained in writing and notified to the intended acquirer immediately after the decision.
The notification shall be within the assessment period. The intended acquirer may request
that the Danish FSA make public the reason for the refusal.
(7) If, during the course of the assessment period, the Danish FSA does not give written refusal
of the application for the intended acquisition, the acquisition shall be considered approved.
(8) The Danish FSA may, when approving acquisitions or increases pursuant to subsection (1),
stipulate a time limit for the completion of such acquisitions or increases. The Danish FSA
may extend such a time limit.
(9) The Danish FSA shall lay down regulations regarding when an acquisition shall be included in
the calculation pursuant to subsection (1).
10.a

(1) In its assessment of an application received pursuant to section 10(1), the Danish FSA shall
ensure that account is taken of sensible and proper management of the company in which
the acquisition is intended. The assessment shall also take into account the likely influence
of the intended acquirer on the company, the suitability of the intended acquirer, and the financial soundness of the intended acquisition in relation to the following criteria:
1)

The reputation of the intended acquirer.

2)

The reputation and experience of the person(s) who will manage the company after the
acquisition.

3)

The financial situation of the intended acquirer, particularly with respect to the nature of
the business operated or intended to be operated in the company covered by section
7(1) in which the acquisition is intended.

4)

Whether the company can continue to comply with the supervision requirements in the
legislation, in particular whether the group of which the company may become a part
has a structure which makes it possible to perform effective supervision and effective
exchange of information between the competent authorities as well as to determine how
responsibilities are to be divided between the competent authorities.

5)

Whether, in connection with the intended acquisition, there are grounds to suspect that
money laundering or terrorist financing, see. sections 4 and 5 of the Act on Measures to
Prevent Money Laundering and Financing of Terrorism, will occur.

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294

(2) The Danish FSA may refuse an application for approval of an intended acquisition if, on the
basis of the criteria mentioned in subsection (1), there are reasonable grounds to believe
that the intended acquirer will hinder sensible and proper management of the company, see
subsection (1), or in the opinion of the Danish FSA the information submitted by the intended acquirer is not sufficient.
(3) The Danish FSA may not take account of the financial needs of the market in its assessment
pursuant to subsection (1).
10b.

Any natural or legal person or natural and legal persons acting together who intend directly
or indirectly to sell a qualifying interest or reduce a qualifying interest in a company covered
by section 7(1), such that the sale entails that the limit of 20%, 33% or 50% respectively of
the share capital or voting rights is no longer achieved, or entails that the company ceases
to be a subsidiary of the relevant parent, shall notify the Danish FSA of this in writing in advance, stating the size of the planned future holding.

10c

(1) Where a company covered by section 7(1) learns of acquisitions or sales of holdings as specified in section 10(1) and section 10b, said company shall immediately notify the Danish FSA
hereof.
(2) A company covered by section 7(1) shall, no later than February each year, submit information to the Danish FSA of the names of the owners of capital who own qualifying interests
in the company as well as information on the sizes of said interests.
(3) An operator of a regulated market shall publish the names of all direct and indirect owners
of the company. Furthermore, the names of direct and indirect owners of qualifying interests
in the company and the sizes of said interests shall be made available to the public.

10d

(1) Where the owners of capital holding one of the interests mentioned in section 10(1) in a
company covered by section 7(1) do not fulfil the requirements of section 10a(1), the Danish FSA may withdraw the voting rights associated with the equity investments of the relevant owner, or order said company to follow specific guidelines.
(2) The Danish FSA may withdraw the voting rights associated with equity investments owned
by natural or legal persons who do not comply with the duty in section 10(1) to submit prior
application for approval. Said equity investments shall have their full voting rights restored
if the Danish FSA is able to approve the acquisition.
(3) The Danish FSA shall withdraw the voting rights associated with equity investments owned
by a natural or legal person who have acquired equity investments as specified in section
10(1) notwithstanding the fact that the Danish FSA has refused approval of this acquisition
of equity investments.

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295

(4) Where the Danish FSA has withdrawn voting rights pursuant to subsections (1)-(3), the relevant equity investment shall not be included in calculations of the voting capital represented at general meetings.
11

A company covered by section 7(1) and a company operating a multilateral trading facility
shall inform the Danish FSA if the company becomes aware of or suspects that somebody
has violated this Act, executive orders issued pursuant to this Act or has grossly or repeatedly violated the regulations laid down by an operator of a regulated market, a clearing centre, a central securities depository or by a company operating a multilateral trading facility.

12

(1) The board of directors of a company covered by section 7(1) shall consist of no less than
five persons.
(2) A company covered by section 7(1) may not, without the consent of the Danish FSA, enter
into agreements on outsourcing or other matters of far-reaching importance with other undertakings with respect to operating a regulated market, securities clearing activities and
book-entry activities as well as money transmission services.
(3) A company covered by section 7(1) may not merge with another company without the approval of the Danish FSA.

12a

(1) A company covered by section 7(1) shall not, without the approval of the board of directors,
which shall be entered in the minute book, establish any exposures, etc. with other companies in which the members of the board of management or members of the board of directors of the company act as members of the board of management or members of the board
of directors.
(2) The exposures specified in subsection (1) shall be granted in accordance with the usual
business terms of the company and on terms based on market conditions. The external auditors of the company shall make a statement in the audit book on the financial statements
whether the requirements set out in the 1st sentence have been met.
(3) The board of directors and the board of management shall, in particular, monitor the propriety and progress of the exposures mentioned in subsection (1).
(4) The regulations in subsections (1), (2), 1st sentence, and (3) shall also apply to exposures
established with companies in which persons related to the managing director by marriage,
kinship or relationship by marriage in the direct line of ascent or descent or as brothers and
sisters are members of the board of management.

12b

(1) Persons employed by the board of directors of a company covered by section 7(1) in pursuance of legislation or provisions in the articles of association, and employees for whom there
is a significant risk of conflicts between own interests and the interests of the company shall
not, at their own expense, or through companies they control,

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1)

take up loans or draw on previously established credits to be used for acquisitions of securities when the securities acquired are provided as collateral for said loan or credit,

2)

acquire, issue, or trade in derivative financial instruments, except to hedge risk,

3)

acquire equity investments, except for units in investment associations, special-purpose

associations, hedge associations and foreign investment undertakings covered by the
Investment Associations, etc. Act with a view to selling such units less than six months
from the date of acquisition, or

4)

acquire positions in foreign currency, except for euro (EUR), if taking the position takes
place with a view to anything other than payment for the purchase of securities, goods
or services, purchase or management of real property, or for use when travelling.

(2) The group of persons mentioned in subsection (1) may not acquire holdings in companies
that carry out activities as mentioned in subsection (1) nos. 1-4. This shall not apply, however, for purchases of shares in banks, insurance companies, mortgage banks and investment firms, as well as investment associations, special-purpose associations, hedge associations and foreign investment undertakings covered by the Investment Associations, etc. Act.
(3) The board of directors shall decide which employees have a significant risk of conflicts between their own interests and the interests of the company, and who shall therefore be covered by the prohibition.
(4) The board of directors shall, for the persons covered by subsection (1), draw up guidelines
regarding compliance with the bans in subsections (1) and (2), 1st sentence, including
guidelines on reporting of investments.
(5) The external auditors in a company covered by section 7(1) shall once a year review the financial undertaking's guidelines under subsection (4) and in the long-form audit report
comments on the annual report state whether the guidelines are adequate and have functioned appropriately, as well as whether the undertaking's control procedures have given
rise to observations.
(6) An account-holding institution shall, upon request from the board of directors of a company
covered by section 7(1), provide the external auditors of said company with access to information on accounts and custody accounts and provide printed statements herefrom with regard to persons covered by sub-section (1).
(7) The prohibition in subsection (1), no. 2 shall not cover financial instruments derived from
shares in the company, or an undertaking in the same group as the company, received as
part of the relevant person's salary.
(8) The prohibition in subsection (1), no. 1 shall not cover loans to buy employee shares or the
instruments mentioned in subsection (7).

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(9) The prohibition in subsection 1 no. 3 shall not cover shares acquired through utilising the instruments mentioned in subsection (7).
(10) Chief internal auditors and deputy chief internal auditors may, irrespective of subsections
(1)-(9), not have financial interests in the undertaking or group in which they are employed.
12c

A member of the board of directors covered by section 7(1) shall not be allowed to hold the
position as member of the board of management or chief internal auditor of said company.
However, in the event of the absence of a member of the board of management, the board
of directors may appoint one of its members as a temporary member of the board of management. In this event, the relevant person may exercise voting rights in the body mentioned.

12d

(1) Persons employed by the board of directors of a company covered by section 7(1) in accordance with legislation or the provisions in the articles of association may not, without the authorisation of the board of directors, own or operate an independent business undertaking,
or in the capacity as a member of the board of directors or an employee, or in any other
way, participate in the management or operation of another enterprise than said company.
(2) Other employees in a company covered by section 7(1) for whom there is a significant risk
of conflicts between the interests of the employee and those of the company may not, without the consent of the board of management, own or operate an independent business undertaking, or in the capacity of member of the board of directors or as an employee, or in
any other way, participate in the management or operation of another enterprise than the
company. The board of directors shall be informed of any authorisation granted by the board
of management.
(3) The board of directors shall decide for which employees there is a significant risk of conflicts
between the interests of the employee and those of the company, and who are consequently
to be required to obtain the authorisation of the board of management, see subsection (2).
(4) The activities mentioned in subsections (1) and (2) shall only be carried out where the company or companies which form part of a group with said company do not have and do not
enter into exposures with the enterprises mentioned in subsections (1) and (2). This shall
not apply to exposures in the form of holdings and exposures in business undertakings that
form part of a group with the company or enterprises where companies covered by section
7(1) jointly own more than 4/5 of the holdings.
(5) All authorisations granted by the board of directors in pursuance of subsection (1) shall appear in the minute book of the board of directors.
(6) The company shall at least annually publish information on the duties and responsibilities
approved by the board of directors under subsection (1). Furthermore, the external auditors

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shall make a declaration in the long-form audit report on the annual report stating whether
the company has exposures with business undertakings covered by subsections (1) and (2).
(7) In exceptional cases, the Danish FSA may grant exemptions from subsection (4).
12e

(1) The Danish FSA may order a company covered by section 7(1) to dismiss a member of the
board of management of the company covered by section 7(1) within a time limit set by the
Danish FSA, if such person, pursuant to section 9(2), can no longer carry out his duties.
(2) The Danish FSA may order a member of the board of directors of a company covered by section 7(1) to cease his duties within a time limit set by the Danish FSA, if such person, pursuant to section 9(2), can no longer carry out his duties.
(3) The Danish FSA may order a company covered by section 7(1) to dismiss a member of the
board of management when charges have been brought against such person in criminal proceedings regarding violation of the Criminal Code, the Securities Trading etc. Act or other financial legislation until the criminal proceedings have been settled, if a conviction will mean
that said person does not comply with the requirements of section 9(2), no. 1. The Danish
FSA shall lay down a time limit within which the requirements of the order shall be met. The
Danish FSA may, under the same conditions as the 1st sentence, order a member of the
board of directors of a company covered by section 7(1) to cease his duties. The Danish FSA
shall lay down a time limit within which the requirements of the order shall be met.
(4) The duration of the order notified pursuant to subsection (2) on the basis of section 9(2),
no. 2 or 3 shall appear on the order.
(5) Orders notified pursuant to subsections (1)-(3) may be brought before the courts at the request of the company covered by section 7(1) and of the person to whom the order relates.
Such request shall be submitted to the Danish FSA within four weeks from the date on which
the order was issued to the person. The request shall not act as stay of proceedings for the
order, but the court may, by warrant, decide that the relevant member of the board of management or the relevant member of the board of directors may retain his position during the
legal proceedings. The Danish FSA shall bring the case before the courts within four weeks.
The case shall be brought through civil proceedings.
(6) The Danish FSA may, at its own initiative or on application, withdraw an order notified pursuant to subsection (2) and subsection (3), 3rd sentence. If the Danish FSA refuses an application for withdrawal, the applicant may demand that the refusal be brought before the
courts. Such request shall be submitted to the Danish FSA within four weeks from the date
on which the refusal was notified to the person. Requests for judicial review may, however,
only be submitted provided the order has no time limit, and no less than five years have
elapsed from the date of issue of the order, or no less than two years after the refusal of
withdrawal by the Danish FSA was affirmed by judgment.

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(7) If the company covered by section 7(1) does not dismiss the member of the board of management before expiry of the time limit, the Danish FSA may withdraw the licence of the undertaking, see section 92(1), no. 4. The Danish FSA may also withdraw the licence of the
undertaking, see section 92(1), no. 4, if a member of the board of directors fails to comply
with an order notified pursuant to subsections (2) and (3).
12f

(1) The board of directors of operators of regulated markets, clearing centres and central securities depositories, see section 7(1), which have securities admitted to trading on a regulated market in an EU/EEA Member State or which have a balance sheet total of DKK 500 million or above for two consecutive financial years shall:
1)

specify target figures for the share of the underrepresented gender on the board of directors
and

2)

prepare a policy for the purpose of increasing the share of the underrepresented gender
on the company's other management levels, but see subsections (2)-(4).

(2) It is sufficient for parent companies preparing consolidated financial statements to specify
target figures and to prepare a policy, see subsection (1), for the entire group.
(3) A subsidiary which is a part of a group may omit to specify target figures and to prepare a
policy, see subsection (1), if the parent company specifies target figures and prepares a policy for the entire group.
(4) Undertakings which have employed less than 50 employees in the most recent financial year
may omit to prepare a policy for the purpose of increasing the share of the underrepresented gender on their other management levels, see subsection (1), no. 2.
(5) If an undertaking is covered by this provision as well as the provisions regarding the gender
balance of the supreme governing body in the Companies Act, the Commercial Foundations
Act or the Consolidated Act on Certain Commercial Undertakings, this provision shall prevail.
12g

(Repealed).

12h

(Repealed).

13

(1) The board of directors, auditors and other employees in a company covered by section 7(1),
nos. 1 and 2 may not without authorisation, disclose anything which has come to their
knowledge during the performance of their position or charge.
(2) Subsection (1) shall not prevent a company covered by section 7(1), nos. 1 and 2, as part of
its co-operation with other companies under section 7(1), a regulated market for securities
in a Member State of the European Union or a country with which the Union has entered into
a cooperation agreement for the financial area, or a foreign regulated market, clearing cen-

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tre and central securities depository recognised by the Danish FSA from divulging information to these, provided that such information is subject to a similar duty of confidentiality
with the recipients of such information.
(3) Subsection (1) shall also include information which a company covered by section 7(1), nos.
1 and 2 receives from other companies covered by section 7(1), nos. 1 and 2 or any regulated foreign markets stating that the information is secret or confidential or wherever this
follows from the nature of the information.
(4) The regulations laid down in section 60(2)-(4) shall apply to central securities depositories.
14

(1) The annual report of a company covered by section 7(1), the long-form audit report of an
external auditor regarding the annual report, and the long-form audit report of the chief internal auditor on the annual report shall be submitted to the Danish FSA in duplicate. The
Danish FSA shall submit one copy of the annual report to the Danish Business Authority,
which shall record the receipt in its computer information system. The annual reports received shall be available to the public at the premises of the Danish Business Authority.
(2) The Danish FSA may lay down regulations on the presentation of accounts and the performance of the audit, including systems audit, in companies covered by section 7(1).
(3) The Danish FSA may lay down regulations on consolidated accounts.
(4) The Danish FSA shall lay down more detailed regulations on transactions carried out between companies covered by section 7(1), and
1)

undertakings directly or indirectly linked with said company as subsidiary undertakings,

associates or parent undertakings, or as the parent undertaking's associates and other
subsidiary undertakings,

2)

undertakings or persons linked to the company through close links, see section 5(1), no.
17 of the Financial Business Act, or

3)

undertakings not covered by nos. 1 and 2 where the majority of the members of the
management of said undertakings are the same individuals or where the undertakings
have joint management under an agreement or provisions in their articles of association.

(5) Intra-group transactions carried out contrary to regulations laid down in subsection (4) shall
be cancelled so that performance of all transactions is reversed where possible. Payments
from the company made in connection with intra-group transactions contrary to regulations
laid down in pursuance of subsection (4) shall be returned with annual interest at an amount
corresponding to the interest stipulated in section 5(1) and (2) of the Interest on Late Payments etc. Act (lov om rente ved forsinket betaling m.v.").

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301

(6) If electronic communication is used, the requirement for the submission of more than one
copy of the annual report, see subsection (1), may be deviated from.
15

(1) The base capital of a company covered by section 7(1) shall be calculated as the paid-up
share capital less the holding of own shares and losses for the current year plus additional
share premium and reserves.
(2) The Danish FSA may lay down capital adequacy rules and regulations on hedging of the risks
of companies covered by section 7(1). The Danish FSA may lay down regulations regarding
amortisation of intangible assets.
(3) The board of directors and board of management of a company covered by section 7(1),
shall ensure that the company has sufficient capital base, see subsection (1), and that the
company has at its disposal internal procedures for risk measurements and risk management
for ongoing assessments and maintenance of a capital base of a size that is sufficient to
cover the risks of the company. The board of directors and board of management shall, on
the basis of the assessment, in accordance with the 1st sentence, calculate the capital need
of the company. The capital need may not exceed that of section 8(2) for the relevant type
of undertaking. The Danish FSA may lay down a higher individual capital requirement than
that in section 8(2).

15a

(1) The Minister for Economic and Business Affairs shall lay down more detailed regulations on
outsourcing relating to
1)

the outsourcing undertaking's liability for and supervision of a service supplier, including
chain outsourcing by such supplier,

2)

the outsourcing undertaking's internal guidelines for outsourcing, and

3)

requirements which the outsourcing undertaking shall, as a minimum, ensure are complied with by the service supplier at all times and which shall be agreed in the outsourcing contract.

(2) The Danish FSA may decide that outsourcing carried out by the outsourcing undertaking
shall cease within a time limit specified by the Danish FSA, if the outsourcing contract or
parties to the contract do not comply with the regulations stipulated pursuant to subsection
(1).

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II
Trade
Part 4
Operation of a regulated market
16

(1) A "regulated market" shall mean the multilateral system where within the system and in accordance with its non-discretionary rules hereof, a plurality of third party interests in the
purchase and sale of securities are brought together and carried, in a such a manner that
agreements on trading in securities admitted to trading in accordance with the regulations
or systems of the market, shall be made.
(2) Operators of regulated markets shall have an exclusive right to employ the words reguleret
marked" (regulated market) and autoriseret markedsplads" (authorised market place) in
their names and about the regulated market. The operators of regulated markets whereupon
listed securities have been admitted to trading, mentioned in the 1st sentence, shall have an
exclusive right to employ the word fondsbrs" (stock exchange) in their names and about
the regulated market. Other natural or legal persons may not use names or descriptions for
their activities that may create the impression that they are operating a regulated market,
including a regulated market where listed securities have been admitted to trading.
(3) Operators of regulated markets, which have been granted a licence by the Danish FSA to
operate regulated markets, shall employ a word for that regulated market, which shows that
they are a regulated market. Operators of regulated markets shall not be subject to the obligation of the 1st sentence, if it is clear on the regulated market which regulations are
linked to the securities admitted to trading on the regulated market in question.

17

(1) Operators of a regulated market may operate other activities which are ancillary to operating the regulated market, including as clearing centre, central securities depository and operation of multi-lateral trading facilities. The Danish FSA may decide that the ancillary activity shall be exercised in another company. If the operator of a regulated market operates
a multilateral trading facility as ancillary activity, the multilateral trading facility may, however, always be operated by the same company as the regulated market.
(2) If the operator of a regulated market is operating a clearing centre, a central securities depository or a multilateral trading facility as an ancillary activity, see subsection (1), the requirements for a licence and operation of these types of activities in this Act shall apply. An
operator of a regulated market which intends to operate a multilateral trading facility as an
alternative market, shall notify the Danish FSA before commencing operation of the alternative market place. Multilateral trading facilities which have been in operation before such notification may not subsequently be operated as alternative market places.

18

(1) An operator of a regulated market shall be responsible for the market being conducted in an
adequate and appropriate manner.

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303

(2) The operator shall

1)

be able to identify and deal with any conflicts of interest between the operator and the
operator's group of owners, and the sound function of the regulated market,

2)

be able to manage the risks to which the operator and the regulated market are exposed, to identify all significant risks for the operation of the market and to introduce
measures for the purpose of reducing such risks,

3)

to ensure sound management of the technical function of the market's systems, including the establishment of effective emergency systems.

4)

to have regulations ensuring fair and orderly trading, and establish objective criteria for
the efficient execution of orders,

5)

o ensure effective and timely execution of transactions carried out in the systems of the
market,

6)

to have at its disposal sufficient financial resources to ensure the well-functioning functions of the market, taking into account the transactions carried out on the market and
the risks to which the market is exposed,

7)

to monitor that issuers of securities and members of the market comply with the regulations for the regulated market,

8)

to register the transactions that are carried out by members of the market by use of the
market's systems, for identifying violations of the market's regulations, trading conditions in violation of the regulations for the regulated market or behaviour that may involve violation of Part 10,

9)

to check that issuers of securities admitted to trading on the regulated market comply
with their disclosure obligations,

10) to facilitate the access of the market members to disclosed information, and
11) to check regularly that securities admitted to trading continue to comply with the admission requirements.
18a

(1) An operator of a regulated market shall publish the current prices and the market depth of
these prices of shares admitted to trading on the regulated market, and which are offered in
the system of the regulated market. This information shall, within the normal opening hours
of the regulated market, regularly be made available to the public on reasonable and commercial terms.
(2) If an operator of a regulated market gives securities dealers, who are required to disclose
publicly prices of shares according to section 33a, access to the arrangements that the oper-

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ator is applying to disclose information covered by subsection (1), this shall take place on
reasonable commercial terms and on a non-discriminatory basis.
(3) The Danish FSA may exempt an operator of a regulated market from the obligation in subsection (1) on the basis of market model, type of order or size of order.
(4) The Danish FSA shall lay down specified regulations on the obligation to disclose information
under subsection (1) and on exemption under subsection (3).
18b

(1) An operator of a regulated market shall publish price, volume and time of transactions carried out with shares admitted to trading on the market. Such information shall be made
available to the public on reasonable commercial terms and as close to real time as possible.
(2) If an operator of a regulated market gives securities dealers, who are required to disclose
publicly information about transactions with shares according to section 33b, access to
the arrangements that the operator is applying to disclose information covered by subsection (1), this shall take place on reasonable commercial terms and on a non-discriminatory
basis.
(3) An operator of a regulated market may lay down regulations regarding postponement of
publication on the basis of the size or type of the transactions. These regulations shall be
approved by the Danish FSA. The operator shall publish the approved regulations.
(4) The Danish FSA shall lay down more detailed regulations on the duty of an operator of a
regulated market to publish price, volume and time of transactions carried out in other securities than shares.
(5) The Danish FSA may lay down more detailed regulations on the duty to publish under subsection (1). The Danish FSA may furthermore lay down more detailed regulations on the
conditions of postponement of publication under subsection (3).

19

(1) An operator of a regulated market shall lay down regulations on membership of the market.
The regulations shall be transparent, non-discriminatory and based on objective criteria. The
regulations shall indicate any obligations for the members as a consequence of
1)

establishment and operation of the market,

2)

regulations for transactions on the market,

3)

professional standards incurred on employees at securities dealers who are operating on

the market,

4)

conditions laid down for other members of the market than securities dealers, and

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305

5)

regulations and procedures for clearing and settlement of transactions carried out on the
market.

(2) The regulations for the regulated market on clearing and settlement shall ensure that members of the regulated market are entitled to use another settlement system for transactions
in financial instruments than the one chosen by the market operator, if
1)

there are the required connections and arrangements between the settlement system
selected by the member and any other relevant system or any other relevant facility to
ensure an effective and financial settlement of the relevant transaction, and

2)

the Danish FSA finds the technical conditions for settlement of transactions on the regulated market through another settlement system than that selected by the operator of
the regulated market to be suitable for ensuring the effective and proper function of the
financial markets.
Part 5
Access to regulated markets

20

(1) Securities dealers, with the exception of investment management companies and management companies, with a licence to execute client orders or trading on their own account, and
who are covered by section 4(1), nos. 1-3, Danmarks Nationalbank (Denmark's central
bank) and other central banks from Member States of the European Union or from countries
with which the Union has entered into an agreement for the financial area, shall have the
right to become members of a regulated market, if they comply with the regulations laid
down for the market, see section 19. Securities dealers, with the exception of investment
management companies and management companies covered by section 4(1), no 3, who in
their home country are licensed to execute client orders or trade on their own account, but
who do not exercise securities trading through a branch or services in Denmark, see sections 30 and 31 of the Financial Business Act, shall have the same right.
(2) Securities dealers covered by subsection (1) and central banks from Member States of the
European Union or from countries with which the Union has entered into an agreement for
the financial area, shall have the right to become remote members of a regulated market,
unless physical presence under the trading procedures and systems of the regulated market
is required in order to carry out transactions on the market.
(3) An operator of a regulated market may admit other natural or legal persons than those mentioned in subsection (1) as members of the regulated market, if the persons
1)

are fit and proper,

2)

have sufficient level of trading capacity and competence,

3)

have proper administrative procedures to the extent necessary, and

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306

4)

have sufficient resources to manage the functions following from membership of the
regulated market which shall ensure appropriate settlement of transactions.

(4) Notwithstanding subsection (3), an operator of a regulated market may only admit persons
domiciled in a country outside the European Union with which the Union has not entered into
an agreement for the financial area if these are credit institutions, investment companies or
central banks. If the relevant credit institution or investment company is not covered by section 4(1), no 4, admission shall be subject to authorisation from the Danish FSA.
(5) An operator of a regulated market shall regularly give notice to the Danish FSA about the
changes in the membership of the regulated market.
(6) An operator of a regulated market who intends to allow natural or legal persons in another
Member State of the European Union or in a country with which the Union has entered into
an agreement for the financial area to become remote members of the regulated market or a
multilateral trading facility, shall notify the Danish FSA hereof. The Danish FSA shall within
one month deliver such notification to the supervisory authorities of the country where the
remote members are domiciled.
Part 6
Admission of securities to trading on a regulated market, official listing and public offers of
securities exceeding EUR 5,000,000 etc.
21

(1) An operator of a regulated market shall lay down clear and transparent regulations governing admission of securities for trading on the regulated market. The regulations shall ensure
that securities admitted to trading are traded in an honest, proper and effective manner,
and that when these are securities covered by section 2(1), no 1, they are freely negotiable.
In relation to derivatives, the regulations shall in particular ensure that the derivative contract is drawn up in a manner ensuring correct price formation and effective settlement conditions.
(2) An operator of a regulated market shall, in admission of securities to trading on the regulated market, ensure that the regulations laid down pursuant to subsection (1) are met, and
that an approved and published prospectus has been presented, see section 23(2) and section 24(1).
(3) An operator of a regulated market may, without the consent of the issuer, admit a security
to trading on the regulated market, if the security, with the consent of the issuer, has been
admitted to trading on another regulated market in Denmark or in another Member State of
the European Union or in a country with which the Union has entered into an agreement for
the financial area. The operator of the regulated market shall inform the issuer that the issuer's securities has been admitted to trading on the regulated market.

26

307

(4) In admission of a security for trading under subsection (3) compliance with the regulations
of this Act on disclosure obligations for issuers and about prospectuses rests with the person
giving rise to admission of the security for trading.
(5) An operator of a regulated market may, with prior authorisation of the Danish FSA, admit instruments not covered by section 2(1) for trading on the regulated market.
22

(1) The Danish FSA may, upon request from an issuer of shares, share certificates or bonds,
make a decision about official listing of the relevant security, if said security has been admitted or will be admitted to trading on a regulated market.
(2) The Danish FSA shall lay down regulations on the conditions for official listing of securities,
see subsection (1), and on suspending and removing the securities from listing.

23

(1) An issuer or a person requesting admission of securities to trading on a regulated market,

may not give rise to admission of the securities to trading until an approved prospectus for
the relevant securities has been made available to the public, see subsection (2) and section
24(1). Similarly, an offeror may not make an offer of securities to the public until an approved prospectus for the relevant securities has been made available to the public, see
subsection (2) and section 24(1).
(2) The Danish FSA shall make decisions regarding the approval of the prospectus.
(3) The prospectus shall include the information deemed necessary for investors and their investment counsellor to form a well-founded estimate of the issuers assets and liabilities, financial position, results and future prospects, and of any guarantor, and of the rights attaching to the securities offered to the public or admitted to trading.
(4) The regulations in this Part regarding the duty to publish a prospectus shall, notwithstanding
subsection (1), not apply to the following:
1)

Money-market instruments, see section 2(1) no. 2 with a lifetime of less than 12
months.

2)

Negotiable mortgage deeds, see section 2(1) no 11.

3)

Units in collective investment schemes covered by the Investment Associations, etc. Act

4)

Non-equity securities, issued by

a)

a Member State of the European Union or a country with which the Union has entered into an agreement for the financial area, or by one of the relevant country's
regional or municipal authorities,

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308

b)

international public-law institutions of which one or more Member States of the European Union or countries with which the Union has entered into an agreement for
the financial area, are members,

c)

the European Central Bank or

d)

central banks domiciled in Member States of the European Union or countries with
which the Union has entered into an agreement for the financial area.

5)

Shares in a central bank domiciled in a Member State of the European Union or in a

country with which the Union has entered into an agreement for the financial area.

6)

Securities unconditionally and irrevocably guaranteed by a Member State of the European Union or a country with which the Union has entered into an agreement for the financial area, or by one of the relevant country's regional or municipal authorities.

7)

Securities issued with a view to raising funds for non-profit purposes by staterecognised organisations domiciled in a Member State of the European Union or a country with which the Union has entered into an agreement for the financial area, which
work for non-profit purposes.

8)

Non-equity securities issued in a continuous or repeated manner by credit institutions

provided that these securities
a)

are not subordinated, convertible or exchangeable,

b)

do not give a right to subscribe to or acquire other types of securities and that they
are not linked to a derivative instrument,

9)

c)

materialise reception of repayable deposits, and

d)

are covered by a deposit guarantee scheme.

Securities included in a public offer of securities, where the entire offer is below EUR
5,000,000, the limit being calculated over a period of 12 months.

10) Non-equity securities issued in a continuous or repeated manner by credit institutions

where the total consideration of the offer is less than EUR 75,000,000 which limit shall
be calculated over a period of 12 months, provided that these securities
a)

are not subordinated, convertible or exchangeable and

b)

do not give a right to subscribe to or acquire other types of securities and that they
are not linked to a derivative instrument.

(5) An issuer, an offeror or a person requesting admission to trading of securities mentioned in

subsection (4), nos. 4, 6, 9 and 10 may, however, draw up a prospectus in accordance with

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309

the regulations stipulated in this Part as well as regulations issued pursuant to subsections
(7) and (8) and section 24(2).
(6) A prospectus shall be drawn up in conformity with the regulations laid down by the Danish
FSA pursuant to subsection (7), and shall be presented in such a manner that it is possible
to understand the content and to assess the importance of the information given.
(7) The Danish FSA shall lay down regulations governing the contents of prospectuses, format,
language, advertising and duration as well as omission of information in the prospectus.
Moreover, the Danish FSA shall lay down regulations for the approval of prospectuses in
cases where the security is requested for trading on several regulated markets in Denmark
or on regulated markets in another Member State of the European Union or in a country with
which the Union has entered into an agreement for the financial area.
(8) The Danish FSA shall lay down regulations regarding exemption from duty to publish a prospectus, including regulations on exempting specified securities from the duty, as well as
regulations on approval of natural persons and small and medium-sized undertakings as
qualified investors. Moreover, the Danish FSA shall lay down regulations on admission to a
register for natural persons and small and medium-sized undertakings as qualified investors.
23a

(1) The Danish FSA shall notify the issuer, the offerors or the person asking for admission to
trading of its decisions regarding the approval of the prospectus within ten business days after receipt of the application for approval of the prospectus.
(2) The time limit mentioned in subsections (1) and (5) shall be extended to 20 business days if
the offer to the public involves securities issued by an issuer which does not have securities
admitted to trading and which has not previously offered securities to the public.
(3) If there are reasonable grounds to assume that the documents submitted are incomplete or
that supplementary information is needed, the time limits of subsections (1), (2) and (5)
shall not apply until the date on which such information is provided by the issuer, the offeror
or the person asking for admission to trading. If the documents are incomplete and the
time-limit for approval is consequently suspended, the Danish FSA shall notify the relevant
person in this respect within ten business days after receipt of the application.
(4) The Danish FSA may transfer the approval of a prospectus to the competent authority of another Member State of the European Union or a country with which the Union has entered
into an agreement for the financial area, provided the competent authority of said country
accepts this. The issuer, the offeror or the person asking for admission to trading shall be
notified of such transfer within three business days after the date of the Danish FSA's decision regarding the transfer.
(5) When the Danish FSA receives an application for approving a prospectus from a competent
authority in another Member State of the European Union or a country with which the Union

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has entered into an agreement for the financial area, the Danish FSA shall notify the issuer,
the offeror or the person asking for admission to listing or trading of its decision regarding
the approval of the prospectus within ten business days after the competent authority has
made its decision regarding the transfer of the approval of the prospectus.
24

(1) Offers to the public of securities and admission of securities to trading on a regulated market may not take place until the prospectus has been published according to the regulations
laid down pursuant to subsection (2).
(2) The Danish FSA shall lay down regulations governing offers for sale and the publication of
prospectuses.

25

(1) An operator of a regulated market may suspend or remove a security from trading on the
regulated market, if the security no longer meets the regulations of the regulated market.
However, suspension or removal may not take place if it is likely that this will be of significant detriment to the interests of the investors or the proper functioning of the market.
(2) An operator who under subsection (1) makes a decision about suspension or removal of a
security shall, as soon as possible, make the decision about suspension or removal available
to the public and notify the Danish FSA about the relevant information.
(3) If an issuer whose securities are admitted to trading on a regulated market, submits a request for removal from trading, the operator of the regulated market shall comply with such
request. The removal may, however, not be made if it is likely that this will be to the detriment of the interests of the investors or the proper functioning of the market.
(4) An issuer may have a security removed from trading on a regulated market if said security
in this connection is or will be admitted to trading or has been admitted to trading on another regulated market.

26

(Repealed).

26a

The powers that have been assigned to an operator of a regulated market in accordance
with the provisions of section 21 shall be exercised by the Danish FSA when an operator of a
regulated market in Denmark or in another Member State of the European Union or in a
country with which the Union entered into an agreement for the financial area, or a company
operating an alternative market place, makes a request for admission of securities to trading
on a regulated market. The Danish FSA shall also exercise the powers assigned to an operator of a regulated market, see section 25, when securities covered by the 1st sentence have
been admitted to trading on the regulated market.

30

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Part 7
Disclosure obligations
27

(1) An issuer of securities admitted to trading on a regulated market in Denmark, in another

Member State of the European Union or in a country with which the Union has entered into
an agreement for the financial area on securities, or for which a request for admission for
trading on such market has been made, shall, as soon as possible, disclose publicly inside
information, see section 34(2), if this information pertains directly to said issuer's activities.
The issuer shall be required to disclose publicly such information immediately upon the coming into existence of the relevant circumstances or the occurrence of the relevant event, albeit not yet formalised. Significant changes concerning already publicly disclosed inside information shall be publicly disclosed promptly after these changes occur, and through the
same channel as the one used for public disclosure of the original information.
(2) Inside information, which an issuer, as mentioned in subsection (1), or a person acting on
his behalf or for his account, discloses to a third party in the normal exercise of his employment, profession or duties, see section 36, shall be publicly disclosed in a complete and effective manner simultaneously with the disclosure to said third party. If at the time of the
disclosure, the issuer is not aware that disclosure has taken place, public disclosure shall be
effected immediately after the issuer learns or ought to have learnt that disclosure of inside
information has been effected. If the issuer in other ways than mentioned in the 1st and 2nd
sentences learns or ought to have learnt that the inside information is no longer kept confidential, the issuer shall publish this inside information as soon as possible. The 1st and 2nd
sentences shall not apply if the third party receiving the inside information is subject to a
duty of confidentiality under legislation, administrative provisions, articles of association or
a contract, or if the disclosure is effected in such a manner that it is ensured that the receiving third party knows that the information is inside information and that said third party is
consequently subject to the ban against disclosure of inside information, see section 36.
(3) An issuer shall only be obliged to disclose publicly inside information under subsections (1)
and (2) in relation to the regulated markets where the issuer has requested or received approval for admission of securities for trading.
(4) An issuer shall ensure that public disclosure of inside information is effected in such a manner that provides the public with rapid access to said information and that the disclosed information is sufficient for complete, correct and timely assessment of the inside information
to be carried out. The issuer may not, in a manner likely to be misleading, combine disclosure of inside information with marketing activities. An issuer shall, as far as possible, ensure that public disclosure be effected simultaneously to all categories of investors in all
Member States of the European Union or countries with which Union has entered into an
agreement for the financial area, where the issuer has requested or received approval of securities.

31

312

(5) A securities issuer as mentioned in subsection (1) shall, without undue delay and for an appropriate period after publication of inside information was effected under subsection (1) or
(2), display all this information on its website.
(6) An issuer may under its own responsibility delay the public disclosure of inside information
in accordance with subsection (1) such as not to prejudice his legitimate interests provided
that such omission would not be likely to mislead the public and provided that the issuer is
able to ensure the confidentiality of that information. Legitimate interests under the 1st sentence may, in particular, pertain to:
1)

Negotiations in course, or related elements, where the outcome or normal pattern of

those negotiations would be likely to be affected by public disclosure. If the financial viability of the issuer is in grave and imminent danger, although a petition for bankruptcy
or commencement of financial reconstruction has not been submitted, public disclosure
of inside information may only be delayed for a limited period, and only if such public
disclosure would seriously jeopardise the interests of existing and potential shareholders
by undermining the conclusion of specific negotiations designed to ensure the long-term
financial recovery of the issuer.

2)

Decisions or contracts made or established by the management of an issuer, where approval is required from another company body of the issuer in order for the decision or
contract to become effective. The 1st sentence shall only apply if publication of the decision made or the establishment of the contract before the approval has been granted
would entail a risk that the investors do not carry out a correct assessment of the information disclosed.

(7) An issuer of negotiable securities covered by section 2(1), no. 1 and admitted to trading on
a regulated market in Denmark, in another Member State of the European Union or in another country with which the Union has entered into an agreement for the financial area,
shall no later than eight days prior to the annual general meeting, but no later than four
months after the end of the financial year, make public the annual report approved by the
board of directors. The issuer shall also publish the half-year interim report approved by the
board of directors for the first six months of the financial year. The publication of the halfyear interim report shall take place as soon as possible after expiry of the half-year period,
but no later than two months after said period. The published annual reports and half-year
interim reports for issuers in Denmark and from other Member States of the European Union
or from countries with which the Union has entered into an agreement for the financial area,
shall be prepared in accordance with the accounting legislation of the country in which the
issuer is domiciled. The Danish FSA shall lay down regulations on which regulations shall apply with respect of preparing annual reports and half-year interim reports for issuers from
other countries. The annual report and the half-year interim report shall be made available
to the public for a minimum of five years.

32

313

(8) An issuer of shares admitted to trading on a regulated market in Denmark, in another Member State of the European Union or a country with which the Union has entered into an
agreement for the financial area, shall publish an interim management statement during the
first as well as the second half-year period of the financial year. The statement shall be published ten weeks after the beginning of the half-year period in question at the earliest and
no later than six weeks before then end hereof. An issuer who publishes quarterly interim
reports shall not be obligated to publish the interim management statements mentioned in
the 1st sentence.
(9) The provisions on half-year interim reports laid down in subsection (7) shall only apply to issuers of shares or bonds or other types of negotiable debt instruments, except for securities
equivalent to shares in companies, or securities that, if converted or the attached rights are
exercised, provide a right to acquire shares or securities equivalent to shares.
(10) Subsection (7) shall not apply in relation to units in collective investment schemes covered
by the Investment Associations, etc. Act.
(11) Subsections (7) and (8) shall not apply to the following issuers:
1)

Member States of the European Union or countries with which Union has entered into an
agreement for the financial area, or regional or municipal authorities in these countries.

2) International public-law institutions of which one or more Member States of the European
Union or countries with which the Union has entered into an agreement for the financial
area, are members.
3)

The European Central Bank.

4) Central banks domiciled in Member States of the European Union or countries with which
the Union has entered into an agreement for the financial area.
5)

Issuers who only issue debt instruments admitted to listing or trading on a regulated
market in Denmark, or another Member State of the European Union or in a country with
which the Union has entered into agreement for the financial area for securities, and
whose nominal value per unit is no less than EUR 100,000, or whose nominal value per
unit on the date of issue corresponds to no less than EUR 100,000 if the debt instruments are issued in another currency than euro. Notwithstanding the first sentence,
subsections (7) and (8) do not apply in the entire term of the debt instruments to issuers who only issue debt instruments whose nominal value per unit is no less than EUR
50,000 or whose nominal value per unit on the date of issue corresponds to no less than
EUR 50,000 in case that the debt instruments are issued in another currency than euro if
such debt instruments had already been admitted to trading on a regulated market in
Denmark, in another Member State or in a country with which the Union has entered an
agreement for the financial area prior to 31 December 2010.

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314

(12) Subsection (7), 2nd sentence shall not apply to issuers who, on 20 January 2004, exclusively issued and continue to exclusively issue debt instruments admitted to trading on a
regulated market in Denmark, in another Member State of the European Union or in a country with which the Union has entered into an agreement for the financial area, which is covered by an unconditional and irrevocable guarantee from the issuer's home country in the
European Union, or in a country with which the Union has entered into an agreement for the
financial area, or regional or municipal authorities in this country.
27a

(1) Issuers of negotiable securities covered by section 2(1), no. 1 shall in connection with publication of information in accordance with this part, ensure that the publication takes place in
such a manner that the information quickly becomes available throughout the European Union and countries with which the Union has entered into an agreement for the financial area.
(2) An issuer as mentioned in subsection (1) shall, together with the publication, submit the information to the Danish FSA.
(3) An issuer as mentioned in subsection (1) shall submit the information published in accordance with to subsection (1) to the Danish FSA, which will store the information. The Danish
FSA may identify other authorities or legal persons in and outside Denmark to deal with the
task.
(4) Subsections (1)-(3) shall not apply to units in collective investment schemes covered by the
Investment Associations, etc. Act.
(5) Subsections (1)-(3) shall not apply to notifications about holdings of shares in companies
admitted to trading on an alternative market place that an issuer is obligated to publish under section 29(1), 3rd sentence.

27b. (Repealed).
28

(1) A company with shares admitted to trading on a regulated market in Denmark, in another
Member State of the European Union or in a country with which the Union has entered into
an agreement for the financial area which acquires or disposes of own shares, shall as soon
as possible publish the unit of own shares if the unit reaches, exceeds or falls to less than
5% or 10% of the voting rights.
(2) A company as mentioned in subsection (1) which has Denmark has its home country, shall
also, as soon as possible publish the unit of own shares if the proportion reaches, exceeds or
falls to less than 15, 20, 25, 50 or 90% and limits of one-third or two-thirds of the voting
rights.
(3) Denmark shall be regarded as home country, if the company
1)

has its registered office in Denmark, or

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315

2)

is registered in a country outside the European Union with which the Union has not entered into an agreement for the financial area, and Denmark is the place where the
company

28a

a)

offered its shares to the public for the first time after 31 December 2003 or

b)

submitted its first application for admission to trading on a regulated market.

(1) Senior employees of companies issuing shares, admitted to trading on a regulated market in
Denmark, in another Member State of the European Union or in a country with which the Union has entered into an agreement for the financial area, or for which a request for admission to trading on such a market has been made, shall notify the issuing company of transactions conducted on their own account relating to the company's shares or other securities
linked to such shares. Notification shall be given to the issuing company no later than on the
next business day after the transaction. If the senior employee has not received the information mentioned in subsection (7) on the next business day after the transaction, said notification shall be given as soon as possible and no later than two business days after the
transaction.
(2) "Senior employees" shall mean
1)

members of the issuing company's board of management or board of directors or supervisory board or a supervisory body linked to the company, or

2)

other senior employees of the issuing company who have regular access to inside information relating, directly or indirectly, to the issuer, if the relevant senior employee is
authorised to make management decisions of superior importance for the issuer's future
business development.

(3) Close relations of a senior employee in an issuing company shall notify the relevant senior
employee of transactions conducted on their own account relating to shares issued by the
relevant company or other securities linked to such shares. Notification shall be given to the
senior employee no later than on the next business day after the transaction. If said close
relation has not received the information mentioned in subsection (7) on the next business
day after the transaction, notification shall be given as soon as possible and no later than
two business days after the transaction. The senior employee shall forward notifications received to the issuing company no later than on the next business day after receipt.
(4) Close relations of a senior employee" shall mean the following natural and legal persons
with relation to the group of persons mentioned in subsection (2):
1)

Spouse or cohabitee.

2)

Minors, where the person mentioned in subsection (2) is the parent holding custody.

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3)

Other relatives who, for a period of no less than one year from the time of the transaction, have belonged to the household of the person mentioned in subsection (2).

4)

Legal persons provided

a)

a natural person, covered by subsection (2) or by nos. 1-3 holds the managerial responsibility for the legal person,

b)

natural persons covered by subsection (2) or by nos. 1-3 alone or jointly exercise
influence as mentioned in section 31(2) and (3), for the legal person,

c)

the legal person has been established with a view to benefiting financial interests of
a natural person covered by subsection (2) or by nos. 1-3, or

d)

the legal person otherwise has financial interests that have significant similarities
with the financial interests of a natural person covered by subsection (2) or by nos.
1-3.

(5) An issuer shall, no later than on the next business day after receipt of a notification from a
senior employee under subsection (1), 1st sentence, or subsection (3), 4th sentence, report
the information received to the Danish FSA. The Danish FSA shall immediately hereafter
make such information public.
(6) The obligation of a senior employee to give notification under subsection (1), 1st sentence,
and to forward information received under subsection (3), 4th sentence shall only commence
if the market prices of the transactions carried out over the course of a calendar year by the
senior employee and close relations of the relevant senior employee constitute a total
amount of EUR 5,000 or more. If the limit of EUR 5,000 is exceeded the obligation for the
senior employee to give notification and to forward information received shall only apply for
transactions carried out after the limit was exceeded.
(7) Notification under subsections (1) and (3) as well as reporting under subsection (5) shall
contain information regarding
1)

the name of the natural or legal person obligated to give notification according to subsections (1) or (3),

2)

the reason said person has an obligation to give notification,

3)

the name of the issuer of the securities in question,

4)

the ISIN code and designation of the relevant securities,

5)

the nature of the transaction (purchase, sale or other transaction),

6)

the trade date and the market on which the transaction was carried out, and

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7)

the number of securities traded and the market price hereof.

(8) The Danish FSA may lay down more detailed regulations on notification, reporting and publication of information covered by subsections (1)-(7).
28b

(1) Any natural or legal person who, as part of performance of profession or business, prepares
or disseminates recommendations regarding securities as mentioned in section 27(1) to the
public or distribution channels or regarding an issuer of such securities shall ensure that the
presentation and dissemination of recommendations is effected in an honest and fair manner
and that information is given on any interests or conflicts of interest in relation to the securities or the issuer to whom the recommendation pertains.
(2) The Danish FSA shall lay down more detailed regulations on honest and fair presentation and
information on interests or conflicts of interest in the preparation and dissemination of recommendations pertaining to securities and issuers hereof.

28c
29

(Repealed).
(1) Anyone who holds shares in companies with shares admitted to trading on a regulated market in Denmark, in another Member State of the European Union or in a country with which
the Union has entered into an agreement for the financial area or admitted to trading on an
alternative market place shall, in such cases as referred to in subsection (2), notify as soon
as possible the company of the share holdings in the company. At the same time as the notification to the company, the relevant person shall submit the information on the holding to
the Danish FSA. After receipt of the notification, the company shall publish the contents of
the notification.
(2) Notification concerning shareholding according to subsection (1) shall be given, if
1)

the voting right conferred on the shares represents no less than 5% of the share capital's voting rights or their nominal value accounts for no less than 5% of the share capital, or

2)

a change of a holding already notified entails that limits at intervals of 5, 10, 15, 20,
25, 50 or 90% and limits of one-third or two-thirds of the share capital's voting rights or
nominal value are reached or are no longer reached or the change entails that the limits
stated in no. 1 are no longer reached.

(3) The Danish FSA may decide that the duty to notify pursuant to subsection (1) shall cover
other securities which grant rights to acquire shares.
(4) The Danish FSA shall lay down more detailed regulations on holdings, notification of holdings
pursuant to subsections (1) and (2) and the duty to notify rights to exercise voting rights in
other circumstances. The Danish FSA may also lay down regulations which derogate from
subsection (1).

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318

29a

(Repealed).

30

The Danish FSA shall lay down regulations governing the obligation of issuers to disclose information, including information on language, content, the method by which publication,
registration and storage of information is to take place, as well as the content of the interim
management statements. The regulations may derogate from the requirements of this Act
on the obligations of the issuer in section 27(7) and (8) and section 27a(1)-(3). The Danish
FSA may also lay down regulations on issuers' equal treatment of and communication with
shareholders and holders of bonds or other types of tradable debt instruments.
Part 8
Takeover bids

31

(1) If a shareholding is transferred directly or indirectly in a company with one or more share
classes admitted to trading on a regulated market or an alternative market place, to an acquirer or to persons who act in concert with him, the acquirer shall give all the shareholders
of the company the opportunity to sell their shares on identical terms, if the transfer means
that the acquirer obtains a controlling influence over the company, see subsections (2) and
(3).
(2) There shall be controlling influence when the acquirer directly or indirectly holds more than
50% of the voting rights of a company, unless it can be clearly proven in special cases that
such ownership does not entail controlling influence.
(3) There shall also be controlling influence when an acquirer not owning more than 50% of the
voting rights in a company has
1)

right of disposal of more than 50% of the voting rights by virtue of an agreement with
other investors,

2)

authority to manage the financial and operational conditions in a company pursuant to

an article of association or an agreement,

3)

authority to appoint or dismiss a majority of the members of the supervisory body, and
this body has controlling influence of the company, or

4)

more than one-third of the voting rights in the company and the actual majority of votes
at the general meeting or a similar body, thus having controlling influence over the
company.

(4) The existence and effect of potential voting rights, including subscription rights and purchase options on shares, which can immediately be utilised or converted, shall be considered
when assessing whether an acquirer has controlling influence.

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(5) When calculating voting rights within a company, voting rights associated with shares owned
by the company or its subsidiary undertakings shall be included in the calculation. A company's acquisition of own shares shall, however, be subject to mandatory offers according to
subsection (1) if the acquisition expresses circumvention of the limits mentioned in subsections (2) and (3).
(6) The obligation referred to in subsection (1) shall not apply if the relevant transfer in subsection (1) is the result of a voluntary bid for all the shareholders to transfer all their shares,
and this voluntary offer complies with the obligations of section 32(1).
(7) Section 71 of the Companies Act shall apply correspondingly to transfers of voting rights in a
company with one or more share classes admitted to trading on an alternative market place.
(8) The Danish FSA may grant exemption from the obligation in subsection (1) if special conditions apply.
32

(1) In connection with an offer to acquire shares pursuant to section 31, the acquirer shall draw
up and make public an offer document containing information on the financial and other
terms of the bid, including the deadline for acceptance of the bid and any other information
considered necessary for the shareholders to reach an informed judgement on the bid.
(2) Where a bid, which is not subject to mandatory offers pursuant to section 31, is submitted
publicly for acquisition of shares in a company with one or several share classes admitted to
trading on a regulated market or an alternative market place, an offer document shall also
be drawn up in accordance with subsection (1).
(3) A decision on making an offer shall be made public immediately.
(4) The Danish FSA shall lay down regulations governing mandatory offers under section 31(1),
voluntary takeover bids, notifications of decisions about making a bid, the contents of the
offer document, including the offeror's duty to disclose intended payment of the target company's resources after completion of a takeover bid, prohibition against entering into agreements about bonuses or similar benefits, the bid price and approval and publication etc. Furthermore, the Danish FSA shall lay down regulations governing the obligation of the offeree
company to explain the contents of a bid.

32a

(1) The Danish FSA may refer the supervision of a takeover bid concerning shares in a company
with one or more classes of shares, admitted to trading on a regulated market, to the competent authority of another Member State of the European Union or countries with which the
Union has entered into an agreement for the financial area.
(2) The Danish FSA shall lay down regulations about the legislation applicable and about which
authority shall be competent.

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Part 9
Reporting of transactions and publication of prices and transactions by securities dealers
33

(1) This part of this Act shall apply to securities dealers except for
1)

investment management companies covered by section 4(1), no 2.

2)

management companies covered by section 4(1), no 3, and

3)

other securities dealers covered by section 4(1), no 3 which exclusively provide services
in Denmark, covered by section 31 of the Financial Business Act.

(2) A securities dealer, which carries out transactions with securities admitted to trading on a
regulated market in Denmark, a regulated market in a Member State of the European Union
or in a country with which the Union has entered into an agreement for the financial area, or
on an alternative market place, shall report information about the transaction as soon as
possible and no later than by the closing time on the relevant market the day after completion of the transaction. The information may be reported by the securities dealer, a third
party on behalf of the securities dealer or a trade-matching or reporting system approved by
the Danish FSA or by the regulated market or the multilateral trading facility through whose
systems the transaction is carried out.
(3) The Danish FSA may decide that the reporting duty shall rest upon other. Furthermore, the
Danish FSA may decide that the reporting duty shall cover other securities not admitted to
trading on a regulated market or an alternative market place.
(4) A securities dealer shall file all relevant information about all transactions with financial instruments carried out by the securities dealer on its own or a client's account, for a minimum of five years after carrying out the transaction.
(5) The Danish FSA may lay down more detailed regulations on the reporting duty, including
scope and contents, and the venue of reporting.
33a

(1) Securities dealers that systematically internalise, meaning that the securities dealers on an
organised, frequent and systematic basis, deal on their own account by carrying out client
orders outside a regulated market or a multilateral trading facility, in shares admitted to
trading on a regulated market in Denmark, or a regulated market in a Member State of the
European Union or in a country with which the Union has entered into an agreement for the
financial area, shall publish binding prices of the shares that are systematically internalised.
(2) Subsection (1) shall apply if there is a liquid market for the relevant share. If no liquid market exists for the relevant share, securities dealers who systematically internalise, see subsection (1), shall upon request notify their clients of binding prices.
(3) Subsections (1) and (2) shall only apply to deals of up to normal market size.

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(4) The Danish FSA may lay down more detailed regulations on the duty of securities dealers to
publish binding prices, including on contents, publication, the possibility of withdrawing prices, the duty to carry out orders at set prices, the execution of orders from professional clients, access to the set prices of securities dealers, and on the securities dealers' possibility
of limiting the number of transactions.
33b

(1) Securities dealers who, on their own or a client's account, carry out transactions in shares
admitted to trading on a regulated market in Denmark or in a Member State of the European
Union or in a country with which the Union has entered into an agreement for the financial
area, and where such transactions are carried out outside a regulated market or a multilateral trading facility in Denmark or in another Member State of the European Union or in a
country with which the Union has entered into an agreement for the financial area, shall
publish information about price, volume and date of the completion of the transaction. The
information shall be made available to the public on reasonable commercial terms, as close
to real time as possible and in a manner which is easily available to other market participants.
(2) A securities dealer may postpone the publication under subsection (1) on the basis of the
size and type of the transaction.
(3) The Danish FSA shall lay down more detailed regulations on the duty of securities dealers to
publish information about price, volume and the date of transactions carried out in other securities than shares.
(4) The Danish FSA may lay down more detailed regulations on the duty to publish under subsection (1) and postponement of publication under subsection (2).
Part 10

Abuse of inside information, price manipulation and measures for the prevention of market
abuse
34

(1) The regulations in this part of this Act shall include abuse of inside information and price
manipulation and measures for the prevention of market abuse regarding
1)

securities admitted to trading on a stock exchange in Denmark, in another Member

State of the European Union or in a country with which the Union has entered into an
agreement for the financial area, or similar foreign markets for securities, and securities
for which a request for admission to listing or trading on such markets has been made,
and

2)

securities which are not covered by no. 1, but which are linked to one or more securities
as mentioned in no. 1, and units covered by section 2(1), no. 3.

(2) "Inside information" shall mean information of a precise nature which has not been made
public, relating to issuers of securities, securities, or market conditions which, if it were

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made public, would be likely to have a significant effect on the market price of one or more
securities. Information shall be regarded as published once, for the market, there has been
general and relevant dissemination hereof.
(3) In subsection (2):
1)

Information of a precise nature shall mean information which

a)

indicates a set of circumstances which exists or may reasonably be expected to

come into existence or an event which has occurred or may reasonably be expected
to do so and

b)

is specific enough to enable a conclusion to be drawn as to the possible effect of

that set of circumstances or event on the market price of the relevant securities.

2)

Information which would be likely to have a significant effect on the market price of one
or more securities shall mean: Information a reasonable investor would be likely to use
as part of the basis of investment decisions.

(4) For securities dealers and the employees of such undertakings, inside information shall also
mean information conveyed by a customer and related to the client's pending orders, provided the information otherwise meets the requirements of subsections (2) and (3).
(5) With regard to trade in commodities instruments, "inside information" shall mean information of a precise nature which has not been made public relating, directly or indirectly, to
one or more such instruments and which users of markets on which such instruments are
traded would expect to receive in accordance with accepted market practices on those markets. Users of markets for commodities instruments expect to receive information that
1)

is routinely made available to the users of those markets, or

2)

is required to be disclosed in accordance with legal or regulatory provisions, market

rules, contracts or customs on the commodity instruments market or relevant underlying commodity market.

35

(1) Purchase, sale or recommendation to buy or sell a given security may not be performed by
any person with inside information, which could be of importance to the transaction in question.
(2) The provision in subsection (1) shall not apply to
1)

purchase of securities effected in the context of a public takeover bid for the purpose of
gaining control of that company or proposing a merger with that company with one or
several share classes admit-ted to trading on a regulated market in Denmark, in another
Member State of the European Union, or in a country with which the Union has entered
into an agreement for the financial area, or corresponding foreign markets for securi-

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ties, if the inside information was obtained in connection with an investigation of the
company carried out with a view to making the offer to purchase, and
2)

buying and selling of securities conducted in the discharge of an obligation, provided

that this obligation has become due at the time of the transaction and where that said
obligation results from an agreement concluded before the person concerned possessed
inside information.

(3) Notwithstanding the provision laid down in subsection (1), securities dealers and the employees of such undertakings may, loyally, carry out an order from a client. Moreover, such
persons may pursue normal activities if such activities are carried out as a normal part of
the function of said securities dealer as market-maker in the security concerned.
(4) The provisions of subsection (1) shall not apply to transactions carried out by a sovereign
state, its central bank, the European System of Central Banks or the person acting on behalf
of said state or banks, in pursuit of monetary, exchange-rate or public-debt-management
policies.
(5) The provision of subsection (1) shall not apply to trading in own shares in buy-back programmes or to securities as part of the stabilisation of the price of a security, provided such
trading is carried out in accordance with Commission Regulation (EC) no. 2273/2003 of 22
December 2003 implementing Directive 2003/6/EC of the European Parliament and of the
Council as regards exemptions for buy-back programmes and stabilisation of financial instruments.
36.

Any person with inside information may not disclose such information to any other person
unless such disclosure is made within the normal course of the exercise of his employment,
profession or duties.

37

(1) An issuer with Denmark as its home country, see section 28(3) and which has securities as
mentioned in section 34(1), no. 1, and its parent company shall draw up internal rules governing the access for members of the board of directors, members of the supervisory board,
members of the board of management and other employees to deal for their own or any
third party's account in the securities issued by said issuer, see the first limb, as well as in
any financial instruments attached hereto. Similar regulations shall be prepared by public
authorities and undertakings, including securities dealers, lawyers and accountants who, by
virtue of the exercise of their profession or business, regularly come into possession of inside information. If the undertakings mentioned in the 1st and 2nd sentences are organ-ised
as partnerships, limited partnerships or similar, the internal rules shall also apply to the
owners of such undertakings.
(2) An issuer with Denmark as its home country, see section 28(3) and with securities as mentioned in section 34(1), no. 1 shall lay down internal rules for the purpose of preventing inside information from becoming available to others than those needing such information.

43

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Similar regulations shall be prepared by public authorities and undertakings, including securities dealers, lawyers and accountants who - by virtue of the exercise of their profession or
business - regularly come into possession of inside information.
(3) Internal rules prepared by an issuer pursuant to subsection (2), 1st sentence, shall, as a
minimum, contain provisions effectively ensuring that
1)

persons other than those who require it for the exercise of their functions within the issuer do not gain access to inside information,

2)

persons who have access to inside information know the legal and regulatory duties entailed and are aware of the sanctions attaching to misuse or unauthorised circulation of
such information, and

3)

public disclosure of inside information is effected immediately, if the issuer ascertains

that disclosure has taken place, but see section 27(2), 4th sentence.

(4) A securities issuer as mentioned in section 34(1), no. 1, shall prepare and update on an ongoing basis a list of those persons working for them and having access to inside information.
Similar lists shall be prepared by natural and legal persons who act on behalf of an issuer as
mentioned in the 1st sentences or at the expense of such issuer. The persons covered by the
lists shall be notified hereof immediately. The 1st to 3rd sentences shall not apply to a sovereign state, the central bank of such state, the European System of Central Banks or the
person acting on behalf of said state or banks when the issue of securities takes place as
part of their monetary, exchange-rate or public-debt-management policies.
(5) Internal rules issued pursuant to subsections (1) and (2) and lists prepared pursuant to subsection (4) shall, upon request, be submitted to the regulated market and the Danish FSA.
(6) Securities dealers and the employees of these undertakings carrying out transactions with
securities as mentioned in section 34(1), shall, without undue delay, inform the Danish FSA
if it is reasonable to assume that a transaction constitutes a violation of section 35(1) or
section 39(1). However, this shall only apply if the transaction was carried out as part of a
loyal execution of a client's order, see. section 35(3) and section 39(2). Notification as specified in the 1st sentences which a securities dealer or its employees carry out for a good
reason, shall not be considered a breach of regulations regarding duty of confidentiality, irrespective of whether such regulations are laid down by an act, executive order or a contract.
(7) Securities dealers and the employees of these undertakings that have notified the Danish
FSA pursuant to subsection (6) shall be obliged to keep secret the fact that such notification
has been effected. Fulfilment of the duty to keep the notification secret as mentioned in the
1st sentence shall not entail any kind of responsibility on the part of the relevant securities
dealer or its employees.

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(8) In the event that a securities dealer participates in securities transactions, the buyer or seller of said securities shall identify himself to the securities dealer. The identification shall
comprise name, address, civil registration number (CPR number) or business registration
number (CVR number) or similar identification if the party in question does not have a CPR
number or a CVR number. If the transaction takes place on behalf of any third party, this
shall also be notified.
(9) The securities dealer shall register the information specified in subsection (8) and keep the
information for five years.
(10) The Danish FSA shall lay down more detailed regulations regarding preparation and
maintenance of lists under subsection (4) and regarding the content and extent of the obligation to give notification under subsection (6), 1st sentence.
37a
38

(Repealed).
(1) "Price manipulation" shall mean acts covered by nos. 1-4 which are likely to influence the
price of securities covered by section 34(1) in a direction deviating from their value on the
market through
1)

dissemination of information through the media or other methods likely to give false or
misleading signals as to the supply of, demand for, or price of securities,

2)

transactions or orders to trade likely to give false or misleading signals as to the supply
of, demand for or price of securities,

3)

transactions or orders to trade which employ fictitious devices or any other form of deception or contrivance, or

4)

transactions or orders to trade through which secure, by a person, or persons acting in

collaboration, the price of one or several securities at an abnormal or artificial level.

(2) Price manipulation under subsection (1) may, for example, include
1)

sending out an expression of opinion through the media regarding a security or an issuer of a security after having previously acquired a certain amount of the relevant security if, at a later time, profit is gained from the impact of the opinions voiced on the price
of the security, and if the conflict of interest is not disclosed to the public in a proper
and effective manner no later than at the time said expression of opinion is sent out,

2)

the buying or selling of securities at the close of the market with the effect of misleading investors acting on the basis of closing prices, or

3)

conduct by a person, or persons acting in collaboration, to secure a dominant position

over the supply of or demand for a security which has the effect of fixing, directly or in-

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directly, purchase or sale prices of the security at an abnormal or artificial level or creating other unfair trading conditions for the transaction.
(3) In the application of the provision in subsection (1), no. 1 in relation to editors and editing
employees who, in their professional capacity, disseminate information, account shall be
taken of the regulations applicable for the profession of such persons. The 1st sentence shall
not apply if the relevant editor or editing employee derives, directly or indirectly, an advantage or profits from the dissemination of the information in question.
(4) The provisions in subsection (1), nos. 2 and 4 shall not apply if the person who has entered
into the transaction or placed the order for trade proves that the transaction or the order for
trade conforms to accepted market practices and that the reason for entering into such
transaction or placing such order was legitimate. The Danish FSA shall make a decision regarding acceptance of market practices.
(5) The Danish FSA shall lay down more detailed regulations regarding transactions, orders for
trade and dissemination of information that may be regarded as price manipulation under
the provisions in subsection (1), nos. 1-4. The Danish FSA shall also lay down more detailed
regulations for the circumstances under which a transaction or order for trade may be regarded as being in accordance with accepted market practices under the provision in subsection (4).
39

(1) Price manipulation or attempts at such manipulation may not take place.
(2) Notwithstanding the provision laid down in subsection (1), securities dealers and the employees of such undertakings may, loyally, carry out an order from a client.
(3) The provisions of subsection (1) shall not apply to transactions carried out by a sovereign
state, its central bank, the European System of Central Banks or the person acting on behalf
of said state or banks, in pursuit of monetary, exchange-rate or public-debt-management
policies.
(4) The provision of subsection (1) shall not apply to trading in own shares in buy-back programmes or to securities as part of the stabilisation of the price of a security, provided such
trading is carried out in accordance with Commission Regulation (EC) no. 2273/2003 of 22
December 2003 implementing Directive 2003/6/EC of the European Parliament and of the
Council as regards exemptions for buy-back programmes and stabilisation of financial instruments.

39a.

Section 34(2)-(5), section 35(1)-(4), section 36, section 37(6)-(10), section 38 and section
39(1)-(3) shall also apply to trading with securities admitted to trading on an alternative
market place. In addition, Commission Regulation (EC) of 22 December 2003 implementing
Directive 2003/6/EC of the European Parliament and of the Council as regards exemptions
for buy-back programmes and stabilisation of financial instruments, see section 35(5) and

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section 39(4), shall also apply to trading with securities admitted to trading on an alternative market place.
39b

(Repealed).
Part 11
(Repealed).
Part 11a
(Repealed).
Part 11b
Operation of a multilateral trading facility

40

(1) A "Multilateral trading facility (MTF)" shall mean a trading system with the exception of
regulated markets, where within the system and in accordance with the non-discretionary
rules hereof, a plurality of third party's interests in the purchase and sale of financial instruments covered by section 2, nos. 1-10 are brought together in a way that results in an
agreement of transfer.
(2) A company that operates a multilateral trading facility shall
1)

have regulations that ensure fair and correct trading and include objective criteria for
effective execution of orders,

2)

have regulations that lay down criteria for determining which securities may be traded
through the systems of the trading facility,

3)

ensure that the users have access to sufficient publicly available information for the clients to make an investment assessment,

4)

have regulations establishing objective criteria that comply with the requirements of
section 42a on access to the trading facility.

5)

inform the users of the trading facility of their respective responsibility for settling
transactions carried out in the systems of the trading facility, and ensure an effective
settling of these transactions,

6)

monitor that users of the trading facility are in compliance with the regulations for the
trading facility, and

7)

register the transactions that are carried out by members of the market by use of the
trading facility, with a view to identifying violations of the trading facility's regulations,
trading conditions in violation of the regulations for the trading facility or behaviour that
may involve violation of Part 10.

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40a.
41

(Repealed).
(1) A company operating a multilateral trading facility shall publish current prices and the market depth of these prices of shares that are traded in the systems of the trading facility, if
the shares are at the same time admitted to trading on a regulated market. This information
shall, within the normal opening hours of the trading facility, regularly be made available to
the public on fair commercial terms.
(2) The Danish FSA may exempt a company operating a multilateral trading facility from the obligation of subsection (1) on the basis of market model, order type or order size.
(3) The Danish FSA shall lay down specified regulations on the obligation to disclose information
under subsection (1) and on exemption under subsection (2).

42

(1) A company that operates a multilateral trading facility shall publish price, volume and date
of transactions carried out in systems of the trading facility, if the shares are at the same
time admitted to trading on a regulated market. This information shall be made available to
the public on fair commercial terms and as close to real time as possible, unless the information about the transactions is published through a regulated market's systems.
(2) A company operating a multilateral trading facility may lay down regulations on postponement of publication based on the size or type of the transactions. These regulations shall be
approved by the Danish FSA. The company that operates the multilateral trading facility
shall publish the approved regulations.
(3) The Danish FSA shall lay down more detailed regulations on a duty to publish price, volume
and date of transactions carried out through the systems of a multilateral trading facility
with other securities than shares.
(4) The Danish FSA may lay down more detailed regulations on the duty to disclose information
under subsection (1), and on the possibility of postponement of publication under subsection
(2), including the conditions herefor.

42a

A company operating a multilateral trading facility may only grant access to the trading facility to the following natural or legal persons:
1)

Securities dealers, see section 4.

2)

Securities dealers, as mentioned in section 4(1), nos. 3 and 4, who do not carry out
business activities through a branch or provide services in Denmark, see sections 30
and 31 of the Financial Business Act.

3)

Other natural or legal persons, if the persons

a)

are fit and proper,

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b) have sufficient level of trading facility and competence,

c)

have, where applicable, adequate organisational arrangements, and

d) have sufficient resources for the role they are to perform, taking into account participation in trading at the multilateral trading facility established in order to guarantee
the adequate settlement of transactions.
42b

(1) A company operating a multilateral trading facility may not, without prior approval from the
Danish FSA, enter into an agreement with clearing centres or other undertakings that clear
or settle transactions involving money or securities.
(2) If the agreement as mentioned in subsection (1) is intended to be made with a party domiciled in another Member State of the European Union or in a country with which the Union
has entered into an agreement for the financial area, the Danish FSA may dispense with approving such agreement if it can be established that the agreement will prevent appropriate
operation of the multilateral trading facility, or if the Danish FSA finds that clearing and settlement in accordance with the agreement cannot be carried out in a technically lawful manner.
Special regulations on the operation of alternative market places

42c

(1) Companies that operate an alternative market place may only admit securities to trading on
the alternative market place, if
1)

the issuer of the security has made a request herefor, and

2)

the security has not been admitted to trading on a regulated market in Denmark or
similar markets in other countries.

(2) In relation to securities dealers from countries outside the European Union with which the
Union has not entered into an agreement for the financial area covered by section 42a, no. 2
and other natural or legal persons from such countries, except for central banks, access to
an alternative market place shall be by prior approval from the Danish FSA.
(3) A company that operates an alternative market place shall lay down regulations on the issuers' disclosure obligation.
42d

(1) Companies operating an alternative market place shall have exclusive right to using the
words alternative market place" in their name. Other natural or legal persons may not use
names or descriptions for their activities that may create the impression that they are operating an alternative market place.
(2) Companies which have been granted permission from the Danish FSA to operate an alternative market place shall use a description for the alternative market place indicating that it is
in fact an alternative market place. Companies which operate alternative market places shall

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not be subject to the obligation of the 1st sentence, if it is clear on the alternative market
place which regulations are linked to the securities which have been admitted to trading on
the relevant alternative market place.
42e

(1) A company operating an alternative market place may suspend or remove a security from
trading on the alternative market place. Suspension and removal may, however, not be
made if it is likely that this will be to the detriment of the interests of the investors or the
proper functioning of the market.
(2) If an issuer whose securities are admitted to trading on a regulated market, submits a request for removal from trading, the company operating the alternative market place shall
comply with such request. However, removal may not take place if it is likely that this will
be of significant detriment to the interests of the investors or the proper functioning of the
market.
(3) An issuer shall be entitled to have a security removed from trading on an alternative market
place if the security in that connection is admitted to trading or has been admitted to trading on another alternative market place.
(4) Trading with a security shall cease no later than at the same time as the security has been
admitted to trading on a regulated market.

42f

The powers which in section 42c are ascribed to a company operating an alternative market
place, shall be exercised by the Danish FSA if an operator of a regulated market in Denmark
or in another Member State of the European Union or in a country with which the Union has
entered into an agreement for the financial area, or a company operating an alternative
market place, makes a request for admission of securities for trading on the alternative
market place. The Danish FSA shall also exercise the powers which in section 42e are ascribed to a company operating an alternative market place if securities covered by the 1st
sentence are admitted to trading on the alternative market place.
Part 12

Prospectuses in connection with public offers of securities between EUR 1,000,000 and EUR
5,000,000
43

(1) This part shall apply to offers to the public of securities when the offer lies between EUR
1,000,000 and EUR 5,000,000.
(2) This part shall apply to securities as mentioned in section 2(1), no 1, except for bonds with
a term of less than one year.
(3) The Danish FSA may lay down regulations stipulating that offers of specified securities be
exempted from this Act.

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331

44

(1) An offeror may not make an offer of securities to the public until an approved prospectus
has been made available to the public for these securities, see subsection (2) and section
46(1).
(2) The Danish FSA shall make decisions regarding the approval of the prospectus.
(3) The prospectus shall include the information deemed necessary for investors and their investment counsellor to form an informed judgement of the assets and liabilities, financial
position, results and future prospects, and of any guarantor, and of the rights attaching to
the securities offered to the public.
(4) A prospectus fulfilling the requirements laid down in sections 23-24 and in regulations issued
pursuant to section 23(7) and (8) and section 24(2) may replace the prospectus referred to
in subsection (1).
(5) A prospectus which meets the requirements for prospectuses under the provisions of Directive 2003/71/EC as amended by Directive 2010/73/EU and which has been approved by
the competent authorities in a Member State of the European Union or a country with which
the Union has entered into an agreement for the financial area, shall rank equal to the prospectus referred to in subsection (1). Before publication, the prospectus shall be presented
to the Danish FSA, and the Danish FSA shall ensure that the conditions under the 1st sentence have been met.
(6) The Danish FSA shall lay down regulations regarding the contents of the prospectus, language, submission, validity and advertisement.

45

(1) Prospectuses as mentioned in section 44 shall be submitted to the Danish FSA.

(2) The Danish FSA shall ensure that the prospectuses referred to in section 44 comply with the
regulations of this Part and the provisions laid down in pursuance hereof.
(3) Receipt of prospectuses referred to in section 44 shall be registered with and made public by
the Danish Business Authority.
(4) The Danish FSA shall lay down regulations governing payment of fees for the processing of
prospectuses.
(5) The Danish Business Authority shall lay down regulations governing publication of receipt of
prospectuses covered by this Part and governing the payment of fees for publication.

46

(1) Offers to the public may not take place until the prospectus has been published according to
the regulations laid down in pursuance of section 45(5).
(2) The Danish FSA may lay down regulations regarding the detailed contents of the material
concerning public offers.

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Part 13
(Repealed).
47

(Repealed).
Part 14
(Repealed).

48

(Repealed).

49

(Repealed).
III
Clearing, settlement and financial collateral, etc.
Part 15
Clearing activities

50

(1) "Clearing" shall mean the calculation of obligations and rights pertaining to an agreed exchange of financial instruments, whether in connection with netting, see subsection (3), or
for each transaction.
(2) Settlement" shall mean any exchange of services for the purpose of fulfilling the obligations
of the parties.
(3) "Netting" as specified in section 57 shall mean conversion into one to a net claim or a one
net obligation of claims and obligations resulting from transfer orders which a participant or
participants either issue to, or receive from, one or more other participants with the result
that only a net claim can be demanded or a net obligation be owed.
(4) "Interoperable systems" shall mean two or more systems which have entered into an
agreement with one another according to which transactions shall be cleared, cleared and
settled or settled across the systems. Where relevant, the 1st sentence shall also include the
systems operator, see subsection (5), of an interoperable system.
(5) A "systems operator" shall mean the entity or entities which hold the legal responsibility for
the operation of a system, including an interoperable system.
(6) "Securities clearing activities" shall mean regular activities where clearing, settlement or
clearing and settlement of securities transactions are carried out on behalf of a clearing participant, and this shall include being a party to transactions or otherwise securing the completion of the transactions. The Danish FSA shall, in cases of doubt, decide whether securities clearing activities are being carried out.

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(7) A "clearing participant" shall mean a party which have entered into an agreement with a
clearing centre on regularly participating in clearing, settlement or clearing and settlement.
(8) An "indirect participant"

shall

mean

an

indirect participant

as

defined

in

Directive

2009/44/EC of the European Parliament and of the Council.

51

Securities clearing activities may only be carried out by clearing centres and Danmarks Nationalbank (Denmark's central bank).

52

(1) The board of directors of a clearing centre shall be responsible for the activities of the centre
being conducted in an adequate and proper manner. The individual clearing centre shall lay
down regulations governing clearing and settlement and ensure that all parties involved are
treated equally. The terms relating to the clearing centre's settlement of payments at Danmarks Nationalbank (Denmark's central bank) shall not be covered by the 2nd sentence.
(2) A clearing centre may lay down more detailed regulations governing the securities, which
can be cleared, settled, or cleared and settled, at the centre.

53

(1) A clearing centre may keep cash accounts for clearing participants and arrange for the lending and borrowing of money and securities in connection with clearing, settlement, or clearing and settlement of securities transactions. More detailed regulations in this respect shall
be laid down in a participation agreement, see section 54.
(2) A clearing centre may carry out other activities that are ancillary to the undertaking as a
clearing centre, including operation of a regulated market or a central securities depository.
If a clearing centre is operating a regulated market as an ancillary activity, the clearing centre may also operate a multilateral trading facility. The Danish FSA may decide that the ancillary activity shall be exercised in another company. If the clearing centre operates a regulated market as an ancillary activity, a multilateral trading facility may always be operated
by the same company as the regulated market.
(3) If a clearing centre operates a central securities depository, a regulated market or a multilateral trading facility as an ancillary activity, the requirements for licence and operation of
these types of activities of this Act, shall apply. In connection with ancillary operation of a
multilateral trading facility, the requirements for licence and operation of this type of activity in the Financial Business Act, shall furthermore apply.
Part 16
Participation agreements with a clearing centre

54

(1) A clearing participant shall enter into a participation agreement with the clearing centre.
Such agreement may be concluded for the purpose of clearing and settling own, a third party's, or own and a third party's securities transactions.

53

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(2) Securities dealers, credit institutions and investment companies which have been granted a
licence in another Member State of the European Union or in a country with which the Union
has entered into an agreement for the financial area, and which do not carry out securities
trading through a branch or provide services in Denmark, clearing centres, the Agency for
Governmental Management, Danmarks Nationalbank (Denmark's central bank), and central
banks in another Member State of the European Union or in a country with which the Union
has entered into an agreement for the financial area, may clear and settle transactions on
behalf of third parties.
(3) Securities dealers, credit institutions and investment companies which have been granted a
licence in another country within the European Union or in a country with which the Union
has entered into an agreement for the financial area, shall be permitted to enter into an
agreement with the clearing centre if they satisfy the conditions laid down in subsection (4).
The clearing centre may decide that others are to be permitted to enter into a participation
agreement.
(4) The clearing centre shall lay down regulations governing participation as a clearing participant, including the conditions to be satisfied by the clearing participants in order to participate in clearing and settlement of own, a third party's, or own and a third party's transactions.
(5) If a clearing participant grossly or repeatedly ignores the terms of the participation agreement, the clearing centre may terminate the agreement.
Part 17
Risk hedging
55

(1) If a clearing centre or a clearing participant grants loans to a clearing participant in connection with settlement of securities transactions or payments in such clearing centre, it may be
agreed with the borrower in advance that the borrower's investment securities, which are
held with a central securities depository in one or more custody accounts as specified by the
borrower, may serve as collateral for the repayment of such loans.
(2) If a designated payment system or a participant in such a system grants loans to a participant or an indirect participant in the system in connection with settlement of securities
transactions within the system, it may be agreed with the borrower in advance that the borrower's investment securities, which are held with a central securities depository in one or
more accounts as specified by the borrower, may serve as collateral for the repayment of
such loans.
(3) If securities clearing activities are carried out or if a payment system is operated by Danmarks Nationalbank (Denmark's central bank), and the securities clearing centre, the payment system, or a participant in the securities clearing activities or the payment system,
grants loans to a participant or an indirect participant in connection with settlement within

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the system, it may be agreed with the borrower in advance that the borrower's investment
securities, which are held with a central securities depository in one or more custody accounts as specified by the borrower, may serve as collateral for the repayment of such
loans.
(4) Subsection (3) shall apply correspondingly where a clearing centre or a payment system,
which has been notified to the Commission in pursuance of Article 10, first subparagraph of
Directive 98/26/EC of the European Parliament and of the Council (the Finality Directive),
settles payments in accounts with Danmarks Nationalbank (Denmark's central bank). It shall
be a condition that the agreement on collateral is governed by Danish law.
(5) In cases where loans are granted in connection with settling of securities and payments in
systems, where the loans are not covered by subsections (1)-(4), the Danish FSA shall approve that it may be agreed with the borrower in advance that the borrower's investment
securities, which are held with a central securities depository in one or more accounts as
specified by the borrower, may serve as collateral for the repayment of such loans. Approval
shall be conditional upon the agreement on collateral being governed by Danish law.
(6) If an agreement referred to in subsections (1)-(5) has been registered at a central securities
depository and if loans are granted for purposes of settlement, a charge on the investment
securities concerned may be notified in connection with said settlement, see subsections
(1)-(5), to the central securities depository with a view to book-entry. Protection against legal proceedings and transferees pursuant to the regulations laid down in part 22 of this Act
shall only be obtained through such book-entry.
(7) If a clearing centre or a clearing participant has paid for another natural or legal person's
acquisition of investment securities settled through a clearing centre, a charge may be registered by book-entry at a central securities depository as collateral for the payer's claim
against the acquirer on the acquired securities which at the same time are registered by
book-entry on the acquirer's account with said central securities depository and which have
not, as agreed with the payer, been transferred by sale settled at the same time as the acquisition. By registration of the charge, protection shall be obtained against legal proceedings and transferees pursuant to the regulations laid down in part 22 of this Act.
(8) The Danish FSA shall lay down more detailed regulations governing the time limits within
which a lender by notice is to be required to assert the charge notified pursuant to subsections (6) and (7). Registration of the charge shall be cancelled without notice pursuant to
section 68 if the charge has not been asserted before expiry of the time limit. In exceptional
circumstances, a central securities depository may postpone the time limit referred to in the
2nd sentence, including in the event of operational problems or if Danmarks Nationalbank
(Denmark's central bank) has given notification that its payment systems are out of order
due to technical problems.

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336

56

(1) Investment securities on which a charge has been registered pursuant to section 55(6) or
(7), may, if advance agreement has been concluded in this respect or if the transaction has
been concluded between a securities dealer and a securities dealer or an institutional investor or similar professional investor, be immediately realised after the expiry of the time limit
fixed by the Danish FSA pursuant to section 55(8) provided that the borrower has not already fulfilled his obligations. The time limit mentioned in the 1st sentence may be derogated from upon agreement between the parties if the charge has been registered pursuant to
section 55(6) or (7).
(2) Securities provided as collateral to a clearing centre or a clearing participant for the purpose
of fulfilling the regulation laid down by the clearing centre governing provision of collateral
may be immediately realised if a previous agreement has been concluded hereon and the
clearing centre's regulations governing provision of security have been violated.
Part 18
Payment systems, netting, etc.

57

(1) An agreement between systems participants and a clearing centre, a designated payment
system, interoperable systems or Danmarks Nationalbank (Denmark's central bank) on netting pertaining to all transfer orders, may with effect towards the estate and creditors, also
include a provision to the effect that such transfer orders shall be netted, cleared and settled or reversed in full if one of the parties, including a systems participant in an interoperable system, is declared bankrupt or a notice of financial reconstruction has been submitted,
and provided that the transfer orders were included in the system before the bankruptcy order or the financial reconstruction have commenced.
(2) Agreements on netting pursuant to subsection (1) may include transfer orders which are not
included in the clearing centre, Danmarks Nationalbank (Denmark's central bank), the designated payment system or an interoperable system until after the bankruptcy order or a financial reconstruction has commenced, but on the business day of the bankruptcy order or
commencement of the financial reconstruction, if the systems operator, the interoperable
system, the clearing centre, the designated payment system or Danmarks Nationalbank
(Denmark's central bank), at the time when the claim became irrevocable, see section 57c,
neither was nor should have had knowledge of the bankruptcy or the commencement of financial reconstruction. In cases where a transfer order has been entered into the system on
the business day of the bankruptcy order or commencement of financial reconstruction but
after expiry of the day when the bankruptcy has been published in the Danish Official Gazette, it shall rest on the system to prove that the system neither was nor should have had
knowledge about the bankruptcy.
(3) Agreements on netting with foreign clearing centres and payment systems notified to the
Commission pursuant to Article 10, 1st paragraph of Directive 98/26/EC of the European

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Parliament and of the Council shall have the same legal effect as the agreements specified in
subsection (1) above.
(4) The Danish FSA may approve that agreements on netting not covered by subsection (3) and
entered into with foreign clearing centres and payment systems or corresponding foreign
undertakings which carry out securities clearing activities or clearing of payments outside of
the European Union or countries with which the Union has entered into an agreement will
have legal effect pursuant to subsection (1).
(5) Agreements as specified in subsection (1) shall, in order to have legal effect towards the estate and creditors, be submitted to the Danish FSA prior to the bankruptcy order or commencement of a financial reconstruction. If the agreement concerns a designated payment
system covered by section 86(2), in order to have legal effect towards the estate and the
creditors prior to the bankruptcy, commencement of a financial reconstruction, the agreement shall be submitted to Danmarks Nationalbank (Denmark's central bank).
(6) Agreements under subsections (1) and (4) shall contain objective conditions pertaining to
the cases in which transfer orders, which have been entered into but not settled, are either

57a

1)

fulfilled in accordance with the netting agreement, or

2)

revoked.

(1) The Danish FSA may designate a payment system where this system is subject to Danish
law and at least one participant has its head office in Denmark with the effect that netting
agreements and agreements on collateral regarding settlement of payment will have legal
effect in accordance with the provisions in section 57(1), but see section 57(5), and the provisions in section 57b(1) and (2). Participants in the payment system shall be credit institutions as defined in Article 4, no. 1, of Directive 2006/48/EC of the European Parliament and
of the Council, investment companies as defined in Article 4(1), no. 1, of Directive
2004/39/EC of the European Parliament and of the Council, public authorities, or others,
who the Danish FSA considers as having significant importance to the settlement of payments. Indirect participants in the payment system shall be credit institutions as defined in
Article 1, 1st indent of Directive 77/780/EEC.
(2) The Danish FSA shall ensure that the regulations and participation agreements applicable to
the system and participants include provisions stipulating
1)

the system is to be subject to Danish law,

2)

who may be direct participants in the system,

3)

who may be indirect participants in the system,

4)

the conditions governing representation of indirect participants by direct participants,

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5)

whether clearing is to be by netting, see. section 50(3) for each transaction or a combination hereof,

6)

which requirements the system makes concerning collateralisation with a view to ensuring settlement within the system,

7)

the conditions mentioned in section 57c and

8)

terms and conditions in any agreement concluded by the system with a settlement
agent or a clearing institution as defined in Article 2(d) and (e) of Directive 98/26/EC of
the European Parliament and of the Council.

(3) The Danish FSA may order a designated payment system to amend the regulations and participation agreements issued pursuant to subsection (2).
(4) The Danish FSA may stipulate requirements regarding the capital base of a designated payment system, requirements regarding management, see section 9, requirements regarding
audits and preparation of operation plans, administrative procedures, and adequate control
measures and security measures, including measures within IT.
(5) The system shall submit notification to the Danish FSA specifying the direct and indirect participants in the system and any changes thereto.
(6) The Danish FSA may require registration under subsection (1) of payment systems where
significant considerations for settlement of payment or society warrant such.
(7) Powers under subsections (1) to (6) shall be exercised by Danmarks Nationalbank (Denmark's central bank) in the case of a payment system covered by section 86(2).
57b

(1) Transactions involving collateral provided towards Danmarks Nationalbank (Denmark's central bank), a clearing centre, a designated payment system, interoperable systems or participants in such systems cannot be rendered null and void pursuant to section 70(1) or section
72(2) of the Bankruptcy Act. Reversal may be carried out, if
1)

the security has not been provided without undue delay after the lack of such collateral
arose, or

2)

the security has been provided under such circumstances that it does not appear to be
ordinary.

(2) Where collateral as mentioned in subsection (1) has been provided in the form of securities
or deposits, this collateral may be realised immediately if a previous agreement to this effect
has been concluded and the participant has not already fulfilled his obligations towards
Danmarks Nationalbank (Denmark's central bank), a clearing centre or a designated payment system or participants in such systems.

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(3) Subsections (1) and (2) shall apply correspondingly to collateral provided in connection with
clearing centres and payment systems which have been registered with the Commission pursuant to Article 10, first paragraph of Directive 98/26/EC of the European Parliament and of
the Council where said collateral is provided in accordance with the regulations of the clearing centre or payment system. This shall apply correspondingly to collateral provided for
central banks in their capacity as central banks within the European Union or countries with
which the Union has entered into an agreement.
(4) The Danish FSA may approve that agreements on collateral, which are not covered by subsection (3) and which are entered into with foreign clearing centres or payment systems or
similar foreign undertakings carrying out securities clearing activities or clearing of payments outside the European Union or countries with which the Union has entered into an
agreement with the effect that collateral according to such agreement are covered by subsection (1) and (2).
57c

(1) Regulations and participation agreements for a clearing centre, a designated payment system or corresponding activities carried out by Danmarks Nationalbank (Denmark's central
bank) shall include provisions on,
1)

when a transfer order is to be considered entered into the system, and

2)

the point/s in time after which a registered transfer order can no longer be revoked by a
participant or a third party.

(2) Where a clearing centre, a designated payment system or Danmarks Nationalbank (Denmark's central bank) enter into a mutual agreement on interoperability or with interoperable
systems or operators of such, the parties shall, as far as possible, ensure that the regulations of the interoperable systems be coordinated with regard to the conditions mentioned in
subsection (1). Unless expressly provided for in the regulations for each of the interoperable
systems, the regulations for each system concerning the moment mentioned in subsection
(1), nos. 1 and 2 shall not be affected by the regulations for other interoperable systems.
(3) Agreements covered by subsection (2) shall be considered of far-reaching importance, see
section 12(2).
57d

(1) The Danish FSA shall draw up a list of the clearing centres and payment systems with which
agreements may be concluded gaining legal effect in accordance with the provisions laid
down in section 57(1) and section 57b(1) and (2). Such list shall be published by executive
order.
(2) The Danish FSA shall give notice of the clearing centres and payment systems under subsection (1), as well as of payment systems and securities clearing systems operated by Danmarks Nationalbank (Denmark's central bank) to the European Securities and Markets Au-

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thority, see Article 10 of Directive 98/26/EC of the European Parliament and of the Council
as amended.
(3) Where the bankruptcy court issues a bankruptcy order or commences financial reconstruction for a participant in a clearing centre or a payment system covered by subsection (2),
the bankruptcy court shall immediately notify the Danish FSA in this respect. The Danish
FSA shall immediately forward this notification to the European Systemic Risk Board, the
other Member States of the European Union and countries with which the Union has entered
into an agreement and the European Securities and Markets Authority.
57e

(1) If a participant in a clearing centre, a designated payment system or corresponding activity

carried out by Danmarks Nationalbank (Denmark's central bank) is declared bankrupt;
commences financial reconstruction or any other type of insolvency proceedings as defined
in Article 2j of Directive 98/26/EC of the European Parliament and of the Council are commenced, the rights and obligations arising from or in connection with participation in the
system shall be determined by the law governing that system.
(2) If a Danish participant in a foreign clearing centre or a foreign payment system notified to
the Commission pursuant to Article 10(1) of Directive 98/26/EC of the European Parliament
and of the Council is declared bankrupt or commences financial reconstruction or any other
type of insolvency proceedings as defined in Article 2j of Directive 98/26/EC of the European
Parliament and of the Council, the rights and obligations arising from or in connection with
participation in the system shall be determined by the law governing that system, see section 57(3), and section 57b(3).
(3) If a Danish participant in a foreign clearing centre or a foreign payment system which is not
covered by subsection (2) and which is domiciled in a country outside the European Union
with which the Union has not entered into an agreement, goes bankrupt, become subject to
financial reconstruction or any other type of insolvency proceedings, the rights and obligations arising from, or in connection with, the participation of that participant in the system
and which are not covered by a licence according to section 57(4) or section 57b(4) shall be
determined by the law governing that system, if the Danish FSA has approved the participation agreement between the participant and the system.
Part 18a
Financial collateral arrangements and close-out netting agreements, etc.

58

(1) The provisions of this part of this Act shall apply to financial collateral arrangements and to
collateral after such collateral has been provided. Collateral shall be regarded as having
been provided when the relevant act of security has been carried out.
(2) Sections 58h and 58i shall, however, apply irrespective of whether an agreement on closeout netting or ongoing netting has been established as part of a financial collateral arrangement.

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58a

(1) A "financial collateral arrangement" shall mean an agreement between parties covered by
section 58b on collateral for financial obligations, see section 58e, in the form of collateral
covered by section 58f. Collateral" shall mean collateral in the form of title transfer as well
as by way of security.
(2) In order for a financial collateral arrangement to be covered by this part of this Act, it shall
be in writing or in another manner legally equal to this. If collateral is in the form of debt,
see section 58f(1) and (2), the collateral taker shall receive a list from the collateral provider including all debt covered by the collateral. The list shall be submitted in writing or in a
manner which is legally equivalent herewith. Receipt by the collateral taker of the list mentioned in the 2nd sentence, shall, notwithstanding section 31 of the Debt Instrument Act
("Gldsbrevsloven") be the relevant act of security in connection with collateral pursuant to
section 58f(1) and (2). In respect of other transferees, the collateral taker shall, at the time
of receipt of the list be in good faith.
(3) If the collateral provider and the collateral taker are closely connected, see section 2, nos.
2-4 of the Bankruptcy Act, subsection 2, 4th sentence shall not apply. If the collateral taker
becomes closely connected to the collateral provider, subsection 2, 4th sentence shall not
apply to collateral established after this date.
(4) In connection with the use of debt as financial collateral, the debtor may in respect of the
mutual claim, in writing or in a manner which is legally equivalent herewith, withdraw his
confidentiality requirement pursuant to section 117(1) of the Financial Business Act, to the
extent that this is necessary in order to make the collateral effective.
(5) If a debtor in respect of a debt used as financial collateral withdraws his access to offsetting
the liabilities covered by the financial collateral agreement, or which for other reasons can
be used for offsetting, this shall take place in writing or in a manner which is legally equivalent herewith.

58b

(1) Parties to a financial collateral arrangement may only be the following:

1)

A public authority (excluding publicly guaranteed undertakings unless they are covered
by nos. 2-6), including
a)

public-sector bodies in a European Union Member State and countries with which the
Union has entered into an agreement for the financial area which are charged with
or are intervening in the management of public debt,

b)

publicsector bodies in a European Union Member State and countries with which the
Union has entered into an agreement for the financial area which are authorised to
hold accounts for clients.

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2)

A central bank, the European Central Bank, the Bank for International Settlements, a
multilateral development bank as defined in Article 1, no. 19 of Directive 2000/12/EC,
the International Monetary Fund and the European Investment Bank.

3)

A financial institution subject to supervision, including:

a)

a credit institution as defined in Article 1, no. 1 of Directive 2000/12/EC, including

the institutions listed in Article 2(3) of said Directive,

b)

an investment company as defined in Article 1, no. 2 of Directive 2004/39/EC,

c)

a financial institution as defined in Article 1, no. 5 of Directive 2000/12/EC,

d)

an insurance company as defined in Article 1a of Directive 92/49/EEC and an insurance company as defined in Article 1a of Directive 92/96/EEC,

e)

an undertaking for collective investment in transferable securities as defined in Article 1(2) of Directive 85/611/EEC, or

f)

an investment management company as defined in Article 1a, no. 2 of Directive

85/611/EEC.

4)

A central counterparty, a settlement agent or a clearing institution as defined in Article

2c, d and e of Directive 98/26/EC, including similar institutions regulated under national
law acting in the futures, options and derivative financial instruments to the extent not
covered by that Directive.

5)

A legal person who acts in a trust or representative capacity on behalf of any one or
more persons, including any holders of bonds or other forms of debt instruments or any
institution as defined in nos. 1-4.

6)

A legal person not covered by nos. 1-5, including unincorporated undertakings and partnerships as well as sole traders.

58c

The provisions of this Part shall apply to financial collateral arrangements containing provisions regarding
1)

netting through close-out netting and ongoing netting, see sections 58h and 58i,

2)

realisation of collateral, see section 58j,

3)

supplementary collateral, see section 58l,

4)

right of substitution, see section 58m, or

5)

right of use, see section 58g.

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58d

Realisation according to section 58j(1), or valuation of collateral or mutual claims set off or
acquired pursuant to section 58g; 58h; section 58j(2)-(4) and section 58k, shall be conducted in a commercially reasonable manner.

58e

(1) It shall be clear from a financial collateral arrangement which of the present or future, actual or contingent or prospective financial obligations of the parties or any third parties are
covered by the arrangement.
(2) "Financial obligations" shall mean obligations providing the collateral taker with a right to
cash settlement or delivery of securities.
(3) If both parties to a financial collateral arrangement are covered by section 58b, no. 6, only
claims originating from trade in foreign currencies and securities, trade on commodities exchanges as well as deposits and loans shall be regarded as financial obligations.
(4) If only one or none of the parties to an agreement on close-out netting pursuant to section
58h is covered by section 58b, only claims originating from trade in foreign currencies and
securities shall be regarded as financial obligations.

58f

(1) Collateral under a financial collateral arrangement may only comprise cash, and "cash" shall,
in this context, mean money credited to an account, or securities covered by section 2(1),
nos. 1-3. If both parties to a financial collateral arrangement are covered by section 58b,
nos. 1-5 financial collateral may also include debt.
(2) In this Act "debt" shall mean a pecuniary claim on the basis of an agreement where a credit
institution, as defined in Article 4, no. 1 of Directive 2006/48/EC, including institutions on
the list in Article 2 of the Directive, provides credit in the form of a loan. Loans to consumers as defined in Article 3a of Directive 2008/48/EC, or a micro or small enterprise as defined in Article 1 and Article 2(2) and (3) of the Annex to Commission Recommendation
2003/361/EC, shall only be covered by the 1st sentence if either the collateral provider or
the collateral taker is covered by section 58b, no. 2.
(3) The own shares of a collateral provider, shares in affiliated undertakings within the meaning
of Directive 83/349/EEC, and shares in undertakings whose exclusive purpose is to own
means of production that are of material significance to the collateral provider's activities,
may not be provided as collateral under a financial collateral arrangement. The same shall
apply to shares in companies with the purpose of owning real property for the use of their
shareholders.
(4) Cash deposits which cannot be made subject to legal proceedings may neither be applied as
collateral under a financial collateral arrangement nor may they be made subject to closeout netting.

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(5) "Equivalent collateral" shall mean an amount of the same size and the same currency as the
original collateral, if this was provided in the form of cash or securities identical to the original collateral, if this was provided in the form of securities.
(6) In a financial collateral arrangement, provision may be made to the effect that equivalent
collateral may be composed of another currency or other securities with a value corresponding to the value of the original collateral at the time when the equivalent collateral is provided or delivered.
58g

(1) A financial collateral arrangement by way of security may contain provisions regarding right
of use. When right of use has been agreed upon, the collateral taker may - in accordance
with the terms of a financial collateral arrangement - transfer the collateral received, or
some of this, to a third party for ownership or as collateral.
(2) If a collateral taker has exercised a right of use under subsection (1), said collateral taker
shall return equivalent collateral no later than on the due date for the performance of the
collateralised financial obligation(s). The returned collateral shall be deemed as having been
provided under the financial collateral arrangement at the same time as the original collateral was provided.
(3) Return under subsection (2) may only be reversed if the conditions of section 74 of the
Bankruptcy Act have been met.
(4) Return under subsection (2), 1st sentence may be omitted to the extent that the value of
the collateral is set off against the collateralised financial obligations or is made subject to
close-out netting in accordance with the terms of the financial collateral arrangement, and
the claim for return shall then be deemed to have arisen at the same time as the original
collateral was first provided.
(5) Subsections (1)-(4) shall not apply to debt.

58h

(1) An arrangement may, with legal consequences for third parties, but see subsections (3)-(6),
contain provisions stipulating that the financial obligations covered by the arrangement, see
section 58e, are to be netted through close-out netting, if one of the parties breaches the
arrangement, including that close-out netting is to be effected if a party is in insolvency proceedings or if execution is levied against a claim covered by the provision on close-out netting. Insolvency proceedings" shall mean bankruptcy, financial reconstruction, administration of the insolvent estate of a deceased person, debt restructuring as well as other Danish
and foreign types of liquidation and reorganisation measures caused by the insolvency of the
debtor, as defined in Article 2, no. 1, j and k of Directive 2002/47/EC.
(2) With legal consequences for the estate and the creditors, agreement may be made to the effect that if a breach arises, see subsection (1), close-out netting shall not be effected until
the party not in breach gives notification in this respect to the party in breach. In situations

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where the party in breach is made subject to insolvency proceedings, said party may, however, demand that the close-out netting be carried out in such a manner that the conditions
applicable to the parties are the same as they would have been if close-out netting had been
effected without undue delay after the time when the party not in breach knew, or should
have known, that the party in breach was made subject to insolvency proceedings.
(3) Close-out netting covered by subsection (1), which is carried out after the party in breach is
subject to financial reconstruction, may include claims that incurred before the time when
the party not in breach knew, or should have known, the circumstances occasioning the reference date, see section 1 of the Bankruptcy Act.
(4) Close-out netting covered by subsection (1), which is carried out after the party in breach
has been declared bankrupt, may include claims that incurred before the time when the party not in breach knew, or should have known, the circumstances occasioning the reference
date, see section 1 of the Bankruptcy Act. Claims incurred after the end of the day when the
bankruptcy was published in the Danish Official Gazette may not, however be included in
close-out netting.
(5) A claim covered by the provisions of section 42(3) and (4) of the Bankruptcy Act may be included in close-out netting under subsection (1) unless the party not in breach knew, or
should have known, that the party in breach was insolvent when the claim against said party
was acquired or arose respectively.
(6) Close-out netting under subsection (1) may only be reversed under section 69 of the Bankruptcy Act if such close-out netting included claims which could not have been included in
agreed close-out netting in the event of bankruptcy, see subsections (4) and (5).
(7) The provisions in section 58a(2), section 58d, section 58e, and section 58f(4) shall apply
correspondingly to a close-out netting arrangement which is not part of a financial collateral
arrangement.
58i

An agreement may, with legal consequences for the third party, contain a provision to the
effect that all claims covered by said arrangement which originate from trade in foreign currency and securities are to be netted on an ongoing basis in connection with agreed settlement. The provisions of section 58h(3)-(6) shall apply correspondingly to agreements on
ongoing netting.

58j

(1) A financial collateral arrangement may contain a provision to the effect that the collateral
taker may, in the event of a breach, immediately realise the collateral. Immediate realisation may, subject to the terms of the arrangement, be effected
1)

without advance approval by public authorities or others,

2)

without advance notification to the collateral provider, and

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3)

without application of a special procedure.

(2) On financial collateral in the form of title-transfer, realisation shall be effected through setting off the value of the collateral against the collateralised obligations.
(3) On collateral in the form of cash, realisation shall be effected through setting off the value of
the collateral against the collateralised obligations.
(4) On financial collateral in the form of security, realisation shall be effected through a sale of
the collateral. If stipulated in the financial collateral arrangement, realisation may be effected through the collateral taker appropriating the collateral, provided the arrangement lays
down principles for the valuation of the collateral, but see section 58d.
58k

(1) A financial collateral arrangement in the form of title transfer shall, in relation to the act of
security and realisation, be effective in accordance with the terms of the arrangement.
(2) In the event of breach before the collateral taker has met any obligation to transfer equivalent collateral, the obligation may be made the subject of netting through close-out netting,
see section 58h, if this is provided for in the arrangement.

58l

(1) A financial collateral arrangement may contain a provision to the effect that the parties are
obliged to provide collateral or additional collateral in order to take account of changes in
the value of the collateral or the amount of the financial obligations covered by the arrangement if the changes occurred after establishment of the arrangement and were due to
market-related conditions.
(2) If collateral provided under subsection (1) was provided without undue delay after the claim
for collateral could be asserted under the arrangement, said collateral may not be reversed
under section 70 or 72 of the Bankruptcy Act. Reversal under the conditions laid down in
section 72 of the Bankruptcy Act may, however, be effected if - under the circumstances the provision of collateral could not be regarded as ordinary.

58m

(1) The collateral provider may, upon agreement with the collateral taker, substitute collateral
with other collateral of substantially the same value.
(2) If substitution collateral covered by subsection (1) was provided no later than at the same
time as the collateral provider regained possession of the substituted collateral, the substitution collateral may only be reversed if the substituted collateral was reversible.
Part 18b
Authorisation and applicable law

58n

(1) If a security is registered by book-entry in an account, the issues mentioned in subsection

(2) regarding the security shall be governed by legislation in the country where the account

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is maintained. Legislation in the country where the account is maintained" shall mean the
legislation of said country except regulations on applicable law.
(2) Issues to be governed by the legislation mentioned in subsection (1) shall be
1)

the legal nature of securities collateral and the proprietary effects attached hereto,

2)

the requirements for perfecting a financial collateral arrangement against a third party
and the completion of the steps necessary to render such an arrangement effective
against third parties,

3)

whether a person's title to or interest in securities collateral is to be overridden by or

subordinated to a competing title or interest, including whether good faith acquisition
has occurred, and

4)

the steps required for the realisation of collateral in the form of securities following the
occurrence of an enforcement event.
IV
Book-entry
Part 19
Issue and book-entry of dematerialised securities

59

(1) Securities may be issued and transferred electronically (dematerialised).

(2) In this Act "investment securities" shall mean negotiable, dematerialised securities registered by book-entry with a central securities depository.
(3) "Book-entry" shall mean the issue of investment securities through a central securities depository and entry of rights to such securities in a book-entry register with the central securities depository. A single investment security may only be issued through one central securities depository.
(4) The board of directors of a central securities depository may decide that securities other
than those under subsection (2) may also be registered by book-entry as investment securities with the central securities depository concerned.
(5) "Book-entry activities" shall mean regular activities pertaining to book-entry of investment
securities. In cases of doubt, the Danish FSA shall decide whether book-entry activities are
being carried out.
(6) Regulations governing the activities of a central securities depository shall be laid down in
the articles of association of the company which are subject to approval by the Danish FSA.

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Part 20
Book-entry activities
60

(1) The board of directors of a central securities depository shall be responsible for its activities
being conducted in an adequate and proper manner. The individual central securities depository shall lay down regulations governing book-entry of securities as investment securities
and governing the securities, which may be admitted for book-entry with the depository as
investment securities. Such regulations shall ensure that all parties involved are treated
equally and shall be subject to approval by the Danish FSA.
(2) A central securities depository may not disclose information concerning the data entered on
the records to any others than the Danish FSA and the participating undertakings pursuant
to part 21 of this Act.
(3) The Minister for Economic and Business Affairs may decide that a central securities depository, to a specified extent, is to be required to disclose information about the data entered on
the records to a public authority including Danmarks Nationalbank (Denmark's central bank).
(4) The board of directors, auditors as well as members of the board of management and other
employees in a central securities depository may not, without authorisation, disclose anything which has come to their knowledge during the performance of their position or charge.

61

(1) A central securities depository may carry out other activities, which are ancillary to the activity as a central securities depository, including operation of a regulated market or as a
clearing centre.
(2) If a central securities depository operates a regulated market as an ancillary activity, the
central securities depository may also operate a multilateral trading facility. The Danish FSA
may decide that the ancillary activity shall be exercised in another company. If the central
securities depository operates a regulated market as an ancillary activity, a multilateral
trading facility may however always be operated in the same company as the regulated
market.
(3) If a central securities depository operates a clearing centre, a regulated market or a multilateral trading facility as an ancillary activity, the requirements for a licence and operation of
these types of activity in this Act shall apply. In ancillary operation of a multilateral trading
facility the requirements on licence and operation of this type of activity laid down in the Financial Business Act shall also apply.
Part 21
Participation agreements with a central securities depository

62

(1) Apart from the central securities depository concerned, the following account-holding institutions shall have the right to report transactions for book-entry with a central securities depository on its behalf and with legal effect pursuant to sections 66-75:

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1)

financial undertakings licensed as banks or investment firms,

2)

financial undertakings licensed as mortgage-credit institution or investment management company to the extent that such undertakings are licensed under section 9(1) of
the Financial Business Act,

3)

undertakings, jointly managed by these financial undertakings for the purpose of managing securities,

4)

Danmarks Nationalbank (Denmark's central bank) and central banks in another Member
State of the European Union or in a country with which the Union has entered into an
agreement for the financial area,

5)

the Agency for Governmental Management,

6)

clearing centres,

7)

bond-issuing institutions as regards investment securities issued by the institution in

question, and

8)

investment companies and credit institutions which have been granted a licence in another Member State of the European Union or in a country with which the Union has entered into an agreement for the financial area.

(2) Management companies, which have been granted a licence in another Member State of the
European Union or in a country with which the Union has entered into an agreement for the
financial area, shall be authorised to effect book-entry, see subsection (1), if such institution, firm or company legally carries out securities trading either through a branch or by
providing services in Denmark, see sections 30 and 31 respectively of the Financial Business
Act.
(3) Credit institutions and investment companies, which have been granted a licence in a country outside the European Union with which the Union has not entered into an agreement for
the financial area, shall have the right to report transactions for book-entry, see subsection
(1), if such company legally carries out securities trading either through a branch or by
providing services in Denmark, see section 1(3) and section 33, respectively, of the Danish
Financial Business Act.
(4) Foreign clearing centres or similar institutions which are subject to public supervision, shall,
subject to the approval of the Danish FSA, have the right to report transactions for book entry, see subsection (1).
(5) Major customers may obtain information concerning their own accounts directly from a central securities depository, and they may transfer notifications of sale through a central secu-

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rities depository to the account-holding institutions or a clearing centre, and notify transactions for book-entry on own accounts directly to a central securities depository.
63

(1) Foreign central securities depositories and custodian institutions which are subject to public
supervision (foreign depositories) and Danish central securities depositories may, subject to
the approval of the Danish FSA, report transactions for book-entry with a central securities
depository on its behalf and with legal effect pursuant to sections 66-75.
(2) Upon approval by the Danish FSA, a central securities depository may effect book-entries
with foreign depositories and with Danish central securities depositories.

64

(1) Account-holding institutions, see section 62(1)-(4) shall enter into a participation agreement
with a central securities depository in order to be entitled to report transactions for bookentry with the depository in question.
(2) The major customers referred to in section 62(5) shall enter into a participation agreement
with a central securities depository in order to be entitled to procure information concerning
their own accounts, to transfer notifications of sale, and to notify transactions for book-entry
on own accounts directly to the depository in question.
(3) A central securities depository may, after having been authorised by the Danish FSA, enter
into a participation agreement with a credit institution or investment company as mentioned
in section 62(3) that does not carry out securities trading either through a branch or by
providing services in Denmark, see sections 1(3) and 33 respectively of the Financial Business Act.
(4) In the event of bankruptcy, financial reconstruction or similar in an undertaking covered by
subsections (1) and (3), the participation agreement mentioned in the same subsections
shall terminate immediately and consequently also the right to effect book-entry with a central securities depository. Unless otherwise agreed, the central securities depository shall
subsequently take over the reporting of transactions for book-entry in the affected accounts
for a period of no more than four months following which the book-entries of the account
holder shall be transferred to an account with the individual issuer. The Danish FSA may lay
down more detailed regulations regarding procedures in connection with the termination of a
participation agreement as mentioned in the 1st sentence and in connection with transfer of
an account holder's book-entries to an account with the issuer as mentioned in the 2nd sentence.

65

(1) The Danish FSA shall lay down regulations regarding the basis and procedure for book-entry
as well as regarding approval of persons who, as employees in a central securities depository or an account-holding institution, may perform the tasks related to such book-entry.
(2) The Danish FSA may lay down more detailed regulations regarding book-entry of limited
rights to investment securities as well as regulations regarding the access of central securi-

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ties depositories or account-holding institutions to charge fees for the management of investment securities and for book-entries pertaining hereto.
Part 22
Legal consequences of book-entry, etc.
66

(1) Rights to investment securities shall be registered by book-entry in a central securities depository in order to obtain protection against legal proceedings and assignees.
(2) Any agreement or legal proceeding capable of defeating a right not registered by book-entry
shall be registered by book-entry itself, and a transferee under an agreement shall be in
good faith when applying to the account-holding institution.
(3) The legal consequences of the book-entries shall count from the time of final control at the
central securities depository.
(4) An account-holding institution shall be obliged to report, without delay, received applications
for book-entry in a central securities depository.

67

If the account-holding institution has doubts pertaining to actual or legal matters significant
for the book-entry or if any person claims to said account-holding institution that the intended book-entry would violate the relevant person's rights, said institution shall submit an
application for preliminary book-entry. The relevant central securities depository shall then
decide how final book-entry may be effected.

68

(1) Notification of the book-entry shall be given to the party or parties entitled according to the
book-entry register as well as to the applicant. Notification of any impediments for the bookentry shall be given. As far as possible, the person(s) entitled in the book-entry register
shall be notified of any drawings, alterations or extinguishments.
(2) Notification shall be given by the central securities depository or by the account-holding institution on behalf of the central securities depository subject to agreement with the central
securities depository.
(3) The persons who are so entitled according to the book-entry register and the applicants
may, in conformity with the central securities depository's regulations, which shall be approved by the Danish FSA, decide that notices pertaining to drawings or alterations shall be
given periodically and may similarly, in whole or in part, choose not to receive any notices of
drawings or alterations. The same shall apply to notifications regarding extinguishment, unless said extinguishment is a consequence of bankruptcy, liquidation, merger, demerger or
similar events unforeseen at the time of investment. Such choices shall be registered by
book-entry on the individual account.

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(4) A central securities depository may, upon request by the account-holding institution, decide
that no notices are to be sent out with respect to alterations to the data entered if the holder of the right has already received information to that effect.
(5) Notice given pursuant to subsections (1)-(4) shall be effected in conformity with the regulations of a central securities depository in this respect. Said regulations shall be subject to
approval by the Danish FSA.
69

Once an agreement as to rights pertaining to investment securities has been finally registered by book-entry at a central securities depository, an assignee in good faith may not be
met with any objections as to the validity of the agreement. However, the objection that the
transfer is void because of forgery or duress under threat of violence shall prevail.

70

Sections 15-18 of the Debt Instruments Act ("lov om gldsbreve") shall apply correspondingly to the debtor indicated on investment securities, which correspond to negotiable debt
instruments, with the effect that final book-entry with a central securities depository replaces possession of the debt instrument.

71

(1) A central securities depository shall lay down regulations governing disbursement.
(2) If a central securities depository on behalf of the issuer effects payment in good faith to the
person entitled to receive such payment according to the book-entry register, the central securities depository shall be discharged from liability, even though the payee was not entitled
to receive the payment or was legally incompetent. However, this shall not apply if the person entitled to receive the payment according to the book-entry register derives his right
from an agreement transfer which is void due to forgery or duress under threat of violence.

72

(1) If the seller is an account-holding institution, said seller may make the transfer of title to an
investment security conditional upon payment of the purchase price within a certain time
limit as stipulated by the Danish FSA. The reservation concerning payment shall lapse without prior notice in pursuance of section 68 if the transferor does not assert his claim for reservation before expiry of the time limit stated in the 1st sentence.
(2) If the account holder keeps an account on behalf of one or more owners, this shall be registered by book-entry on the account.

73

Claims for payment indicated on investment securities shall become statute-barred under
the general rules of Danish law.

74

If the account-holding institution becomes aware of an error in the data entered, said account-holding institution shall request the relevant central securities depository to alter such
entry. Before any alteration is effected, the person(s) who is/are entitled according to the
book-entry register shall have the opportunity to comment hereon.

75

(1) A central securities depository may cancel rights which have clearly ceased.

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(2) If an account with a central securities depository contains rights registered by book-entry
which must be assumed to have lost their validity, or are more than 20 years old and have
most probably ceased, or to which in all probability there is no holder, the central securities
depository in question may summon any possible holders of the rights in question through
the Danish Official Gazette at a notice of three months. Moreover, the person(s) registered
by book-entry as holder(s) shall be notified separately by registered letter. If no one presents themselves before the expiry of the time limit, the central securities depository shall
cancel the right.
(3) The Danish FSA may lay down regulations governing the implementation of subsection (2).
Part 23
Statements of account
76

(1) Regular statements of account shall be prepared for owners of investment securities. Said
statement of account shall list the investment securities for which the relevant persons are
registered by book-entry as owners on the date of the statement. Similarly, statements shall
be prepared for holders of limited rights to investment securities registered by book-entry.
(2) The account-holding institution shall be registered on each account. The account-holding institution shall have access, on behalf of the relevant central securities depository, to prepare
a statement of the account. Statements shall be prepared for an interested party according
to the book-entry register if said person so requests.
(3) The Danish FSA shall lay down more detailed regulations regarding the preparation of
statements of account under subsection (1) and regarding the content of such statements of
account.
Part 24
Complaints and compensation

77

(1) A complaint against a decision regarding book-entry, alteration or extinguishment of rights

in a central securities depository may be brought before the Complaints Board for Central
Securities Depositories. This shall not apply, however, to claims for compensation.
(2) The tasks of the Complaints Board shall be carried out by one or more persons appointed by
the Minister for Economic and Business Affairs, and said person(s) shall satisfy the requirements for being appointed judge. The Minister for Economic and Business Affairs shall also
appoint proxies.
(3) Complaints pursuant to subsection (1) shall be submitted to the Complaints Board no later
than six weeks after book-entry in the central securities depository concerned has been effected. For the purpose of hearing the claim, the Complaints Board shall have access to all
information concerning the case held by the central securities depository and the account-

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holding institution. The Complaints Board shall reach a decision, which - together with the
grounds for such decision - shall be sent to the parties involved.
(4) In special cases, the Complaints Board may hear complaints submitted after expiry of the
time limit set out in subsection (3).
(5) The Complaints Board may refuse to hear complaints deemed obviously groundless.
(6) The Complaints Board shall carry out its activities independently of any instructions as to the
hearing and ruling of any individual case.
(7) The Danish FSA shall lay down more detailed regulations as to the activities of the Complaints Board. Regulations may be laid down governing payment of fees for the hearing of a
complaint and the publishing of the decisions of the Complaints Board.
78

Pursuant to section 77, the following may lodge complaints:

1)

anyone who has a reasonable interest in the decision,

2)

an account-holding institution, if such account-holding institution intends to contest a

decision made by a central securities depository pursuant to sections 67, 74 and 75, and

3)

a central securities depository if it intends to contest the book-entry effected by the account-holding institution.

79

(1) Decisions reached by the Complaints Board may be brought before the High Court of Eastern
Denmark no later than two weeks after the person concerned has been informed of the decision. The case shall be brought before the High Court in the form of an interlocutory appeal
to the Complaints Board. The rules governing interlocutory appeals in civil cases shall, subject to the necessary adaptations, apply to the lodging with and the hearing by the High
Court.
(2) Complaints which, pursuant to sections 77 and 78, may be filed with the Complaints Board
may only be brought before the courts of law in pursuance of subsection (1).
(3) High Court decisions may not be appealed. However, the Board of Appeal may permit interlocutory appeal to the Supreme Court if such interlocutory appeal concerns matters of principle. Section 392(2) of the Administration of Justice Act shall apply correspondingly.

80

(1) A central securities depository shall be liable in damages for any loss resulting from errors in
connection with the book-entry, alteration or extinguishment of rights on accounts with the
central securities depository concerned or for payments made by the central securities depository, even if such errors are fortuitous. However, if the error can be ascribed to an account-holding institution, the liability in damages shall rest with said account-holding institution, see section 81.

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(2) The holder of rights who, pursuant to section 69, 2nd sentence, fails to acquire or loses any
rights over investment securities may claim damages from the central securities depository
concerned for the losses incurred.
(3) If the claimant has contributed to the error himself, with intent or through negligence, the
damages may be reduced or the right to damages entirely lost.
(4) The total damages pursuant to subsection (1) for any loss resulting from the same error
shall not exceed DKK 500 million.
81

(1) An account-holding institution shall be liable in damages for any loss resulting from errors
committed by such account-holding institution in connection with reporting transactions for
book-entry, alteration or extinguishment of rights on accounts with a central securities depository or for payments made through the central securities depository, even if such error
is fortuitous.
(2) If the claimant has contributed to the error himself, with intent or through negligence, the
damages may be reduced or the right to damages entirely lost.
(3) The total damages pursuant to subsection (1) for any loss resulting from the same error
shall not exceed DKK 500 million.
(4) If a Danish account-holding institution is unable to pay damages pursuant to subsection (1),
the remaining Danish account-holding institutions which have entered into a participation
agreement with the central securities depository concerned shall be liable for the outstanding amount up to DKK 500 million per error.
(5) The Danish account-holding institutions shall, between themselves, enter into an agreement
on the apportionment and payment of amounts pursuant to subsection (4). The Danish FSA
shall approve such agreement.
(6) Foreign account-holding institutions may join the scheme referred to in subsections (4) and
(5).

82

(1) The total capital resources of a central securities depository shall be at least DKK 1 billion in
the form of commitments from participants.
(2) In the participation agreement the account-holding institution shall undertake, to a specified
extent, to contribute to the total capital resources of the central securities depository.
(3) The more detailed regulations governing the commitments for the benefit of a central securities depository shall be stipulated in its articles of association.

82a

The Minister for Finance may, when the central government acts as the account-holding institution, guarantee claims for compensation with regard to incorrect book-entries as men-

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tioned in section 81(1), and guarantee the central government's contribution to the total
capital resources of a central securities depository, see section 82.
V
The Financial Council
Part 25
Supervision, enforcement, etc.
83

(1) The Danish FSA shall supervise compliance with the provisions of this Act and regulations
laid down pursuant to this Act, except section 12b(1) and (2). The Danish FSA shall also supervise compliance with the regulations issued pursuant to section 31(8) of the Act on approved auditors and audit firms. The Danish FSA shall supervise compliance with Articles 3742 of Commission Regulation no. 1031/2010 of 12 November 2010 (CO2 Auction Regulation), Regulation no 236/212 of the European Parliament and of the Council of 14 March
2012 (the Short Selling Regulation) and Regulation no 648/2012 of the European Parliament
and of the Council of 4 July 2012 (the EMIR Regulation) except from Titles 6 and 7.
(2) For issuers of securities with their registered office in Denmark, the Danish FSA shall enforce
compliance with the regulations regarding financial information in annual reports and interim
financial reports in sections 183-193 of the Financial Business Act, sections 63 and 64 of the
Investment Associations, etc. Act, and the Danish Financial Statements Act, if such securities have been admitted to trading on a regulated market in Denmark, in a Member State of
the European Union or in a country with which the Union has entered into an agreement for
the financial area. The Danish FSA shall also enforce compliance with the regulations issued
pursuant to section 196 of the Financial Business Act and section 76 of the Investment Associations, etc. Act, as well as the Financial Statements Act, and the Danish FSA shall also enforce compliance with the provisions of the Regulation of the European Parliament and of the
Council on application of international accounting standards. In this connection, the Danish
FSA shall exercise the powers vested in the Danish FSA under section 197 of the Financial
Business Act, section 77 of the Investment Associations, etc. Act and section 159a of the Financial Statements Act. In respect of matters concerning undertakings covered by the Financial Statements Act, the Danish Business Authority shall assume the Danish FSA's obligations.
(3) Enforcement pursuant to subsection (2) shall also cover enforcement of the regulations regarding financial information in annual and interim financial reports by issuers with Denmark
as their home country, pursuant to section 28(3), no. 2 as these regulations are laid down in
the accounting legislation to which the relevant issuers are subject, see section 27(7). The
Danish FSA may, in connection with enforcement
1)

provide guidance,

2)

take action against violations,

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3)

order that errors be corrected and that violations be remedied, and

4)

order a change of conditions, including order publication of changed or additional information.

(4) If deemed appropriate, the Danish FSA may make public the relevant information, publish
the order, or suspend or remove the securities involved from trading on a regulated market.
(5) In connection with enforcement by the Danish FSA under subsections (2)-(4), the Danish
FSA shall exercise the powers following from section 87(1)-(3) and (6), with due account being taken of the procedure in accordance with section 83b(3) and (4).
(6) The Danish FSA may, in special cases, utilise external assistance, including in connection
with the enforcement under subsections (2)-(4).
(7) Section 346(4) and section 356 of the Financial Business Act shall apply correspondingly to
supervision by the Danish FSA under this Act.
(8) If enforcement pursuant to subsection (3), 1st sentence, see subsection (2) relates to nonfinancial activities, section 156(3) of the Financial Statements Act and regulations issued in
pursuance hereof on payment of an annual fee for the enforcement activity associated with
this shall apply correspondingly.
(9) The Danish FSA shall prepare an annual list of regulated markets for compliance with Article
47 of Directive 2004/39/EC on markets in financial instruments (the MIFID Directive).
(10) In cooperation with the National Consumer Agency of Denmark, the Danish FSA shall submit an annual report on the status regarding issue of regulations on good securities trading
practices and regarding experience with application of such regulations to the Minister for
Economic and Business Affairs, see section 3(2).
(11) Regulations issued pursuant to section 18(2), no. 4, section 19(1), section 21(1), section
40(2), nos. 1, 2 and 4, section 52(1) and (2), section 54(4), and section 71(1) as well as
changes hereto shall be notified to the Danish FSA.
(12) A clearing centre shall submit notification to the Danish FSA specifying the direct and indirect participants in the clearing centre and any changes thereto.
(13) In its organisation of supervisory activities, the Danish FSA shall consider the potential
consequences for the financial stability in other Member States of the European Union or a
country with which the Union has entered into an agreement for the financial area. This shall
apply in particular in connection with crisis situations. For material subsidiary undertakings
of foreign undertakings which have been granted a licence to carry out the activities mentioned in section 7(1) in a Member State of the European Union or in a country with which

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the Union has entered into an agreement for the financial area, the Danish FSA shall participate in any cooperation fora regarding supervision of the overall group.
83a

(1) The Danish FSA may decide that the powers of the Danish FSA under
1)

section 23(2), section 23a(1)-(3) and (5), section 31(4), section 44(2) and (5), and section 45(1) and (2), and regulations issued in pursuance of section 23(7) and (8), section
24(2), section 29(4), section 32(4), section 43(3), section 44(6), section 45(4) and section 46(2) may be exercised on behalf of the Danish FSA by an operator of a regulated
market, or the company operating an alternative market place on the basis of more detailed conditions,

2)

section 22(1) and regulations issued pursuant to section 22(2) may be exercised on behalf of the Danish FSA by an operator of a regulated market on the basis of more detailed conditions,

3)

section 27a(1)-(3), section 28a(5) and section 30 and regulations issued pursuant to
section 33(5) may be exercised on behalf of the Danish FSA by an operator of a regulated market on the basis of more detailed conditions.

4)

section 83(1) to ensure compliance with the provisions of section 29(1) and (2), section
31(1) and section 32(1) and (3) may be exercised on behalf of the Danish FSA by an
operator of a regulated market, or a company operating an alternative market place on
the basis of more detailed conditions, and

5)

section 83(1) to ensure compliance with the provisions of section 27, section 28 and
section 33(1) may be exercised on behalf of the Danish FSA by an operator of a regulated market on the basis of more detailed conditions.

(2) An operator of a regulated market or a company operating an alternative market place that
has authority under subsection (1) may request payment for performance of tasks related to
such authority.
(3) An operator of a regulated market or a company operating an alternative market place that
has authority under subsection (1) shall comply with parts 3-7 of the Public Administration
Act as well as the Access to Public Administration Files Act when making decisions within the
delegated areas, see subsection (1).
(4) The provisions of section 84a(1) and (2) shall apply correspondingly to operators of a regulated market or companies operating alternative market places that have authority under
subsection (1).
(5) The provisions of section 84b(1) and (2), nos. 5, 7 and 8 shall apply correspondingly to the
extent that operators of a regulated market or companies operating alternative market places respectively have been granted authority under subsection (1).

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(6) The Danish FSA shall, through an Executive Order, make decisions regarding delegation under sub-section (1).
83b

(1) During enforcement under section 83(2) and (3), investigation shall be made as to compliance with the regulations regarding financial information in selected financial information
from the relevant issuers' annual reports and interim financial reports. Enforcement shall,
each year, include up to 20% of the issuers covered by section 83(2) and (3). The relevant
issuers shall be selected from a risk perspective as well as through random selection.
(2) Investigation under subsection (1) shall be initiated through formal enforcement for obvious
violations of the regulations regarding financial information in the annual reports and interim
financial reports of the selected issuers.
(3) If, in the formal enforcement under subsection (2), there is reason to consider that the financial information contains errors and omissions significant to the decision-making of the
investors, the Danish FSA shall obtain an account from the undertaking, its management or
its external auditors. If, after the Danish FSA has obtained said account, there is still reason
to consider that the financial information contains errors and omissions significant to the decision-making of the investors, the Danish FSA shall obtain further information from the undertaking or its management, including long-form audit reports. The Danish FSA may demand that an account or further information from the undertaking or its management be
certified by the auditor, and the Danish FSA may also lay down a time limit for receipt of the
account or information by the Danish FSA.
(4) If, after the Danish FSA has carried out formal enforcement under subsection (2) and obtained an account or further information under subsection (3), there is still reason to consider that the financial information contains errors and omissions significant to the decisionmaking of the investors, the Danish FSA may initiate more thorough enforcement of the financial information.
(5) Notwithstanding subsections (2)-(4), the Danish FSA may, in situations where special, specific circumstances give reason to consider that the financial information contains errors and
omissions significant to the decision-making of the investors, initiate more thorough enforcement of the financial information from any issuer covered by section 83(2) and (3).
(6) For the issuers mentioned in section 83(2) and (3), which are covered by the Financial Business Act or the Investment Associations, etc. Act, the Danish FSA may initiate enforcement
not complying with the provisions of subsections (2)-(5). Further, the provisions of subsections (1)-(5) shall not affect the Danish FSA's possibility, as part of its normal supervision,
to monitor matters and carry out more thorough investigations, which also cover accounting
matters at the issuers mentioned in the 1st sentence. The Danish FSA shall make decisions
in matters pertaining to financial information, which forms part of this supervision and which
pertains to the relevant issuers.

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Part 26
The Financial Council
84

(1) Except from section 86(2) the Financial Council shall make decisions in matters of a principle
nature and in matters with far-reaching, significant consequences for stakeholders in the securities market with equal authority as the Council has been granted under section 345 of
the Financial Business Act. This also applies to matters regarding compliance with Articles
37-42 of Commission Regulation no. 1031/2010 of 12 November 2010 (CO2 Auction Regulation) Commission Regulation no. 236/2012 of 14 March 2012 (the Short Selling Regulation)
and Regulation no. 648/2012 of the European Parliament and of the Council (the EMIR Regulation) of 4 July 2012 except from Article 17.

84a

(1) By virtue of sections 152 to 152e of the Criminal Code, employees of the Danish FSA shall
be obliged to keep secret any confidential information they receive in the course of their supervisory duties. The same shall apply to persons performing services as part of the operations of the Danish FSA, and experts acting on behalf of the Danish FSA. This shall also apply after the termination of the employment contract or any other contract. 1st-3rd sentences shall apply correspondingly to employees of the Danish Business Authority in respect of
information they receive in the course of performing the tasks specified in section 83(2) and
(3).
(2) Consent from the individual who the duty of confidentiality aims to protect shall not entitle
the persons mentioned in subsection (1) to disclose confidential information.
(3) Subsection (1) shall, however, not apply to information in cases on good securities trading
practices, see section 3 and executive orders issued in pursuance of section 3.
(4) The provision in subsection (1) shall not prevent the Danish FSA or the Danish Business Authority as part of the Authority's performance of its tasks under section 83(2) and (3) from
disclosing on their own initiative confidential information in summary or abbreviated form, if
neither the individual limited company under section 7(1) nor others covered by this Act nor
their clients can be identified.
(5) Confidential information may be disclosed in civil proceedings if a limited company under
section 7(1) or others covered by this Act has been declared bankrupt, and if such information does not concern client relationships or third parties involved in or having been involved in attempts to rescue the limited company or others covered by this Act.
(6) The provision of subsection (1) shall not prevent confidential information from being disclosed to:
1)

Public authorities, including the prosecution service and the police, in connection with
the investigations and legal prosecution of any criminal offences covered by the Criminal
Code or the supervision legislation.

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2)

The Minister concerned as part of his/her overall supervision.

3)

Administrative authorities and courts hearing decisions made by the Danish FSA or the
Danish Business Authority's performance of its tasks under section 83(2) and (3).

4)

The Ombudsman of the Danish Parliament.

5)

A parliamentary commission set up by the Danish Parliament.

6)

Courts of inquiry set up by law or in accordance with the Courts of Inquiry Act ("lov om
undersgelseskommissioner").

7)

The Danish Parliament's standing committee concerning general financial affairs in a

limited company covered by section 7(1) with regard to crisis management of companies
covered by section 7(1), when decisions are to be made as to whether the State shall
grant a guarantee or makes funds available. The same shall apply correspondingly in
connection with the parliamentary control of cases covered by the 1st sentence.

8)

Members of the Public Accounts Committee and the Auditor General's Office (Rigsrevisionen").

9)

Interested parties, including authorities involved in attempts to save a limited company

in distress covered by section 7(1), if the Danish FSA has received mandate from the
Minister for Business and Growth, provided that the recipients of information need said
information.

10) The trustee in bankruptcy, the bankruptcy court and other authorities participating in
liquidation, bankruptcy proceedings or similar procedures, as well as persons responsible for the statutory audit of the financial statements of a company covered by section
7(1) or others covered by this Act, provided that the recipients of information need said
information to perform their duties.
11) Institutions managing depositor, investor or insurance guarantee schemes, provided
that such information is required by the recipients for the performance of their duties.
12) Danmarks Nationalbank (Denmark's central bank), foreign central banks, the European
System of Central Banks and the European Central Bank in their capacity as monetarypolicy authorities, provided that the information is necessary for said banks to meet
their statutory obligations, including performance of monetary policy, monitoring of
payment and securities management systems as well as safeguarding the stability of the
financial system.
13) An institution which carries out clearing proceedings for securities or money, provided
that such information is required to ensure that said institution reacts duly to non-

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compliance or potential non-compliance within the market where said institution is responsible for clearing proceedings.
14) Financial supervisory authorities in other Member States of the European Union or countries with which the Union has entered into an agreement for the financial area which
are responsible for the supervision of operators of regulated markets, clearing centres,
central securities depositories, credit institutions, finance institutions, insurance companies, investment companies, management companies or of the capital markets and bodies involved in liquidation, bankruptcy proceedings or similar procedures, as well as persons responsible for carrying out statutory audits of the financial statements of an operator of a regulated market, a clearing centre, a central securities depository, provided
that the recipients of information need it to perform their duties.
15) Bodies in Member States of the European Union or in countries with which the Union has
entered into an agreement for the financial area which are responsible for supervising
compliance with the regulations for financial information from issuers of securities admitted to trading on a regulated market.
16) Ministers with responsibility for the financial legislation in Member States of the European Union or in countries with which the Union has entered into an agreement for the financial area in connection with crisis management of companies covered by section
7(1).
17) The European Securities and Markets Authority, the European Systemic Risk Board as
well as bodies established by the European Securities and Markets Authority, provided
that the recipients of information need said information to perform their duties.
18) Financial supervisory authorities in countries outside the European Union with which the
Union has not entered into an agreement for the financial area, which are responsible
for supervision of credit institutions, financial institutions, insurance companies or capital markets and bodies involved in liquidation, bankruptcy proceedings or in other similar procedures, and persons responsible for carrying out statutory audits of the accounts
of a company covered by section 7(1) or for others covered by this Act, but see subsections (11) and (12).
19) The auction monitor pursuant to Commission Regulation no. 1031/2010 of 12 November
2010 (CO2 Auction Regulation) to carry out the auction monitor's functions.
20) The Danish Business Authority with regard to information received as part of enforcement under sections 83(2) and (3) and 83b, or information in cases on approval by the
Danish FSA of prospectuses in pursuance of section 23, and in cases on supervision by
the Danish FSA of the duty to disclose information in section 27, when such information
is of significance to the accounting checks of the Danish Business Authority, see section
83(2).

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21) The Supervisory Authority on Auditing and the disciplinary board for state-authorised
public accountants and registered public accountants (Revisornvnet") for the performance of their duties.
22) Authorities performing tasks under Regulation no. 648/2012/EU of the European Parliament and of the Council of 4 July 2012 (the EMIR Regulation) to the extent that the information is required for such authorities' performance of tasks under the Regulation.
(7) The provision of subsection (1) shall not prevent confidential information from being disclosed to an operator of a regulated market licensed under section 8, or a company operating an alternative market place, see section 7a(2) provided that
1)

this is to take action when, or investigate whether, inside information has been abused
or price manipulation has taken place in accordance with the provisions in part 10 of
this Act, or

2)

this is to take action when, or investigate whether the trading and the listing on the
regulated market or the alternative market place are performed in a fair and transparent
manner.

(8) All those receiving confidential information from the Danish FSA or the Danish Securities
Council under subsections (5)-(7) shall fall under the duty of confidentiality specified in subsection (1) with regard to said information.
(9) Confidential information received by the Danish FSA or the Danish Business Authority as part
of its performance of tasks under section 83(2) and (3) shall only be used in the course of
its supervisory duties, to impose sanctions, or where appeals are made against the decision
of the Danish FSA to a higher administrative authority or where such a decision is brought
before the courts of law.
(10) Access to issue confidential information to the standing committee of the Danish Parliament
under subsection (6), no. 7 shall be limited to documents in cases which have been established in the Danish FSA after 16 September 1995.
(11) Information may only be disclosed pursuant to subsection (6), no. 18
1)

on the basis of an international co-operation agreement, and

2)

provided that the recipients of said information are, at a minimum, subject to a statutory duty of confidentiality corresponding to the duty of confidentiality pursuant to subsection (1) and that said recipients require said information to perform their duties.

(12) Confidential information from Member States of the European Union or countries with which
the Union has entered into an agreement for the financial area shall only be disclosed pursuant to subsection (6), no. 18 where the authorities submitting said information have granted

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express permission to do so, and said information shall only be used for the purposes specified by said permission.
84b

(1) Only companies covered by section 7(1), a designated payment system, the securities dealer, an approved foreign clearing centre, the securities dealer, the account-holding institution
or the issuer of securities which a decision made by the Danish FSA concerns, but see subsections (2) and (3), shall be considered a party in relation to the Danish FSA.
(2) In the instances specified below, persons natural and legal other than an undertaking covered by subsection (1) shall also be considered a party to the decision made by the Danish
FSA, as regards the parts of the case which concern said person:
1)

A company that applies for a licence to operate a regulated market, a securities clearing
activities and book-entry activities, see section 8(1).

2)

A foreign clearing centre which has applied for a licence under section 8a.

3)

A member of the board of directors or the board of management of a company that the
Danish FSA receives information about in connection with approval in pursuance of section 9(1) and (2).

4)

The intended acquirer or holder of a qualifying investment where the Danish FSA deals
with cases on authorising acquisitions, see sections 10, 10a and 10b as well as where
the Danish FSA reacts as a result of omission to notify the Danish FSA about an investment or withdraws the voting rights associated with the relevant owner's investment,
see section 10d(1)-(3).

5)

Any person contravening the prohibitions in this Act against words covered by section
16(2) and section 42d(1).

6)

Any person against whom the Danish FSA commences an investigation regarding violation of section 29 on notification of share holdings or on violation of part 10.

7)

Anyone who brings before the Danish FSA a decision made by an operator of a regulated
market, a company operating an alternative market place, a clearing centre or a central
securities depository, see section 88(3), and who the Danish FSA considers to be party
to the case, and others who the Danish FSA considers to be parties to the case.

8)

An acquirer as mentioned in sections 31(1) and 32(1) and (2) as well as others that the
Danish FSA, in special cases, regards as parties to the case.

9)

Anyone that the Danish FSA, in pursuance of section 33(2), has identified as being covered by said obligation to report.

10) Anyone the Danish FSA orders to draw up internal rules according to section 37(1) and
(2), or to amend these.

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(3) A member of the board of directors, an auditor, a member of the board of management, or
other senior employees of a company covered by section 7 or in other undertakings covered
by this Act shall be considered as party to the case, if the Danish FSA's reprimand or order
pursuant to this Act or provisions issued pursuant to this Act are aimed specifically at said
person.
(4) Subsections (1) and (3) shall apply correspondingly to decisions made by the Danish FSA
and the Danish Business Authority as part of their enforcement under section 83(2) and (3)
and section 83b. Furthermore, anyone who the Danish FSA and the Danish Business Authority consider to be party to the case shall be considered as party in relation to these decisions.
(5) Status as a party and authorities as party under subsections (2) and (3) shall be limited to
matters where the Danish FSA or the Council makes decisions after 17 December 1998.
84c

(1) Supervisory measures imposed on an undertaking under section 84, see section 345(2), no.
1, of the Financial Business Act and supervisory measures imposed under authority granted
by the Financial Council shall be published stating the name of the undertaking, but see subsection (3). The undertaking shall publish the information on its website in a place where it
naturally belongs as soon as possible and no later than three business days after the undertaking has been notified of the supervisory measure or at the latest at the time of publication required under the other provisions of this Act. At the same time as the publication the
undertaking shall post a link providing direct access to the supervisory measure on the front
page of the undertaking's website in a visible manner, and it shall follow clearly from the
link and any related text that it is a supervisory measure imposed by the Danish FSA. If the
undertaking comments on the supervisory measure, such comments shall be made further to
the supervisory measure and the comments shall be clearly separated from the supervisory
measure. Removal of the link on the front page and the information from the undertaking's
website shall be made according to the same principles which the undertaking applies to
other notifications but not until the link and the information have been posted on the website for at least three months and at the earliest after the next general meeting or meeting
of representatives. The undertaking's obligation to make the information public on the undertaking's website only applies to legal persons. The Danish FSA shall publish the information on its website. Supervisory measures imposed under section 84, see section
345(2), no. 3, of the Financial Business Act and the Danish FSA's decisions to turn cases
over to police investigation shall be published on the Danish FSA's website stating the name
of the undertaking, but see subsection (3). Supervisory measures imposed due to violation
of Regulation no. 648/2012 of the European Parliament and of the Council of 4 July 2012
(the EMIR Regulation) shall be published under section 84g.
(2) If a case has been turned over to police investigation and a decision made wholly or partly
against the undertaking or a fine accepted or if a case has been settled by acceptance of an
administrative notification of a fine, the judgment, the acceptance of a fine or an extract

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shall be published, but see subsection (3). If the judgment is not final or if it is appealed,
this must follow from the publication. The undertaking's publication shall be made on the
undertaking's website at a place where it naturally belongs as soon as possible and no later
than 10 business days after the judgment has been delivered or the fine accepted or no later
than the time of publication required under other provisions of this Act. At the same time as
the publication the undertaking shall post a link providing direct access to the judgment, the
acceptance of a fine or the extract on the front page of the undertaking's website in a visible
manner and it shall follow clearly from the link and any related text that it is a judgment or
an acceptance of a fine. If the undertaking comments on the judgment, the acceptance of a
fine or the extract, such comments shall be made further to these and the comments shall
be clearly separated from the judgment, the acceptance of a fine or the extract. Removal of
the link on the front page and the information from the undertaking's website shall be made
according to the same principles which the undertaking applies to other notifications but not
until the link and the information have been posted on the website for at least three months
and at the earliest after the next general meeting or meeting of representatives. The undertaking shall inform the Danish FSA of the publication, including sending a copy of the judgment or the acceptance of a fine. Subsequently the Danish FSA shall make public the judgment, the acceptance of the fine or an extract on its website. The undertaking's obligation to
make the information public on the undertaking's website only applies to legal persons. The
Danish FSA shall make the information public on its website.
(3) Publication pursuant to subsections (1) and (2) may not, however, take place if it will mean
disproportionate damage for the undertaking, or issues relating to investigations make publication inadvisable. Publication may not contain confidential information on client relationships or information subject to section 12(1) of the Access to Public Administration Files Act.
Publication may not contain confidential information which originates from financial supervisory authorities in other countries within or outside the European Union unless the authorities which have issued the information have given their express consent.
(4) If publication is omitted pursuant to subsection (3), 1st sentence, publication pursuant to
subsections (1) or (2) shall be effected when the considerations necessitating omission no
longer apply. This shall only apply, however, for up to two years after the date of the supervisory measure.
84d

(1) In the matters mentioned in subsection (2), the Danish FSA may make public the name of
an undertaking or natural person which, pursuant to section 83(1), is given a reprimand for
violation of this Act or provisions laid down pursuant to this Act. The Danish FSA may also
make public the name of an undertaking or natural person, if, in the matters mentioned in
subsection (2), it is ascertained that the undertaking or natural person has not violated this
Act or provisions laid down pursuant to this Act. Publication under the 1st and 2nd sentences may be effected when the Danish FSA deems it to be of interest to the investors to know
the name of the undertaking or natural person. The 1st to 3rd sentences shall apply correspondingly to decisions made by the Danish Financial Council in the types of cases men-

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tioned in subsection (2), nos. 6-8 and 13 when such decisions are made with regard to natural persons.
(2) Publication may be effected in matters pertaining to violation of
1)

the regulations on public disclosure of inside information, see section 27(1), (2), (4) and
(5),

2)

the regulations on public disclosure of annual reports and half-year interim reports, see
section 27(7),

3)

the regulations on public disclosure of interim management statements, see section

27(8),

4)

the regulations on publication, registration and storage of information, see section

27a(1)-(3) and of provisions on this issued in accordance with section 30,

5)

the regulations on notification of own shares, see section 28,

6)

the regulations on notification, reporting and public disclosure of senior employees'

transactions, see section 28a(1), (3), (5) and (7), and of provisions in this respect issued pursuant to section 28a(8).

7)

the regulations on preparation and dissemination of recommendations regarding securities, see section 28b(1), as well as of provisions in this respect issued pursuant to section 28b(2),

8)

the regulations on notification of major shareholdings, see section 29(1), and of the
provisions in this respect, issued in pursuance of section 29(4),

9)

the regulations on the duty to disclose information of the issuers' equal treatment of
and communication with shareholders and owners or other forms of negotiable debt securities, issued in pursuance of section 30,

10) the regulations on takeover bids, see section 31(1) and section 32(1)-(3), and of the
provisions in this respect, issued pursuant to section 32(4),
11) the regulations on securities dealers' transaction reporting and public disclosure of prices and transactions, see section 33(2) and (4), section 33a(1) and (2), and section
33b(1), as well as provisions issued pursuant to section 33(3) and (5), section 33a(4)
and section 33b(3) and (4),
12) the regulations against insider trading, disclosure of inside information, and price manipulation, see section 35(1), section 36 and section 39(1),
13) the provisions on issuance of internal rules, see section 37(1)-(3),

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14) the regulations on preparation of insider lists, see section 37(4), and of the provisions in
this respect in pursuance of section 37(10),
15) the regulations on notification of suspicious transactions, see section 37(6), 1st sentence, and of provisions in this respect issued pursuant to section 37(10),
16) the regulations in Articles 37-42 of Commission Regulation no. 1031/2010 of 12 November 2010 (CO2 Auction Regulation), and
17) Regulation no. 236/2012 of the European Parliament and of the Council of 14 March
2012 (the Short Selling Regulation).
(3) The Danish FSA may, in the matters mentioned in subsection (2), also make public the name
of an undertaking or natural person who the Danish FSA has ordered to pay a daily or weekly fine under section 95, if the Danish FSA deems it to be in the interest of the investors to
know the name of the undertaking or natural person.
(4) Public disclosure pursuant to subsection (1) may not be effected if this would lead to disproportionate damage to the undertaking or natural person.
(5) The Danish FSA may, if deemed appropriate, make public an order to rectify matters that
are in contravention of this Act or provisions laid down pursuant to this Act, which is issued
to a natural or legal person or an affiliation of legal persons under section 93(3), 1st and 3rd
sentences
(6) If an issuer of securities fails to comply with an order about publication of information notified under section 93(3), the Danish FSA may publish the information. Publication under the
1st sentence may take place in cases covered by section 27(1), (7) and (8), section 27a(1)(3), section 28 and section 29(1), and cases covered by the regulations issued in accordance
with section 30.
84e

The Danish FSA shall inform the public about cases on good securities trading practices, see
section 3, and executive orders issued pursuant to section 3, dealt with by the Danish FSA,
the prosecution service or the courts, and which are of public interest or of significance for
interpretation of the provisions mentioned.

84f

(1) In instances where a limited company covered by section 7(1), or other undertakings subject to supervision covered by this Act are declared bankrupt or the majority of the company's operation has ceased or been transferred, the Danish FSA shall prepare a report on the
reasons for this, if the state in connection with or for a short period prior to this has granted
a guarantee or made funds available to the company, its creditors or an acquirer of all or
part of the company.

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(2) The Danish FSA shall publish the report pursuant to subsection (1). In connection with publication, section 84a shall not apply, unless the information relates to client relationships or
third parties which are or have been involved in attempts to save the relevant company.
(3) The report pursuant to subsection (1) shall describe the role of the Danish FSA during the
course of events up to the bankruptcy, etc.
84g

(1) The Danish FSA shall publish information regarding sanctions imposed pursuant to section
93(5) due to violation of Regulation no. 648/2012 of the European Parliament and of the
Council of 4 July 2012 (the EMIR Regulation) unless such publication will cause serious harm
to the financial markets or cause disproportionate damage to the parties involved.
(2) The Danish FSA may publish information about reprimands and orders which the Danish FSA
imposes under section 93(3) for violation of the Regulation.
(3) The publication must not contain personal data covered by Article 2(1)(a) of Directive
95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement
of such data.

84h

The Minister for Business and Growth may in respect of undertakings under supervision covered by this Act lay down regulation about the undertakings' obligation to publish information about the Danish FSA's assessment of the undertaking and about the Danish FSA's
possibility to publish the information before the undertaking.

85

Undertakings subject to supervision under this Act shall pay a fee to the Danish FSA. The fee
shall be set pursuant to part 22 of the Financial Business Act.

86

(1) The Danish FSA shall supervise that the activities of securities dealers, operators of regulated markets, designated payment systems, clearing centres, central securities depositories
and account-holding institutions, including their regulations, organisation plans, procedures
and control and security measures, including the area of IT, are adequate and in accordance
with this Act and provisions laid down pursuant to this Act. Similarly, the Danish FSA shall
supervise that companies operating multilateral trading facilities comply with its obligations
under this Act. However, supervision shall not be carried out with designated payment systems subject to monitoring by Danmarks Nationalbank (Denmark's central bank) pursuant to
subsection (2). The Danish FSA shall also ensure that approved foreign clearing centres, see
section 8a, comply with the regulations laid down pursuant to this Act and the terms of the
licence under section 8a(3) or (4).
(2) Danmarks Nationalbank (Denmark's central bank) shall monitor payment systems which
Danmarks Nationalbank (Denmark's central bank) considers as having significant importance
to the settlement of payments or the completion of the monetary transactions of Danmarks
Nationalbank (Denmark's central bank) in order to promote the flexibility of the systems by

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contributing to their effectiveness and stability. Danmarks Nationalbank (Denmark's central

bank) shall notify the Danish FSA about which payment systems are subject to monitoring
by Danmarks Nationalbank (Denmark's central bank).
(3) The Danish FSA shall prepare a list of the payment systems covered by subsection (2). Such
list shall be published by executive order.
87

(1) The Danish FSA may order the board of directors, board of management and auditors of securities dealers, operators of regulated markets, clearing centres, central securities depositories, account-holding institutions, companies operating multilateral trading facilities, designated payment systems, issuers, suppliers and sub-suppliers to provide the information
necessary for the activities of the Danish FSA.
(2) The Danish FSA may ask for any information, including accounts, accounting records,
printouts of books, other business records, tape recordings and similar in connection with
the conclusion of transactions and electronically stored data, deemed necessary for the activities of the Danish FSA or for deciding whether a natural or legal person is covered by the
provisions of this Act.
(3) The Danish FSA may order the companies mentioned in subsection (1) to report certain information electronically.
(4) The Danish FSA may procure information from public bodies, including electronic information.
(5) The Danish FSA may at all times, on proof of identity and without a court order, carry out
inspection visits at the place of business of a securities dealer, an operator of a regulated
market, a company operating a multilateral trading facility, a clearing centre, a central securities depository, an account-holding institution, and a designated payment system.
(6) The Danish FSA may procure information under subsections (1)-(5) for use by the authorities mentioned in section 84a(6) nos. 14 and 18.
(7) Authorisation pursuant to subsections (1)-(6) shall be exercised by Danmarks Nationalbank
(Denmark's central bank) in matters relating to a designated payment system covered by
section 57a(7).
(8) The Danish FSA may at any time, on proof of identity and without a court order, have access
to service suppliers and sub-suppliers in order to obtain information about the outsourced
activity.

87a
88

(Repealed).
(1) Decisions made by the Danish FSA under this Act or under regulations issued pursuant to
this Act may be brought before the Company Appeals Board no later than four weeks after

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the person concerned has been notified of such decision. The same shall apply correspondingly for decisions made by the Danish FSA pursuant to Articles 37-42 of Commission Regulation no. 1031/2010 of 12 November 2010 (CO2 Auction Regulation), Regulation no.
236/2012 of the European Parliament and of the Council of 14 March 2012 (the Short Selling
Regulation) and Regulation no. 648/2012 of the European Parliament and of the Council of 4
July 2012 (the EMIR Regulation) with the limitations set out in the Regulation and except
from Articles 14 and 15. The provision in the 1st sentence shall not cover decisions under
subsection (3) or section 87. The provisions of this subsection shall also apply to decisions
made by the Danish Business Authority on behalf of the Danish FSA, see section 83(2) and
(3) and section 83b(2)-(4), as well as decisions made by Danmarks Nationalbank (Denmark's central bank) pursuant to section 57a(7).
(2) Subsection (1) shall also apply to decisions made by undertakings exercising powers on behalf of the Danish FSA.
(3) Decisions made by operators of regulated markets, companies operating multilateral trading
facilities, clearing centres or central securities depositories pursuant to this Act or regulations issued pursuant to this Act as well as decisions by said undertakings in matters of farreaching or principle significance made in accordance with their own regulations may be
brought before the Danish FSA no later than four weeks after the person concerned has been
notified about the decision. This may act as stay of proceedings.
(4) Decisions by the Company Appeals Board and decisions which the Danish FSA makes under
subsection (3) may be brought before the courts through institution of legal proceedings no
later than eight weeks after the person concerned has been notified about the decision.
(5) Decisions regarding book-entry, alteration or extinguishment of rights in a central securities
depository made by a central securities depository and decisions made by the Complaints
Board for Central Securities Depositories shall not be covered by subsections (1)-(4).
89

(1) The Danish FSA may lay down regulations stipulating that securities dealers, operators of
regulated markets, clearing centres, central securities depositories, account-holding institutions, companies operating multilateral trading facilities, and designated payment systems
are to prepare information for the general public for statistical purposes.
(2) Statistics Denmark may also lay down regulations as mentioned in subsection (1).
(3) Public authorities and institutions disseminating statistics liable to have a significant effect
on the financial markets shall disseminate them in a transparent way which ensures that
everyone has equal access to the information.

90
91

(Repealed).
(1) The Danish Data Protection Agency shall supervise compliance with the Act on Processing of
Personal Data, provisions laid down pursuant to said Act, and with section 60(2)-(4). The

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Danish Data Protection Agency shall also supervise, at its own initiative or following a complaint from a registered entity, that a central securities depository is utilised in accordance
with the Acts and provisions mentioned.
(2) The Danish Data Protection Agency may, from a central securities depository or an accountholding institution, request any information significant to its activities, including to decisions
regarding whether a matter is subject to this Act or the Act on Processing of Personal Data.
(3) As regards central securities depositories or account-holding institutions, the members and
staff of the Danish Data Protection Agency shall at any time, on proof of identity, without a
court order have access to all premises from which the book-entry registers of the central
securities depositories are managed or may be utilised as well as to the premises where said
book-entry register or the technical aids are stored or utilised.
(4) If the Danish Data Protection Agency deems that a central securities depository or an account-holding institution does not comply with section 60(2)-(4), the Danish FSA shall issue
an order to the relevant depository or institution about the measures to be carried out. Orders issued by the Danish Data Protection Agency may not be brought before other administrative authorities.
Part 27
Withdrawal of licenses or approval
92

(1) The Danish FSA may withdraw the licence pursuant to section 8 of an operator of a regulated market, a clearing centre and a central securities depository where
1)

the undertaking does not commence activities within 12 months after the licence was
granted,

2)

activities are not carried out for a period of more than six months,

3)

the company expressly waives its right to make use of the licence,

4)

the company grossly or repeatedly neglects its obligations under this Act or orders pursuant to section 93(3), or provisions issued pursuant to this Act,

5)

a member of the board of directors or the board of management of the company does
not comply with the requirements mentioned in section 9(1) and (2), or

6)

the company no longer meets the conditions under which authorisation was granted.

(2) If the Danish FSA deems that an account-holding institution covered by section 62(1), nos.
2-8 or subsections (2)-(4), seriously fails to satisfy its obligations or orders issued under
this Act, the Danish FSA may withdraw the relevant institution's right to carry out activities
under sections 62 and 76(2).

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(3) If an operator of a regulated market, a clearing centre or a central securities depository

does not meet the capital requirement under section 8(2), no. 2, or the individually set capital requirement under section 15(3), 4th sentence, the Danish FSA may either set a time
limit within which the capital is to be brought up to the set requirement, or withdraw the licence immediately. The 1st sentence shall apply correspondingly in situations where the total capital resources of a central securities depository do not meet the requirement of section 82(1).
92a

The Danish FSA may withdraw an approval under section 8a(3) or (4), if
1)

the activities do not commence within a time limit set for the approval, or if no time limit has been set for the approval within 12 months after granting the licence,

2)

the activities are not exercised for a period of more than six consecutive months,

3)

the approved foreign clearing centre grossly or repeatedly neglects its obligations under
this Act, or provisions issued pursuant to this Act or orders pursuant to section 93(3),

4)

the approved foreign clearing centre no longer complies with the terms upon which the
approval was granted, or which are later added to the approval, or

5)

the Danish FSA assesses that it is not possible to carry out the clearing in a safe, efficient and technically responsible manner for the financial markets.

92b

The Danish FSA may withdraw a licence under section 8c(1) or (4), if
1)

the activities do not commence within a time limit set for the licence, or if no time limit
has been set for the licence, within 12 months after the licence was granted,

2)

the activities are not exercised for a period of more than six consecutive months,

3)

the auction platform or its operator grossly or repeatedly neglects their obligations under Commission Regulation no. 1031/2010 of 12 November 2010 (CO2 Auction Regulation), this Act or provisions issued pursuant to this Act or orders granted under section
93(3),

4)

the auction platform or its operator no longer complies with the terms upon which the licence was granted, or which were later added to the licence, or

5)

The Danish FSA assesses that the auction platform's implementation of auctions is not
taking place in a safe, efficient and technically responsible manner for the market.

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VI
Penalties, etc.
Part 28
Penalties, etc.
93

(1) Violation of section 8(1); section 8a(2); section 9(3); section 10(1); sections 10b and 10c;
section 11; section 12a; section 12b(1), subsection (2), 1st sentence, subsections (3)-(6)
and (10); section 12c, section 12d(1), section 12f(1), no. 1, section 14(1), 1st sentence,
section 15(3); section 16(2), 3rd sentence, and subsection (3); section 18, section 18a(1)
and (2), section 18b(1) and (2) and subsection (3), 2nd and 3rd sentences; section 19; section 20(4), 2nd sentence, subsection (5) and subsection (6), 1st sentence; section 21(1)
and (2), and subsection (3), 2nd sentence; section 23(1) and (3); section 24(1); section
25(1), 2nd sentence, and subsection (2), section 27(1), subsection (2), 1st-3rd sentences,
and subsections (7) and (8), section 27a(1)-(3), section 28, section 28a(1), subsection (3),
4th sentence, subsection(5), 1st sentence, and subsection (7), section 28b(1), section 29(1)
and (2), section 31(1), section 32(1)-(3), subsections (2) and (4), section 33a(1) and (2),
2nd sentence, section 33b(1) and (2), section 37(1)-(5), subsection (6), 1st sentence, subsection (7), 1st sentence, and subsections (8) and (9), section 40(2), section 41(1), 2nd
sentence; section 42(1) and subsection (2), 2nd and 3rd sentences, section 42a, section
42b(1), section 42c, section 42d, subsection (1), 2nd sentence, and subsection (2), section
42e(1), 2nd sentence, and subsection (1), 2nd sentence, and subsection (2), 2nd sentence,
section 44(1) and (3); section 45(1), section 46(1), section 51, section 52(1), 2nd sentence,
section 60(1), 2nd sentence, section 75(2), 2nd sentence, section 76(2) and section 84c(1),
1st-5th sentences, and (2), 1st-7th sentences, shall be liable to a fine. Gross or repeated
violation of section 23(6), section 52(1), 1st sentence, and section 60(1), 1st sentence, as
well as approved foreign clearing centres grossly or repeatedly violating the terms laid down
in licences granted under section 8a(3) or (4) shall be subject to the same penalty.
(2) A financial undertaking or a financial holding company which does not comply with an order
pursuant to section 3(1) and (2) shall be liable to a fine. Furthermore, a member of the
board of directors of an undertaking covered by section 7(1) who does not comply with an
order issued under of section 12e(2) and (3), 3rd sentence shall be liable to a fine.
(3) If a natural or legal person fails to meet its obligations under this Act or the provisions laid
down in accordance with, the Danish FSA may order the person concerned to remedy the
matter. The Danish FSA may also order a natural or legal person to change this matter if the
natural or legal person fails to meet its obligations under Commission Regulation no.
1031/2010 of 12 November 2010 (CO2 - Auction Regulation), Regulation no. 236/2012 of
the European Parliament and of the Council of 14 March 2012 (the Short Selling Regulation)
or Regulation no. 648/2012 of the European Parliament and of the Council of 4 July 2012
(the EMIR Regulation). An order may also be issued to combinations of legal persons. Authorities under the 1st and 3rd sentences shall be exercised by Danmarks Nationalbank

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(Denmark's central bank) in the case of a designated payment system covered by section
57a(7). If deemed appropriate, the Danish FSA may suspend or remove the securities involved from the regulated market or the multilateral trading facility. Similarly, the Danish
FSA may suspend or remove the securities involved from trading if the relevant security is
removed or suspended from a regulated market in a Member State of the European Union or
in a country with which the Union has entered into an agreement for the financial area. Any
person not complying with an order from the Danish FSA or Danmarks Nationalbank (Denmark's central bank), or giving incorrect or misleading information to the Danish FSA or
Danmarks Nationalbank (Denmark's central bank), shall be liable to a fine, provided that the
offence does not carry a more severe penalty under other legislation.
(4) Regulations issued by the Minister for Economic and Business Affairs, the Danish FSA or the
Danish Business Authority pursuant to this Act may stipulate fines for any violation of the
rules of the regulations.
(5) The Danish FSA may stipulate fines for any violation of the rules of the regulations included
in the Regulations from the European Union in the areas of legislation with which the Danish
FSA carries out supervision.
(6) Companies, etc. (legal persons) may incur criminal liability according to the regulations in
chapter 5 of the Criminal Code.
(7) The period of limitation for violations of the provisions in this Act or regulations issued pursuant to this Act shall be 5 years.
(8) The sentence under subsection (1) shall take into account the gravity of the violation and
the amount of time the violation has taken place.
93a

(1) The Minister for Economic and Business Affairs may lay down regulations stipulating that the
Danish FSA in specified cases of violations of this Act and regulations issued pursuant to this
Act, deemed not to entail higher penalty than a fine, in notifications of fines may state that
the case may be decided without court proceedings if the offender declares himself guilty of
the offence and ready to pay a fine as stated in the notification within a specified time limit.
(2) The provisions laid down in the Danish Administration of Justice Act on requirements concerning the content of indictments and on the right of the accused to remain silent, shall apply similar to notifications of fines.
(3) Further prosecution shall be discontinued on acceptance of a fine.

94

(1) Any person violating section 35(1), section 36 and section 39(1), shall be liable to a fine or
imprisonment for up to one year and six months. If a violation of section 35(1) and section
39(1) is intentional and of a particularly gross nature, or if a large number of intentional
violations have been committed, the penalty may be increased to imprisonment for four
years.

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(2) The provisions in section 93(6) shall apply correspondingly.

95

(1) If the board of management, board of directors or auditor of a securities dealer, an operator
of a regulated market, a clearing centre, a central securities depository, an account-holding
institution, a company operating a multilateral trading facility, a designated payment system
or an issuer omits to comply with the duties and obligations imposed on them under this Act
or under provisions issued pursuant to this Act by the Danish FSA or the Danish Business
Authority, or in matters relating to a designated payment system covered by section 57a(7)
Danmarks Nationalbank (Denmark's central bank), the Danish FSA or the Danish Business
Authority may, as a coercive measure, impose daily or weekly fines.
(2) If a natural or legal person omits to comply with the duties and obligations imposed on it
under this Act, the Danish FSA or the Danish Business Authority may, as a coercive measure, impose daily or weekly fines on the natural or legal person or on the persons responsible for said legal person.

96

(1) Members of the board of directors, members of the board of management, auditors and their
deputies as well as employees of an operator of a regulated market, a clearing centre, a
central securities depository, a designated payment system, an account-holding institution
or a company operating a multilateral trading facility who disclose or utilise unduly any confidential information which has come to their knowledge during the performance of their duties, shall be liable to a fine, unless more severe penalty is incurred under other legislation.
(2) If persons affiliated with an operator of a regulated market, a company operating a multilateral trading facility, a clearing centre, a central securities depository, a designated payment
system or an account-holding institution provide incorrect or misleading information on matters pertaining to the operator of a regulated market, the company operating a multilateral
trading facility, the clearing centre, central securities depository, designated payment system, or the account-holding institution to the Danish FSA, Danmarks Nationalbank (Denmark's central bank) other public authorities, the relevant person shall be liable to a fine or
imprisonment up to four months, unless more severe penalty is incurred under other legislation.
VII
Conversion provisions, etc.
Part 29
Conversion provisions

97

The Copenhagen Stock Exchange, VP Securities Services and the Guarantee Fund for Danish
Options and Futures may be converted into limited companies under the regulations in sections 98-104.

96

377

98

(1) The board of directors of each of the funds referred to in section 97 may decide that the
fund is to be dissolved without a liquidation by transfer of total assets and debt to one or
more of the limited companies owned or established by the fund having authorisation to carry out activities pursuant to section 7(1), nos. 1, 5 or 6. At the same time, shares in each of
the limited companies corresponding to the value of the transferred assets after deduction of
the fund's contributed liabilities shall be transferred to a newly established fund. The boards
of directors of the newly established funds may, with the consent of the authority responsible for the funds, decide to amalgamate the funds.
(2) Dissolution without liquidation may also be effected through transfer of the fund's total assets and debt to one or more limited companies licensed to carry out activities in accordance
with section 7(1), nos. 1, 5 or 6 of this Act. At the same time, shares in each of the limited
companies corresponding to the value of the transferred assets after deduction of the fund's
contributed debt shall be transferred to a newly established fund. If such transfer takes
place to one or more limited companies established under subsection (1), the boards of directors of the newly established funds may, with the consent of the authority responsible for
the funds, decide to amalgamate the funds.
(3) Conversion pursuant to subsections (1) and (2) may also take place by the shares in the
limited company or companies mentioned in subsections (1) and (2) being transferred to the
existing fund, if this is in conformity with the articles of association of the existing fund.
(4) Decisions made under subsections (1)-(3) shall be made subject to the majority otherwise
required for important decisions. The shareholders of the limited company or companies
mentioned in subsection (2) shall draw up a shareholder's agreement to be approved by the
Minister for Economic and Business Affairs.
(5) The continuing fund pursuant to subsection (1), 2nd and 3rd sentences, (2), 2nd and 3rd
sentences and (3) shall be regarded as corporate under the Corporate Funds Act ("Lov om
erhvervsdrivende fonde").

99

(1) In the event of conversion pursuant to section 98(1)-(3) of this Act, sections 6a-6c and section 33(1) of the Public Companies Act as compared with sections 134-134i or sections 136136i shall apply correspondingly subject to any variations necessary.
(2) The joint statement of accounts and opening balance sheet referred to in section 134b of the
Public Companies Act shall be prepared pursuant to the accounting regulations applying to
limited companies which carry out the type of activities which the newly established limited
companies are contemplating.
(3) Documents which, pursuant to the Public Companies Act, are to be submitted to the Danish
Business Authority shall also be submitted to the Danish FSA.
(4) The Danish FSA shall approve the conversion pursuant to section 98(1)-(3).

97

378

100

(1) The continuing fund, see section 98(1)-(3), shall be managed by a board of directors with no
less than five members.
(2) A majority of the members shall be appointed by the board of directors of the limited company from among the members of the board of directors.
(3) If, in connection with the conversion, the fund acquires shares in more than one limited
company converted pursuant to section 98(2) shall not apply.

101

(1) The boards of directors of each of the funds referred to in section 97 may also decide that
the fund or funds are to be dissolved without liquidation by transfer of total assets and liabilities to one or more of the limited companies owned or established by the fund or funds
having authorisation to carry out activities pursuant to section 7(1), nos. 1, 5 or 6. The value of the assets transferred shall in each limited company be equivalent to or exceed the
value of the debt transferred. In each limited company, an in distributable fund reserve
equivalent to the value of the assets contributed less the debt of the fund shall be set up,
see sections 102 and 103.
(2) Dissolution without liquidation may also take place by transfer of the assets and liabilities of
the fund in full to one or more limited companies authorised to carry out activities pursuant
to section 7(1), nos. 1, 5 or 6. The value of the assets transferred shall in each limited company be equivalent to or exceed the value of the debt transferred. In each limited company
an in distributable fund reserve equivalent to the value of the assets contributed less the
debt of the fund shall be set up, or if such an in distributable fund reserve already exists in
the limited company, this shall be increased by the value of the assets contributed less the
liabilities of the fund, see sections 102 and 103.
(3) Section 98(4), and section 99 shall apply correspondingly to conversion pursuant to subsections (1) and (2).

102

(1) The in distributable fund reserve may be used to cover a loss that is not covered by amounts
available for dividends in the limited company.
(2) In the event of the dissolution of the limited company, dividends may only be distributed to
shareholders if the obligations under subsection (4) have been met.
(3) By transfer of the limited company's assets and liabilities to one or more limited companies
which carry out activities pursuant to section 7(1), nos. 1, 5 or 6, the continuing company
shall take over the fund reserve on the same terms as applied until such transfer.
(4) In the decision as to conversion pursuant to section 101(1) or (2), more detailed regulations
shall be laid down governing the distribution of the fund reserve in the event of the dissolution of the company. The fund reserve shall, dependent on whether the limited company has
a licence to carry out activities pursuant to section 7(1), nos. 1, 5 or 6 be distributed for

98

379

purposes pertaining to stock-exchange activities, clearing activities or book-entry activities,

respectively.
103

10% of the profit for the year not applied to cover any losses from prior years shall be
transferred to the fund reserve. The provision may not, however, exceed interest on the
funds reserve corresponding to the interest calculated pursuant to section 213(2) of the Financial Business Act after deduction of a proportionate share of the corporation tax for the
year.

104

(1) The board of directors of each of the funds referred to in section 97 may also decide that the
conversion is to be effected by a combination of the conversions described in sections 98
and 101. The fund or funds shall transfer total assets and liabilities to one or more limited
companies, see section 98(1) and (2) and section 101(1) and (2). In each limited company
an in distributable fund reserve shall be set up, see sections 102 and 103. At the same time,
shares in each of the limited companies equivalent to the value of the assets contributed
less the liabilities of the fund and less the in distributable fund reserve shall be transferred
to a fund, see sections 98(1)-(3), which is regarded as corporate under the Corporate Funds
Act ("lov om erhvervsdrivende fonde").
(2) Sections 98-103 shall apply to the conversion pursuant to subsection (1) with the changes
necessary.
VIII
Amendment of other acts
Part 30
Amendment of other acts

105

(Omitted.)

106

(Omitted).

107

(Omitted).

108

(Omitted).

109

(Omitted).

110

(Omitted).

111

(Omitted).

112

(Omitted).

113

(Omitted).

114

(Omitted).

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380

115

(Omitted).

116

(Repealed).

117

(Omitted).

118

(Omitted).

119

(Omitted).

120

(Omitted).

121

(Omitted).

122

(Omitted).

123

(Omitted).

124

(Omitted).

125

(Omitted).
IX
Entry into force and transitional provisions, etc.
Part 31
Entry into force and transitional provisions, etc.

126

(1) The date of entry into force of this Act or parts hereof shall be laid down by the Minister for
Economic and Business Affairs, in respect of section 105, nos. 1, 3-9, 12 and 13; and sections 106-115 after consultation with the Minister for Taxation, and in respect of sections
123-125 after consultation with the Minister for Justice. Section 105, nos. 2, 10 and 11 shall
enter into force the day after publication in the Danish Law Gazette. For activities pertaining
to central securities depositories and clearing, this Act shall enter into force no later than 1
June 1997. However, this Act shall enter into force no later than 1 June 1996 except for section 6(3), which shall enter into force on 1 June 1997.
(2) The Minister for Economic and Business Affairs may repeal, in full or in part, the Act on the
Copenhagen Stock Exchange (lov om Kbenhavns Fondsbrs"), see Consolidating Act no.
713 of 8 September 1993, the Act on a Central Securities Depository ("lov om en vrdipapircentral"), see Consolidating Act no. 807 of 6 October 1993 and Act no. 213 of 10 April
1991 on prospectuses in connection with first offer to the public of certain securities.
(3) Section 105, nos. 1, 3-9, 12 and 13; section 106, no. 1; section 107; section 108, nos. 1, 2
and 4; sections 109 and 110; section 112, no. 2; and section 115 shall take effect as from
the income year 1997, but see subsections (6) and (7)

100

381

(4) Section 105, no. 10 shall take effect for companies and associations, etc. which will be covered by section 35K of the Corporation Tax Act as from the entry into force of the provision.
(5) Section 112, no. 1 shall take effect as from the income year 1988.
(6) In connection with the conversion of the Copenhagen Stock Exchange and the VP Securities
Services into limited companies before 1 January 1997, section 14h(3) of the Merger Tax Act
(fusionsskatteloven"), as stated in section 112, no. 2 of this Act, shall apply correspondingly.
(7) In connection with the conversion of the Guarantee Fund for Danish Options and Futures into
a limited company before 1 January 1997, section 14h of the Merger Tax Act ("Fusionsskatteloven"), as stated in section 112, no. 2 of this Act, shall apply correspondingly.
127

(1) Notwithstanding the provisions in section 7, no. 1 and section 8(2), nos. 1 and 2, the Copenhagen Stock Exchange may carry out stock-exchange activities until 1 July 1997. In carrying out such activities, the Copenhagen Stock Exchange shall be considered a stock exchange under this Act.
(2) Notwithstanding the provisions in section 7, nos. 5 and 6, and section 8(2), nos. 1 and 2,
the VP Securities Services and the Guarantee Fund for Danish Options and Futures may continue to carry out securities clearing activities. In carrying out such activities, Guarantee
Fund for Danish Options and Futures and the VP Securities Services shall be considered
clearing centres under this Act.
(3) Notwithstanding the provisions in section 7, no. 6 and section 8(2), nos. 1 and 2, the VP Securities Services may continue to carry out book-entry activities. In carrying out such activities, the VP Securities Services shall be considered a central securities depository under this
Act.
(4) In connection with the conversion of the Copenhagen Stock Exchange into a limited company, the employees of said limited company may appoint one member of the board of directors. In connection with the conversion of VP Securities Services into a limited company, the
employees of said limited company may appoint two members of the board of directors.
(5) Subsection (4) shall apply for a period of three years as from the conversion, whereafter the
entitlement of the company's employees to be represented on the board of directors shall be
governed by the provisions of the Companies Act.

127a

(1) The VP Securities Services shall be a private, independent institution. Detailed regulations
concerning VP Securities Services and its activities shall be laid down by the board of directors of VP Securities Services in the articles of association, which shall be approved by the
Danish FSA.

101

382

(2) A board of directors comprising up to 14 members as well as a board of management shall

manage VP Securities Services.
(3) The matters addressed by the board of directors shall, where special majorities are not due
under the articles of association, be decided by a simple majority of votes. The articles of
association may stipulate that the chairperson is to have the casting vote in the event of
parity of votes.
(4) The Minister for Economic and Business Affairs shall, for a period of three years at a time,
appoint the chairman of the board of directors and other members of the board of directors,
but see subsections (5)-(9). Among the members, four shall be appointed on the recommendation of organisations representing the issuers of investment securities, four on the
recommendation of organisations representing the account-holding institutions referred to in
section 62(1), nos. 2 and 3, and one member on the recommendation of Danmarks Nationalbank (Denmark's central bank). Two of the members shall be appointed with a special
view to protecting the interests of the owners of investment securities. Proxies shall be appointed for these members.
(5) The employees of VP Securities Services may elect two members of the board of directors
and proxies for these from among the employees of VP Securities Services in accordance
with subsections (6)-(9).
(6) No less than half of the employees shall vote for a decision to utilise the right under subsection (5). The decision shall be notified in writing to the board of directors.
(7) The election of members of the board of directors and proxies by the employees shall take
place by secret ballot. The members shall join the board of directors one month after it has
received written notification of the name and address of the persons concerned.
(8) The members of the board of directors elected by the employees shall be appointed for three
years at a time from among the employees who have been employed by VP Securities Services one year prior to the election.
(9) The Minister for Economic and Business Affairs shall lay down regulations regarding
1)

who are to be considered employees,

2)

the detailed implementation of elections pursuant to subsections (6) and (7),

3)

possibility of omitting election pursuant to subsection (7) if the number of members and
proxies to be elected to the board of directors only corresponds to the number of candidates,

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383

4)

judicial protection of the job of members of the board of directors elected by the employees so that any disagreement as to protection as well as violation or interpretation
of the regulations shall be subjected to industrial disputes procedures, and

5)

the form in which the employees of VP Securities Services shall be informed of VP Securities Services' affairs.

(10) The board of directors shall employ the board of management and ensure that the activities
of VP Securities Services are carried out properly in accordance with the provisions of this
Act and the articles of association of VP Securities Services.
(11) The board of management shall be in charge of the day-to-day management of VP Securities Services in accordance with the guidelines and directions of the board of directors.
128

With regard to limited companies established pursuant to section 101 or section 104, the
Danish FSA may, irrespective of the provisions in section 8(2), no. 2, grant a licence to carry out stock-exchange activities, securities clearing activities and book-entry activities provided that the base capital of the company at the time of the licence is no less than DKK 40
million. No less than DKK 16 million of this amount shall be share capital.

129

The provision in section 6(3), 1st sentence relating to consent from clients shall apply to
new client relationships commenced after the entry into force of said provision. In respect of
existing client relationships, consent from each client shall be obtained no later than 18
months after entry into force of section 6(3), 1st sentence if a securities dealer keeps the
client's securities in an omnibus account or safekeep.

130

(1) This Act shall not apply to the Faroe Islands and Greenland, but with the exception of sections 105-115, section 123 and section 125, may be brought into force by Royal Decree for
these parts of the Realm subject to any variations necessitated by the specific conditions
prevailing in the Faroe Islands and Greenland.
(2) Section 125 may by Royal Decree be brought into force for the Faroe Islands subject to any
variations necessitated by the specific conditions prevailing in the Faroe Islands.
Act no. 475 of 10 June 1997 contains the following entry into force and transitional provisions:

(1) This Act shall enter into force on 1 January 1998. Section 42b(4) of the Act on banks and
savings banks etc. as expressed in section 2, no. 17, of this Act will, however, be effective
in respect of purchases made as from 9 April 1997. Section 3, nos. 1-4, 7-12, 14 and 17,
will, however, become effective the day after the announcement in the Danish Legal Gazette.
(2) The board of directors shall, on 1 March 1998 at the latest, have completed the drafting of
internal guidelines pursuant to section 90(2), section 91(5) and section 91a(1) of the Insur-

103

384

ance Act as expressed in section 1, nos. 4 and 5, of this Act, section 19(2), section 19a(5)
and section 19b(1) of the Act on banks and savings banks etc. as expressed in section 2,
nos. 7 and 8, of this Act, section 18a(2), section 18b(5) and section 18c(1) of the MortgageCredit Loans and Mortgage-Credit Bonds etc. Act as expressed in section 3, no. 6, of this
Act, section 12(4) and section 12b(1) of the Securities Trading etc. Act as expressed in section 4, nos. 1 and 3, of this Act, section 12(2) and section 12b(1) of the Consolidated Investment Companies Act as expressed in section 5, nos. 5 and 6 of this Act, section 5a(2)
and section 5c(1) of the LD Pensions Act as expressed in section 7, no. 1, of this Act and
section 24c(2) and section 24e(1) of the Danish Consolidated Act on Arbejdsmarkedets
Tillgspension (Danish Labour Market Supplementary Pension Fund) as expressed in section
8, no. 1, of this Act.
(3) The provisions in section 91(2), 2nd sentence, section 91a(2), section 92, section 92b(5),
2nd sentence, and section 124(5) and (6) of the Insurance Act as expressed in section 1,
nos. 5 and 7, of this Act, section 19a(2), 2nd sentence, section 19b(2) and (3), section
19d(4), 2nd sentence, and section 31(6) and (7) of the Act on banks and savings banks etc.
as expressed in section 2, nos. 8 and 10 of this Act, section 18b(2), 2nd sentence, section
18c(2) and (3), section 18e(4), 2nd sentence, and section 89(4) and (5) of the MortgageCredit Loans and Mortgage-Credit Bonds etc. Act as expressed in section 3, nos. 6 and 13, of
this Act, section 12a(2), 2nd sentence, section 12b(2) and (3), section 12d(4), 2nd sentence, and section 14(2) of the Securities Trading etc. Act as expressed in section 4, nos. 3
and 4, of this Act, section 11a(3), 2nd sentence, and section 12b(2) and (3) of the Consolidated Investment Companies Act as expressed in section 5, nos. 4 and 6, of this Act, section
5b(3), 2nd sentence, section 5c(2), section 5d, section 5g(3), 2nd sentence, and section
8a(9) of the LD Pensions Act as expressed in section 7, nos. 1 and 2, of this Act, section
24d(3), 2nd sentence, section 24e(2), section 24f, section 24i(3), 2nd sentence, and section
25b(9) of the Danish Consolidated Act on Arbejdsmarkedets Tillgspension (Danish Labour
Market Supplementary Pension Fund) as expressed in section 8, nos. 1 and 2, of this Act
shall apply to financial years commencing on 1 January 1998 or later.
(4)-(6) (Omitted).
(7) Notwithstanding the regulations of this Act, members of the board of management and their
deputies and persons of equal status, as well as branch managers in financial institutions
covered by this Act may carry out duties as members of boards of directors of Danish Ship
Finance, Dansk Eksportfinansiering, the Danish Agricultural Mortgage Bank, Danish Venture
Finance A/S, Finansieringsinstituttet for Hoteller m.v., FIH - Finance for Danish Industry, the
Nordic Association, LRF Mortgage Bank, Totalkredit Realkreditfond, The Bank of Greenland
A/S, the Kingdom of Denmark Fishing Bank and Bornholm's Investment Fund.
(8) Persons covered by section 12c(3) of the Securities Trading etc. Act, as stated in section 4,
no. 3 of this Act, who on 1 January 1998 perform functions as chief internal auditors or deputy chief internal auditors in companies outside the group may continue to do so until expiry

104

385

of the term in operation on 9 April 1997. If the persons mentioned commence, after this
date, a term of a function as chief internal auditor or deputy chief internal auditor in a company not covered by section 12c(3), such person shall resign no later than 1 February 1998.
(9) Exposures and collateral, entered into legally before 1 January 1998 between the elected external auditors or a chief internal auditor or deputy chief internal auditor or the employees
of ATP or LD and the institutions and companies mentioned in sections 1-5, 7 and 8 may
continue until the originally agreed expiry date.
(10)-(11) (Omitted).
(12) Persons who were legally elected before 1 January 1998 to perform the statutory audit of
financial institutions covered by this Act but who are not state-authorised public accountants
or registered public accountants may carry on their tasks until the first ordinary general
meeting after 1 January 1998 at which meeting the financial statements are adopted.
10

(1) This Act shall not apply to Greenland and the Faroe Islands, but see subsection (3), but sections 2, 4 and 5 may, by Royal Decree, be brought into force for these parts of the Realm
subject to any variations necessitated by the specific conditions prevailing in the Faroe Islands and Greenland respectively.
(2) Sections 1 and 6 may, by Royal Decree, be brought into force for Greenland subject to any
variations necessitated by the specific conditions prevailing in Greenland.
(3) Section 3 shall apply to the Faroe Islands and Greenland.

--Act no 414 of 1998 contains the following entry into force and transitional provisions:
15

(1) This Act shall enter into force on 1 July 1998.

(2) At the same time the Securities Centres Act shall be repealed, see Consolidated Act no 807
of 6 October 1993.
(3) The Executive Orders issued pursuant to the Securities Centres Act shall remain in force until they are repealed or replaced by regulations laid down pursuant to the Securities Trading
etc. Act with the amendments following from section 1 of this Act.

(4) Undertakings which are not banks and which facilitate or carry out foreign exchange spot
transactions on behalf of customers for the purpose of investments in view of the customers
obtaining a profit from a change in exchange rates and which have started the undertaking
before 1 July 1998 shall no later than 1 January 1999 file an application for a licence to carry out investment company activities with the Danish FSA. The undertaking may subse-

105

386

quently carry on its activities without a licence until the Danish FSA has considered the application.
(5)-(15) (Omitted).
16

(1) This Act shall not apply to Greenland and the Faroe Islands, but see subsection (2), but sections 1, 2, 4 and 5 may, by Royal Decree, be brought into force for these parts of the Realm
subject to any variations necessitated by the specific conditions prevailing in the Faroe Islands and Greenland respectively.
(2) Section 6 shall apply to the Faroe Islands and Greenland.

--Act no 250 of 1999 contains the following entry into force and transitional provisions:
2

(1) This Act shall enter into force on 1 May 1999.

(2) In respect of shareholders who on 12 March 1999 comply with the conditions for being covered by section 31(1), no. 5, but not nos. 1-4, the takeover obligation is not triggered until
one of the provisions of nos. 1-4 has been complied with. It is a condition that before 1 January 1999 the shareholder shall inform the stock exchange on which the shares are listed of
his holdings, and that the stock exchange has verified that the shareholder is covered by the
first sentence and has informed the shareholder of such verification.
(3) Transfers in the period from 12 March 1999 to 1 May 1999 complying with the conditions for
being covered by section 31(1), no. 5, trigger the takeover obligation pursuant to section 31
as amended in section 1, nos. 10-12. The time limit for making a bid pursuant to Executive
Order no 333 of 23 April 1996 runs from 1 May 1999.

This Act shall not apply to the Faroe Islands and Greenland, but may, by Royal Decree, be
brought into force for these parts of the Realm subject to any variations necessitated by the
specific conditions prevailing in the Faroe Islands and Greenland respectively.

--Act no. 283 of 2000 contains the following entry into force and transitional provisions:
2

(1) This Act shall enter into force on 1 May 2000, but see, subsection (2).
(2) The Minister for Economic Affairs lays down the time of entry into force of section 1, no. 12.
(3) Notwithstanding the provisions in sections 57a, 57c and 57d as expressed in section 1, no.
19, of this Act agreements on netting and provision of security have legal effect pursuant to
section 57(1) and section 57b(1) and (2), as expressed in section 1, nos. 18 and 19, of this
Act until 31 December 2000 if on 1 May 2000 the payment system or the clearing centre was

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387

covered by the Danish FSA's Executive Order no 828 of 10 November 1999 about the clearing centres and settlement systems in which netting with legal effect pursuant to section
57(1) and (2) of the Securities Trading etc. Act may be applied.
(4) Notwithstanding the provision of section 8(4) as expressed in section 1, no. 4, of this Act a
clearing centre which had on 1 May 2000 been granted a licence under section 8(1) may
continue to carry on clearing centre activities until 31 December 2000 even though the rules
and participation agreements of the clearing centre do not contain provisions as stated in
section 57c as expressed in section 1, no. 19, of this Act.
(5) A payment system or a clearing centre covered by subsections (3) and (4) cannot be filed
with the Commission under section 57d(2) as expressed in section 1, no. 19, of this Act.
3

This Act shall not apply to the Faroe Islands and Greenland, but section 1 may, by Royal Decree, be brought into force for these parts of the Realm subject to any variations necessitated by the specific conditions prevailing in the Faroe Islands and Greenland.

--Act no. 295 of 2000 contains the following entry into force and transitional provisions:
6

This Act shall enter into force on 15 May 2000.

This Act shall not apply to the Faroe Islands and Greenland, but sections 1, 3 and 4 may, by
Royal Decree, be brought into force for Greenland, and sections 3 and 4 may, by Royal Decree, be brought into force for the Faroe Islands subject to any variations necessitated by
the specific conditions prevailing in the Faroe Islands and Greenland.

--Act no. 427 of 2002 contains the following entry into force and transitional provisions:
3

(1) This Act shall enter into force on 1 July 2002, but see subsection (2).
(2) Section 1, nos. 13, 14, 16-18, 35 and 39 shall enter into force on 1 October 2002. The Minister for Economic and Business Affairs shall determine the time of entry into force of section
1, nos. 5, 8-12, 19, 26, 30, 31, 33, 34, 37 and 38, as well as section 2.

(1) Status of the total possessions in companies held by persons covered by section 34(4) and
section 37(3), see section 1, nos. 16 and 17, shall be notified to the relevant issuer and reported by said issuer to the relevant stock exchange and authorised market place respectively, where the company's shares are admitted to listing or trading no later than 1 January
2003.

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388

(2) The Danish Securities Council Executive Order no. 429 of 28 May 2001 on Good Securities
Trading Practices for Trading in Certain Securities shall, however, remain in force until the
Minister for Economic and Business Affairs issues regulations in the area.
5

This Act shall not apply to the Faroe Islands and Greenland, but may, by Royal Decree, be
brought into force for these parts of the Realm subject to any variations necessitated by the
specific conditions prevailing in the Faroe Islands and Greenland.

--Act no. 428 of 2002 contains, inter alia, the following entry into force and transitional provisions:
19

(1) This Act shall enter into force on 1 July 2002, but see subsections (2) and (3).
(2)-(4) (Omitted).

20

(1)-(4) (Omitted).
(5) Guidelines agreed pursuant to section 17 of the Marketing Practices Act before the entry into
force of the Act shall continue to apply to financial undertakings until they are repealed or
replaced by regulations laid down by the Minister for Economic and Business Affairs pursuant
to section 3(2) of the Financial Business Act as expressed in section 1, no. 3 of this Act.

21

(2) Except from section 1, no. 13, this Act shall not apply to the Faroe Islands and Greenland,
but may, by Royal Decree, be brought into force for these parts of the Realm subject to any
variations necessitated by the specific conditions prevailing in the Faroe Islands and Greenland, but see subsection 2.
(2) Sections 4 and 7 cannot be brought into force for the Faroe Islands. This also applies to section 1 in respect of insurance business.

--Act no. 453 of 2003 contains, inter alia, the following entry into force provision:
375

(1) This Act shall enter into force on 1 January 2004, but see subsections (2) and (3).
(2)-(5) (Omitted).

--Act no. 1171 of 2003 contains, inter alia, the following entry into force provisions etc:
6

(1) This Act shall enter into force on 1 January 2004, but see subsections (2) and (3).
(2) The Minister for Economic and Business Affairs shall determine the time of entry into force of
section 2. Section 2 may, however, not enter into force before the time when the Hague

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Convention stipulating the law applicable to certain rights in respect of securities held with
an intermediary enters into force in relation to the European Union.
(3) Section 3, nos. 6, 20-23, 27 and 27, shall enter into force on 1 January 2005.
7

Chief internal auditors or deputy chief internal auditors may notwithstanding the ban in section 12b(9) of the Securities Trading etc. Act, see section 1(3) of this Act, maintain and utilise financial interests owned by said chief internal auditors or deputy chief internal auditors
at the entry into force of this Act.

(1) Part 18a of the Securities Trading etc. Act as expressed in section 1, no. 12, of this Act shall
apply to financial collateral arrangements, close-out netting, etc. established after entry into
force of this Act.
(2) Section 58 of the Securities Trading etc. Act, see Consolidating Act no. 587 of 9 July 2002 as
amended by section 426 of Act no. 453 of 10 June 2003 shall continue to apply to netting
agreements established before entry into force of this Act.

--Act no 108 of 2007 contains, inter alia, the following entry into force provisions:
21

(1) The Act shall enter into force on 1 November 2007, but see subsections (3)-(7).
(2) At the same time Executive Order no. 1140 of 14 December 2000 about membership of a
stock exchange for other persons than securities traders and Danmarks Nationalbank (Denmark's central bank) and Executive Order no 986 of 4 October 2004 about securities traders
operating an alternative trading system.
(3) Section 1, no. 88, section 3, nos. 1, 3, 11, 24, 27, 30, 40-43, 58, 61, 62, 68, 69, 76, 81,
83, 85 and 86, section 6, nos. 1-9, section 7, section 8, nos. 3, 8 and 9, section 9, nos. 6
and 7, section 10, no. 6 and sections 11-15 shall enter into force on 15 February 2007.
(4) Section 1, nos. 2, 3, 54-60, 62, 63, 90, 93, 94, 105-109, 116, 118 and 119, section 3, no.
74, and section 4 shall enter into force on 1 June 2007.
(5) Section 6, no. 10, shall enter into force on 15 December 2007.
(6) Section 1, no. 88, section 3, no. 62, section 11, no. 1, section 12, no. 12, and section 13,
no. 2 shall be effective from 1 January 2006.
(7) Section 5 shall enter into force for financial years commencing on 1 June 2007 or later.

109

390

This translation was carried out by the professional translation agency GlobalDenmark Translations on
behalf of the Danish Financial Supervisory Authority. The text is to be regarded as an unofficial translation based on the latest official Executive Order. Only the Danish document has legal validity.

Executive Order on Conditions for Admission of Securities to Official Listing1

Executive Order no. 1069 of 4 September 2007

The following shall be laid down pursuant to section 22(2), and section 93(3) of the Securities Trading,
etc. Act, cf. Consolidated Act no. 479 of 1 June 2006, as amended by Act no. 108 of 7 February 2007:

Part 1
Conditions for admission of securities to official listing
1

(1)

The Danish FSA shall, upon request from an issuer, make a decision about official listing of
shares, certificates representing shares and bonds, if said securities fulfil the conditions of
this Executive Order, and if the securities have been admitted or will be admitted to trading
on a regulated market in Denmark.

(2)

The Danish FSA may reject an application for official listing if the Danish FSA deems that the
issuer's situation is such that the official listing would be detrimental to investors' interests.

(3)

The Danish FSA may make any condition for official listing of a security considered necessary in order to protect investors. An issuer shall be notified of any conditions.

The Danish FSA may refuse to admit to official listing a security already officially listed in a
country within the European Union or in a country with which the Community has entered into an agreement for the financial area where the issuer fails to comply with the obligations
resulting from official listing in that country.

(1)

The Danish FSA shall notify the issuer of a decision within six months of receipt of the application. If the Danish FSA requires any further information within that period, the time limit
shall not apply until from the date on which the issuer has submitted all the information
necessary for making this decision.

(2)

Failure to give a decision within the time limit specified in subsection (1) shall be deemed a
rejection of the application.

This Executive Order contains provisions implementing parts of Directive 2001/34/EC of the European Parliament
and of the Council of 28 May 2001on the admission of securities to official stock exchange listing and on information to be published on those securities (Official Journal 2001, no. L 184, p 1), as subsequently amended by
Directive 2005/1/EC of the European Parliament and of the Council of 9 March 2005 amending Council Directives
73/239/EEC,

85/611/EEC,

91/675/EEC,

92/49/EEC

and

93/6/EEC

and

Directives

94/19/EC,

98/78/EC,

2000/12/EC, 2001/34/EC, 2002/83/EC and 2002/87/EC in order to establish a new organisational structure for financial services committees (Text with EEA relevance) (Official Journal 2005, no. L 079, p 9).

391

(1)

Shares may be officially listed if the foreseeable market capitalisation of the shares represents at least EUR 1,000,000. If this market capitalisation cannot be assessed, the company's capital and reserves, including profit or loss, from the last financial year, must be at
least EUR 1,000,000.

(2)

The company and its shares shall meet the conditions in annex 1.

(3)

The Danish FSA may make a decision as mentioned in annex 1, point 2.5.

(4)

Subsection (1) shall not apply to decisions in connection with the admission to official listing
of a further block of shares of the same class as those already admitted.

(1)

Bonds issued by undertakings may be officially listed, if the loan accounts for at least EUR
200,000. This, however, shall not be applicable in the case of tap issues where the amount
of the loan is not fixed.

(2)

The undertakings and the bonds shall meet the conditions in annex 2, points 1.1 and 1.2.

(1)

Convertible bonds, exchangeable bonds and bonds with warrants shall meet the conditions in
annex 2, point 1.3.

(2)

The Danish FSA may make a decision as mentioned in annex 2, point. 1.3.

(1)

Notwithstanding section 5, bonds from the following issuers shall be officially listed when the
conditions in annex 2, point 2 are met:
1)

A state or its regional or local authorities, including regional and local authorities.

2)

A public international body.

3)

Companies and other legal persons which are nationals of a country within the European
Union or a country with which the Community has entered into an agreement for the financial area or one of their federal states, and which are set up by, governed by or
managed pursuant to a special law where repayments and interest payments in respect
of the bonds are guaranteed by the countries or federal states concerned.

(1)

Certificates representing shares may be admitted to official listing, if the company whose
shares provide a basis for the certificate fulfils the conditions set out in section 4 and the
obligations set out in section 10 and if the certificates fulfil the conditions for shares set out
in annex 1, point. 2.

(2)

Furthermore, the certificates mentioned in subsection (1) shall only be admitted to official
listing, if the Danish FSA is satisfied that the issuer of the certificates is offering adequate
safeguards for the protection of investors.

392

Official listing in several countries

9

Where applications are to be made simultaneously or within short intervals for admission of
the same securities to official listing in other countries within the European Union or in countries with which the Community has entered into an agreement for the financial area, or applications for official listing of securities which have already been admitted to official listing
in another country within the European Union or in a country with which the Community has
entered into an agreement for the financial area, this shall be stated in the application.
Part 2
Obligations for issuers of securities officially listed

10

(1)

In the case of a new public issue of shares of the same class as those already officially
listed, the company shall be required, where the new shares are not automatically admitted,
to apply for their admission to the same listing, either no more than a year after their issue
or when they become freely negotiable. This shall apply without prejudice to the provisions
of annex 1, point 2.5., second paragraph.

11

(2)

The general meetings of the company shall be open to the press.

(1)

In order to protect investors or to ensure the smooth operation of the market, issuers of securities shall publish the information required by the Danish FSA in such a form and within
such time limits as the Danish FSA considers appropriate.

(2)

If an issuer fails to comply with the requirement mentioned in subsection (1), the Danish
FSA may itself cause the required information to be published after the issuer has had the
opportunity to give his opinion.
Part 3
Suspension and withdrawal of official listing

12

In the event of failure of the issuer to comply with the obligations resulting from admission
to official listing, the Danish FSA may, in addition to implementing any action and penalties
mentioned in section 11(2), section 13 and section 14, make public the fact that the issuer
is failing to comply with those obligations.

13

The Danish FSA may decide on a suspension where the smooth operation of the market is,
or will be jeopardised or where protection of investors so requires.

14

(1)

The Danish FSA may decide that the official listing of a security be withdrawn, if the Danish
FSA deems that, owing to special circumstances, normal regular dealings in a security are no
longer possible.

(2)

Where an issuer of securities requests withdrawal of an official listing, the request shall be
complied with, unless the Danish FSA considers the discontinuation not to be in the interest
of the investors, the borrowers or the securities market.

393

Part 4
Exemptions, penalties and entry into force
15

The Danish FSA may grant exemptions from the requirements of section 4(1), and section
5(1), 1st clause, if the Danish FSA deems that there will be an adequate market for the
shares or bonds concerned.

16

(1)

Violation of section 9, section 10 and section 11(1) shall be subject to a fine.

(2)

Enterprises etc. (legal persons) may incur criminal liability under the rules of chapter 5 of
the Criminal Code.

17

This Executive Order shall enter into force on 1 November 2007. At the same time, Executive Order no. 172 of 23 February 2007 on conditions for admission of securities to official
listing on any stock exchange etc. shall be repealed.

Ministry of Economics and Business Affairs, 4 September 2007

Henrik Bjerre-Nielsen
/Camilla Sborg

Annex 1
Conditions for admission of shares to official listing
1

Conditions relating to the company for the shares of which admission to official
listing is sought.

1.1

Legal position of the company

The legal position of the company must be in conformity with the legislation to which it is
subject, as regards both its formation and its operation under its articles of association.

1.2

A company's period of existence

The company must have published or filed its financial statements in accordance with national law for the three accounting years preceding the application for listing. By way of exception, the Danish FSA may derogate from this condition where such derogation is desirable in the interests of the company or of investors and where the Danish FSA is satisfied
that investors have the necessary information available to be able to arrive at an informed
judgment on the company and the shares for which admission to official listing is sought.

394

Conditions relating to the shares for which admission to official listing is sought

2.1

Legal position of the shares

The legal position of the shares must be in conformity with the acts and regulations to which
they are subject.

2.2

Negotiability of the shares

The shares must be freely negotiable.
The Danish FSA may treat shares which are not fully paid up as freely negotiable, if arrangements have been made to ensure that the negotiability of such shares is not restricted
and that dealing is made open and proper by providing the public with all appropriate information.
The Danish FSA may, in the case of the admission to official listing of shares which may be
acquired only subject to approval, derogate from the provisions in the first paragraph only if
the use of the approval clause does not disturb the market.

2.3

Public issue preceding admission to official listing

Where public issue precedes admission to official listing, the first listing may be made only
after the end of the period during which subscription applications may be submitted.

2.4

Distribution of shares
A sufficient number of shares must be distributed to the public in one or more countries
within the European Union or in countries with which the Community has entered into an
agreement for the financial area no later than the time of admission.
This condition shall not apply where shares are to be distributed to the public through the
regulated market. In that event, admission to official listing may be granted only if the Danish FSA is satisfied that a sufficient number of shares will be distributed through the regulated market within a short period.
Where admission to official listing is sought for a further block of shares of the same class,
the Danish FSA may assess whether a sufficient number of shares has been distributed to
the public in relation to all the shares issued and not only in relation to this further block.
If the shares are admitted to official listing in one or more countries outside the European
Union with which the Community has not entered into an agreement for the financial area,
the Danish FSA may, notwithstanding the provision in first paragraph, provide for their admission to official listing if a sufficient number of shares is distributed to the public in the
relevant countries where they are listed.

395

A sufficient number of shares shall be deemed to have been distributed either when the
shares in respect of which application for admission has been made are in the hands of the
public to the extent of at least 25 per cent of the subscribed capital represented by the class
of shares concerned or when, in view of the large number of shares of the same class and
the extent of their distribution to the public, the market will operate properly with a lower
percentage.
2.5

Official listing of shares of the same class

The application for admission to official listing must cover all the shares of the same class
already issued.
However, the Danish FSA may provide that this condition is not to apply to applications for
admission not covering all the shares of the same class already issued where the shares of
that class for which admission is not sought belong to blocks serving to maintain control of
the company or are not negotiable for a certain time under agreements, provided that the
public is informed of such situations and that there is no danger of such situations prejudicing the interests of the holders of the shares for which admission to official listing is sought.

2.6

Physical form of shares

For admission to official listing of shares issued by companies which are nationals of another
country with which the Community has entered into an agreement for the financial area and
which have a physical form it is necessary and sufficient that their physical form comply with
the standards laid down in that other country with which the Community has entered into an
agreement for the financial area.
The physical form of shares issued by companies which are nationals of countries outside
the European Union with which the Community has not entered into an agreement for the financial area, must afford sufficient safeguard for the protection of the investors.

2.7

Shares issued by companies in a country outside the European Union with which the Community has not entered into an agreement for the financial area
If the shares issued by a company which is a national of in a country outside the European
Union with which the Community has not entered into an agreement for the financial area
are not officially listed in either the country of origin or in the country in which the major
proportion of shares is held, they may only be admitted to official listing if the Danish FSA is
satisfied that the absence of an official listing in the country of origin or in the country in
which the major proportion is held is not due to the need to protect investors.

396

Annex 2
Conditions for admission of bonds to official listing
1

Official listing of bonds issued by an undertaking

1.1

Conditions relating to the undertaking for whose bonds admission to listing is sought

1.1.1

Legal position of the undertaking

The legal position of the undertaking must be in conformity with the laws and regulations to
which it is subject, as regards both its formation and its operation under its articles of association.

1.2

Conditions relating to the bonds for which admission to official listing is sought

1.2.1

Legal position of the bonds

The legal position of the bonds must be in conformity with the laws and regulations to which
they are subject.

1.2.2

Negotiability of the bonds

The bonds must be freely negotiable.
The Danish FSA may treat bonds which are not fully paid up as freely negotiable if arrangements have been made to ensure that the negotiability of these bonds is not restricted and
that dealing is made open and proper by providing the public with all appropriate information.

1.2.3

Public issue preceding admission to official listing

Where public issue precedes admission to official listing, the first listing may be made only
after the end of the period during which subscription applications may be submitted. This
provision shall not apply in the case of tap issues of bonds when the closing date for subscription is not fixed.

1.2.4

Official listing of bonds ranking pari passu

The application for admission to official listing must cover all the bonds ranking pari passu.

1.2.5

Physical form of bonds

For admission to official listing of bonds issued by undertakings which are nationals of another country with which the Community has entered into an agreement for the financial area, and which have a physical form it is necessary and sufficient that their physical form
comply with the standards laid down in that other country with which the Community has
entered into an agreement for the financial area.

397

The physical form of bonds only issued in a single country with which the Community has
entered into an agreement for the financial area, must, however, conform to the standards
in force in that country.
The physical form of bonds issued by undertakings which are nationals of countries outside
the European Union with which the Community has not entered into an agreement for the financial area, must afford sufficient safeguard for the protection of the investors.
1.3

Other conditions

1.3.1

Convertible or exchangeable bonds, and bonds with warrants

Convertible or exchangeable bonds and bonds with warrants may be admitted to official listing only if the related shares are already listed on the same regulated market or on another
regulated, regularly operating, recognised open market or are so admitted simultaneously.
The Danish FSA may, however, by way of derogation from the provisions in paragraph 1,
provide for the admission to official listing of convertible, exchangeable bonds and bonds
with warrants, if the Danish FSA is satisfied that the holders have at their disposal all the information necessary to form an opinion concerning the value of the shares to which these
bonds relate.

Official listing of bonds issued by a state or its regional or local authorities or by a

public international body

2.1

Negotiability of the bonds

The bonds must be freely negotiable.

2.2

Public issue preceding admission to official listing

Where public issue precedes admission to official listing, the first listing may be made only
after the end of the period during which subscription applications may be submitted. This
provision shall not apply where the closing date for subscription is not fixed.

2.3

Official listing of bonds ranking pari passu

The application for admission to official listing must cover all the bonds ranking pari passu.

2.4

Physical form of bonds

For admission to official listing of bonds issued by a country with which the Community has
entered into an agreement for the financial area, or its local public bodies, in a physical
form, it is necessary and sufficient that such physical form comply with the standards in
force in that other country with which the Community has entered into an agreement for the
financial area.

398

The physical form of bonds issued by countries outside the European Union with which the
Community has not entered into an agreement for the financial area or their local public
bodies or by international organisations of a public nature which must afford sufficient guarantees to protect the investor.

399

This translation was carried out by the professional translation agency GlobalDenmark Translations on
behalf of the Danish Financial Supervisory Authority. The text is to be regarded as an unofficial translation based on the latest official Executive Order. Only the Danish document has legal validity.

Executive Order on Prospectuses for Securities Admitted to Trading on a

Regulated Market and for Offers to the Public of Securities of more than EUR
5,000,0001
Executive Order no. 643 of 19 June 2012

The following shall be laid down pursuant to section 23(7) and (8), section 24(2) and section 93(4) and
(5) of the Securities Trading etc. Act, cf. Consolidating Act no. 883 of 9 August 2011:

Part 1
Scope, etc.
1

The regulations of this Executive Order shall apply to the securities mentioned in section
2(1) of the Securities Trading etc. Act, except for the securities mentioned in section 23(4),
when such securities are sought to be admitted to trading on a regulated market and for offers to the public of securities of more than EUR 5,000,000.

For the purposes of this Executive Order "qualified investors" shall mean: Persons or entities
described in Annex II, paragraph I, nos. 1-4 of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, and persons
or entities who, on request, are treated as professional customers in accordance with Annex
II of Directive 2004/39/EC, or are recognised as eligible counterparties in accordance with
article 24 of Directive 2004/39/EC, unless they have requested to be treated as nonprofessional customers. On request, investment companies and credit institutions shall notify their classification to the issuer, without prejudice to the relevant legislation on data protection. Investment companies, with authorisation to continue to consider existing professional customers as such in accordance with article 71(6) of Directive 2004/39/EC, may
treat such customers as qualified investors pursuant to this Executive Order.

This Executive Order contains provisions implementing parts of Directive 2003/71/EC of the European Parliament
and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC, (Official Journal 2003, no. L 345, p. 64) and Directive 2010/73/EU of the European Parliament and of the Council of 24 November 2010 amending Directives
2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading and
2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose
securities are admitted to trading on a regulated market and Directive 2010/78/EU of the European Parliament
and of the Council of 24 November 2010.

400

For the purposes of this Executive Order "small and medium-sized undertakings" shall mean
undertakings which, according to their last annual or consolidated financial statements, meet at
least two of the following three criteria:

1)

An average number of full-time employees during the financial year of less than 250.

2)

A total balance sheet not exceeding EUR 43,000,000.

3)

An annual net turnover not exceeding EUR 50,000,000.

For the purposes of this Executive Order "issuer" shall mean a legal entity which issues or
proposes to issue securities.

For the purposes of this Executive Order "person making an offer" or "offeror" shall mean a
natural or legal person who offers securities to the public.

For the purposes of this Executive Order "offering programme" shall mean a programme
which would permit the issuance of non-equity securities, cf. section 2a(2) of the Securities
Trading etc. Act, having a similar type and/or class, in a continuous or repeated manner
during a specified issuing period, including warrants in any form.

For the purposes of this Executive Order "securities issued in a continuous or repeated manner" shall mean issues on tap or at least two separate issues of securities of a similar type
and/or class within a period of 12 months.

(1) For the purposes of this Executive Order "home country" shall mean:
1)

For all issuers of securities in a Member State of the European Union or a country with
which the Union has entered into an agreement for the financial area, the Member State
of the European Union or the country with which the Union has entered into an agreement for the financial area in which the issuer has its registered office, provided the issuer is not covered by no. 2.

2)

For all issuers of non-equity securities, cf. section 2a(2) of the Securities Trading etc.
Act, and
a)

whose nominal value per security amounts to at least EUR 1,000, or

b)

which give the right to acquire transferable securities or to receive a cash amount,
as a consequence of their being converted or the rights conferred by them being exercised, provided that the issuer of the securities is not the issuer of the underlying
securities or an entity belonging to the same group as the latter issuer, the Member
State of the European Union, or the country with which the Union has entered into
an agreement for the financial area where the issuer has its registered office, or
where the securities were or are to be admitted to trading on a regulated market for
securities or where the securities are offered to the public.

401

3)

For all issuers of securities which have their registered office in a country outside the
European Union or a country with which the Union has entered into an agreement for
the financial area, which are not mentioned in no. 2, the Member State of the European
Union or the country with which the Union has entered into an agreement for the financial area where the securities are intended to be offered to the public for the first time
after 31 December 2003 or where the first application for admission to trading on a regulated market for securities is submitted.

(2) Choice of home country, cf. subsection (1), nos. 2 and 3 shall be decided by the issuer, offeror, or the person who requests admission to trading.
(3) If the choice of home country, cf. subsection (1), no. 3, was not decided by the issuer, offeror, or the person who applied for admission to trading the first time the securities were offered to the public or admitted to trading, they may make this choice later.
9

For the purposes of this Executive Order "host country" shall mean the Member State of the
European Union or the country with which the Union has entered into an agreement for the
financial area, in which an offer to the public is carried out or in which an application is
made for admission to trading, if this is different from the home country.

10

For the purposes of this Executive Order "base prospectus" shall mean a document containing all relevant information concerning the issuer and the securities to be offered to the public or admitted to trading on a regulated market for securities and, at the discretion of the
issuer, the final terms of the offer.

11

For the purposes of this Executive Order "key information" shall mean significant and appropriately structured information which is to be made available to investors in order to enable
them to understand the nature of and risks associated with issuers, guarantors, as well as
the securities being offered to them or being admitted to trading on a regulated market, as
well as to decide, without prejudice to section 16(3), no. 2, which of the securities being offered are to be considered more closely. On the basis of the offer and the relevant securities, key information shall include the following elements:
1)

A brief description of the risks and the most important aspects in relation to the

2)

A brief description of the risks and important aspects in relation to the investment in the
relevant security, including the rights attached to the securities.

3)

The general terms of the offer, including the estimated expenses imposed on the investor by the issuer or the offeror.

4)

More detailed information on the admission to trading.

5)

The reasons for the offer as well as application of the proceeds.

402

12

For the purposes of this Executive Order "company with limited market value" shall mean a
company which is admitted to trading on a regulated market and which had an average
market value of less than EUR 100,000,000 on the basis of the market value at the end of
the year for the past three calendar years.
Part 2
Exemptions from the obligation to publish a prospectus

13

(1) Then obligation to publish a prospectus pursuant to sections 23 and 24 of the Securities
Trading etc. Act shall not apply for the following offers:
1)

Securities offered exclusively to qualified investors, cf. section 2.

2)

Securities offered to fewer than 150 natural or legal persons per Member State of the
European Union or per country with which the Union has entered into an agreement for
the financial area, who are not qualified investors, cf. section 2.

3)

Securities offered to investors who acquire securities for a total of no less than EUR
100,000 per investor for each separate offer.

4)

Securities offered with a nominal value per security totalling no less than EUR 100,000.

(2) Any resale of securities previously subject to one or more of the types of offer mentioned in
subsection (1), shall be considered as a separate offer and a decision shall be made on
whether the resale is an offer of securities to the public for which there is an obligation to
publish a prospectus.
(3) The obligation to publish a prospectus pursuant to sections 23 and 24 of the Securities Trading etc. Act shall not apply to resale of securities or final placement of securities via financial
intermediaries, when there is a valid prospectus in accordance with sections 22-24, and
when, on the basis of a written agreement, the issuer or the person who is responsible for
drawing up this prospectus declares full understanding and acceptance of its application.
14

The obligation to publish a prospectus pursuant to sections 23 and 24 of the Securities Trading etc. Act shall not apply to offers to the public of the following securities:
1)

Shares issued with a view to substitution of shares of the same class already issued, if
the issuing of such new shares does not involve any increase in the issued share capital.

2)

Securities offered in connection with a takeover bid, provided that a document is made
available containing information which is equivalent to that in the prospectus.

3)

Securities offered, allotted or to be allotted in connection with a merger or division of an

undertaking, provided that a document is made available containing information which is
equivalent to that in the prospectus.

403

4)

Dividends paid to existing shareholders in the form of shares of the same class as the
shares in respect of which dividends are paid, provided a document is made available
containing information on the number and class of the shares and the reasons for, and
details of, the transaction.

5)

Securities offered, allotted or to be allotted to existing or former members of the board

of directors or supervisory board or employees of the issuing or a group company, cf.
section 5(1), no. 9 of the Financial Business Act. This is provided that the securities are
offered, allotted or to be allotted by the issuing company and that the company has its
head office or registered office in the European Union or one or more countries with
which the Union has entered into an agreement for the financial area, and that a document is made available containing information on the number and class of the securities
and the reasons for, and details of, the offer.

6)

Subsection (1), no.5 shall also apply for a company established outside the European
Union, the shares of which are admitted to trading either on a regulated market or on a
market in a third country. In the latter case there shall be adequate information, including the document mentioned in subsection (1), no. 5, in a language commonly used in
international financial circles, and the European Commission shall have an equivalence
decision regarding the market in the relevant third country.

15

(1) The obligation to publish a prospectus pursuant to sections 23 and 24 of the Securities Trading etc. Act shall not apply to admission to trading of the following securities:
1)

Shares and units in collective investment schemes representing, over a period of 12

months, less than 10 per cent of the number of shares or units in collective investment
schemes of the same class already admitted to trading on the same regulated market.

2)

Shares issued with a view to substitution of shares of the same class already admitted
to trading on the same regulated market, provided the issuing of such new shares does
not involve any increase in the issued share capital.

3)

Securities offered in connection with a takeover bid, provided that a document is made
available containing information which is equivalent to that in the prospectus.

4)

Securities offered, allotted or to be allotted in connection with a merger or division of an

undertaking, provided that a document is made available containing information which is
equivalent to that in the prospectus.

5)

Shares offered, allotted or to be allotted free of charge to existing shareholders, and

dividends paid out in the form of shares of the same class as the shares in respect of
which such dividends are paid, provided that said shares are of the same class as the
shares already admitted to trading on the same regulated market and that a document

404

is made available to the shareholders containing information on the number and class of
the shares and the reasons for, and details of, the offer.
6)

Securities offered, allotted or to be allotted to existing or former members of the board

of directors or supervisory board or employees of the issuing or a group company, cf.
section 5(1), no. 9 of the Financial Business Act. This is provided that the securities are
offered, allotted or to be allotted by the issuing company, that the relevant securities
are of the same class as the securities already admitted to trading on the same regulated market, and that a document is made available to the persons mentioned above containing information on the number and class of the securities and the reasons for, and
details of, the offer.

7)

Shares resulting from the exchange of other securities or from the exercise of the rights
conferred by other securities, provided that said shares are of the same class as the
shares already admitted to trading on the same regulated market.

(2) The obligation to publish a prospectus pursuant to sections 23 and 24 of the Securities Trading etc. Act shall not apply for admission to trading on a regulated market for securities already admitted to trading on another regulated market, when the following conditions are
fulfilled:
1)

The securities, or securities of the same class, have been admitted to trading on that
other regulated market for more than 18 months.

2)

The prospectus for securities first admitted to trading on that other regulated market after 1 July 2005 is approved and made available to the public in accordance with article
14

of

Directive

2003/71/EC

with

the

amendments

consequential

upon

Directive

2010/73/EU on the prospectus to be published when securities are offered to the public
or admitted to trading.
3)

The prospectus for securities first admitted to trading after 30 June 1983, but before 1
July 2005 is approved in accordance with the requirements of Directive 80/390/EEC coordinating the requirements for the drawing up, scrutiny and distribution of the listing
particulars to be published for the admission of securities to official stock exchange listing or Directive 2001/34/EC on the admission of securities to official stock exchange
listings and on information to be published on those securities.

4)

The permanent obligations for trading on that other regulated market have been fulfilled.

5)

The person requesting the admission of a security to trading on a regulated market in

Denmark pursuant to subsection (2) draws up a summary and makes it available to the
public in Danish in accordance with Part 6.

405

6)

The contents of the summary document, cf. no. 5, shall comply with section 16(3). Furthermore, the document shall state where the most recent prospectus can be obtained
and where the financial information published by the issuer pursuant to his permanent
disclosure obligations is available.
Part 3
Format and contents of the prospectus

16

(1) The prospectus shall contain information concerning the issuer and the securities to be offered to the public or to be admitted to trading on a regulated market. It shall also contain a
summary.
(2) The issuer, offeror or person requesting admission to trading on a regulated market, may
draw up the prospectus as a single document or as separate documents. A prospectus composed of separate documents shall divide the required information into a registration document, a securities note and a summary. The registration document shall contain information
relating to the issuer. The securities note shall contain information concerning the securities
offered to the public or which are to be admitted to trading on a regulated market.
(3) The summary in the prospectus shall be brief, in non-technical language and it shall contain
key information in the language in which the prospectus was originally drawn up. The form
and content of the summary shall, together with the prospectus, convey appropriate information on the most important elements of the relevant securities such that investors can
more easily decide whether to invest in such securities. The summary shall also contain a
warning that:
1)

The summary should be read as an introduction to the prospectus.

2)

Any decision to invest in the securities should be based on consideration of the prospectus as a whole.

3)

Where a claim relating to the information contained in a prospectus is brought before a

court, the plaintiff investor might have to bear the costs of translating the prospectus
before the legal proceedings are initiated.

4)

Civil liability attaches to the natural or legal persons who have completed the summary,
or any translation thereof, and applied for its approval, but only if the summary is misleading, inaccurate or inconsistent, or does not include key information when read together with the other parts of the prospectus.

(4) Where the prospectus relates to the admission to trading on a regulated market of nonequity securities, cf. section 2a(2) of the Securities Trading etc. Act having a nominal value
of at least EUR 100,000, the requirement in subsection (1) that the prospectus shall contain
a summary shall not apply.

406

17

(1) An issuer which has had a registration document approved by the Danish FSA within the
past 12 months may decide only to draw up the securities note and summary when securities are offered to the public or admitted to trading. In this situation the Danish FSA shall
decide approval of the securities note and the summary.
(2) When subsection (1) applies, the securities note shall provide information which would normally be provided in the registration document, if there have been material changes which
would affect investors' assessments since the most recent update to the registration document, or any supplement in accordance with section 27, was approved. Such information
may also be provided in a supplement to the registration document, cf. section 27.

18

(1) For the following types of securities, the issuer, offeror or person requesting admission to
trading on a regulated market for securities may decide to draw up a base prospectus:
5)

Non-equity securities, cf. section 2a(2) of the Securities Trading etc. Act, including

6)

Non-equity securities, cf. section 2a(2) of the Securities Trading etc. Act, issued in a
continuous or repeated manner by credit institutions
a)

where the proceeds of the issue of the securities are placed in assets which provide sufficient coverage for the liability deriving from the securities until their
maturity date, and

b)

where, in the event of the bankruptcy of the related credit institution, the relevant amounts shall, as a priority, be utilised to repay the capital and interest
falling due.

(2) The base prospectus shall contain all relevant information on the issuer and on the securities
offered to the public or to be admitted to trading on a regulated market for securities.
(3) If the final terms of the offer are not included in either the base prospectus or in a supplement, the final terms shall be provided to investors and filed with the Danish FSA and the
competent authorities in the relevant host country(ies) each time an offer to the public is
made, as soon as is practicable and at all events in reasonable time and no later than the
start of the offer to the public or admission to trading of the relevant securities.
19

(1) Information may be incorporated in the prospectus by reference to one or more previously
or simultaneously published documents that have been approved by, or submitted to, the
Danish FSA. This information shall be the latest available to the issuer. The summary may
not incorporate information by reference.
(2) When information is incorporated by reference, a cross-reference list shall be provided in order to enable investors to identify easily specific items of information.

407

Part 4
Omission of information from the prospectus
20

(1) Where the final offer price and the number of securities which will be offered to the public
cannot be included in the prospectus, one of the following conditions shall be met:
1)

The prospectus shall contain the criteria or the conditions in accordance with which the
final offer price will be determined, including the maximum price and the number of securities.

2)

The acceptances of the purchase or subscription to the securities may be withdrawn no

less than two business days after the final offer price and number of securities to be offered to the public have been received by the Danish FSA.

(2) Issuers shall submit the final offer price and number of securities to the Danish FSA and
publish such information in accordance with section 26 when this is known.
21

(1) The Danish FSA may authorise omission from the prospectus of certain required information
in the following situations:
1)

Disclosure of such information would be contrary to the public interest.

2)

Disclosure of such information would be seriously detrimental to the issuer, provided

that the omission of publication cannot mislead the public with regard to facts and circumstances essential for a judgement of the issuer, offeror or guarantor, if any, and of
the rights attached to the securities to which the prospectus relates.

3)

Such information is only of minor importance for a specific offer or a specific admission
to trading and is not such as could influence the assessment of the financial position and
prospects of the issuer, offeror or guarantor, if any.

(2) In exceptional circumstances, when specific information required to be included in a prospectus is not available due to the nature of the activities of the issuer or the organisation of
the issuer, or when information is not available on the securities to which the prospectus relates, the prospectus may contain other information equivalent to the information required.
If no such information exists, the relevant information requirement shall not apply.
Part 5
Validity
22

(1) A prospectus shall be valid for 12 months after approval. If a supplement to the prospectus
is required pursuant to section 27, the supplement shall be approved and published as a
condition for the validity of the prospectus.
(2) A previously approved registration document as mentioned in section 17 shall be valid for up
to 12 months. The previously approved registration document, if necessary updated in ac-

408

cordance with section 17(2) or section 27, accompanied by an approved securities note as
well as an approved summary, shall be considered to constitute a valid prospectus.
23

In connection with an offering programme, a previously approved base prospectus shall be

valid for a period of up to 12 months.

24

A base prospectus for the securities mentioned in section 18(1), no. 2 shall be valid until no
more of the securities concerned are issued in a continuous or repeated manner.
Part 6
Publication of the prospectus

25

Once approved, the prospectus shall be made available to the public by the issuer, offeror or
person requesting admission to trading as soon as practicable and at all events within a reasonable time, and no later than before the beginning of the offer to the public or the admission to trading of the relevant securities. In the case of a public offer of shares in a class
admitted to trading for the first time, the prospectus shall be available at least six business
days before the end of the offer.

26

(1) The prospectus shall be deemed published when it has been made available to the public in
one the following ways:
1)

by insertion in one or more Danish national newspapers or newspapers widely circulated

in Denmark, when the offer to the public is made or the application for admission to
trading is submitted to a regulated market in Denmark,

2)

in a printed form to be made available, free of charge, to the public at the offices of the
market on which the securities are being admitted to trading, as well as at the registered office of the issuer and at the offices of the financial undertakings placing or acting as intermediaries in selling the securities,

3)

in an electronic form on the issuer's website and, if applicable, on the website of the financial undertakings placing or acting as intermediaries in selling the securities, including financing bodies, or

4)

in an electronic form via the information system on the regulated market where the application for admission to trading is submitted.

(2) The Danish FSA shall publish regularly on its website a list of all the prospectuses approved
over the past 12 months.
(3) In the case of prospectuses comprising several separate documents or incorporating information by reference, the documents and information making up the prospectus may be published and circulated separately, provided that the said documents are made available to the
public free of charge, in accordance with the arrangements mentioned in subsection (1).

10

409

Each document shall indicate where the other constituent documents of the full prospectus
can be obtained.
(4) Where the prospectus is published in electronic form, a paper copy shall, nevertheless, be
delivered to the investor, upon request and free of charge, by the issuer, the offeror, the
person requesting admission to trading or the financial undertakings placing or acting as intermediaries in selling the securities, until the prospectus is no longer valid.
(5) When the prospectus is published in accordance with subsection (1), no. 1 or no. 2. the issuer or the persons responsible for drawing up the prospectus shall also publish the prospectus electronically in accordance with subsection (1) no. 3.
27

(1) Every significant new factor, material mistake or inaccuracy relating to the information included in the prospectus which is capable of affecting the assessment of the securities, and
which arises or is noted between the time when the prospectus is approved and the final
closing of the offer to the public, or the time when trading on a regulated market begins,
whichever occurs last, shall be mentioned in a supplement to the prospectus. Such a supplement shall be approved within a maximum of seven business days and published in accordance with at section 26.
(2) The summary, and any translations thereof, shall also be updated to take into account the
new information included in the supplement.
(3) When the prospectus pertains to an offer of securities to the public, investors who have
agreed to purchase or subscribe to securities before publication of the supplement may,
within two business days of publication of the supplement, withdraw their acceptance, provided the significant new factor, material mistake or inaccuracy mentioned in subsection (1)
arose before the final closing of the offer to the public and provided no securities have been
delivered. This period may be extended by the issuer or the offeror. The final date for withdrawal of agreement shall appear in the supplement.
Part 7
Advertisements

28

(1) If there are advertisements relating either to an offer to the public of securities or to an admission to trading on a regulated market, and there is an obligation to publish a prospectus,
the advertisements shall state that a prospectus has been or will be published. Advertisements shall state where the prospectus has been or will be made available to investors.
(2) Advertisements shall be clearly recognisable as such. The information contained in an advertisement may not be inaccurate, or misleading.
(3) If information is disclosed in public relating either to an offer to the public of securities or to
an admission to trading, and there is an obligation to publish a prospectus, this information

11

410

shall be consistent with the information contained in the prospectus, even if disclosure is not
in connection with advertisements.
29

When, pursuant to sections 13-15, no prospectus is required to be approved and published,

material information, disclosed by an issuer or an offeror and submitted to qualified investors or special categories of investors, including information disclosed in the context of
meetings relating to offers of securities, shall be made available to all qualified investors or
special categories of investors to whom the offer is addressed.
Part 8
Language

30

(1) Where an offer to the public is only made in Denmark or admission to trading on a regulated
market is only sought in Denmark, and Denmark is the home country, the prospectus shall
be drawn up in Danish or English. The summary shall be translated into Danish.
(2) Where an offer to the public is made or admission to trading on a regulated market is sought
in one or more Member States of the European Union or one or more countries with which
the Union has entered into an agreement for the financial area except for Denmark, and
Denmark is the home country, the prospectus shall be drawn up either in a language accepted by the competent authority of the relevant host country, or in English. The competent authority of each host country may require that the summary be translated into the official
language(s).
(3) In the circumstances mentioned in subsection (2), for the purposes of administration by the
Danish FSA of the application for approval of the prospectus, the prospectus shall be drawn
up in either Danish, Norwegian, Swedish or English.
(4) Where an offer to the public is made or admission to trading on a regulated market is sought
in more than one Member State of the European Union or more than one country with which
the Union has entered into an agreement for the financial area, including Denmark, and
Denmark is the home country, the prospectus shall be drawn up in Danish or English. The
summary shall be translated into Danish. The prospectus shall also be made available either
in a language accepted by the competent authorities of the host countries or in English.
(5) Where an offer to the public is made or admission to trading on a regulated market in Denmark is sought, and the home country is a Member State of the European Union or a country
with which the Union has entered into an agreement for the financial area, except for Denmark, the prospectus shall be drawn up in Danish or English. The summary shall be translated into Danish.
(6) When, in one or more Member States of the European Union or one or more countries with
which the Union has entered into an agreement for the financial area, admission to trading
is sought of non-equity securities, cf. section 2a(2) of the Securities Trading etc. Act, and if

12

411

the nominal value per unit amounts to at least EUR 100,000, the prospectus shall be drawn
up either in a language accepted by the competent authorities of the home and host country, respectively, or in English.
(7) The Danish FSA may grant full or partial exemption from the requirement in subsections (1)
and (4) that the prospectus shall be drawn up in Danish or English, if the relevant offer, admission to trading, or security is of such a nature that considerations of investor protection
do not necessitate that the prospectus be available in Danish or English.
Part 9
Cross-border offers and admission to trading
31

A prospectus and any supplements thereto, which has been approved by a Member State of
the European Union or by a country with which the Union has entered into an agreement for
the financial area, except for Denmark, shall be valid for the offer to the public or the admission to trading in Denmark, provided that the Danish FSA and ESMA is notified in accordance with article 18 of Directive 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading, and provided that the provisions on validity in Part 5 are fulfilled.

32

(1) The Danish FSA shall, at the request of the issuer or the person responsible for drawing up
the prospectus, provide the competent authority of the host country and the issuer or the
person responsible for drawing up the prospectus with a certificate of approval, if a public
offer of securities or admission to trading of securities is planned in one or more Member
States of the European Union or one or more countries with which the Union has entered into an agreement for the financial area.
(2) The Danish FSA shall provide the certificate of approval for the competent authority in the
host country as well as the issuer or the person responsible for drawing up the prospectus,
cf. subsection (1), no later than three business days after receipt of the request or, if the
request is submitted together with the application for approval of the prospectus, within one
business day after the approval of the prospectus.
(3) The certificate of approval shall state that the prospectus has been drawn up in accordance
with Directive 2010/73/EU on the prospectus to be published when securities are offered to
the public or admitted to trading, and a copy of the prospectus shall be enclosed. If the provisions of section 21 have applied, this shall be stated in the certificate as well as the reason
for this.
(4) If the competent authority of the host country requires that the summary be translated, the
issuer or the person responsible for drawing up the prospectus shall submit a translated
summary to the Danish FSA. The translated summary shall be enclosed with the certificate
of approval sent by the Danish FSA to the competent authority of the host country, cf. subsection (1).

13

412

(5) The procedure mentioned in subsections (1)-(4) shall also be followed for any supplements
to the prospectus.
33

(1) When Denmark is the home country, the Danish FSA may approve a prospectus with regard
to issuers with their registered office in a country outside the European Union or a country
with which the Union has entered into an agreement for the financial area, which has been
drawn up in accordance with legislation in a country outside the European Union or a country with which the Union has entered into an agreement for the financial area, with a view to
an offer to the public or admission to trading in Denmark, on the following conditions:
1)

The prospectus has been drawn up in accordance with international standards set by international securities commissions, including the IOSCO disclosure standards.

2)

The information requirements pursuant to the legislation of the relevant country, including information of a financial nature, are equivalent to the requirements under Directive
2003/71/EC on the prospectus to be published when securities are offered to the public
or admitted to trading.

(2) Sections 30-32 shall apply correspondingly for offers to the public or admission to trading of
securities issued by an issuer with its registered office in a country outside the European Union or a country with which the Union has entered into an agreement for the financial area.
34

(1) If the Danish FSA finds that an issuer or an offeror has acted in contravention of the provisions of Part 6 of the Securities Trading etc. Act and of this Executive Order in connection
with a public offer of securities in Denmark, the Danish FSA shall bring the matter before the
competent authority of the home country of the issuer and the ESMA.
(2) The Danish FSA shall take appropriate measures in order to protect investors after informing
the competent authority of the home country of the issuer or offeror, and the ESMA, if the
issuer or the financial undertaking responsible for the public offer continues to contravene
the provisions of Part 6 of the Securities Trading etc. Act and of this Executive Order.
Part 10
Transitional provisions

35

Issuers which have their registered office in a country outside the European Union or a
country with which the Union has entered into an agreement for the financial area and
whose securities have been admitted to trading on a regulated market in a Member State of
the European Union or a country with which the Union has entered into an agreement for the
financial area on 1 July 2005, shall choose their competent authority in accordance with the
regulations of section 8. The relevant issuer shall notify its decision to the competent authority in the chosen home country no later than 31 December 2005.

14

413

Part 11
Penalty provisions
36

(1) Intentional or grossly negligent violation of section 16(1), (2), 2nd clause and (3), section
17(2), section 18(2) and (3), section 19(1), 2nd and 3rd clauses, and (2), section 20(1),
section 25, section 26(3), 2nd clause, section 27(1), 1st clause, sections 28 and 29 of this
Executive Order shall be liable to a fine.
(2) Intentional or grossly negligent violation of articles 4-20, article 22(1), 1st and 2nd indents,
(4) and (5), article 25(1) and (2) and article 26(1), of Commission Regulation no. 809/2004
of 29 April 2004 (implementing Directive 2003/71/EC of the European Parliament and of the
Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements)
shall be liable to a fine.
(3) Companies, etc. (legal persons) may incur criminal liability according to the regulations in
chapter 5 of the Criminal Code.
Part 12
Entry into force

37

(1) This Executive Order shall enter into force on 1 July 2012.
(2) At the same time Executive Order no. 223 of 10 March 2010 on the Prospectus to be Published for Securities Admitted to Trading on a Regulated Market and for Offers to the Public
of Securities of more than EUR 2,500,000 shall be repealed.

Danish Financial Supervisory Authority, 19 June 2012

Ulrik Ndgaard
/ Hanne Re Larsen

15

414

This translation was carried out by the professional translation agency GlobalDenmark Translations on
behalf of the Danish Financial Supervisory Authority. The text is to be regarded as an unofficial translation based on the latest official Executive Order. Only the Danish document has legal validity.

Executive Order on Prospectuses for Offers to the Public of Certain Securities

between EUR 1,000,000 and EUR 5,000,000
Executive Order no. 644 of 19 June 2012

The following shall be laid down pursuant to section 43(3), section 44(6), section 46(2) and section
93(4) of the Securities Trading etc. Act, cf. Consolidating Act no. 883 of 9 August 2011:

Part 1
Scope
1

The regulations in this Executive Order shall apply to the securities mentioned in section
43(2) of the Securities Trading etc. Act, for offers to the public between EUR 1,000,000 and
EUR 5,000,000.
Part 2
Exemptions from the obligation to publish a prospectus

(1) The obligation to publish a prospectus pursuant to Part 12 of the Securities Trading etc. Act
shall not apply to the following offers:
1)

Securities offered exclusively to qualified investors, cf. section 2 of the Executive Order
on Prospectuses for Securities Admitted to Trading on a Regulated Market and for Offers
to the Public of Securities of more than EUR 5,000,000.

2)

Securities offered to fewer than 150 natural or legal persons per Member State of the
European Union or per country with which the Union has entered into an agreement for
the financial area, who are not qualified investors, cf. section 2 of the Executive Order
on Prospectuses for Securities Admitted to Trading on a Regulated Market and for Offers
to the Public of Securities of more than EUR 5,000,000.

3)

Securities offered to investors who acquire securities for a total of no less than EUR
100,000 per investor for each separate offer.

4)

Securities offered with a nominal value per security totalling no less than EUR 100,000.

(2) Any resale of securities which were previously covered by one or more of the offers in subsection (1) shall be considered as a separate offer, and a decision shall be made as to
whether the resale is an offer of securities to the public for which there is an obligation to
publish a prospectus.

415

The obligation to publish a prospectus pursuant to Part 12 of the Securities Trading etc. Act
shall not apply to the following securities:
1)

Units in collective investment schemes subject to the Investment Associations etc. Act.

2)

Securities issued by

a)

a Member State of the European Union or a country with which the Union has entered
into an agreement for the financial area, or by one of the relevant countrys regional or
municipal authorities, or

b)

International public-law institutions, of which one or more Member States of the European Union or one or more countries with which the Union has entered into an agreement for the financial area, are members.

3)

Securities offered in connection with a takeover bid, provided that a document is made
available containing information which is equivalent to that in the prospectus.

4)

Securities offered, allotted or to be allotted in connection with a merger or division of an

undertaking, provided that a document is made available containing information which is
equivalent to that in the prospectus.

5)

Bonus shares.

6)

Shares offered with a view to substitution of shares of the same class already issued, if
the issuing of such new shares does not involve any increase in the issued share capital.

7)

Securities offered, allotted or to be allotted to existing or former members, of the board

of directors or supervisory board or employees of the issuing company or a group company, cf. section 5(1), no. 9 of the Financial Business Act. This is provided that the securities are offered, allotted or to be allotted by the issuing company and that the company has its head office or registered office in the European Union or one or more countries with which the Union has entered into an agreement for the financial area, and that
a document is made available containing information on the number and class of the securities as well as the reasons for, and details of, the offer.

8)

Subsection (1), no.7 shall also apply for a company established outside the European
Union, the shares of which are admitted to trading on a regulated market or on a market in a third country. In the latter case the exemption shall apply, provided there is adequate information, including the document dealt with in subsection (1), no. 7, as a
minimum in a language customary in the sphere of international finance, and that the
European Commission has made an equivalence decision regarding the market in the
relevant third country.

416

9)

Securities resulting from conversion of convertible bonds or from the exercise of the
rights conferred by warrants, in the case of publication of a prospectus in connection
with a public offer of the warrants or convertible bonds concerned.

10) Bonds or other negotiable securities equivalent to bonds, provided that they are issued
by credit institutions, banks or finance institutions under public supervision, and the securities are issued in a continuous or repeated manner.
11) Bonds or other negotiable securities equivalent to bonds, if issued by legal persons on
the basis of a state monopoly and established or regulated in pursuance of special legislation, or if loans are unconditionally and irrevocably guaranteed by a Member State of
the European Union or a country with which the Union has entered into an agreement
for the financial area, or by one of the relevant countrys regional or municipal authorities.
12) Bonds or other negotiable securities equivalent to bonds, if issued by legal persons established in pursuance of special legislation, the business activities of whom consist of:
a)

raising funds under state control through the issue of bonds, and

b)

financing production activities by means of the funds raised by the relevant legal persons or funds provided by the state, or participating in such activity through acquisition
of units, and whose bonds, in respect of official stock exchange listing, are equal to
bonds issued or guaranteed by the state.
Part 3
The contents and language of the prospectus

(1) The prospectus shall contain information on the persons responsible for the prospectus, stating their full name, position and address or possible business address as well as information
on the matters stated in sections 5-11.
(2) The persons responsible shall declare that, as far as they know, the information in the prospectus is correct, and that, to the best of their knowledge, the information contained in the
prospectus is considered necessary to enable investors and investment advisors to make an
informed judgement of the issuer's assets and liabilities, financial position, profit and loss,
and prospects, as well as of any guarantor, and of the rights attaching to the securities offered to the public.

Information on the offer to the public and on the securities included in the offer shall at
least contain:
1)

The purpose of the offer.

2)

The type of the securities offered, cf. section 43(2) of the Securities Trading etc. Act.

417

3)

The nominal value of the securities and the number of securities offered.

4)

The rights attached to the securities.

5)

Any restrictions on the negotiability of the securities.

6)

The price at which the securities are offered, or the method by which the price is fixed,
including specification of the expected interval for the price.

7)

More detailed regulations on any subscription rights.

8)

Date of commencement of the right to dividends on the securities, including interest.

9)

Tax deducted at source on the dividends.

10) Offer period.

11) Who, if relevant, has underwritten or is guaranteeing the issue.
12) The possible market, on which the securities can be traded.
13) Payment and time limit for delivery of the securities.
6

(1) Information on the issuer and the capital position of the issuer shall at least contain:
1)

Name and registered office.

2)

Date of incorporation.

3)

The legal form and the current legislation.

4)

The object laid down in the articles of association.

5)

If the issuer is registered in a public register (register of companies, trading register or

similar), where and under which registration number this is.

6)

Amount of issuer's present capital and any division hereof into classes.

7)

Most important characteristics of the securities making up the capital.

8)

Amount of any unpaid part of the capital.

9)

Total nominal value of convertible bonds or warrants as well as more detailed provisions
on conversion or subscription.

10) If relevant, the group of companies to which the issuer belongs.

(2) If the issuer is a limited company, the following shall also be disclosed:

418

1)

Any restrictions on voting rights and ownership.

2)

The highest amount by which the central management body is empowered to increase
the capital, and the duration of such empowerment.

3)
7

The shareholders covered by section 56 of the Companies Act.

(1) The prospectus shall contain a description of the main activities of the issuer, including information on the assets and liabilities, financial position, and profit or loss of the issuer as
well as important events which have influenced the activities, the issuers dependence on
patents, licences and agreements of fundamental importance, information on important investments in progress, information on risk factors for the issuer as well as information on
any legal proceedings of significant financial importance to the issuer.
(2) If the issuer has been operating for such a short period that the first annual financial statements have not yet been prepared, the information pursuant to subsection (1) shall be provided for the period in which the undertaking has been operating.

(1) In connection with information on the assets and liabilities, financial position, and profit or
loss of the issuer, the annual financial statements for the latest financial year and any consolidated financial statements shall be included in the prospectus. The issuer may omit inclusion of one of the financial statements, if this does not contain important supplementary
information.
(2) Any interim financial statements, including half-year financial statements, shall be included
in the prospectus, if such financial statements have been made public after the end of the
previous financial year.
(3) Information on the development of the issuer since the end of the last financial year, as well
as prospects for the future, shall appear to the extent that these may be material for assessment of the issuer.
(4) The issuer's auditor shall be stated with full name and address.
(5) If the auditor has made any qualifications or refused to endorse the annual financial statements and the consolidated accounts or the interim financial statements, this fact shall be
disclosed and the reasons given. If the auditor has given supplementary information in his
endorsement, this shall also be disclosed.

(1) The issuer's board of directors or supervisory board and board of management and any
board of representatives shall be stated with their full name, function and address or any
business address.

419

(2) In connection with offers of shares to the public, remuneration paid in connection with the
offer to the board of directors or supervisory board, board of management and any board of
representatives shall be disclosed.
10

If the offer includes bonds, for which a guarantee is provided by one or more legal entities,
the information mentioned in sections 6-9 shall be provided for the guarantor.

11

(1) If the offer concerns convertible bonds or warrants, information shall also be provided on
the shares or bonds to which they give a right, as well as on conditions and the regulations
for conversion or subscription.
(2) If the undertaking, which is ultimately to issue shares and bonds, is different from the issuer
of convertible bonds or warrants, the information in sections 6-9 shall also be provided for
the ultimate issuer of the shares or bonds.

12

Where, exceptionally, certain information required by sections 4-11 does not exist due to
the issuer's sphere of activity or to the legal form of the issuer or if this information does
not exist for the securities to which the prospectus relates, the prospectus shall contain other information equivalent to the required information.

13

Advertisements relating to an offer to the public of securities shall state that a prospectus
has been or will be published. Advertisements shall state where the prospectus has been or
will be made available to investors.

14

(1) Every significant new factor, material mistake or inaccuracy relating to the information included in the prospectus, which is capable of affecting the assessment of the securities and
which arises or is noted between the time when the prospectus is approved and the final
closing of the offer to the public, shall be mentioned in a supplement to the prospectus.
Such a supplement shall be published in accordance with the regulations in the Executive
Order on Publication by the Danish Business Authority of Prospectuses in connection with
First Public Offers of Certain Securities.
(2) Investors who have agreed to purchase or subscribe to securities before publication of the
supplement may, within two business days of publication of the supplement, withdraw their
acceptance, provided no securities have been delivered. This time limit may be extended by
the issuer or the person responsible for drawing up the prospectus. The final date for withdrawal of agreement shall appear in the supplement.

15

A prospectus shall be drawn up pursuant to sections 4-14 and be drafted in Danish.

Part 4
Validity

16

(1) A prospectus shall be valid for 12 months after approval.

420

(2) If a supplement to the prospectus is required pursuant to section 14, the supplement shall
be approved as a condition for the validity of the prospectus.
Part 5
Submission, registration and publication etc.
17

(1) Prospectuses as mentioned in sections 4-16 shall be submitted to the Danish FSA in two
copies.
(2) The Danish FSA shall ensure that the prospectuses referred to in sections 4-16 comply with
the requirements of Part 12 of the Securities Trading etc. Act and this Executive Order. The
Danish FSA shall deliver one copy of the prospectuses to the Danish Business Authority.

18

Receipt of prospectuses referred to in sections 4-16 shall be registered with and published
by the Danish Business Authority.

19

Any offer to the public shall not take place until five business days after the prospectus has
been published, cf. section 18.
Part 6
Penalty provisions

20

(1) Any intentional or grossly negligent violation of sections 4-13, section 14(1), 1st clause,
sections 15 and 19 of this Executive Order shall be liable to a fine.
(2) Companies etc. (legal persons) may incur criminal liability according to the regulations in
chapter 5 of the Criminal Code.
Part 7
Entry into force

21

(1) This Executive Order shall enter into force on 1 July 2012.
(2) At the same time Executive Order no. 222 of 10 March 2010 on the Prospectus to be Published for Offers to the Public of Certain Securities of between EUR 100,000 and EUR
2,500,000 shall be repealed.

Danish Financial Supervisory Authority, 19 June 2012

Ulrik Ndgaard
/ Hanne Re Larsen

421

This document is meant purely as a documentation tool and the institutions do not assume
any liability for its contents

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COMMISSION REGULATION (EC) No 809/2004

of 29 April 2004
implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses
and dissemination of advertisements
(Text with EEA relevance)

(OJ L 149, 30.4.2004, p. 3)

Amended by:
Official Journal
No
M1

Commission Regulation (EC) No 1787/2006 of 4 December

Page

date

L 337

17

5.12.2006

L 61

24

28.2.2007

L 340

17

19.12.2008

L 103

13

13.4.2012

L 150

9.6.2012

L 256

22.9.2012

2006
M2

Commission Regulation (EC) No 211/2007 of 27 February

2007

M3

Commission Regulation (EC) No 1289/2008 of 12 December 2008

M4

Commission Delegated Regulation (EU) No 311/2012 of 21

December 2011

M5

Commission Delegated Regulation (EU) No 486/2012 of 30

March 2012

M6

Commission Delegated Regulation (EU) No 862/2012 of 4

June 2012

Corrected by:
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Corrigendum, OJ L 215, 16.6.2004, p. 3 (809/2004)

422

B
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COMMISSION REGULATION (EC) No 809/2004

of 29 April 2004
implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements
(Text with EEA relevance)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,
Having regard to Directive 2003/71/EC of the European Parliament and the Council of 4 November 2003
on the prospectus to be published when securities are offered to the public or admitted to trading and
amending Directive 2001/34/EC 1, and in particular Article 5(5), Article 7, Article 10(4), Article 11(3),
Article 14(8) and Article 15(7) thereof,
After consulting the Committee of European Securities Regulators (CESR)

for technical advice,

Whereas:
1

Directive 2003/71/EC lays down principles to be observed when drawing up prospectuses.

These principles need to be supplemented as far as the information to be given therein, the
format and aspects of publication, the information to be incorporated by reference in a prospectus and dissemination of advertisements are concerned.

Depending on the type of issuer and securities involved, a typology of minimum information
requirements should be established corresponding to those schedules that are in practice
most frequently applied. The schedules should be based on the information items required in
the IOSCO Disclosure Standards for cross-border offering and initial listings (part I) and on
the existing schedules of Directive 2001/34/EC of the European Parliament and of the Council of 28 May on the admission of securities to official stock exchange listing and on information to be published on those securities 3.

Information given by the issuer, the offeror or the person asking for admission to trading on
a regulated market, according to this Regulation, should be subject to European Union provisions relating to data protection.

OJ L 345, 31.12.2003, p. 64.

CESR was established by Commission Decision 2001/527/EC (OJ L 191, 13.7.2001, p. 43).

OJ L 184, 6.7.2001, p. 1. Directive as last amended by Directive 2003/71/EC.

423

Care should be taken that, in those cases where a prospectus is composed of separate documents, duplication of information is avoided; to this end separate detailed schedules for
the registration document and for the securities note, adapted to the particular type of issuer and the securities concerned, should be laid down in order to cover each type of security.

The issuer, the offeror or the person asking for admission to trading on a regulated market
are entitled to include in a prospectus or base prospectus additional information going beyond the information items provided for in the schedules and building blocks. Any additional
information provided should be appropriate to the type of securities or the nature of the issuer involved.

In most cases, given the variety of issuers, the types of securities, the involvement or not of
a third party as a guarantor, whether or not there is a listing etc, one single schedule will
not give the appropriate information for an investor to make his investment decision. Therefore the combination of various schedules should be possible. A non exhaustive table of
combinations, providing for different possible combinations of schedules and building blocks
for most of the different type of securities, should be set up in order to assist issuers when
drafting their prospectus.

The share registration document schedule should be applicable to shares and other transferable securities equivalent to shares but also to other securities giving access to the capital
of the issuer by way of conversion or exchange. In the latter case this schedule should not
be used where the underlying shares to be delivered have already been issued before the issuance of the securities giving access to the capital of the issuer; however this schedule
should be used where the underlying shares to be delivered have already been issued but
are not yet admitted to trading on a regulated market.

Voluntary disclosure of profit forecasts in a share registration document should be presented

in a consistent and comparable manner and accompanied by a statement prepared by independent accountants or auditors. This information should not be confused with the disclosure
of known trends or other factual data with material impact on the issuers' prospects. Moreover, they should provide an explanation of any changes in disclosure policy relating to profit
forecasts when supplementing a prospectus or drafting a new prospectus.

Pro forma financial information is needed in case of significant gross change, i. e. a variation
of more than 25 % relative to one or more indicators of the size of the issuer's business, in
the situation of an issuer due to a particular transaction, with the exception of those situations where merger accounting is required.

10

The schedule for the share securities note should be applicable to any class of share since it
considers information regarding a description of the rights attached to the securities and the
procedure for the exercise of any rights attached to the securities.

424

11

Some debt securities such as structured bonds incorporate certain elements of a derivative
security, therefore additional disclosure requirements related to the derivative component in
the interest payment should be included in the securities note schedule for debt securities.

12

The additional building block related to guarantee should apply to any obligation in relation
to any kind of security.

13

The asset backed securities registration document should not apply to mortgage bonds as
provided for in Article 5(4)(b) of Directive 2003/71/EC and other covered bonds. The same
should apply for the asset backed securities additional building block that has to be combined with the securities note for debt securities.

14

Wholesale investors should be able to make their investment decision on other elements
than those taken into consideration by retail investors. Therefore a differentiated content of
prospectus is necessary for debt and derivative securities aimed at those investors who purchase debt or derivative securities with a denomination per unit of at least EUR 50 000 or a
denomination in another currency provided that the value of such minimum denomination
when converted to EURO amounts to at least EURO 50 000.

15

In the context of depository receipts, emphasis should be put on the issuer of the underlying
shares and not on the issuer of the depository receipt. Where there is legal recourse to the
depository over and above a breach of its fiduciary or agency duties, the risk factors section
in the prospectus should contain full information on this fact and on the circumstances of
such recourse. Where a prospectus is drafted as a tripartite document (i.e. registration document, securities note and summary), the registration document should be limited to the information on the depository.

16

The banks registration document schedule should be applicable to banks from third countries
which do not fall under the definition of credit institution provided for in Article 1(1)(a) of
Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions

but have their regis-

tered office in a state which is a member of the OECD.

17

If a special purpose vehicle issues debt and derivative securities guaranteed by a bank, it
should not use the banks registration document schedule.

18

The schedule securities note for derivative securities should be applicable to securities
which are not covered by the other schedules and building blocks. The scope of this schedule
is determined by reference to the other two generic categories of shares and debt securities.
In order to provide a clear and comprehensive explanation to help investors understand how
the value of their investment is affected by the value of the underlying, issuers should be
able to use appropriate examples on a voluntary basis. For instance, for some complex de-

OJ L 126, 26.5.2000, p. 1. Directive as last amended by the 2003 Act of Accession.

425

rivatives securities, examples might be the most effective way to explain the nature of those
securities.
19

The additional information building block on the underlying share for certain equity securities should be added to the securities note for debt securities or substitute the item referring
to information required in respect of the underlying of the schedule securities note for derivative securities, depending on the characteristics of the securities being issued.

20

Member States and their regional or local authorities are outside the scope of Directive
2003/71/EC. However, they may choose to produce a prospectus in accordance with this Directive. Third country sovereign issuers and their regional or local authorities are not outside
the scope of Directive 2003/71/EC and are obliged to produce a prospectus if they wish to
make a public offer of securities in the Community or wish their securities to be admitted to
trading on a regulated market. For those cases, particular schedules should be used for the
securities issued by States, their regional and local authorities and by public international
bodies.

21

A base prospectus and its final terms should contain the same information as a prospectus.
All the general principles applicable to a prospectus are applicable also to the final terms.
Nevertheless, where the final terms are not included in the base prospectus they do not
have to be approved by the competent authority.

22

For some categories of issuers the competent authority should be entitled to require adapted
information going beyond the information items included in the schedules and building
blocks because of the particular nature of the activities carried out by those issuers. A precise and restrictive list of issuers for which adapted information may be required is necessary. The adapted information requirements for each category of issuers included in this list
should be appropriate and proportionate to the type of business involved. The Committee of
European Securities Regulators could actively try to reach convergence on these information
requirements within the Community. Inclusion of new categories in the list should be restricted to those cases where this can be duly justified.

23

In the case of completely new types of securities which cannot be covered by the existing
schedules or any of their combinations, the issuer should still have the possibility to apply
for approval for a prospectus. In those cases he should be able to discuss the content of the
information to be provided with the competent authority. The prospectus approved by the
competent authority under those circumstances should benefit from the single passport established in Directive 2003/71/EC. The competent authority should always try to find similarities and make use as much as possible of existing schedules. Any additional information
requirements should be proportionate and appropriate to the type of securities involved.

24

Certain information items required in the schedules and building blocks or equivalent information items are not relevant to a particular security and thus may be inapplicable in some
specific cases; in those cases the issuer should have the possibility to omit this information.

426

25

The enhanced flexibility in the articulation of the base prospectus with its final terms compared to a single issue prospectus should not hamper the easy access to material information for investors.

26

With respect to base prospectuses, it should be set out in an easily identifiable manner
which kind of information will have to be included as final terms. This requirement should be
able to be satisfied in a number of different ways, for example, if the base prospectus contains blanks for any information to be inserted in the final terms or if the base prospectus
contains a list of the missing information.

27

Where a single document includes more than one base prospectus and each base prospectus
would require approval by a different home competent authority, the respective competent
authorities should act in cooperation and, where appropriate, transfer the approval of the
prospectus in accordance with Article 13(5) of Directive 2003/71/EC, so that the approval by
only one competent authority is sufficient for the entire document.

28

Historical financial information as required in the schedules should principally be presented

in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the
Council of 19 July 2002 on the application of international accounting standard

or Member

States accounting standards. Specific requirements should, however, be laid down for third
country issuers.
29

For the purposes of publication of the document referred to in Article 10 of Directive

2003/71/EC, issuers should be allowed to choose the method of publication they consider
adequate among those referred to in Article 14 of that Directive. In selecting the method of
publication they should consider the objective of the document and that it should permit investors a fast and cost-efficient access to that information.

30

The aim of incorporation by reference, as provided for in Article 11 of Directive 2003/71/EC,

is to simplify and reduce the costs of drafting a prospectus; however this aim should not be
achieved to the detriment of other interests the prospectus is meant to protect. For instance, the fact that the natural location of the information required is the prospectus, and
that the information should be presented in an easily and comprehensible form, should also
be considered. Particular attention should be granted to the language used for information
incorporated by reference and its consistency with the prospectus itself. Information incorporated by reference may refer to historical data, however if this information is no more relevant due to material change, this should be clearly stated in the prospectus and the updated information should also be provided.

31

Where a prospectus is published in electronic form, additional safety measures compared to

traditional means of publication, using best practices available, are necessary in order to
maintain the integrity of the information, to avoid manipulation or modification from unau-

OJ L 243, 11.9.2002, p. 1.

427

thorised persons, to avoid altering its comprehensibility and to escape from possible adverse
consequences from different approaches on offer of securities to the public in third countries.
32

The newspaper chosen for the publication of a prospectus should have a wide area of distribution and a high circulation.

33

A home Member State should be able to require publication of a notice stating how the prospectus has been made available and where it can be obtained by the public. Where a home
Member State requires publication of notices in its legislation, the content of such a notice
should be kept to the necessary items information to avoid duplication with the summary.
These home Member States may also require that an additional notice in relation to the final
terms of a base prospectus is to be published.

34

In order to facilitate centralising useful information for investors a mention should be included in the list of approved prospectuses posted in the web-site of the competent authority of
the home Member State, indicating how a prospectus has been published and where it can
be obtained.

35

Member States should ensure effective compliance of advertising rules concerning public offers and admission to trading on a regulated market. Proper co-ordination between competent authorities should be achieved in cross-border offerings or cross-border admission to
trading.

36

In view of the interval between the entry into force of Regulation (EC) No 1606/2002 and
the production of certain of its effects, a number of transitional arrangements for historical
financial information to be included in a prospectus should be provided for, in order to prevent excessive burden on issuers and enable them to adapt the way they prepare and present historical financial information within a reasonable period of time after the entry into
force of Directive 2003/71/EC.

37

The obligation to restate in a prospectus historical financial information according to Regulation (EC) N 1606/2002 does not cover securities with a denomination per unit of at least
EUR 50 000; consequently such transitional arrangements are not necessary for such securities.

38

For reasons of coherence it is appropriate that this Regulation applies from the date of
transposition of Directive 2003/71/EC.

39

Whereas the measures provided for in this Regulation are in accordance with the opinion of
the European Securities Committee,

428

HAS ADOPTED THIS REGULATION:

CHAPTER I
Subject matter and definitions

Article 1
Subject matter
This Regulation lays down:
1)

the format of prospectus referred to in Article 5 of Directive 2003/71/EC;

2)

the minimum information requirements to be included in a prospectus provided for in

Article 7 of Directive 2003/71/EC;

M5
C1
4)

the modalities according to which information can be incorporated by reference in a prospectus provided for in Article 11 of Directive 2003/71/EC;

5)

the publication methods of a prospectus in order to ensure that a prospectus is publicly

available according to Article 14 of Directive 2003/71/EC;

6)

the methods of dissemination of advertisements referred to in Article 15 of Directive

2003/71/EC.
Article 2
Definitions

For the purposes of this Regulation, the following definitions shall apply in addition to those laid down in
Directive 2003/71/EC:
1

schedule means a list of minimum information requirements adapted to the particular nature of the different types of issuers and/or the different securities involved;

building block means a list of additional information requirements, not included in one of
the schedules, to be added to one or more schedules, as the case may be, depending on the
type of instrument and/or transaction for which a prospectus or base prospectus is drawn
up;

risk factors means a list of risks which are specific to the situation of the issuer and/or the
securities and which are material for taking investment decisions;

429

special purpose vehicle means an issuer whose objects and purposes are primarily the issue
of securities;

asset backed securities means securities which:

a)

represent an interest in assets, including any rights intended to assure servicing, or the
receipt or timeliness of receipts by holders of assets of amounts payable there under;
or

b)

are secured by assets and the terms of which provide for payments which relate to
payments or reasonable projections of payments calculated by reference to identified or
identifiable assets;

umbrella collective investment undertaking means a collective investment undertaking invested in one or more collective investment undertakings, the asset of which is composed of
separate class(es) or designation(s) of securities;

property collective investment undertaking means a collective investment undertaking

whose investment objective is the participation in the holding of property in the long term;

public international body means a legal entity of public nature established by an international treaty between sovereign

advertisement means announcements:

a)

relating to an specific offer to the public of securities or to an admission to trading on a

regulated market;
and

b)
10

aiming to specifically promote the potential subscription or acquisition of securities;

profit forecast means a form of words which expressly states or by implication indicates a
figure or a minimum or maximum figure for the likely level of profits or losses for the current financial period and/or financial periods subsequent to that period, or contains data
from which a calculation of such a figure for future profits or losses may be made, even if no
particular figure is mentioned and the word profit is not used;

11

profit estimate means a profit forecast for a financial period which has expired and for
which results have not yet been published;

12

regulated information means all information which the issuer, or any person who has applied for the admission of securities to trading on a regulated market without the issuers

430

consent, is required to disclose under Directive 2001/34/EC or under Article 6 of Directive

2003/6/EC of the European Parliament and of the Council 6;

M5
13

Rights issue, means any issue of statutory pre-emption rights which allow for the subscription of new shares and is addressed only to existing shareholders. Rights issue also includes
an issue where such statutory pre-emption rights are disabled and replaced by an instrument or a provision conferring near identical rights to existing shareholders when those
rights meet the following conditions:
a)

shareholders are offered the rights free of charge;

b)

shareholders are entitled to take up new shares in proportion to their existing holdings,
or, in the case of other securities giving a right to participate in the share issue, in proportion to their entitlements to the underlying shares;

c)

the rights to subscribe are negotiable and transferable or, if not, the shares arising from
the rights are sold at the end of the offer period for the benefit of those shareholders
who did not take up those entitlements;

d)

the issuer is able, as regards the entitlements referred to in point (b), to impose limits
or restrictions or exclusions and make arrangements it considers appropriate to deal
with treasury shares, fractional entitlements and requirements laid down by law or by a
regulatory authority in any country or territory;

e)

the minimum period during which shares may be taken up is the same as the period for
the exercise of statutory pre-emption rights laid down in Article 29(3) of Council Directive 77/91/EEC 7( 2 );

f)

the rights lapse at the expiration of the exercise period.

Article 2a
Categories of information in the base prospectus and the final terms

The categories set out in Annex XX shall determine the degree of flexibility by which the information can be given in the base prospectus or the final terms. The categories shall be defined as follows:
a)

Category A means the relevant information which shall be included in the base prospectus. This information cannot be left in blank for later insertion in the final terms;

OJ L 96, 12.4.2003, p. 16

OJ L 26, 31.1.1977, p. 1.

10

431

b)

Category B means that the base prospectus shall include all the general principles related to the information required, and only the details which are unknown at the time of
the approval of the base prospectus can be left in blank for later insertion in the final
terms;

c)

Category C means that the base prospectus may contain a reserved space for later insertion for the information which was not known at the time of the approval of the base
prospectus. Such information shall be inserted in the final terms.

Where the conditions of Article 16(1) of Directive 2003/71/EC apply, a supplement shall be
required.

Where those conditions do not apply, the issuer, the offeror or the person asking for admission to trading on a regulated market shall publish a notice of the change.

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CHAPTER II
Minimum information

M5
Article 3
Minimum information to be included in a prospectus
A prospectus shall be drawn up by using one or a combination of the schedules and building blocks set
out in this Regulation.

M6
A prospectus shall contain the information items required in Annexes I to XVII and Annexes XX to XXX
depending on the type of issuer or issues and securities involved. Subject to Article 4a(1), a competent
authority shall not require that a prospectus contains information items which are not included in Annexes I to XVII or Annexes XX to XXX.

M5
In order to ensure conformity with the obligation referred to in Article 5(1) of Directive 2003/71/EC, the
competent authority of the home Member State, when approving a prospectus in accordance with Article
13 of that Directive, may, on a case-by-case basis, require the information provided by the issuer, the
offeror or the person asking for admission to trading on a regulated market to be completed, for each of
the information items.
Where the issuer, the offeror or the person asking for the admission to trading on a regulated market is
required to include a summary in a prospectus, in accordance with Article 5(2) of Directive 2003/71/EC,

11

432

the competent authority of the home Member State, when approving the prospectus in accordance with
Article 13 of that Directive, may, on a case-by-case basis, require certain information provided in the
prospectus, to be included in the summary.

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Article 4
Share registration document schedule
1

For the share registration document information shall be given in accordance with the
schedule set out in Annex I.

The schedule set out in paragraph 1 shall apply to the following:

1)

shares and other transferable securities equivalent to shares;

2)

other securities which comply with the following conditions:

a)

they can be converted or exchanged into shares or other transferable securities

equivalent to shares, at the issuers or at the investors discretion, or on the basis
of the conditions established a the moment of the issue, or give, in any other way,
the possibility to acquire shares or other transferable securities equivalent to
shares;
and

b)

provided that these shares or other transferable securities equivalent to shares are
or will be issued by the issuer of the security and are not yet traded on a regulated
market or an equivalent market outside the Community at the time of the approval
of the prospectus covering the securities, and that the underlying shares or other
transferable securities equivalent to shares can be delivered with physical settlement.
Article 4a

Share registration document schedule in cases of complex financial history or significant financial commitment
1

Where the issuer of a security covered by Article 4(2) has a complex financial history, or has
made a significant financial commitment, and in consequence the inclusion in the registration document of certain items of financial information relating to an entity other than the
issuer is necessary in order to satisfy the obligation laid down in Article 5(1) of Directive
2003/71/EC, those items of financial information shall be deemed to relate to the issuer. The
competent authority of the home Member State shall in such cases request that the issuer,
the offeror or the person asking for admission to trading include those items of information
in the registration document.

12

433

Those items of financial information may include pro forma information prepared in accordance with Annex II. In this context, where the issuer has made a significant financial commitment any such pro forma information shall illustrate the anticipated effects of the transaction that the issuer has agreed to undertake, and references in Annex II to the transaction shall be read accordingly.
2

M5 The competent authority shall base any request pursuant to the first subparagraph of
paragraph 1 on the requirements set out in item 20.1 of Annex I, item 15.1 of Annex XXIII,
item 20.1 of Annex XXV, item 11.1 of Annex XXVII and item 20.1 of Annex XXVIII as regards the content of financial information and the applicable accounting and auditing principles, subject to any modification which is appropriate in view of any of the following factors:

a)

the nature of the securities;

b)

the nature and range of information already included in the prospectus, and the existence of financial information relating to an entity other than the issuer in a form that
might be included in a prospectus without modification;

c)

the facts of the case, including the economic substance of the transactions by which the
issuer has acquired or disposed of its business undertaking or any part of it, and the
specific nature of that undertaking;

d)

the ability of the issuer to obtain financial information relating to another entity with
reasonable effort.

Where, in the individual case, the obligation laid down in Article 5(1) of Directive
2003/71/EC may be satisfied in more than one way, preference shall be given to the way
that is the least costly or onerous.
3

Paragraph 1 is without prejudice to the responsibility under national law of any other person, including the persons referred to in Article 6(1) of Directive 2003/71/EC, for the information contained in the prospectus. In particular, those persons shall be responsible for the
inclusion in the registration document of any items of information requested by the competent authority pursuant to paragraph 1.

For the purposes of paragraph 1, an issuer shall be treated as having a complex financial
history if all of the following conditions apply:

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a)

its entire business undertaking at the time that the prospectus is drawn up is not accurately represented in the historical financial information which it is required to provide
under item 20.1 of Annex I, item 15.1 of Annex XXIII, item 20.1 of Annex XXV, item
11.1 of Annex XXVII and item 20.1 of Annex XXVIII;

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b)

that inaccuracy will affect the ability of an investor to make an informed assessment as
mentioned in Article 5(1) of Directive 2003/71/EC; and

c)

information relating to its business undertaking that is necessary for an investor to

make such an assessment is included in financial information relating to another entity

For the purposes of paragraph 1, an issuer shall be treated as having made a significant financial commitment if it has entered into a binding agreement to undertake a transaction
which, on completion, is likely to give rise to a significant gross change.
In this context, the fact that an agreement makes completion of the transaction subject to
conditions, including approval by a regulatory authority, shall not prevent that agreement
from being treated as binding if it is reasonably certain that those conditions will be fulfilled.
In particular, an agreement shall be treated as binding where it makes the completion of the
transaction conditional on the outcome of the offer of the securities that are the subject
matter of the prospectus or, in the case of a proposed takeover, if the offer of securities that
are the subject matter of the prospectus has the objective of funding that takeover.

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6

For the purposes of paragraph 5 of this Article, and of item 20.2 of Annex I, item 15.2 of
Annex XXIII and item 20.2 of Annex XXV, a significant gross change means a variation of
more than 25 %, relative to one or more indicators of the size of the issuers business, in
the situation of an issuer.

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Article 5
Pro-forma financial information building block
For pro forma financial information, information shall be given in accordance with the building block set
out in Annex II.
Pro forma financial information should be preceded by an introductory explanatory paragraph that
states in clear terms the purpose of including this information in the prospectus.
Article 6
Share securities note schedule
1

For the share securities note information is necessary to be given in accordance with the
schedule set out in Annex III.

The schedule shall apply to shares and other transferable securities equivalent to shares.

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Article 7
Debt and derivative securities registration document schedule for securities with a denomination per unit of less than EUR M5 100 000
For the debt and derivative securities registration document concerning securities which are not covered
in Article 4 with a denomination per unit of less than EUR M5 100 000 or, where there is no individual denomination, securities that can only be acquired on issue for less than EUR M5 100 000
per security, information shall be given in accordance with the schedule set out in Annex IV.
Article 8
Securities note schedule for debt securities with a denomination per unit of less than EUR
M5 100 000
1

For the securities note for debt securities with a denomination per unit of less than EUR
M5 100 000 information shall be given in accordance with the schedule set out in Annex
V.

The schedule shall apply to debt where the issuer has an obligation arising on issue to pay
the investor 100 % of the nominal value in addition to which there may be also an interest
payment.

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Article 9
Guarantees building block
For guarantees information shall be given in accordance with the building block set out in Annex VI.

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Item 3 of Annex VI shall not apply where a Member State acts as guarantor.

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Article 10
Asset backed securities registration document schedule
For the asset backed securities registration document information shall be given in accordance with the
schedule set out in Annex VII.
Article 11
Asset backed securities building block
For the additional information building block to the securities note for asset backed securities information shall be given in accordance with the building block set out in Annex VIII.

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Article 12
Debt and derivative securities registration document schedule for securities with a denomination per unit of at least EUR M5 100 000
For the debt and derivative securities registration document concerning securities which are not covered
in Article 4 with a denomination per unit of at least EUR M5 100 000 or, where there is no individual denomination, securities that can only be acquired on issue for at least EUR M5 100 000 per security, information shall be given in accordance with the schedule set out in Annex IX.
Article 13
Depository receipts schedule
For depository receipts issued over shares information shall be given in accordance with the schedule
set out in Annex X.
Article 14
Banks registration document schedule
1

For the banks registration document for debt and derivative securities and those securities
which are not covered by Article 4 information shall be given in accordance with the schedule set out in Annex XI.

The schedule set out in paragraph 1 shall apply to credit institutions as defined in point (a)
of Article 1(1) of Directive 2000/12/EC as well as to third country credit institutions which
do not fall under that definition but have their registered office in a state which is a member
of the OECD.

These entities may also use alternatively the registration document schedules provided for under in Articles 7 and 12.
Article 15
Securities note schedule for derivative securities
1

For the securities note for derivative securities information shall be given in accordance with
the schedule set out in Annex XII.

The schedule shall apply to securities which are not in the scope of application of the other
securities note schedules referred to in Articles 6, 8 and 16, including certain securities
where the payment and/or delivery obligations are linked to an underlying.
Article 16
Securities note schedule for debt securities with a denomination per unit of at least EUR
M5 100 000

For the securities note for debt securities with a denomination per unit of at least EUR M5
100 000 information shall be given in accordance with the schedule set out in Annex XIII.

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The schedule shall apply to debt where the issuer has an obligation arising on issue to pay
the investor 100 % of the nominal value in addition to which there may be also an interest
payment.
Article 17
Additional information building block on the underlying share

For the additional information on the underlying share, the description of the underlying
share shall be given in accordance with the building block set out in Annex XIV.
In addition, if the issuer of the underlying share is an entity belonging to the same group,
the information required by the schedule referred to in Article 4 shall be given in respect of
that issuer.

The additional information referred to in the first subparagraph of paragraph 1 shall only apply to those securities which comply with both of the following conditions:
1)

they can be converted or exchanged into shares or other transferable securities equivalent to shares, at the issuers or at the investors discretion, or on the basis of the conditions established a the moment of the issue or give, in any other way, the possibility
to acquire shares or other transferable securities equivalent to shares;
and

2)

provided that these shares or other transferable securities equivalent to shares are or
will be issued by the issuer of the security or by an entity belonging to the group of that
issuer and are not yet traded on a regulated market or an equivalent market outside the
Community at the time of the approval of the prospectus covering the securities, and
that the underlying shares or other transferable securities equivalent to shares can be
delivered with physical settlement.
Article 18

Registration document schedule for collective investment undertakings of the closed-end type
1

In addition to the information required pursuant to items 1, 2, 3, 4, 5.1, 7, 9.1, 9.2.1, 9.2.3,
10.4, 13, 14, 15, 16, 17.2, 18, 19, 20, 21, 22, 23, 24, 25 of Annex I, for the registration
document for securities issued by collective investment undertakings of the closed-end type
information shall be given in accordance with the schedule set out in Annex XV.

The schedule shall apply to collective investment undertakings of the closed-end type holding a portfolio of assets on behalf of investors that:
1)

are recognised by national law in the Member State in which it is incorporated as a collective investment undertaking of the closed end type;
or

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2)

do not take or seek to take legal or management control of any of the issuers of its underlying investments. In such a case, legal control and/or participation in the administrative, management or supervisory bodies of the underlying issuer(s) may be taken
where such action is incidental to the primary investment objective, necessary for the
protection of shareholders and only in circumstances where the collective investment
undertaking will not exercise significant management control over the operations of that
underlying issuer(s).
Article 19

Registration document schedule for Member States, third countries and their regional and local authorities
1

For the registration document for securities issued by Member States, third countries and
their regional and local authorities information shall be given in accordance with the schedule set out in Annex XVI.

The schedule shall apply to all types of securities issued by Member States, third countries
and their regional and local authorities.

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Article 20
Registration document schedule for public international bodies and for issuers of debt securities guaranteed by a member state of the OECD
1

For the registration document for securities issued by public international bodies and for securities unconditionally and irrevocably guaranteed, on the basis of national legislation, by a
state which is member of the OECD information shall be given in accordance with the schedule set out in Annex XVII.

The schedule shall apply to:

all types of securities issued by public international bodies,

to debt securities unconditionally and irrevocably guaranteed, on the basis of national

legislation, by a state which is member of the OECD.

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Article 20a
Additional information building block for consent given in accordance with Article 3(2) of Directive 2003/71/EC
1

For the purposes of the third subparagraph of Article 3(2) of Directive 2003/71/EC, the prospectus shall contain the following:

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a)

the additional information set out in Sections 1 and 2A of Annex XXX where the consent
is given to one or more specified financial intermediaries;

b)

the additional information set out in Sections 1 and 2B of Annex XXX where the issuer or
the person responsible for drawing up the prospectus chooses to give its consent to all
financial intermediaries.

Where a financial intermediary does not comply with the conditions attached to consent as
disclosed in the prospectus, a new prospectus shall be required in accordance with the second paragraph of Article 3(2) of Directive 2003/71/EC.

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Article 21
Combination of schedules and building blocks
1

The use of the combinations provided for in the table set out in Annex XVIII shall be mandatory when drawing up prospectuses for the types of securities to which those combinations
correspond according to this table.

However, for securities not covered by those combinations further combinations may be used.

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2

The most comprehensive and stringent registration document schedule, i.e. the most demanding schedule in term of number of information items and the extent of the information
included in them, may always be used to issue securities for which a less comprehensive and
stringent registration document schedule is provided for, according to the following ranking
of schedules:
1)

1. share registration document schedule;

2)

2. debt and derivative securities registration document schedule for securities with a
denomination per unit of less than EUR M5 100 000 ;

3)

3. debt and derivative securities registration document schedule for securities with a
denomination per unit at least EUR M5 100 000 . M5

The issuer, the offeror and the person asking for admission to trading on a regulated market
may choose to draw up a prospectus in accordance with the proportionate schedules set out
in Annexes XXIII to XXIX instead of the schedules set out in Annexes I, III, IV, IX, X and XI
as described in the second subparagraph provided that the respective conditions laid down
in Articles 26a, 26b and 26c are fulfilled.
Where the issuer, the offeror and the person asking for admission to trading on a regulated
market makes that choice:

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a)

the reference to Annex I in Annex XVIII shall be read as a reference to Annex XXIII or
XXV;

b)

the reference to Annex III in Annex XVIII shall be read as a reference to Annex XXIV;

c)

the reference to Annex IV in Annex XVIII shall be read as a reference to Annex XXVI;

d)

the reference to Annex IX in Annex XVIII shall be read as a reference to Annex XXVII;

e)

the reference to Annex X in Annex XVIII shall be read as a reference to Annex XXVIII;

f)

he reference to Annex XI in Annex XVIII shall be read as a reference to Annex XXIX.

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Article 22
Minimum information to be included in a base prospectus and its related final terms

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1

A base prospectus shall be drawn up using one or a combination of schedules and building
blocks provided for in this Regulation according to the combinations for various types of securities set out in Annex XVIII.

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A base prospectus shall contain the information items required in Annexes I to XVII, Annex
XX and Annexes XXIII to XXX depending on the type of issuer and securities involved. Competent authorities shall not require that a base prospectus contains information items which
are not included in Annexes I to XVII, Annex XX or Annexes XXIII to XXX.

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In order to ensure conformity with the obligation referred to in Article 5(1) of Directive
2003/71/EC, the competent authority of the home Member State, when approving a base
prospectus in accordance with Article 13 of that Directive, may, on a case-by-case basis, require the information provided by the issuer, the offeror or the person asking for admission
to trading on a regulated market to be completed for each of the information items.
Where the issuer, the offeror or the person asking for the admission to trading on a regulated market is required to include a summary in a base prospectus, in accordance with Article
5(2) of Directive 2003/71/EC, the competent authority of the home Member State, when approving the base prospectus in accordance with Article 13 of that Directive, may, on a caseby-case basis, require certain information provided in the base prospectus to be included in
the summary.

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1a

The base prospectus may contain options with regard to information categorised as Category
A, Category B and Category C, required by the relevant securities note schedules and building blocks, and set out in Annex XX. The final terms shall determine which of these options
is applicable to the individual issue, by referring to the relevant sections of the base prospectus or by replicating such information.

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The issuer, the offeror or the person asking for admission to trading on a regulated market
may omit information items which are not known when the base prospectus is approved and
which can only be determined at the time of the individual issue.

The use of the combinations provided for in the table in Annex XVIII shall be mandatory
when drawing up base prospectuses for the types of securities to which those combinations
correspond according to this table.
However, for securities not covered by those combinations further combinations may be
used.

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4

The final terms attached to a base prospectus shall only contain the following:
a)

within the various securities notes schedules according to which the base prospectus is
drawn up, the information items in Categories B and C listed in Annex XX. When an item
is not applicable to a prospectus, the item shall appear in the final terms with the mention not applicable;

b)

on a voluntary basis, any additional information set out in Annex XXI;

c)

any replication of, or reference to, options already provided for in the base prospectus
which are applicable to the individual issue.

The final terms shall not amend or replace any information in the base prospectus.

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5

In addition to the information items set out in the schedules and building blocks referred to
in Articles 4 to 20 the following information shall be included in a base prospectus:
1)

indication on the information that will be included in the final terms;

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1a) a section containing a template, the form of the final terms, which has to be filled out
for each individual issue;

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2)

the method of publication of the final terms; if the issuer is not in a position to determine, at the time of the approval of the prospectus, the method of publication of the final terms, an indication of how the public will be informed about which method will be
used for the publication of the final terms;

3)

in the case of issues of non equity securities according to point (a) of Article 5(4) of Directive 2003/71/EC, a general description of the programme.

Only the following categories of securities may be contained in a base prospectus and its related final terms covering issues of various types of securities:
1)

asset backed securities;

2)

warrants falling under Article 17;

3)

non-equity

securities

provided

for

under

point

(b)

of

Article

5(4)

of

Directive

2003/71/EC;
4)

all other non-equity securities including warrants with the exception of those mentioned
in (2).

In drawing up a base prospectus the issuer, the offeror or the person asking for admission
to trading on a regulated market shall clearly segregate the specific information on each of
the different securities included in these categories.
7

Where an event envisaged under Article 16(1) of Directive 2003/71/EC occurs between the
time that the base prospectus has been approved and the final closing of the offer of each
issue of securities under the base prospectus or, as the case may be, the time that trading
on a regulated market of those securities begins, the issuer, the offeror or the person asking
for admission to trading on a regulated market shall publish a supplement prior to the final
closing of the offer or the admission of those securities to trading.

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Where the issuer needs to prepare a supplement concerning information in the base prospectus that relates to only one or several specific issues, the right of investors to withdraw their acceptances pursuant to Article 16(2) of Directive 2003/71/EC shall only apply to the relevant issues and not to any other
issues of securities under the base prospectus.

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Article 23
Adaptations to the minimum information given in prospectuses and base prospectuses
1

Notwithstanding Articles 3 second paragraph and 22(1) second subparagraph, where the issuers activities fall under one of the categories included in Annex XIX, the competent authority of the home Member State, taking into consideration the specific nature of the activities involved, may ask for adapted information, in addition to the information items included
in the schedules and building blocks set out in Articles 4 to 20, including, where appropriate,
a valuation or other experts report on the assets of the issuer, in order to comply with the
obligation referred to in Article 5(1) of Directive 2003/71/EC. The competent authority shall
forthwith inform the Commission thereof.
In order to obtain the inclusion of a new category in Annex XIX a Member State shall notify
its request to the Commission. The Commission shall update this list following the Committee procedure provided for in Article 24 of Directive 2003/71/EC.

By way of derogation of Articles 3 to 22, where an issuer, an offeror or a person asking for
admission to trading on a regulated market applies for approval of a prospectus or a base
prospectus for a security which is not the same but comparable to the various types of securities mentioned in the table of combinations set out in Annex XVIII, the issuer, the offeror
or the person asking for admission to trading on a regulated market shall add the relevant
information items from another securities note schedule provided for in Articles 4 to 20 to
the main securities note schedule chosen. This addition shall be done in accordance with the
main characteristics of the securities being offered to the public or admitted to trading on a
regulated market.

By way of derogation of Articles 3 to 22, where an issuer, an offeror or a person asking for
admission to trading on a regulated market applies for approval of a prospectus or a base
prospectus for a new type of security, the issuer, the offeror or the person asking for admission to trading on a regulated market shall notify a draft prospectus or base prospectus to
the competent authority of the home Member State.
The competent authority shall decide, in consultation with the issuer, the offeror or the person asking for admission to trading on a regulated market, what information shall be included in the prospectus or base prospectus in order to comply with the obligation referred to in
Article 5(1) of Directive 2003/71/EC. The competent authority shall forthwith inform the
Commission thereof.

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The derogation referred to in the first subparagraph shall only apply in case of a new type of
security which has features completely different from the various types of securities men-

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tioned in Annex XVIII, if the characteristics of this new security are such that a combination
of the different information items referred to in the schedules and building blocks provided
for in Articles 4 to 20 is not pertinent.
4

By way of derogation of Articles 3 to 22, in the cases where one of the information items required in one of the schedules or building blocks referred to in 4 to 20 or equivalent information is not pertinent to the issuer, to the offer or to the securities to which the prospectus
relates, that information may be omitted.

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Article 24
Content of the summary of the prospectus, of the base prospectus and of the individual issue
1

The issuer, the offeror or the person asking for the admission to trading on a regulated market shall determine the detailed content of the summary referred to in Article 5(2) of Directive 2003/71/EC in accordance with this Article.
A summary shall contain the key information items set out in Annex XXII. Where an item is
not applicable to a prospectus, such item shall appear in the summary with the mention not
applicable. The length of the summary shall take into account the complexity of the issuer
and of the securities offered, but shall not exceed 7 % of the length of a prospectus or 15
pages, whichever is the longer. It shall not contain cross-references to other parts of the
prospectus.
The order of the sections and of the elements of Annex XXII shall be mandatory. The summary shall be drafted in clear language, presenting the key information in an easily accessible and understandable way. Where an issuer is not under an obligation to include a summary in a prospectus pursuant to Article 5(2) of Directive 2003/71/EC, but produces an
overview section in the prospectus, this section shall not be entitled Summary unless the
issuer complies with all disclosure requirements for summaries laid down in this Article and
Annex XXII.

The summary of the base prospectus may contain the following information:
a)

information included in the base prospectus;

b)

options for information required by the securities note schedule and its building
block(s);

c)

information required by the securities note schedule and its building block(s) left in
blank for later insertion in the final terms.

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The summary of the individual issue shall provide the key information of the summary of the
base prospectus combined with the relevant parts of the final terms. The summary of the individual issue shall contain the following:
a)

the information of the summary of the base prospectus which is only relevant to the individual issue;

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b)

the options contained in the base prospectus which are only relevant to the individual
issue as determined in the final terms;

c)

the relevant information given in the final terms which has been previously left in blank
in the base prospectus.

Where the final terms relate to several securities which differ only in some very limited details, such as the issue price or maturity date, one single summary of the individual issue
may be attached for all those securities, provided the information referring to the different
securities is clearly segregated.
The summary of the individual issue shall be subject to the same requirements as the final
terms and shall be annexed to them.

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CHAPTER III
FORMAT OF THE PROSPECTUS, BASE PROSPECTUS AND SUPPLEMENTS

Article 25
Format of the prospectus
1

Where an issuer, an offeror or a person asking for the admission to trading on a regulated
market chooses, according to Article 5(3) of Directive 2003/71/EC to draw up a prospectus
as a single document, the prospectus shall be composed of the following parts in the following order:
1)

a clear and detailed table of contents;

2)

the summary provided for in Article 5 (2) of Directive 2003/71/EC;

3)

the risk factors linked to the issuer and the type of security covered by the issue;

4)

the other information items included in the schedules and building blocks according to
which the prospectus is drawn up.

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Where an issuer, an offeror or a person asking for the admission to trading on a regulated
market chooses, according to in Article 5(3) of Directive 2003/71/EC, to draw up a prospectus composed of separate documents, the securities note and the registration document
shall be each composed of the following parts in the following order:
1)

a clear and detailed table of content;

2)

as the case may be, the risk factors linked to the issuer and the type of security covered
by the issue;

3)

the other information items included in the schedules and building blocks according to
which the prospectus is drawn up.

In the cases mentioned in paragraphs 1 and 2, the issuer, the offeror or the person asking
for admission to trading on a regulated market shall be free in defining the order in the
presentation of the required information items included in the schedules and building blocks
according to which the prospectus is drawn up.

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4

Where the order of the items does not coincide with the order of the information provided
for in the schedules and building blocks according to which the prospectus is drawn up, the
competent authority of the home Member State may ask the issuer, the offeror or the person asking for the admission to trading on a regulated market to provide a cross reference
list for the purpose of checking the prospectus before its approval. Such list shall identify
the pages where each item can be found in the prospectus.

Where the summary of a prospectus must be supplemented according to Article 16(1) of Directive 2003/71/EC, the issuer, the offeror or the person asking for admission to trading on
a regulated market shall decide on a case-by-case basis whether to integrate the new information in the original summary by producing a new summary, or to produce a supplement to
the summary.
If the new information is integrated in the original summary, the issuer, the offeror or the
person asking for admission to trading on a regulated market shall ensure that investors can
easily identify the changes, in particular by way of footnotes.

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In any case, a new filing of final terms and summary of the individual issue annexed thereto
corresponding to offers made prior to the production of a new summary or a supplement to
the summary shall not be required.

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Article 26
Format of the base prospectus and its related final terms
1

Where an issuer, an offeror or a person asking for the admission to trading on a regulated
market chooses, according to Article 5 (4) of Directive 2003/71/EC to draw up a base prospectus, the base prospectus shall be composed of the following parts in the following order:
1)

a clear and detailed table of contents;

2)

the summary provided for in Article 5 (2) of Directive 2003/71/EC;

3)

the risk factors linked to the issuer and the type of security or securities covered by the
issue(s);

4)

the other information items included in the schedules and building blocks according to
which the prospectus is drawn up.

Notwithstanding paragraph 1, the issuer, the offeror or the person asking for admission to
trading on a regulated market shall be free in defining the order in the presentation of the
required information items included in the schedules and building blocks according to which
the prospectus is drawn up. The information on the different securities contained in the base
prospectus shall be clearly segregated.

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3

Where the order of the items does not coincide with the order of the information provided
for by the schedules and building blocks according to which the prospectus is drawn up, the
home competent authority may ask the issuer, the offeror or the person asking for admission to trading on a regulated market to provide a cross reference list for the purpose of
checking the prospectus before its approval. Such list should identify the pages where each
item can be found in the prospectus.

In case the issuer, the offeror or the person asking for admission to trading on a regulated
market has previously filed a registration document for a particular type of security and, at a
later stage, chooses to draw up base prospectus in conformity with the conditions provided
for in points (a) and (b) of Article 5(4) of Directive 2003/71/EC, the base prospectus shall
contain:
1)

the information contained in the previously or simultaneously filed and approved registration document which shall be incorporated by reference, following the conditions provided for in Article 28 of this Regulation;

2)

the information which would otherwise be contained in the relevant securities note less
the final terms where the final terms are not included in the base prospectus.

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5

The final terms shall be presented in the form of a separate document or be included in the
base prospectus. The final terms shall be prepared in an easily analysable and comprehensible form.
The items of the relevant securities note schedule and its building blocks, which are included
in the base prospectus, shall not be reproduced in the final terms.
The issuer, the offeror or the person asking for admission to trading on a regulated market
may include any of the additional information set out in Annex XXI in the final terms.
A clear and prominent statement shall be inserted in the final terms indicating:
a)

that the final terms have been prepared for the purpose of Article 5(4) of Directive
2003/71/EC and must be read in conjunction with the base prospectus and its supplement(s);

b)

where the base prospectus and its supplement(s) are published in accordance with Article 14 of Directive 2003/71/EC;

c)

that in order to get the full information both the base prospectus and the final terms
must be read in conjunction;

d)

that a summary of the individual issue is annexed to the final terms.

The final terms may include the signature of the legal representative of the issuer or the
person responsible for the prospectus according to the relevant national law or the signature
of both.

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5a

The final terms and the summary of the individual issue shall be drawn up in the same language respectively as the approved version of the form of the final terms of the base prospectus and as the summary of the base prospectus.
When the final terms are communicated to the competent authority of the host Member
State or, if there is more than one host Member State, to the competent authorities of the
host Member States, in accordance with Article 5(4) of Directive 2003/71/EC, the following
language rules shall apply to the final terms and the annexed summary:
a)

where the summary of the base prospectus is to be translated pursuant to Article 19 of

Directive 2003/71/EC, the summary of the individual issue annexed to the final terms
shall be subject to the same translation requirements as the summary of the base prospectus;

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b)

where the base prospectus is to be translated pursuant to Article 19 of Directive

2003/71/EC, the final terms and the summary of the individual issue annexed thereto,
shall be subject to the same translation requirements as the base prospectus.

The issuer shall communicate those translations, together with the final terms, to the competent authority of the host Member State or, if there is more than one host Member State,
to the competent authorities of the host Member States.

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6

Where a base prospectus relates to different securities, the issuer, the offeror or the person
asking for admission to trading on a regulated market shall include a single summary in the
base prospectus for all securities. The information on the different securities contained in
the summary, however, shall be clearly segregated.

Where the summary of a base prospectus must be supplemented according to Article 16(1)
of Directive 2003/71/EC, the issuer, the offeror or the person asking for admission to trading on a regulated market shall decide on a case-by-case basis whether to integrate the new
information in the original summary by producing a new summary, or by producing a supplement to the summary.
If the new information is integrated in the original summary of the base prospectus by producing a new summary, the issuer, the offeror or the person asking for admission to trading
on a regulated market shall ensure that investors can easily identify the changes, in particular by way of footnotes.

Issuers, offerors or persons asking for admission to trading on a regulated market may
compile in one single document two or more different base prospectuses.

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CHAPTER IIIa
PROPORTIONATE DISCLOSURE REGIME

Article 26a
Proportionate schedule for rights issues
1

The proportionate schedules set out in Annexes XXIII and XXIV shall apply to rights issues,
provided that the issuer has shares of the same class already admitted to trading on a regulated market or a multilateral trading facility as defined in point 15 of Article 4(1) of Directive 2004/39/EC of the European Parliament and of the Council 8( 1 ).

OJ L 145, 30.4.2004, p. 1.

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Issuers whose shares of the same class are already admitted to trading on a multilateral
trading facility can only make use of the schedules set out in Annexes XXIII and XXIV when
the rules of that multilateral trading facility contain the following:
a)

provisions requiring issuers to publish annual financial statements and audit reports
within 6 months after the end of each financial year, half yearly financial statements
within 4 months after the end of the first 6 months of each financial year and make public inside information as defined in point 1 of the first paragraph of Article 1 of Directive
2003/6/EC pursuant to Article 6 of that Directive;

b)

provisions requiring issuers to make the reports and information referred to in point (a)
available to the public by publishing them on their websites;

c)

provisions preventing insider dealing and market manipulation in accordance with Directive 2003/6/EC.

A statement at the beginning of the prospectus shall indicate clearly that the rights issue is
addressed to shareholders of the issuer and that the level of disclosure of the prospectus is
proportionate to that type of issue.
Article 26b

Proportionate schedules for small and medium-sized enterprises and companies with reduced
market capitalisation
The proportionate schedules set out in Annexes XXV to XXVIII shall apply when securities issued by
small and medium-sized enterprises and companies with reduced market capitalisation are offered to
the public or admitted to trading on a regulated market situated or operating within a Member State.
However, small and medium-sized enterprises and companies with reduced market capitalisation may
instead choose to draw up a prospectus in accordance with the schedules set out Annexes I to XVII and
XX to XXIV.

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Article 26c
Proportionate requirements for issues by credit institutions referred to in Article 1(2)(j) of
Directive 2003/71/EC
Credit institutions issuing securities referred to in Article 1(2)(j) of Directive 2003/71/EC that draw up a
prospectus in accordance with Article 1(3) of that Directive may choose to include in their prospectus
historical financial information covering only the last financial year, or such shorter period that the issuer has been in operation, in accordance with Annex XXIX to this Regulation.

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CHAPTER IV
INFORMATION AND INCORPORATION BY REFERENCE

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Article 28
Arrangements for incorporation by reference
1

Information may be incorporated by reference in a prospectus or base prospectus, notably if

it is contained in one the following documents:
1)

annual and interim financial information;

2)

documents prepared on the occasion of a specific transaction such as a merger or demerger;

3)

audit reports and financial statements;

4)

memorandum and articles of association;

5)

earlier approved and published prospectuses and/or base prospectuses;

6)

regulated information;

7)

circulars to security holders.

The documents containing information that may be incorporated by reference in a prospectus or base prospectus or in the documents composing it shall be drawn up following the
provisions of Article 19 of Directive 2003/71/EC.

If a document which may be incorporated by reference contains information which has undergone material changes, the prospectus or base prospectus shall clearly state such a circumstance and shall give the updated information.

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4

The issuer, the offeror or the person asking for admission to trading on a regulated market
may incorporate information in a prospectus or base prospectus by making reference only to
certain parts of a document, provided that it states that the non-incorporated parts are either not relevant for the investor or covered elsewhere in the prospectus.

When incorporating information by reference, issuers, offerors or persons asking for admission to trading on a regulated market shall endeavour not to endanger investor protection in
terms of comprehensibility and accessibility of the information.

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CHAPTER V
PUBLICATION AND DISSEMINATION OF ADVERTISEMENTS

Article 29
Publication in electronic form
1

The publication of the prospectus or base prospectus in electronic form, either pursuant to
points (c) (d) and (e) of Article 14(2) of Directive 2003/71/EC, or as an additional means of
availability, shall be subject to the following requirements:
1)

the prospectus or base prospectus shall be easily accessible when entering the web-site;

2)

the file format shall be such that the prospectus or base prospectus cannot be modified;

3)

the prospectus or base prospectus shall not contain hyper-links, with exception of links
to the elecnic addresses where information incorporated by reference is available;

4)

the investors shall have the possibility of downloading and printing the prospectus or
base prospectus.

The exception referred to in point 3 of the first subparagraph shall only be valid for documents incorporated by reference; those documents shall be available with easy and immediate technical arrangements.
2

If a prospectus or base prospectus for offer of securities to the public is made available on
the web-sites of issuers and financial intermediaries or of regulated markets, these shall
take measures, to avoid targeting residents in Members States or third countries where the
offer of securities to the public does not take place, such as the insertion of a disclaimer as
to who are the addressees of the offer.
Article 30
Publication in newspapers

In order to comply with point (a) of Article 14(2) of Directive 2003/71/EC the publication of
a prospectus or a base prospectus shall be made in a general or financial information newspaper having national or supra-regional scope;

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2

If the competent authority is of the opinion that the newspaper chosen for publication does
not comply with the requirements set out in paragraph 1, it shall determine a newspaper
whose circulation is deemed appropriate for this purpose taking into account, in particular,
the geographic area, number of inhabitants and reading habits in each Member State.

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Article 31
Publication of the notice
1

If a Member State makes use of the option, referred to in Article 14(3) of Directive
2003/71/EC, to require the publication of a notice stating how the prospectus or base prospectus has been made available and where it can be obtained by the public, that notice
shall be published in a newspaper that fulfils the requirements for publication of prospectuses according to Article 30 of this Regulation.
If the notice relates to a prospectus or base prospectus published for the only purpose of
admission of securities to trading on a regulated market where securities of the same class
are already admitted, it may alternatively be inserted in the gazette of that regulated market, irrespective of whether that gazette is in paper copy or electronic form.

The notice shall be published no later than the next working day following the date of publication of the prospectus or base prospectus pursuant to Article 14(1) of Directive
2003/71/EC.

The notice shall contain the following information:

1)

the identification of the issuer;

2)

the type, class and amount of the securities to be offered and/or in respect of which
admission to trading is sought, provided that these elements are known at the time of
the publication of the notice;

3)

the intended time schedule of the offer/admission to trading;

4)

a statement that a prospectus or base prospectus has been published and where it can

5)

if the prospectus or base prospectus has been published in a printed form, the addresses where and the period of time during which such printed forms are available to the
public;

6)

if the prospectus or base prospectus has been published in electronic form, the addresses to which investors shall refer to ask for a paper copy;

7)

the date of the notice.

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Article 32
List of approved prospectuses
The list of the approved prospectuses and base prospectuses published on the web-site of the competent authority, in accordance with Article 14(4) of Directive 2003/71/EC, shall mention how such prospectuses have been made available and where they can be obtained.
Article 33
Publication of the final terms of base prospectuses
The publication method for final terms related to a base prospectus does not have to be the same as
the one used for the base prospectus as long as the publication method used is one of the publication
methods indicated in Article 14 of the Directive 2003/71/EC.
Article 34
Dissemination of advertisements
Advertisements related to an offer to the public of securities or to an admission to trading on a regulated market may be disseminated to the public by interested parties, such as issuer, offeror or person
asking for admission, the financial intermediaries that participate in the placing and/or underwriting of
securities, notably by one of the following means of communication:
1)

addressed or unaddressed printed matter;

2)

electronic message or advertisement received via a mobile telephone or pager;

3)

standard letter;

4)

Press advertising with or without order form;

5)

catalogue;

6)

telephone with or without human intervention;

7)

seminars and presentations;

8)

radio;

9)

videophone;

10) videotext;
11) electronic mail;
12) facsimile machine (fax);

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13) television;

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14) notice;
15) bill;
16) poster;
17) brochure;
18) web posting including internet banners.

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Where no prospectus is required in accordance with Directive 2003/71/EC, any advertisement shall include a warning to that effect unless the issuer, the offeror or the person asking for admission to trading on a regulated market chooses to publish a prospectus which complies with Directive 2003/71/EC
and this Regulation.

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CHAPTER VI
TRANSITIONAL AND FINAL PROVISIONS

Article 35
Historical financial information
1

The obligation for Community issuers to restate in a prospectus historical financial information according to Regulation (EC) No 1606/2002, set out in Annex I item 20.1, Annex IV
item 13.1, Annex VII items 8.2, Annex X items 20.1 and Annex XI item 11.1 shall not apply
to any period earlier than 1 January 2004 or, where an issuer has securities admitted to
trading on a regulated market on 1 July 2005, until the issuer has published its first consolidated annual accounts with accordance with Regulation (EC) No 1606/2002.

Where a Community issuer is subject to transitional national provisions adopted pursuant

Article 9 of Regulation (EC) No 1606/2002, the obligation to restate in a prospectus historical financial information does not apply to any period earlier than 1 January 2006 or, where
an issuer has securities admitted to trading on a regulated market on 1 July 2005, until the
issuer has published its first consolidated annual accounts with accordance with Regulation
(EC) No 1606/2002.

Until 1 January 2007 the obligation to restate in a prospectus historical financial information
according to Regulation (EC) No 1606/2002, set out in Annex I item 20.1, Annex IV item

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13.1, Annex VII items 8.2, Annex X items 20.1 and Annex XI item 11.1 shall not apply to issuers from third countries:
1)

who have their securities admitted to trading on a regulated market on 1 January 2007;
and

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2)

who have presented and prepared historical financial information according to the national accounting standards of a third country.

In this case, historical financial information shall be accompanied with more detailed and/or
additional information if the financial statements included in the prospectus do not give a
true and fair view of the issuer's assets and liabilities, financial position and profit and loss.
4

Third country issuers having prepared historical financial information according to internationally accepted standards as referred to in Article 9 of Regulation (EC) No 1606/2002 may
use that information in any prospectus filed before 1 January 2007, without being subject to
restatement obligations.

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5

From 1 January 2009, third country issuers shall present their historical financial information
in accordance either with one of the following accounting standards:
a)

International Financial Reporting Standards adopted pursuant to Regulation (EC) No

1606/2002;

b)

International Financial Reporting Standards provided that the notes to the audited financial statements that form part of the historical financial information contain an explicit and unreserved statement that these financial statements comply with International Financial Reporting Standards in accordance with IAS 1 Presentation of Financial
Statements;

c)

Generally Accepted Accounting Principles of Japan;

d)

Generally Accepted Accounting Principles of the United States of America.

M4
In addition to standards referred to in the first subparagraph, from 1 January 2012, third
country issuers may present their historical financial information in accordance with the following standards:
a)

Generally Accepted Accounting Principles of the Peoples Republic of China;

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b)

Generally Accepted Accounting Principles of Canada;

c)

Generally Accepted Accounting Principles of the Republic of Korea.

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5a

Third country issuers are not subject to a requirement under item 20.1 of Annex I, item 13.1
of Annex IV, item 8.2 of Annex VII, item 20.1 of Annex X, item 11.1 of Annex XI, item 15.1
of Annex XXIII, item 20.1 of Annex XXV, item 13.1 of Annex XXVI, item 20.1 of Annex
XXVIII or item 11 of Annex XXIX, to restate historical financial information included in a prospectus and relevant for the financial years prior to financial years starting on or after 1
January 2015, or to a requirement under item 8.2.a of Annex VII, item 11.1 of Annex IX,
item 20.1.a of Annex X, item 11.1 of Annex XXVII or item 20.1 of Annex XXVIII to provide a
narrative description of the differences between International Financial Reporting Standards
adopted pursuant to Regulation (EC) No 1606/2002 and the accounting principles in accordance with which such information is drawn up relating to the financial years prior to financial
years starting on or after 1 January 2015, provided that the historical financial information
is prepared in accordance with the Generally Accepted Accounting Principles of the Republic
of India.

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6

The provisions of this Article shall also apply to Annex VI, item 3.
Article 36
Entry into force

This Regulation shall enter into force in Member States on the twentieth day after its publication in the
Official Journal of the European Union.
It shall apply from 1 July 2005.
This Regulation shall be binding in its entirety and directly applicable in all Member States.

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ANNEXES
Annexes I to XVII: Schedules and building blocks
Annex XVIII: Table of combinations of schedules and building blocks
Annex XIX: List of specialist issuers

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ANNEX I
Minimum Disclosure Requirements for the Share Registration Document (schedule)
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the Registration Document and, as the
case may be, for certain parts of it, with, in the latter case, an indication of such parts. In
the case of natural persons including members of the issuer's administrative, management
or supervisory bodies indicate the name and function of the person; in case of legal persons
indicate the name and registered office.

1.2

A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the registration
document is, to the best of their knowledge, in accordance with the facts and contains no
omission likely to affect its import. As the case may be, a declaration by those responsible
for certain parts of the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the part of the registration document for which they are responsible is, to the best of their knowledge, in accordance with
the facts and contains no omission likely to affect its import.

STATUTORY AUDITORS

2.1

Names and addresses of the issuers auditors for the period covered by the historical financial information (together with their membership in a professional body).

2.2

If auditors have resigned, been removed or not been re-appointed during the period covered
by the historical financial information, indicate details if material.

SELECTED FINANCIAL INFORMATION

3.1

Selected historical financial information regarding the issuer, presented for each financial
year for the period covered by the historical financial information, and any subsequent interim financial period, in the same currency as the financial information.

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The selected historical financial information must provide the key figures that summarise the
financial condition of the issuer.
3.2

If selected financial information for interim periods is provided, comparative data from the
same period in the prior financial year must also be provided, except that the requirement
for comparative balance sheet information is satisfied by presenting the year end balance
sheet information.

RISK FACTORS
Prominent disclosure of risk factors that are specific to the issuer or its industry in a section
headed Risk Factors.

INFORMATION ABOUT THE ISSUER

5.1

History and development of the issuer

5.1.1

The legal and commercial name of the issuer

5.1.2

The place of registration of the issuer and its registration number

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5.1.3

The date of incorporation and the length of life of the issuer, except where indefinite

5.1.4

The domicile and legal form of the issuer, the legislation under which the issuer operates, its
country of incorporation, and the address and telephone number of its registered office (or
principal place of business if different from its registered office)

5.1.5

The important events in the development of the issuer's business.

5.2

Investments

5.2.1

A description, (including the amount) of the issuer's principal investments for each financial
year for the period covered by the historical financial information up to the date of the registration document

5.2.2

A description of the issuers principal investments that are in progress, including the geographic distribution of these investments (home and abroad) and the method of financing
(internal or external)

5.2.3

Information concerning the issuer's principal future investments on which its management
bodies have already made firm commitments.

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BUSINESS OVERVIEW

6.1

Principal Activities

6.1.1

A description of, and key factors relating to, the nature of the issuer's operations and its
principal activities, stating the main categories of products sold and/or services performed
for each financial year for the period covered by the historical financial information;
and

6.1.2

An indication of any significant new products and/or services that have been introduced and,
to the extent the development of new products or services has been publicly disclosed, give
the status of development.

6.2

Principal Markets
A description of the principal markets in which the issuer competes, including a breakdown
of total revenues by category of activity and geographic market for each financial year for
the period covered by the historical financial information.

6.3

Where the information given pursuant to items 6.1 and 6.2 has been influenced by exceptional factors, mention that fact.

6.4

If material to the issuer's business or profitability, a summary information regarding the extent to which the issuer is dependent, on patents or licences, industrial, commercial or financial contracts or new manufacturing processes.

6.5

The basis for any statements made by the issuer regarding its competitive position.

ORGANISATIONAL STRUCTURE

7.1

If the issuer is part of a group, a brief description of the group and the issuer's position
within the group.

7.2

A list of the issuer's significant subsidiaries, including name, country of incorporation or residence, proportion of own

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8

PROPERTY, PLANTS AND EQUIPMENT

8.1

Information regarding any existing or planned material tangible fixed assets, including
leased properties, and any major encumbrances thereon.

8.2

A description of any environmental issues that may affect the issuers utilisation of the tangible fixed assets.

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OPERATING AND FINANCIAL REVIEW

9.1

Financial Condition
To the extent not covered elsewhere in the registration document, provide a description of
the issuers financial condition, changes in financial condition and results of operations for
each year and interim period, for which historical financial information is required, including
the causes of material changes from year to year in the financial information to the extent
necessary for an understanding of the issuers business as a whole.

9.2

Operating Results

9.2.1

Information regarding significant factors, including unusual or infrequent events or new developments, materially affecting the issuer's income from operations, indicating the extent
to which income was so affected.

9.2.2

Where the financial statements disclose material changes in net sales or revenues, provide a
narrative discussion of the reasons for such changes.

9.2.3

Information regarding any governmental, economic, fiscal, monetary or political policies or

factors that have materially affected, or could materially affect, directly or indirectly, the issuer's operations.

10

CAPITAL RESOURCES

10.1

Information concerning the issuers capital resources (both short and long term);

10.2

An explanation of the sources and amounts of and a narrative description of the issuer's
cash flows;

10.3

Information on the borrowing requirements and funding structure of the issuer;

10.4

Information regarding any restrictions on the use of capital resources that have materially
affected, or could materially affect, directly or indirectly, the issuers operations.

10.5

Information regarding the anticipated sources of funds needed to fulfil commitments referred to in items 5.2.3 and 8.1.

11

RESEARCH AND DEVELOPMENT, PATENTS AND LICENCES

Where material, provide a description of the issuer's research and development policies for
each financial year for the period covered by the historical financial information, including
the amount spent on issuer-sponsored research and development activities.

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12

TREND INFORMATION

12.1

The most significant recent trends in production, sales and inventory, and costs and selling
prices since the end of the last financial year to the date of the registration document.

12.2

Information on any known trends, uncertainties, demands, commitments or events that are
reasonably likely to have a material effect on the issuer's prospects for at least the current
financial year.

13

PROFIT FORECASTS OR ESTIMATES

If an issuer chooses to include a profit forecast or a profit estimate the registration document must contain the information set out in items 13.1 and 13.2:

13.1

A statement setting out the principal assumptions upon which the issuer has based its forecast, or estimate.
There must be a clear distinction between assumptions about factors which the members of
the administrative, management or supervisory bodies can influence and assumptions about
factors which are exclusively outside the influence of the members of the administrative,
management or supervisory bodies; the assumptions must be readily understandable by investors, be specific and precise and not relate to the general accuracy of the estimates underlying the forecast.

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13.2

A report prepared by independent accountants or auditors stating that in the opinion of the
independent accountants or auditors the forecast or estimate has been properly compiled on
the basis stated, and that the basis of accounting used for the profit forecast or estimate is
consistent with the accounting policies of the issuer.
Where financial information relates to the previous financial year and only contains nonmisleading figures substantially consistent with the final figures to be published in the next
annual audited financial statements for the previous financial year, and the explanatory information necessary to assess the figures, a report shall not be required provided that the
prospectus includes all of the following statements:
a)

the person responsible for this financial information, if different from the one which is
responsible for the prospectus in general, approves that information;

b)

independent accountants or auditors have agreed that this information is substantially

consistent with the final figures to be published in the next annual audited financial
statements;

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c)

this financial information has not been audited.

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13.3

The profit forecast or estimate must be prepared on a basis comparable with the historical
financial information.

13.4

If a profit forecast in a prospectus has been published which is still outstanding, then provide a statement setting out whether or not that forecast is still correct as at the time of the
registration document, and an explanation of why such forecast is no longer valid if that is
the case.

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14

ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES AND SENIOR MANAGEMENT

14.1

Names, business addresses and functions in the issuer of the following persons and an indication of the principal activities performed by them outside that issuer where these are significant with respect to that issuer:
a)

members of the administrative, management or supervisory bodies;

b)

partners with unlimited liability, in the case of a limited partnership with a share capital;

c)

founders, if the issuer has been established for fewer than five years;
and

d)

any senior manager who is relevant to establishing that the issuer has the appropriate
expertise and experience for the management of the issuer's business.

The nature of any family relationship between any of those persons.

In the case of each member of the administrative, management or supervisory bodies of the
issuer and of each person mentioned in points (b) and (d) of the first subparagraph, details
of that persons relevant management expertise and experience and the following information:
a)

the names of all companies and partnerships of which such person has been a member
of the administrative, management or supervisory bodies or partner at any time in the
previous five years, indicating whether or not the individual is still a member of the administrative, management or supervisory bodies or partner. It is not necessary to list all
the subsidiaries of an issuer of which the person is also a member of the administrative,
management or supervisory bodies;

b)

any convictions in relation to fraudulent offences for at least the previous five years;

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c)

details of any bankruptcies, receiverships or liquidations with which a person described

in (a) and (d) of the first subparagraph who was acting in the capacity of any of the positions set out in (a) and (d) of the first subparagraph was associated for at least the
previous five years;

d)

details of any official public incrimination and/or sanctions of such person by statutory
or regulatory authorities (including designated professional bodies) and whether such
person has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management
or conduct of the affairs of any issuer for at least the previous five years.

If there is no such information to be disclosed, a statement to that effect is to be made.

14.2

Administrative, Management, and Supervisory bodies' and Senior Management conflicts of

interests
Potential conflicts of interests between any duties to the issuer, of the persons referred to in
item 14.1 and their private interests and or other duties must be clearly stated. In the event
that there are no such conflicts, a statement to that effect must be made.
Any arrangement or understanding with major shareholders, customers, suppliers or others,
pursuant to which any person referred to in item 14.1 was selected as a member of the administrative, management or supervisory bodies or member of senior management.

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Details of any restrictions agreed by the persons referred to in item 14.1 on the disposal
within a certain period of time of their holdings in the issuers securities.
15

REMUNERATION AND BENEFITS

In relation to the last full financial year for those persons referred to in points (a) and (d) of
the first subparagraph of item 14.1:

15.1

The amount of remuneration paid (including any contingent or deferred compensation), and
benefits in kind granted to such persons by the issuer and its subsidiaries for services in all
capacities to the issuer and its subsidiaries by any person.
That information must be provided on an individual basis unless individual disclosure is not
required in the issuers home country and is not otherwise publicly disclosed by the issuer.

15.2

The total amounts set aside or accrued by the issuer or its subsidiaries to provide pension,
retirement or similar benefits.

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16

BOARD PRACTICES
In relation to the issuer's last completed financial year, and unless otherwise specified, with
respect to those persons referred to in point (a) of the first subparagraph of 14.1:

16.1

Date of expiration of the current term of office, if applicable, and the period during which
the person has served in that office.

16.2

Information about members of the administrative, management or supervisory bodies' service contracts with the issuer or any of its subsidiaries providing for benefits upon termination of employment, or an appropriate negative statement.

16.3

Information about the issuer's audit committee and remuneration committee, including the
names of committee members and a summary of the terms of reference under which the
committee operates.

16.4

A statement as to whether or not the issuer complies with its countrys of incorporation corporate governance regime(s). In the event that the issuer does not comply with such a regime, a statement to that effect must be included together with an explanation regarding
why the issuer does not comply with such regime.

17

EMPLOYEES

17.1

Either the number of employees at the end of the period or the average for each financial
year for the period covered by the historical financial information up to the date of the registration document (and changes in such numbers, if material) and, if possible and material, a
breakdown of persons employed by main category of activity and geographic location. If the
issuer employs a significant number of temporary employees, include disclosure of the number of temporary employees on average during the most recent financial year.

17.2

Shareholdings and stock options

With respect to each person referred to in points (a) and (d) of the first subparagraph of
item provide information as to their share ownership and any options over such shares in
the issuer as of the most recent practicable date.

17.3

Description of any arrangements for involving the employees in the capital of the issuer.

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18

MAJOR SHAREHOLDERS

18.1

In so far as is known to the issuer, the name of any person other than a member of the administrative, management or supervisory bodies who, directly or indirectly, has an interest
in the issuers capital or voting rights which is notifiable under the issuer's national law, to-

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gether with the amount of each such persons interest or, if there are no such persons, an
appropriate negative statement.
18.2

Whether the issuer's major shareholders have different voting rights, or an appropriate negative statement.

18.3

To the extent known to the issuer, state whether the issuer is directly or indirectly owned or
controlled and by whom and describe the nature of such control and describe the measures
in place to ensure that such control is not abused.

18.4

A description of any arrangements, known to the issuer, the operation of which may at a
subsequent date result in a change in control of the issuer.

19

RELATED PARTY TRANSACTIONS

Details of related party transactions (which for these purposes are those set out in the
Standards adopted according to the Regulation (EC) No 1606/2002), that the issuer has entered into during the period covered by the historical financial information and up to the
date of the registration document, must be disclosed in accordance with the respective
standard adopted according to Regulation (EC) No 1606/2002 if applicable.
If such standards do not apply to the issuer the following information must be disclosed:
a)

the nature and extent of any transactions which are -as a single transaction or in their
entirety -material to the issuer. Where such related party transactions are not concluded
at arm's length provide an explanation of why these transactions were not concluded at
arms length. In the case of outstanding loans including guarantees of any kind indicate
the amount outstanding;

b)

the amount or the percentage to which related party transactions form part of the turnover of the issuer.

20

FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES,

FINANCIAL POSITION AND PROFITS AND LOSSES

20.1

Historical Financial Information

Audited historical financial information covering the latest 3 financial years (or such shorter
period that the issuer has been in operation), and the audit report in respect of each year.
M2 If the issuer has changed its accounting reference date during the period for which historical financial information is required, the audited historical information shall cover at least
36 months, or the entire period for which the issuer has been in operation, whichever is the
shorter. Such financial information must be prepared according to Regulation (EC) No
1606/2002, or if not applicable to a Member State national accounting standards for issuers
from the Community. For third country issuers, such financial information must be prepared

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according to the international accounting standards adopted pursuant to the procedure of

Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. If such financial information is not equivalent to these
standards, it must be presented in the form of restated financial statements.

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The last two years audited historical financial information must be presented and prepared in
a form consistent with that which will be adopted in the issuers next published annual financial statements having regard to accounting standards and policies and legislation applicable to such annual financial statements.
If the issuer has been operating in its current sphere of economic activity for less than one
year, the audited historical financial information covering that period must be prepared in
accordance with the standards applicable to annual financial statements under the Regulation (EC) No 1606/2002, or if not applicable to a Member State national accounting standards where the issuer is an issuer from the Community. For third country issuers, the historical financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a
third countrys national accounting standards equivalent to these standards. This historical
financial information must be audited.
If the audited financial information is prepared according to national accounting standards,
the financial information required under this heading must include at least:
a)

balance sheet;

b)

income statement;

c)

a statement showing either all changes in equity or changes in equity other than those
arising from capital transactions with owners and distributions to owners;

d)

cash flow statement;

e)

accounting policies and explanatory notes.

The historical annual financial information must be independently audited or reported on as

to whether or not, for the purposes of the registration document, it gives a true and fair
view, in accordance with auditing standards applicable in a Member State or an equivalent
standard.
20.2

Pro forma financial information

In the case of a significant gross change, a description of how the transaction might have affected the assets and liabilities and earnings of the issuer, had the transaction been undertaken at the commencement of the period being reported on or at the date reported.

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This requirement will normally be satisfied by the inclusion of pro forma financial information.
This pro forma financial information is to be presented as set out in Annex II and must include the information indicated therein.
Pro forma financial information must be accompanied by a report prepared by independent
accountants or auditors.
20.3

Financial statements
If the issuer prepares both own and consolidated annual financial statements, include at
least the consolidated annual financial statements in the registration document.

20.4

Auditing of historical annual financial information

20.4.1

A statement that the historical financial information has been audited. If audit reports on the
historical financial information have been refused by the statutory auditors or if they contain
qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given.

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20.4.2

Indication of other information in the registration document which has been audited by the
auditors.

20.4.3

Where financial data in the registration document is not extracted from the issuer's audited
financial statements state the source of the data and state that the data is unaudited.

20.5

Age of latest financial information

20.5.1

The last year of audited financial information may not be older than one of the following:
a)

18 months from the date of the registration document if the issuer includes audited interim financial statements in the registration document;

b)

15 months from the date of the registration document if the issuer includes unaudited
interim financial statements in the registration document.

20.6

Interim and other financial information

20.6.1

If the issuer has published quarterly or half yearly financial information since the date of its
last audited financial statements, these must be included in the registration document. If the
quarterly or half yearly financial information has been reviewed or audited, the audit or review report must also be included. If the quarterly or half yearly financial information is
unaudited or has not been reviewed state that fact.

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20.6.2

If the registration document is dated more than nine months after the end of the last audited financial year, it must contain interim financial information, which may be unaudited (in
which case that fact must be stated) covering at least the first six months of the financial
year.
The interim financial information must include comparative statements for the same period
in the prior financial year, except that the requirement for comparative balance sheet information may be satisfied by presenting the years end balance sheet.

20.7

Dividend policy
A description of the issuers policy on dividend distributions and any restrictions thereon.

20.7.1

The amount of the dividend per share for each financial year for the period covered by the
historical financial information adjusted, where the number of shares in the issuer has
changed, to make it comparable.

20.8

Legal and arbitration proceedings

Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period
covering at least the previous 12 months which may have, or have had in the recent past
significant effects on the issuer and/or group's financial position or profitability, or provide
an appropriate negative statement.

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20.9

Significant change in the issuers financial or trading position

A description of any significant change in the financial or trading position of the group which
has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published, or provide an appropriate
negative statement.

21

ADDITIONAL INFORMATION

21.1

Share Capital
The following information as of the date of the most recent balance sheet included in the
historical financial information:

21.1.1

The amount of issued capital, and for each class of share capital:
a)

the number of shares authorised;

b)

the number of shares issued and fully paid and issued but not fully paid;

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c)

the par value per share, or that the shares have no par value;
and

d)

a reconciliation of the number of shares outstanding at the beginning and end of the
year. If more than 10 % of capital has been paid for with assets other than cash within
the period covered by the historical financial information, state that fact.

21.1.2

If there are shares not representing capital, state the number and main characteristics of
such shares.

21.1.3

The number, book value and face value of shares in the issuer held by or on behalf of the issuer itself or by subsidiaries of the issuer.

21.1.4

The amount of any convertible securities, exchangeable securities or securities with warrants, with an indication of the conditions governing and the procedures for conversion, exchange or subscription.

21.1.5

Information about and terms of any acquisition rights and or obligations over authorised but
unissued capital or an undertaking to increase the capital.

21.1.6

Information about any capital of any member of the group which is under option or agreed
conditionally or unconditionally to be put under option and details of such options including
those persons to whom such options relate.

21.1.7

A history of share capital, highlighting information about any changes, for the period covered by the historical financial information.

21.2

Memorandum and Articles of Association

21.2.1

A description of the issuers objects and purposes and where they can be found in the memorandum and articles of association.

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21.2.2

A summary of any provisions of the issuer's articles of association, statutes, charter or bylaws with respect to the members of the administrative, management and supervisory bodies.

21.2.3

A description of the rights, preferences and restrictions attaching to each class of the existing shares.

21.2.4

A description of what action is necessary to change the rights of holders of the shares, indicating where the conditions are more significant than is required by law.

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21.2.5

A description of the conditions governing the manner in which annual general meetings and
extraordinary general meetings of shareholders are called including the conditions of admission.

21.2.6

A brief description of any provision of the issuer's articles of association, statutes, charter or
bylaws that would have an effect of delaying, deferring or preventing a change in control of
the issuer.

21.2.7

An indication of the articles of association, statutes, charter or bylaw provisions, if any, governing the ownership threshold above which shareholder ownership must be disclosed.

21.2.8

A description of the conditions imposed by the memorandum and articles of association statutes, charter or bylaw governing changes in the capital, where such conditions are more
stringent than is required by law.

22

MATERIAL CONTRACTS
A summary of each material contract, other than contracts entered into in the ordinary
course of business, to which the issuer or any member of the group is a party, for the two
years immediately preceding publication of the registration document.
A summary of any other contract (not being a contract entered into in the ordinary course of
business) entered into by any member of the group which contains any provision under
which any member of the group has any obligation or entitlement which is material to the
group as at the date of the registration document.

23

THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF

ANY INTEREST

23.1

Where a statement or report attributed to a person as an expert is included in the registration document, provide such persons name, business address, qualifications and material
interest if any in the issuer. If the report has been produced at the issuers request a statement to the effect that such statement or report is included, in the form and context in
which it is included, with the consent of the person who has authorised the contents of that
part of the registration document.

23.2

Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able
to ascertain from information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or misleading. In addition, identify the source(s) of the information.

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24

DOCUMENTS ON DISPLAY
A statement that for the life of the registration document the following documents (or copies
thereof), where applicable, may be inspected:
a)

the memorandum and articles of association of the issuer;

b)

all reports, letters, and other documents, historical financial information, valuations and
statements prepared by any expert at the issuers request any part of which is included
or referred to in the registration document;

c)

the historical financial information of the issuer or, in the case of a group, the historical
financial information for the issuer and its subsidiary undertakings for each of the two
financial years preceding the publication of the registration document.

An indication of where the documents on display may be inspected, by physical or electronic

means.
25

INFORMATION ON HOLDINGS
Information relating to the undertakings in which the issuer holds a proportion of the capital
likely to have a significant effect on the assessment of its own assets and liabilities, financial
position or profits and losses.

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ANNEX II
Pro forma financial information building block
1

The pro forma information must include a description of the transaction, the businesses or
entities involved and the period to which it refers, and must clearly state the following:
a)

the purpose to which it has been prepared;

b)

the fact that it has been prepared for illustrative purposes only;

c)

the fact that because of its nature, the pro forma financial information addresses a hypothetical situation and, therefore, does not represent the companys actual financial
position or results.

In order to present pro forma financial information, a balance sheet and profit and loss account, and accompanying explanatory notes, depending on the circumstances may be included.

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Pro forma financial information must normally be presented in columnar format, composed
of:
a)

the historical unadjusted information;

b)

the pro forma adjustments;

and
c)

the resulting pro forma financial information in the final column.

The sources of the pro forma financial information have to be stated and, if applicable, the
financial statements of the acquired businesses or entities must be included in the prospectus
4

The pro forma information must be prepared in a manner consistent with the accounting policies adopted by the issuer in its last or next financial statements and shall identify the following:

a)

the basis upon which it is prepared;

b)

the source of each item of information and adjustment.

Pro forma information may only be published in respect of:

a)

the current financial period;

b)

the most recently completed financial period;

and/or
c)

the most recent interim period for which relevant unadjusted information has been or
will be published or is being published in the same document.

Pro forma adjustments related to the pro forma financial information must be:
a)

clearly shown and explained;

b)

directly attributable to the transaction;

c)

factually supportable.

In addition, in respect of a pro forma profit and loss or cash flow statement, they must be
clearly identified as to those expected to have a continuing impact on the issuer and those
which are not.
7

The report prepared by the independent accountants or auditors must state that in their
opinion:

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a)

the pro forma financial information has been properly compiled on the basis stated;

b)

that basis is consistent with the accounting policies of the issuer.

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ANNEX III
Minimum disclosure requirements for the share securities note (schedule)
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the prospectus and, as the case may be,
for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuer's administrative, management or supervisory
bodies indicate the name and function of the person; in case of legal persons indicate the
name and registered office.

1.2

A declaration by those responsible for the prospectus that, having taken all reasonable care
to ensure that such is the case the information contained in the prospectus is, to the best of
their knowledge, in accordance with the facts and contains no omission likely to affect its
import. As the case may be, declaration by those responsible for certain parts of the prospectus that, having taken all reasonable care to ensure that such is the case the information contained in the part of the prospectus for which they are responsible is, to the best
of their knowledge, in accordance with the facts and contains no omission likely to affect its
import.

RISK FACTORS
Prominent disclosure of risk factors that are material to the securities being offered and/or
admitted to trading in order to assess the market risk associated with these securities in a
section headed Risk Factors.

M6
3

ESSENTIAL INFORMATION

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3.1

Working capital Statement

Statement by the issuer that, in its opinion, the working capital is sufficient for the issuers
present requirements or, if not, how it proposes to provide the additional working capital
needed.

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3.2

Capitalisation and indebtedness

A statement of capitalisation and indebtedness (distinguishing between guaranteed and unguaranteed, secured and unsecured indebtedness) as of a date no earlier than 90 days prior
to the date of the document. Indebtedness also includes indirect and contingent indebtedness.

3.3

Interest of natural and legal persons involved in the issue/offer

A description of any interest, including conflicting ones that is material to the issue/offer,
detailing the persons involved and the nature of the interest.

3.4

Reasons for the offer and use of proceeds

Reasons for the offer and, where applicable, the estimated net amount of the proceeds broken into each principal intended use and presented by order of priority of such uses. If the
issuer is aware that the anticipated proceeds will not be sufficient to fund all the proposed
uses, state the amount and sources of other funds needed. Details must be given with regard to the use of the proceeds, in particular when they are being used to acquire assets,
other than in the ordinary course of business, to finance announced acquisitions of other
business, or to discharge, reduce or retire indebtedness.

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4

INFORMATION CONCERNING THE SECURITIES TO BE OFFERED/ADMITTED TO TRADING

4.1

A description of the type and the class of the securities being offered and/or admitted to
trading, including the ISIN (international security identification number) or other such security identification code.

4.2

Legislation under which the securities have been created.

4.3

An indication whether the securities are in registered form or bearer form and whether the
securities are in certificated form or book-entry form. In the latter case, name and address
of the entity in charge of keeping the records.

4.4

Currency of the securities issue.

4.5

A description of the rights attached to the securities, including any limitations of those
rights, and procedure for the exercise of those rights.

Dividend rights:

fixed date(s) on which the entitlement arises,

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time limit after which entitlement to dividend lapses and an indication of the person in
whose favour the lapse operates,

dividend restrictions and procedures for non-resident holders,

rate of dividend or method of its calculation, periodicity and cumulative or noncumulative nature of payments.

4.6

Voting rights.

Pre-emption rights in offers for subscription of securities of the same class.

Right to share in the issuers profits.

Rights to share in any surplus in the event of liquidation.

Redemption provisions.

Conversion provisions.

In the case of new issues, a statement of the resolutions, authorisations and approvals by
virtue of which the securities have been or will be created and/or issued.

4.7

In the case of new issues, the expected issue date of the securities.

4.8

A description of any restrictions on the free transferability of the securities.

4.9

An indication of the existence of any mandatory takeover bids and/or squeeze-out and sellout rules in relation to the securities.

4.10

An indication of public takeover bids by third parties in respect of the issuers equity, which
have occurred during the last financial year and the current financial year. The price or exchange terms attaching to such offers and the outcome thereof must be stated.

4.11

In respect of the country of registered office of the issuer and the country(ies) where the offer is being made or admission to trading is being sought:

information on taxes on the income from the securities withheld at source,

indication as to whether the issuer assumes responsibility for the withholding of taxes at
the source.

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5

TERMS AND CONDITIONS OF THE OFFER

5.1

Conditions, offer statistics, expected timetable and action required to apply for the offer

5.1.1

Conditions to which the offer is subject.

5.1.2

Total amount of the issue/offer, distinguishing the securities offered for sale and those offered for subscription; if the amount is not fixed, description of the arrangements and time
for announcing to the public the definitive amount of the offer.

5.1.3

The time period, including any possible amendments, during which the offer will be open and
description of the application process.

5.1.4

An indication of when, and under which circumstances, the offer may be revoked or suspended and whether revocation can occur after dealing has begun.

5.1.5

A description of the possibility to reduce subscriptions and the manner for refunding excess
amount paid by applicants.

5.1.6

Details of the minimum and/or maximum amount of application (whether in number of securities or aggregate amount to invest).

5.1.7

An indication of the period during which an application may be withdrawn, provided that investors are allowed to withdraw their subscription.

5.1.8

Method and time limits for paying up the securities and for delivery of the securities.

5.1.9

A full description of the manner and date in which results of the offer are to be made public.

5.1.10

The procedure for the exercise of any right of pre-emption, the negotiability of subscription
rights and the treatment of subscription rights not exercised.

5.2

Plan of distribution and allotment

5.2.1

The various categories of potential investors to which the securities are offered. If the offer
is being made simultaneously in the markets of two or more countries and if a tranche has
been or is being reserved for certain of these, indicate any such tranche.

5.2.2

To the extent known to the issuer, an indication of whether major shareholders or members
of the issuer's management, supervisory or administrative bodies intended to subscribe in
the offer, or whether any person intends to subscribe for more than five per cent of the offer.

5.2.3

Pre-allotment disclosure:

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a)

the division into tranches of the offer including the institutional, retail and issuers employee tranches and any other tranches;

b)

the conditions under which the clawback may be used, the maximum size of such claw
back and any applicable minimum percentages for individual tranches;

c)

the allotment method or methods to be used for the retail and issuers employee
tranche in the event of an over-subscription of these tranches;

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d)

a description of any pre-determined preferential treatment to be accorded to certain

classes of investors or certain affinity groups (including friends and family programmes)
in the allotment, the percentage of the offer reserved for such preferential treatment
and the criteria for inclusion in such classes or groups;

e)

whether the treatment of subscriptions or bids to subscribe in the allotment may be determined on the basis of which firm they are made through or by;

f)

a target minimum individual allotment if any within the retail tranche;

g)

the conditions for the closing of the offer as well as the date on which the offer may be
closed at the earliest;

h)

whether or not multiple subscriptions are admitted, and where they are not, how any
multiple subscriptions will be handled.

5.2.4

Process for notification to applicants of the amount allotted and indication whether dealing
may begin before notification is made.

5.2.5

Over-allotment and green shoe:

a)

the existence and size of any over-allotment facility and/or green shoe.

b)

the existence period of the over-allotment facility and/or green shoe.

c)

any conditions for the use of the over-allotment facility or exercise of the green shoe.

5.3

Pricing

5.3.1

An indication of the price at which the securities will be offered. If the price is not known or
if there is no established and/or liquid market for the securities, indicate the method for determining the offer price, including a statement as to who has set the criteria or is formally
responsible for the determination. Indication of the amount of any expenses and taxes specifically charged to the subscriber or purchaser.

5.3.2

Process for the disclosure of the offer price.

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5.3.3

If the issuers equity holders have pre-emptive purchase rights and this right is restricted or
withdrawn, indication of the basis for the issue price if the issue is for cash, together with
the reasons for and beneficiaries of such restriction or withdrawal.

5.3.4

Where there is or could be a material disparity between the public offer price and the effective cash cost to members of the administrative, management or supervisory bodies or senior management, or affiliated persons, of securities acquired by them in transactions during
the past year, or which they have the right to acquire, include a comparison of the public
contribution in the proposed public offer and the effective cash contributions of such persons.

5.4

Placing and Underwriting

5.4.1

Name and address of the coordinator(s) of the global offer and of single parts of the offer
and, to the extend known to the issuer or to the offeror, of the placers in the various countries where the offer takes place.

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5.4.2

Name and address of any paying agents and depository agents in each country.

5.4.3

Name and address of the entities agreeing to underwrite the issue on a firm commitment
basis, and name and address of the entities agreeing to place the issue without a firm commitment or under best efforts arrangements. Indication of the material features of the
agreements, including the quotas. Where not all of the issue is underwritten, a statement of
the portion not covered. Indication of the overall amount of the underwriting commission
and of the placing commission.

5.4.4

When the underwriting agreement has been or will be reached.

ADMISSION TO TRADING AND DEALING ARRANGEMENTS

6.1

An indication as to whether the securities offered are or will be the object of an application
for admission to trading, with a view to their distribution in a regulated market or other
equivalent markets with indication of the markets in question. This circumstance must be
mentioned, without creating the impression that the admission to trading will necessarily be
approved. If known, the earliest dates on which the securities will be admitted to trading.

6.2

All the regulated markets or equivalent markets on which, to the knowledge of the issuer,
securities of the same class of the securities to be offered or admitted to trading are already
admitted to trading.

6.3

If simultaneously or almost simultaneously with the creation of the securities for which admission to a regulated market is being sought securities of the same class are subscribed for
or placed privately or if securities of other classes are created for public or private placing,

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give details of the nature of such operations and of the number and characteristics of the
securities to which they relate.
6.4

Details of the entities which have a firm commitment to act as intermediaries in secondary
trading, providing liquidity through bid and offer rates and description of the main terms of
their commitment.

6.5

Stabilisation: where an issuer or a selling shareholder has granted an over-allotment option

or it is otherwise proposed that price stabilising activities may be entered into in connection
with an offer:

6.5.1

The fact that stabilisation may be undertaken, that there is no assurance that it will be undertaken and that it may be stopped at any time,

6.5.2

The beginning and the end of the period during which stabilisation may occur,

6.5.3

The identity of the stabilisation manager for each relevant jurisdiction unless this is not
known at the time of publication,

6.5.4

The fact that stabilisation transactions may result in a market price that is higher than would
otherwise prevail.

SELLING SECURITIES HOLDERS

7.1

Name and business address of the person or entity offering to sell the securities, the nature
of any position office or other material relationship that the selling persons has had within
the past three years with the issuer or any of its predecessors or affiliates.

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7.2

The number and class of securities being offered by each of the selling security holders.

7.3

Lock-up agreements
The parties involved.
Content and exceptions of the agreement.
Indication of the period of the lock up.

EXPENSE OF THE ISSUE/OFFER

8.1

The total net proceeds and an estimate of the total expenses of the issue/offer.

DILUTION

9.1

The amount and percentage of immediate dilution resulting from the offer.

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9.2

In the case of a subscription offer to existing equity holders, the amount and percentage of
immediate dilution if they do not subscribe to the new offer.

10

ADDITIONAL INFORMATION

10.1

If advisors connected with an issue are mentioned in the Securities Note, a statement of the
capacity in which the advisors have acted.

10.2

An indication of other information in the Securities Note which has been audited or reviewed
by statutory auditors and where auditors have produced a report. Reproduction of the report
or, with permission of the competent authority, a summary of the report.

10.3

Where a statement or report attributed to a person as an expert is included in the Securities

Note, provide such persons' name, business address, qualifications and material interest if
any in the issuer. If the report has been produced at the issuers request a statement to the
effect that such statement or report is included, in the form and context in which it is included, with the consent of the person who has authorised the contents of that part of the
Securities Note.

10.4

Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able
to ascertain from information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or misleading. In addition, identify the source(s) of the information.

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ANNEX IV
Minimum disclosure requirements for the debt and derivative securities registration document
(schedule)
(Debt and derivative securities with a denomination per unit of less than EUR M5 100 000
)
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the registration document and, as the
case may be, for certain parts of it, with, in the latter case, an indication of such parts. In
the case of natural persons including members of the issuer's administrative, management
or supervisory bodies indicate the name and function of the person; in case of legal persons
indicate the name and registered office.

1.2

A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case the information contained in the registration
document is, to the best of their knowledge, in accordance with the facts and contains no
omission likely to affect its import. As the case may be, declaration by those responsible for

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certain parts of the registration document that, having taken all reasonable care to ensure
that such is the case, the information contained in the part of the registration document for
which they are responsible is, to the best of their knowledge, in accordance with the facts
and contains no omission likely to affect its import.
2

STATUTORY AUDITORS

2.1

Names and addresses of the issuers auditors for the period covered by the historical financial information (together with their membership in a professional body).

2.2

If auditors have resigned, been removed or not been re-appointed during the period covered
by the historical financial information, details if material.

SELECTED FINANCIAL INFORMATION

3.1

Selected historical financial information regarding the issuer, presented, for each financial
year for the period covered by the historical financial information, and any subsequent interim financial period, in the same currency as the financial information.
The selected historical financial information must provide key figures that summarise the financial condition of the issuer.

3.2

If selected financial information for interim periods is provided, comparative data from the
same period in the prior financial year must also be provided, except that the requirement
for comparative balance sheet data is satisfied by presenting the year end balance sheet information.

RISK FACTORS
Prominent disclosure of risk factors that may affect the issuers ability to fulfil its obligations
under the securities to investors in a section headed Risk Factors.

INFORMATION ABOUT THE ISSUER

5.1

History and development of the Issuer

5.1.1

the legal and commercial name of the issuer;

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5.1.2

the place of registration of the issuer and its registration number;

5.1.3

the date of incorporation and the length of life of the issuer, except where indefinite;

5.1.4

the domicile and legal form of the issuer, the legislation under which the issuer operates, its
country of incorporation, and the address and telephone number of its registered office (or
principal place of business if different from its registered office);

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5.1.5

any recent events particular to the issuer which are to a material extent relevant to the
evaluation of the issuers solvency.

5.2

Investments

5.2.1

A description of the principal investments made since the date of the last published financial
statements.

5.2.2

Information concerning the issuers principal future investments, on which its management
bodies have already made firm commitments.

5.2.3

Information regarding the anticipated sources of funds needed to fulfil commitments referred to in item 5.2.2.

BUSINESS OVERVIEW

6.1

Principal activities

6.1.1

A description of the issuers principal activities stating the main categories of products sold
and/or services performed;
and

6.1.2

an indication of any significant new products and/or activities.

6.2

Principal markets
A brief description of the principal markets in which the issuer competes.

6.3

The basis for any statements made by the issuer regarding its competitive position.

ORGANISATIONAL STRUCTURE

7.1

If the issuer is part of a group, a brief description of the group and of the issuer's position
within it.

7.2

If the issuer is dependent upon other entities within the group, this must be clearly stated
together with an explanation of this dependence.

TREND INFORMATION

8.1

Include a statement that there has been no material adverse change in the prospects of the
issuer since the date of its last published audited financial statements.
In the event that the issuer is unable to make such a statement, provide details of this material adverse change.

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8.2

Information on any known trends, uncertainties, demands, commitments or events that are
reasonably likely to have a material effect on the issuer's prospects for at least the current
financial year.

PROFIT FORECASTS OR ESTIMATES

If an issuer chooses to include a profit forecast or a profit estimate, the registration document must contain the information items 9.1 and 9.2:

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9.1

A statement setting out the principal assumptions upon which the issuer has based its forecast, or estimate.
There must be a clear distinction between assumptions about factors which the members of
the administrative, management or supervisory bodies can influence and assumptions about
factors which are exclusively outside the influence of the members of the administrative,
management or supervisory bodies; the assumptions must be readily understandable by investors, be specific and precise and not relate to the general accuracy of the estimates underlying the forecast. M6

9.2

A report prepared by independent accountants or auditors stating that in the opinion of the
independent accountants or auditors the forecast or estimate has been properly compiled on
the basis stated, and that the basis of accounting used for the profit forecast or estimate is
consistent with the accounting policies of the issuer.
Where financial information relates to the previous financial year and only contains nonmisleading figures substantially consistent with the final figures to be published in the next
annual audited financial statements for the previous financial year, and the explanatory information necessary to assess the figures, a report shall not be required provided that the
prospectus includes all of the following statements:
a)

the person responsible for this financial information, if different from the one which is
responsible for the prospectus in general, approves that information;

b)

independent accountants or auditors have agreed that this information is substantially

consistent with the final figures to be published in the next annual audited financial
statements;

c)

this financial information has not been audited.

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9.3

The profit forecast or estimate must be prepared on a basis comparable with the historical
financial information.

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10

ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES

10.1

Names, business addresses and functions in the issuer of the following persons, and an indication of the principal activities performed by them outside the issuer where these are significant with respect to that issuer:

10.2

a)

members of the administrative, management or supervisory bodies;

b)

partners with unlimited liability, in the case of a limited partnership with a share capital.

Administrative, Management, and Supervisory bodies' conflicts of interests

Potential conflicts of interests between any duties to the issuing entity of the persons referred to in item 10.1 and their private interests and or other duties must be clearly stated.
In the event that there are no such conflicts, make a statement to that effect.

11

BOARD PRACTICES

11.1

Details relating to the issuer's audit committee, including the names of committee members
and a summary of the terms of reference under which the committee operates.

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11.2

A statement as to whether or not the issuer complies with its countrys of incorporation corporate governance regime(s). In the event that the issuer does not comply with such a regime a statement to that effect must be included together with an explanation regarding
why the issuer does not comply with such regime.

12

MAJOR SHAREHOLDERS

12.1

To the extent known to the issuer, state whether the issuer is directly or indirectly owned or
controlled and by whom and describe the nature of such control, and describe the measures
in place to ensure that such control is not abused.

12.2

A description of any arrangements, known to the issuer, the operation of which may at a
subsequent date result in a change in control of the issuer.

13

FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES,

FINANCIAL POSITION AND PROFITS AND LOSSES

13.1

Historical Financial Information

Audited historical financial information covering the latest 2 financial years (or such shorter
period that the issuer has been in operation), and the audit report in respect of each year.
M2 If the issuer has changed its accounting reference date during the period for which historical financial information is required, the audited historical information shall cover at least
24 months, or the entire period for which the issuer has been in operation, whichever is the

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shorter. Such financial information must be prepared according to Regulation (EC) No

1606/2002, or if not applicable to a Member States national accounting standards for issuers
from the Community. For third country issuers, such financial information must be prepared
according to the international accounting standards adopted pursuant to the procedure of
Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. If such financial information is not equivalent to these
standards, it must be presented in the form of restated financial statements.
The most recent years historical financial information must be presented and prepared in a
form consistent with that which will be adopted in the issuers next published annual financial statements having regard to accounting standards and policies and legislation applicable
to such annual financial statements.
If the issuer has been operating in its current sphere of economic activity for less than one
year, the audited historical financial information covering that period must be prepared in
accordance with the standards applicable to annual financial statements under the Regulation (EC) No 1606/2002, or if not applicable to a Member States national accounting standards where the issuer is an issuer from the Community. For third country issuers, the historical financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a
third countrys national accounting standards equivalent to these standards. This historical
financial information must be audited.
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If the audited financial information is prepared according to national accounting standards,
the financial information required under this heading must include at least:
a)

balance sheet;

b)

income statement;

c)

cash flow statement;

and
d)

accounting policies and explanatory notes

The historical annual financial information must have been independently audited or reported on as to whether or not, for the purposes of the registration document, it gives a true
and fair view, in accordance with auditing standards applicable in a Member State or an
equivalent standard.

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13.2

Financial statements
If the issuer prepares both own and consolidated financial statements, include at least the
consolidated financial statements in the registration document.

13.3

Auditing of historical annual financial information

13.3.1

A statement that the historical financial information has been audited. If audit reports on the
historical financial information have been refused by the statutory auditors or if they contain
qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given.

13.3.2

An indication of other information in the registration document which has been audited by
the auditors.

13.3.3

Where financial data in the registration document is not extracted from the issuer's audited
financial statements state the source of the data and state that the data is unaudited.

13.4

Age of latest financial information

13.4.1

The last year of audited financial information may not be older than 18 months from the
date of the registration document.

13.5

Interim and other financial information

13.5.1

If the issuer has published quarterly or half yearly financial information since the date of its
last audited financial statements, these must be included in the registration document. If the
quarterly or half yearly financial information has been reviewed or audited the audit or review report must also be included. If the quarterly or half yearly financial information is
unaudited or has not been reviewed state that fact.

13.5.2

If the registration document is dated more than nine months after the end of the last audited financial year, it must contain interim financial information, covering at least the first six
months of the financial year. If the interim financial information is un-audited state that
fact.
The interim financial information must include comparative statements for the same period
in the prior financial year, except that the requirement for comparative balance sheet information may be satisfied by presenting the years end balance sheet.

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13.6

Legal and arbitration proceedings

Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period

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covering at least the previous 12 months which may have, or have had in the recent past,
significant effects on the issuer and/or group's financial position or profitability, or provide
an appropriate negative statement.
13.7

Significant change in the issuers financial or trading position

A description of any significant change in the financial or trading position of the group which
has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published, or an appropriate negative
statement.

14

ADDITIONAL INFORMATION

14.1

Share Capital

14.1.1

The amount of the issued capital, the number and classes of the shares of which it is composed with details of their principal characteristics, the part of the issued capital still to be
paid up, with an indication of the number, or total nominal value, and the type of the shares
not yet fully paid up, broken down where applicable according to the extent to which they
have been paid up.

14.2

Memorandum and Articles of Association

14.2.1

The register and the entry number therein, if applicable, and a description of the issuers objects and purposes and where they can be found in the memorandum and articles of association.

15

MATERIAL CONTRACTS
A brief summary of all material contracts that are not entered into in the ordinary course of
the issuer's business, which could result in any group member being under an obligation or
entitlement that is material to the issuers ability to meet its obligation to security holders in
respect of the securities being issued.

16

THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF

ANY INTEREST

16.1

Where a statement or report attributed to a person as an expert is included in the registration document, provide such persons name, business address, qualifications and material
interest if any in the issuer. If the report has been produced at the issuers request a statement to that effect that such statement or report is included, in the form and context in
which it is included, with the consent of that person who has authorised the contents of that
part of the registration document.

16.2

Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able

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to ascertain from information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or misleading. In addition, the issuer shall identify the source(s) of the information.
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17

DOCUMENTS ON DISPLAY
A statement that for the life of the registration document the following documents (or copies
thereof), where applicable, may be inspected:
a)

the memorandum and articles of association of the issuer;

b)

all reports, letters, and other documents, historical financial information, valuations and
statements prepared by any expert at the issuer's request any part of which is included
or referred to in the registration document;

c)

the historical financial information of the issuer or, in the case of a group, the historical
financial information of the issuer and its subsidiary undertakings for each of the two financial years preceding the publication of the registration document.

An indication of where the documents on display may be inspected, by physical or electronic

means.
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ANNEX V
Minimum disclosure requirements for the securities note related to debt securities (schedule)
(Debt securities with a denomination per unit of less than EUR M5 100 000 )
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the prospectus and, as the case may be,
for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuer's administrative, management or supervisory
bodies indicate the name and function of the person; in case of legal persons indicate the
name and registered office.

1.2

A declaration by those responsible for the prospectus that, having taken all reasonable care
to ensure that such is the case, the information contained in the prospectus is, to the best of
their knowledge, in accordance with the facts and contains no omission likely to affect its
import. As the case may be, declaration by those responsible for certain parts of the prospectus that the information contained in the part of the prospectus for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no
omission likely to affect its import.

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RISK FACTORS

2.1

Prominent disclosure of risk factors that are material to the securities being offered and/or
admitted to trading in order to assess the market risk associated with these securities in a
section headed Risk Factors. M6

ESSENTIAL INFORMATION C1

3.1

Interest of natural and legal persons involved in the issue/offer

A description of any interest, including conflicting ones, that is material to the issue/offer,
detailing the persons involved and the nature of the interest.

3.2

Reasons for the offer and use of proceeds

Reasons for the offer if different from making profit and/or hedging certain risks. Where applicable, disclosure of the estimated total expenses of the issue/offer and the estimated net
amount of the proceeds. These expenses and proceeds shall be broken into each principal
intended use and presented by order of priority of such uses. If the issuer is aware that the
anticipated proceeds will not be sufficient to fund all the proposed uses, state the amount
and sources of other funds needed.

INFORMATION CONCERNING THE SECURITIES TO BE OFFERED/ADMITTED TO TRADING

4.1

A description of the type and the class of the securities being offered and/or admitted to
trading, including the ISIN (International Security Identification Number) or other such security identification code.

4.2

Legislation under which the securities have been created.

4.3

An indication of whether the securities are in registered form or bearer form and whether
the securities are in certificated form or book-entry form. In the latter case, name and address of the entity in charge of keeping the records.

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4.4

Currency of the securities issue.

4.5

Ranking of the securities being offered and/or admitted to trading, including summaries of
any clauses that are intended to affect ranking or subordinate the security to any present or
future liabilities of the issuer.

4.6

A description of the rights attached to the securities, including any limitations of those
rights, and procedure for the exercise of those rights.

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M5
4.7

The nominal interest rate and provisions relating to interest payable:

the date from which interest becomes payable and the due dates for interest,

the time limit on the validity of claims to interest and repayment of principal.

Where the rate is not fixed, a statement setting out the type of underlying and a description
of the underlying on which it is based and of the method used to relate the underlying and
the rate and an indication where information about the past and the further performance of
the underlying and its volatility can be obtained.

a description of any market disruption or settlement disruption events that affect the
underlying,

adjustment rules with relation to events concerning the underlying,

name of the calculation agent.

If the security has a derivative component in the interest payment, provide a clear and comprehensive explanation to help investors understand how the value of their investment is affected by the value of the underlying instrument(s), especially under the circumstances
when the risks are most evident.
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4.8

Maturity date and arrangements for the amortisation of the loan, including the repayment
procedures. Where advance amortisation is contemplated, on the initiative of the issuer or of
the holder, it shall be described, stipulating amortisation terms and conditions.

4.9

An indication of yield. Describe the method whereby that yield is calculated in summary
form.

4.10

Representation of debt security holders including an identification of the organisation representing the investors and provisions applying to such representation. Indication of where the
public may have access to the contracts relating to these forms of representation.

4.11

In the case of new issues, a statement of the resolutions, authorisations and approvals by
virtue of which the securities have been or will be created and/or issued.

4.12

In the case of new issues, the expected issue date of the securities.

4.13

A description of any restrictions on the free transferability of the securities.

4.14

In respect of the country of registered office of the issuer and the country(ies) where the offer being made or admission to trading is being sought:

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information on taxes on the income from the securities withheld at source;

indication as to whether the issuer assumes responsibility for the withholding of taxes at
the source.

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5

TERMS AND CONDITIONS OF THE OFFER

5.1

Conditions, offer statistics, expected timetable and action required to apply for the offer

5.1.1

Conditions to which the offer is subject.

5.1.2

Total amount of the issue/offer; if the amount is not fixed, description of the arrangements
and time for announcing to the public the definitive amount of the offer.

5.1.3

The time period, including any possible amendments, during which the offer will be open and
description of the application process.

5.1.4

A description of the possibility to reduce subscriptions and the manner for refunding excess
amount paid by applicants.

5.1.5

Details of the minimum and/or maximum amount of application, (whether in number of securities or aggregate amount to invest).

5.1.6

Method and time limits for paying up the securities and for delivery of the securities.

5.1.7

A full description of the manner and date in which results of the offer are to be made public.

5.1.8

The procedure for the exercise of any right of pre-emption, the negotiability of subscription
rights and the treatment of subscription rights not exercised.

5.2

Plan of distribution and allotment

5.2.1

The various categories of potential investors to which the securities are offered. If the offer
is being made simultaneously in the markets of two or more countries and if a tranche has
been or is being reserved for certain of these, indicate any such tranche.

5.2.2

Process for notification to applicants of the amount allotted and indication whether dealing
may begin before notification is made.

5.3

Pricing

5.3.1

An indication of the expected price at which the securities will be offered or the method of
determining the price and the process for its disclosure. Indicate the amount of any expenses and taxes specifically charged to the subscriber or purchaser.

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5.4

Placing and Underwriting

5.4.1

Name and address of the co-ordinator(s) of the global offer and of single parts of the offer
and, to the extend known to the issuer or to the offeror, of the placers in the various countries where the offer takes place.

5.4.2

Name and address of any paying agents and depository agents in each country.

5.4.3

Name and address of the entities agreeing to underwrite the issue on a firm commitment
basis, and name and address of the entities agreeing to place the issue without a firm commitment or under best efforts arrangements. Indication of the material features of the
agreements, including the quotas. Where not all of the issue is underwritten, a statement of
the portion not covered. Indication of the overall amount of the underwriting commission
and of the placing commission.

5.4.4

When the underwriting agreement has been or will be reached.

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6

ADMISSION TO TRADING AND DEALING ARRANGEMENTS

6.1

An indication as to whether the securities offered are or will be the object of an application
for admission to trading, with a view to their distribution in a regulated market or other
equivalent markets with indication of the markets in question. This circumstance must be
mentioned, without creating the impression that the admission to trading will necessarily be
approved. If known, give the earliest dates on which the securities will be admitted to trading.

6.2

All the regulated markets or equivalent markets on which, to the knowledge of the issuer,
securities of the same class of the securities to be offered or admitted to trading are already
admitted to trading.

6.3

Name and address of the entities which have a firm commitment to act as intermediaries in
secondary trading, providing liquidity through bid and offer rates and description of the main
terms of their commitment.

ADDITIONAL INFORMATION

7.1

If advisors connected with an issue are mentioned in the Securities Note, a statement of the
capacity in which the advisors have acted.

7.2

An indication of other information in the Securities Note which has been audited or reviewed
by statutory auditors and where auditors have produced a report. Reproduction of the report
or, with permission of the competent authority, a summary of the report.

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7.3

Where a statement or report attributed to a person as an expert is included in the Securities

Note, provide such persons' name, business address, qualifications and material interest if
any in the issuer. If the report has been produced at the issuers request a statement to that
effect that such statement or report is included, in the form and context in which it is included, with the consent of that person who has authorised the contents of that part of the
Securities Note.

7.4

Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able
to ascertain from information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or misleading. In addition, identify the source(s) of the information.

7.5

Credit ratings assigned to an issuer or its debt securities at the request or with the cooperation of the issuer in the rating process. A brief explanation of the meaning of the ratings if this has previously been published by the rating provider.

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ANNEX VI
Minimum disclosure requirements for guarantees
(Additional building block)
1

Nature of the Guarantee

A description of any arrangement intended to ensure that any obligation material to the issue will be duly serviced, whether in the form of guarantee, surety, Keep well Agreement,
Mono-line Insurance policy or other equivalent commitment (hereafter referred to generically as guarantees and their provider as guarantor for convenience).
Without prejudice to the generality of the foregoing, such arrangements encompass commitments to ensure obligations to repay debt securities and/or the payment of interest and
the description shall set out how the arrangement is intended to ensure that the guaranteed
payments will be duly serviced.

Scope of the Guarantee

Details shall be disclosed about the terms and conditions and scope of the guarantee. Without prejudice to the generality of the foregoing, these details should cover any conditionality
on the application of the guarantee in the event of any default under the terms of the security and the material terms of any mono-line insurance or keep well agreement between the
issuer and the guarantor. Details must also be disclosed of any guarantors power of veto in
relation to changes to the security holders rights, such as is often found in Mono-line Insurance.

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Information to be disclosed about the guarantor

The guarantor must disclose information about itself as if it were the issuer of that same
type of security that is the subject of the guarantee.

Documents on display
Indication of the places where the public may have access to the material contracts and other documents relating to the guarantee.

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ANNEX VII
Minimum disclosure requirements for asset-backed securities registration document (schedule)
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the registration document and, as the
case may be, for certain parts of it, with, in the latter case, an indication of such parts. In
the case of natural persons including members of the issuer's administrative, management
or supervisory bodies indicate the name and function of the person; in case of legal persons
indicate the name and registered office.

1.2

A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case, the information given in the registration document is, to the best of their knowledge, in accordance with the facts and does not omit anything likely to affect its import. As the case may be, declaration by those responsible for certain parts of the registration document that having taken all reasonable care to ensure that
such is the case, the information contained in that part of the registration document for
which they are responsible is, to the best of their knowledge, in accordance with the facts
and contains no omission likely to affect its import.

STATUTORY AUDITORS

2.1

Names and addresses of the issuers auditors for the period covered by the historical financial information (together with any membership of any relevant professional body).

RISK FACTORS

3.1

The document must prominently disclose risk factors in a section headed Risk Factors that
are specific to the issuer and its industry.

INFORMATION ABOUT THE ISSUER:

4.1

A statement whether the issuer has been established as a special purpose vehicle or entity
for the purpose of issuing asset backed securities;

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4.2

The legal and commercial name of the issuer;

4.3

The place of registration of the issuer and its registration number;

4.4

The date of incorporation and the length of life of the issuer, except where indefinite;

4.5

The domicile and legal form of the issuer, the legislation under which the issuer operates its
country of incorporation and the address and telephone number of its registered office (or
principal place of business if different from its registered office).

4.6

Description of the amount of the issuers authorised and issued capital and the amount of
any capital agreed to be issued, the number and classes of the securities of which it is composed.

BUSINESS OVERVIEW

5.1

A brief description of the issuers principal activities

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5.2

A global overview of the parties to the securitisation program including information on the
direct or indirect ownership or control between those parties.

ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES

6.1

Names, business addresses and functions in the issuer of the following persons, and an indication of the principal activities performed by them outside the issuer where these are significant with respect to that issuer:
a)

members of the administrative, management or supervisory bodies;

b)

partners with unlimited liability, in the case of a limited partnership with a share capital.

MAJOR SHAREHOLDERS

7.1

To the extent known to the issuer, state whether the issuer is directly or indirectly owned or
controlled and by whom, and describe the nature of such control and describe the measures
in place to ensure that such control is not abused.

FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES,

FINANCIAL POSITION, AND PROFITS AND LOSSES

8.1

Where, since the date of incorporation or establishment, an issuer has not commenced operations and no financial statements have been made up as at the date of the registration
document, a statement to that effect shall be provided in the registration document.

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8.2

Historical Financial Information

Where, since the date of incorporation or establishment, an issuer has commenced operations and financial statements have been made up, the registration document must contain
audited historical financial information covering the latest 2 financial years (or shorter period that the issuer has been in operation) and the audit report in respect of each year. M2
If the issuer has changed its accounting reference date during the period for which historical
financial information is required, the audited historical information shall cover at least 24
months, or the entire period for which the issuer has been in operation, whichever is the
shorter. Such financial information must be prepared according to Regulation (EC) No
1606/2002, or if not applicable to a Members State national accounting standards for issuers from the Community. For third country issuers, such financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting
standards equivalent to these standards. If such financial information is not equivalent to
these standards, it must be presented in the form of restated financial statements.
The most recent year's historical financial information must be presented and prepared in a
form consistent with that which will be adopted in the issuers next annual published financial statements having regard to accounting standards and policies and legislation applicable
to such annual financial statements.

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If the issuer has been operating in its current sphere of economic activity for less than one
year, the audited historical financial information covering that period must be prepared in
accordance with the standards applicable to annual financial statements under Regulation
(EC) No 1606/2002, or if not applicable to a Member States national accounting standards
where the issuer is from the Community. For third country issuers, the historical financial information must be prepared according to the international accounting standards adopted
pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. This historical financial information must be audited.
If the audited financial information is prepared according to national accounting standards,
the financial information required under this heading must include at least the following:
a)

the balance sheet;

b)

the income statement;

c)

the accounting policies and explanatory notes.

The historical annual financial information must be independently audited or reported on as

to whether or not, for the purposes of the registration document, it gives a true and fair

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view, in accordance with auditing standards applicable in a Member State or an equivalent

standard.
8.2a

This paragraph may be used only for issues of asset backed securities having a denomination per unit of at least EUR M5 100 000 .
Where, since the date of incorporation or establishment, an issuer has commenced operations and financial statements have been made up, the registration document must contain
audited historical financial information covering the latest 2 financial years (or shorter period that the issuer has been in operation) and the audit report in respect of each year. M2
If the issuer has changed its accounting reference date during the period for which historical
financial information is required, the audited historical information shall cover at least 24
months, or the entire period for which the issuer has been in operation, whichever is the
shorter. Such financial information must be prepared according to Regulation (EC) No
1606/2002 or, if not applicable, to a Members State national accounting standards for issuers from the Community. For third country issuers, such financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting
standards equivalent to these standards. Otherwise, the following information must be included in the registration document:
a)

a prominent statement that the financial information included in the registration document has not been prepared in accordance with the international accounting standards
adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 and
that there may be material differences in the financial information had Regulation (EC)
No 1606/2002 been applied to the historical financial information;

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b)

immediately following the historical financial information a narrative description of the

differences between the international accounting standards adopted pursuant to the
procedure of Article 3 of Regulation (EC) No 1606/2002 and the accounting principles
adopted by the issuer in preparing its annual financial statements.

The most recent years historical financial information must be presented and prepared in a
form consistent with that which will be adopted in the issuers next annual financial statements having regard to accounting standards and policies and legislation applicable to such
annual financial statements.
If the audited financial information is prepared according to national accounting standards,
the financial information required under this heading must include at least the following:
a)

the balance sheet;

b)

the income statement;

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c)

the accounting policies and explanatory notes.

The historical annual financial information must be independently audited or reported on as

to whether or not, for the purposes of the registration document, it gives a true and fair
view, in accordance with auditing standards applicable in a Member State or an equivalent
standard. Otherwise, the following information must be included in the registration document:

8.3

a)

a prominent statement disclosing which auditing standards have been applied;

b)

an explanation of any significant departures from International Standards on Auditing.

Legal and arbitration proceedings

Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the company is aware), during a period
covering at least the previous 12 months, which may have, or have had in the recent past,
significant effects on the issuer and/or groups financial position or profitability, or provide
an appropriate negative statement.

8.4

Material adverse change in the issuers financial position

Where an issuer has prepared financial statements, include a statement that there has been
no material adverse change in the financial position or prospects of the issuer since the date
of its last published audited financial statements. Where a material adverse change has occurred, this must be disclosed in the registration document.

THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF

ANY INTEREST

9.1

Where a statement or report attributed to a person as an expert is included in the registration document, provide such persons name, business address, qualifications and material
interest if any in the issuer. If the report has been produced at the issuers request a statement to that effect that such statement or report is included, in the form and context in
which it is included, with the consent of that person who has authorised the contents of that
part of the registration document.

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9.2

Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able
to ascertain from information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or misleading In addition, the issuer shall identify the source(s) of the information.

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DOCUMENTS ON DISPLAY

10.1

A statement that for the life of the registration document the following documents (or copies
thereof), where applicable, may be inspected:
a)

the memorandum and articles of association of the issuer;

b)

all reports, letters, and other documents, historical financial information, valuations and
statements prepared by any expert at the issuers request any part of which is included
or referred to in the registration document;

c)

the historical financial information of the issuer or, in the case of a group, the historical
financial information of the issuer and its subsidiary undertakings for each of the two financial years preceding the publication of the registration document.

An indication of where the documents on display may be inspected, by physical or electronic

means.
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ANNEX VIII
Minimum disclosure requirements for the asset-backed securities additional building block
1

THE SECURITIES

1.1

The minimum denomination of an issue.

1.2

Where information is disclosed about an undertaking/obligor which is not involved in the issue, provide a confirmation that the information relating to the undertaking/obligor has been
accurately reproduced from information published by the undertaking/obligor. So far as the
issuer is aware and is able to ascertain from information published by the undertaking/obligor no facts have been omitted which would render the reproduced information misleading.
In addition, identify the source(s) of information in the Securities Note that has been reproduced from information published by an undertaking/obligor.

THE UNDERLYING ASSETS

2.1

Confirmation that the securitised assets backing the issue have characteristics that demonstrate capacity to produce funds to service any payments due and payable on the securities.

2.2

In respect of a pool of discrete assets backing the issue:

2.2.1

The legal jurisdiction by which the pool of assets is governed

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2.2.2

(a) In the case of a small number of easily identifiable obligors, a general description of
each obligor.
(b) In all other cases, a description of: the general characteristics of the obligors; and the
economic environment, as well as global statistical data referred to the securitised assets.

2.2.3

the legal nature of the assets;

2.2.4

the expiry or maturity date(s) of the assets;

2.2.5

the amount of the assets;

2.2.6

loan to value ratio or level of collateralisation;

2.2.7

the method of origination or creation of the assets, and for loans and credit agreements, the
principal lending criteria and an indication of any loans which do not meet these criteria and
any rights or obligations to make further advances;

2.2.8

an indication of significant representations and collaterals given to the issuer relating to the
assets;

2.2.9

any rights to substitute the assets and a description of the manner in which and the type of
assets which may be so substituted; if there is any capacity to substitute assets with a different class or quality of assets a statement to that effect together with a description of the
impact of such substitution;

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2.2.10

a description of any relevant insurance policies relating to the assets. Any concentration with
one insurer must be disclosed if it is material to the transaction.

2.2.11

Where the assets comprise obligations of 5 or fewer obligors which are legal persons or
where an obligor accounts for 20 % or more of the assets, or where an obligor accounts for
a material portion of the assets, so far as the issuer is aware and/or is able to ascertain
from information published by the obligor(s) indicate either of the following:
a)

information relating to each obligor as if it were an issuer drafting a registration document for debt and derivative securities with an individual denomination of at least EUR
M5 100 000 ;

b)

if an obligor or guarantor has securities already admitted to trading on a regulated or

equivalent market or the obligations are guaranteed by an entity admitted to trading on
a regulated or equivalent market, the name, address, country of incorporation, nature of
business and name of the market in which its securities are admitted.

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2.2.12

If a relationship exists that is material to the issue, between the issuer, guarantor and obligor, details of the principal terms of that relationship.

2.2.13

Where the assets comprise obligations that are not traded on a regulated or equivalent market, a description of the principal terms and conditions of the obligations.

2.2.14

Where the assets comprise equity securities that are admitted to trading on a regulated or
equivalent market indicate the following:
a)

a description of the securities;

b)

a description of the market on which they are traded including its date of establishment,
how price information is published, an indication of daily trading volumes, information
as to the standing of the market in the country and the name of the markets regulatory
authority;

c)
2.2.15

the frequency with which prices of the relevant securities, are published.

Where more than ten (10) per cent of the assets comprise equity securities that are not
traded on a regulated or equivalent market, a description of those equity securities and
equivalent information to that contained in the schedule for share registration document in
respect of each issuer of those securities.

2.2.16

Where a material portion of the assets are secured on or backed by real property, a valuation report relating to the property setting out both the valuation of the property and cash
flow/income streams.
Compliance with this disclosure is not required if the issue is of securities backed by mortgage loans with property as security, where there has been no revaluation of the properties
for the purpose of the issue, and it is clearly stated that the valuations quoted are as at the
date of the original initial mortgage loan origination.

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2.3

In respect of an actively managed pool of assets backing the issue:

2.3.1

equivalent information to that contained in items 2.1 and 2.2 to allow an assessment of the
type, quality, sufficiency and liquidity of the asset types in the portfolio which will secure the
issue;

2.3.2

the parameters within which investments can be made, the name and description of the entity responsible for such management including a description of that entitys expertise and
experience, a summary of the provisions relating to the termination of the appointment of
such entity and the appointment of an alternative management entity, and a description of
that entitys relationship with any other parties to the issue.

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2.4

Where an issuer proposes to issue further securities backed by the same assets, a prominent
statement to that effect and unless those further securities are fungible with or are subordinated to those classes of existing debt, a description of how the holders of that class will be
informed.

STRUCTURE AND CASH FLOW

3.1

Description of the structure of the transaction, including, if necessary, a structure diagram.

3.2

Description of the entities participating in the issue and description of the functions to be
performed by them.

3.3

Description of the method and date of the sale, transfer, novation or assignment of the assets or of any rights and/or obligations in the assets to the issuer or, where applicable, the
manner and time period in which the proceeds from the issue will be fully invested by the issuer.

3.4

An explanation of the flow of funds including:

3.4.1

how the cash flow from the assets will meet the issuers obligations to holders of the securities, including, if necessary, a financial service table and a description of the assumptions
used in developing the table;

3.4.2

information on any credit enhancements, an indication of where material potential liquidity

shortfalls may occur and the availability of any liquidity supports and indication of provisions
designed to cover interest/principal shortfall risks;

3.4.3

without prejudice to item 3.4.2, details of any subordinated debt finance;

3.4.4

an indication of any investment parameters for the investment of temporary liquidity surpluses and description of the parties responsible for such investment;

3.4.5

how payments are collected in respect of the assets;

3.4.6

the order of priority of payments made by the issuer to the holders of the class of securities
in question;

3.4.7

details of any other arrangements upon which payments of interest and principal to investors are dependent;

3.5

the name, address and significant business activities of the originators of the securitised assets.

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3.6

Where the return on, and/or repayment of the security is linked to the performance or credit
of other assets which are not assets of the issuer, items 2.2 and 2.3 are necessary;

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3.7

the name, address and significant business activities of the administrator, calculation agent
or equivalent, together with a summary of the administrators/calculation agents responsibilities, their relationship with the originator or the creator of the assets and a summary of the
provisions relating to the termination of the appointment of the administrator/calculation
agent and the appointment of an alternative administrator/calculation agent;

3.8

the names and addresses and brief description of:

a)

any swap counterparties and any providers of other material forms of credit/liquidity
enhancement;

b)

the banks with which the main accounts relating to the transaction are held.

POST ISSUANCE REPORTING

4.1

Indication in the prospectus whether or not it intends to provide post-issuance transaction

information regarding securities to be admitted to trading and the performance of the underlying collateral. Where the issuer has indicated that it intends to report such information,
specify in the prospectus what information will be reported, where such information can be
obtained, and the frequency with which such information will be reported.

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ANNEX IX
Minimum disclosure requirements for the debt and derivative securities registration document
(schedule)
(Debt and derivative securities with a denomination per unit of at least EUR M5 100 000 )
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the registration document and, as the
case may be, for certain parts of it, with, in the latter case, an indication of such parts. In
the case of natural persons including members of the issuer's administrative, management
or supervisory bodies indicate the name and function of the person; in case of legal persons
indicate the name and registered office.

1.2

A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the registration
document is, to the best of their knowledge, in accordance with the facts and contains no
omission likely to affect its import. As the case may be, declaration by those responsible for
certain parts of the registration document that, having taken all reasonable care to ensure
that such is the case, the information contained in the part of the registration document for
which they are responsible is, to the best of their knowledge, in accordance with the facts
and contains no omission likely to affect its import.

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STATUTORY AUDITORS

2.1

Names and addresses of the issuers auditors for the period covered by the historical financial information (together with their membership in a professional body).

2.2

If auditors have resigned, been removed or not been re-appointed during the period covered
by the historical financial information, details if material.

RISK FACTORS

3.1

Prominent disclosure of risk factors that may affect the issuers ability to fulfil its obligations
under the securities to investors in a section headed Risk Factors.

INFORMATION ABOUT THE ISSUER

4.1

History and development of the Issuer

4.1.1

the legal and commercial name of the issuer;

4.1.2

the place of registration of the issuer and its registration number;

4.1.3

the date of incorporation and the length of life of the issuer, except where indefinite;

4.1.4

the domicile and legal form of the issuer, the legislation under which the issuer operates, its
country of incorporation, and the address and telephone number of its registered office (or
principal place of business if different from its registered office;

4.1.5

any recent events particular to the issuer and which are to a material extent relevant to the
evaluation of the issuers solvency.

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5

BUSINESS OVERVIEW

5.1

Principal activities:

5.1.1

A brief description of the issuers principal activities stating the main categories of products
sold and/or services performed;

5.1.2

The basis for any statements in the registration document made by the issuer regarding its
competitive position.

ORGANISATIONAL STRUCTURE

6.1

If the issuer is part of a group, a brief description of the group and of the issuer's position
within it.

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6.2

If the issuer is dependent upon other entities within the group, this must be clearly stated
together with an explanation of this dependence.

TREND INFORMATION

7.1

Include a statement that there has been no material adverse change in the prospects of the
issuer since the date of its last published audited financial statements.
In the event that the issuer is unable to make such a statement, provide details of this material adverse change.

PROFIT FORECASTS OR ESTIMATES

If an issuer chooses to include a profit forecast or a profit estimate, the registration document must contain the information items 8.1 and 8.2 the following:

8.1

A statement setting out the principal assumptions upon which the issuer has based its forecast, or estimate.
There must be a clear distinction between assumptions about factors which the members of
the administrative, management or supervisory bodies can influence and assumptions about
factors which are exclusively outside the influence of the members of the administrative,
management or supervisory bodies; be readily understandable by investors; be specific and
precise; and not relate to the general accuracy of the estimates underlying the forecast.

8.2

Any profit forecast set out in the registration document must be accompanied by a statement confirming that the said forecast has been properly prepared on the basis stated and
that the basis of accounting is consistent with the accounting policies of the issuer.

8.3

The profit forecast or estimate must be prepared on a basis comparable with the historical
financial information.

ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES

9.1

Names, business addresses and functions in the issuer of the following persons, and an indication of the principal activities performed by them outside the issuer where these are significant with respect to that issuer:
a)

members of the administrative, management or supervisory bodies;

b)

partners with unlimited liability, in the case of a limited partnership with a share capital.

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9.2

Administrative, Management, and Supervisory bodies' conflicts of interests

Potential conflicts of interests between any duties to the issuing entity of the persons referred to in item 9.1 and their private interests and or other duties must be clearly stated.
In the event that there are no such conflicts, a statement to that effect.

10

MAJOR SHAREHOLDERS

10.1

To the extent known to the issuer, state whether the issuer is directly or indirectly owned or
controlled and by whom, and describe the nature of such control, and describe the measures
in place to ensure that such control is not abused.

10.2

A description of any arrangements, known to the issuer, the operation of which may at a
subsequent date result in a change in control of the issuer.

11

FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES,

FINANCIAL POSITION AND PROFITS AND LOSSES

11.1

Historical Financial Information

Audited historical financial information covering the latest two financial years (or such shorter period that the issuer has been in operation), and the audit report in respect of each
year. M2 If the issuer has changed its accounting reference date during the period for
which historical financial information is required, the audited historical information shall
cover at least 24 months, or the entire period for which the issuer has been in operation,
whichever is the shorter. Such financial information must be prepared according to Regulation (EC) No 1606/2002, or if not applicable to a Members State national accounting
standards for issuers from the Community. For third country issuers, such financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys
national accounting standards equivalent to these standards. Otherwise, the following information must be included in the registration document:
a)

a prominent statement that the financial information included in the registration document has not been prepared in accordance with the international accounting standards
adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 and
that there may be material differences in the financial information had Regulation (EC)
No 1606/2002 been applied to the historical financial information.

b)

immediately following the historical financial information a narrative description of the

differences between the international accounting standards adopted pursuant to the
procedure of Article 3 of Regulation (EC) No 1606/2002 and the accounting principles
adopted by the issuer in preparing its annual financial statements.

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The most recent year's historical financial information must be presented and prepared in a
form consistent with that which will be adopted in the issuers next published annual financial statements having regard to accounting standards and policies and legislation applicable
to such annual financial statements.
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If the audited financial information is prepared according to national accounting standards,
the financial information required under this heading must include at least the following:
a)

the balance sheet;

b)

the income statement;

c)

the accounting policies and explanatory notes.

The historical annual financial information must be independently audited or reported on as

to whether or not, for the purposes of the registration document, it gives a true and fair
view, in accordance with auditing standards applicable in a Member State or an equivalent
standard. Otherwise, the following information must be included in the registration document:

11.2

a)

a prominent statement disclosing which auditing standards have been applied;

b)

an explanation of any significant departures from international standards on auditing.

Financial statements
If the issuer prepares both own and consolidated financial statements, include at least the
consolidated financial statements in the registration document.

11.3

Auditing of historical annual financial information

11.3.1

A statement that the historical financial information has been audited. If audit reports on the
historical financial information have been refused by the statutory auditors or if they contain
qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given.

11.3.2

An indication of other information in the registration document which has been audited by
the auditors.

11.3.3

Where financial data in the registration document is not extracted from the issuer's audited
financial statements, state the source of the data and state that the data is unaudited.

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11.4

Age of latest financial information

11.4.1

The last year of audited financial information may not be older than 18 months from the
date of the registration document.

11.5

Legal and arbitration proceedings

Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period
covering at least the previous 12 months which may have, or have had in the recent past,
significant effects on the issuer and/or group's financial position or profitability, or provide
an appropriate negative statement

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11.6

Significant change in the issuers financial or trading position

A description of any significant change in the financial or trading position of the group which
has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published, or an appropriate negative
statement.

12

MATERIAL CONTRACTS
A brief summary of all material contracts that are not entered into in the ordinary course of
the issuer's business, which could result in any group member being under an obligation or
entitlement that is material to the issuers ability to meet its obligation to security holders in
respect of the securities being issued.

13

THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF

ANY INTEREST

13.1

Where a statement or report attributed to a person as an expert is included in the registration document, provide such persons name, business address, qualifications and material
interest if any in the issuer. If the report has been produced at the issuers request a statement to that effect that such statement or report is included, in the form and context in
which it is included, with the consent of that person who has authorised the contents of that
part of the registration document.

13.2

Third party information

Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able
to ascertain from information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or misleading; in addition, identify the source(s) of the information.

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DOCUMENTS ON DISPLAY
A statement that for the life of the registration document the following documents (or copies
thereof), where applicable, may be inspected:
a)

the memorandum and articles of association of the issuer;

b)

all reports, letters, and other documents, historical financial information, valuations and
statements prepared by any expert at the issuer's request any part of which is included
or referred to in the registration document;

c)

the historical financial information of the issuer or, in the case of a group, the historical
financial information of the issuer and its subsidiary undertakings for each of the two financial years preceding the publication of the registration document.

An indication of where the documents on display may be inspected, by physical or electronic

means.
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ANNEX X
Minimum disclosure requirements for the depository receipts issued over shares (schedule)
INFORMATION ABOUT THE ISSUER OF THE UNDERLYING SHARES
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the prospectus and, as the case may be,
for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuer's administrative, management or supervisory
bodies indicate the name and function of the person; in case of legal persons indicate the
name and registered office.

1.2

A declaration by those responsible for the prospectus that, having taken all reasonable care
to ensure that such is the case, the information contained in the prospectus is, to the best of
their knowledge, in accordance with the facts and contains no omission likely to affect its
import. As the case may be, declaration by those responsible for certain parts of the prospectus that, having taken all reasonable care to ensure that such is the case, the information contained in the part of the prospectus for which they are responsible is, to the best
of their knowledge, in accordance with the facts and contains no omission likely to affect its
import.

STATUTORY AUDITORS

2.1

Names and addresses of the issuers auditors for the period covered by the historical financial information (together with their membership in a professional body).

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2.2

If auditors have resigned, been removed or not been re-appointed during the period covered
by the historical financial information, indicate details if material.

SELECTED FINANCIAL INFORMATION

3.1

Selected historical financial information regarding the issuer, presented for each financial
year for the period covered by the historical financial information, and any subsequent interim financial period, in the same currency as the financial information.
The selected historical financial information must provide the key figures that summarise the
financial condition of the issuer.

3.2

If selected financial information for interim periods is provided, comparative data from the
same period in the prior financial year shall also be provided, except that the requirement
for comparative balance sheet information is satisfied by presenting the year end balance
sheet information.

RISK FACTORS
Prominent disclosure of risk factors that are specific to the issuer or its industry in a section
headed Risk Factors.

INFORMATION ABOUT THE ISSUER

5.1

History and development of the issuer

5.1.1

the legal and commercial name of the issuer;

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5.1.2

the place of registration of the issuer and its registration number;

5.1.3

the date of incorporation and the length of life of the issuer, except where indefinite;

5.1.4

the domicile and legal form of the issuer, the legislation under which the issuer operates, its
country of incorporation, and the address and telephone number of its registered office (or
principal place of business if different from its registered office);

5.1.5

the important events in the development of the issuer's business.

5.2

Investments

5.2.1

A description, (including the amount) of the issuer's principal investments for each financial
year for the period covered by the historical financial information up to the date of the prospectus;

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5.2.2

A description of the issuers principal investments that are currently in progress, including
the distribution of these investments geographically (home and abroad) and the method of
financing (internal or external);

5.2.3

Information concerning the issuer's principal future investments on which its management
bodies have already made firm commitments.

BUSINESS OVERVIEW

6.1

Principal Activities

6.1.1

A description of, and key factors relating to, the nature of the issuer's operations and its
principal activities, stating the main categories of products sold and/or services performed
for each financial year for the period covered by the historical financial information.

6.1.2

An indication of any significant new products and/or services that have been introduced and,
to the extent the development of new products or services has been publicly disclosed, give
the status of development.

6.2

Principal Markets
A description of the principal markets in which the issuer competes, including a breakdown
of total revenues by category of activity and geographic market for each financial year for
the period covered by the historical financial information.

6.3

Where the information given pursuant to items 6.1 and 6.2 has been influenced by exceptional factors, mention that fact.

6.4

If material to the issuer's business or profitability, disclose summary information regarding

the extent to which the issuer is dependent, on patents or licences, industrial, commercial or
financial contracts or new manufacturing processes.

6.5

The basis for any statements made by the issuer regarding its competitive position.

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7

ORGANISATIONAL STRUCTURE

7.1

If the issuer is part of a group, a brief description of the group and the issuer's position
within the group.

7.2

A list of the issuer's significant subsidiaries, including name, country of incorporation or residence, proportion of ownership interest and, if different, proportion of voting power held.

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PROPERTY, PLANTS AND EQUIPMENT

8.1

Information regarding any existing or planned material tangible fixed assets, including
leased properties, and any major encumbrances thereon.

8.2

A description of any environmental issues that may affect the issuers utilisation of the tangible fixed assets.

OPERATING AND FINANCIAL REVIEW

9.1

Financial condition
To the extent not covered elsewhere in the prospectus, provide a description of the issuers
financial condition, changes in financial condition and results of operations for each year and
interim period, for which historical financial information is required, including the causes of
material changes from year to year in the financial information to the extent necessary for
an understanding of the issuers business as a whole.

9.2

Operating results

9.2.1

Information regarding significant factors, including unusual or infrequent events or new developments, materially affecting the issuer's income from operations, indicating the extent
to which income was so affected.

9.2.2

Where the financial statements disclose material changes in net sales or revenues, provide a
narrative discussion of the reasons for such changes.

9.2.3

Information regarding any governmental, economic, fiscal, monetary or political policies or

factors that have materially affected, or could materially affect, directly or indirectly, the issuer's operations.

10

CAPITAL RESOURCES

10.1

Information concerning the issuers capital resources (both short and long term).

10.2

An explanation of the sources and amounts of and a narrative description of the issuer's
cash flows.

10.3

Information on the borrowing requirements and funding structure of the issuer.

10.4

Information regarding any restrictions on the use of capital resources that have materially
affected, or could materially affect, directly or indirectly, the issuers operations.

10.5

Information regarding the anticipated sources of funds needed to fulfil commitments referred to in items 5.2.3 and 8.1.

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11

RESEARCH AND DEVELOPMENT, PATENTS AND LICENCES

Where material, provide a description of the issuer's research and development policies for
each financial year for the period covered by the historical financial information, including
the amount spent on issuer-sponsored research and development activities.

12

TREND INFORMATION

12.1

The most significant recent trends in production, sales and inventory, and costs and selling
prices since the end of the last financial year to the date of the prospectus.

12.2

Information on any known trends, uncertainties, demands, commitments or events that are
reasonably likely to have a material effect on the issuer's prospects for at least the current
financial year.

13

PROFIT FORECASTS OR ESTIMATES

If an issuer chooses to include a profit forecast or a profit estimate the prospectus must
contain the information items 13.1 and 13.2.

13.1

A statement setting out the principal assumptions upon which the issuer has based its forecast, or estimate.
There must be a clear distinction between assumptions about factors which the members of
the administrative, management or supervisory bodies can influence and assumptions about
factors which are exclusively outside the influence of the members of the administrative,
management or supervisory bodies; the assumptions must be readily understandable by investors, be specific and precise and not relate to the general accuracy of the estimates underlying the forecast.

M6
13.2

A report prepared by independent accountants or auditors stating that in the opinion of the
independent accountants or auditors the forecast or estimate has been properly compiled on
the basis stated, and that the basis of accounting used for the profit forecast or estimate is
consistent with the accounting policies of the issuer.
Where financial information relates to the previous financial year and only contains nonmisleading figures substantially consistent with the final figures to be published in the next
annual audited financial statements for the previous financial year, and the explanatory information necessary to assess the figures, a report shall not be required provided that the
prospectus includes all of the following statements:

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a)

the person responsible for this financial information, if different from the one which is
responsible for the prospectus in general, approves that information;

b)

independent accountants or auditors have agreed that this information is substantially

consistent with the final figures to be published in the next annual audited financial
statements;

c)

this financial information has not been audited.

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13.3

The profit forecast or estimate prepared on a basis comparable with the historical financial
information.

13.4

If the issuer has published a profit forecast in a prospectus which is still outstanding, provide a statement setting out whether or not that forecast is still correct as at the time of the
prospectus, and an explanation of why such forecast is no longer valid if that is the case.

14

ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES AND SENIOR MANAGEMENT

14.1

Names, business addresses and functions in the issuer of the following persons and an indication of the principal activities performed by them outside that issuer where these are significant with respect to that issuer:
a)

members of the administrative, management or supervisory bodies;

b)

partners with unlimited liability, in the case of a limited partnership with a share capital;

c)

founders, if the issuer has been established for fewer than five years;

d)

any senior manager who is relevant to establishing that the issuer has the appropriate
expertise and experience for the management of the issuer's business.

The nature of any family relationship between any of those persons.

In the case of each member of the administrative, management or supervisory bodies of the
issuer and person described in points (b) and (d) of the first subparagraph, details of that
persons relevant management expertise and experience and the following information:
a)

the names of all companies and partnerships of which such person has been a member
of the administrative, management or supervisory bodies or partner at any time in the
previous five years, indicating whether or not the individual is still a member of the administrative, management or supervisory bodies or partner. It is not necessary to list all
the subsidiaries of an issuer of which the person is also a member of the administrative,
management or supervisory bodies;

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b)

any convictions in relation to fraudulent offences for at least the previous five years;

c)

details of any bankruptcies, receiverships or liquidations with which a person described

in points (a) and (d) of the first subparagraph who was acting in the capacity of any of
the positions set out in points (a) and (d) of the first subparagraph member of the administrative, management or supervisory bodies was associated for at least the previous
five years;

d)

details of any official public incrimination and/or sanctions of such person by statutory
or regulatory authorities (including designated professional bodies) and whether such
person has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management
or conduct of the affairs of any issuer for at least the previous five years.

If there is no such information to be disclosed, a statement to that effect must be made.

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14.2

Administrative, Management, and Supervisory bodies' and Senior Management conflicts of

interests
Potential conflicts of interests between any duties to the issuer of the persons referred to in
the first subparagraph of item 14.1 and their private interests and or other duties must be
clearly stated. In the event that there are no such conflicts, make a statement to that effect.
Any arrangement or understanding with major shareholders, customers, suppliers or others,
pursuant to which any person referred to in the first subparagraph of item 14.1 was selected
as a member of the administrative, management or supervisory bodies or member of senior
management.

15

REMUNERATION AND BENEFITS

In relation to the last full financial year for those persons referred to in points (a) and (d) of
the first subparagraph of item 14.1:

15.1

The amount of remuneration paid (including any contingent or deferred compensation), and
benefits in kind granted, to such persons by the issuer and its subsidiaries for services in all
capacities to the issuer and its subsidiaries by any person.
This information must be provided on an individual basis unless individual disclosure is not
required in the issuers home country and is not otherwise publicly disclosed by the issuer.

15.2

The total amounts set aside or accrued by the issuer or its subsidiaries to provide pension,
retirement or similar benefits.

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16

BOARD PRACTICES
In relation to the issuer's last completed financial year, and unless otherwise specified, with
respect to those persons referred to in point (a) of the first subparagraph of item 14.1:

16.1

Date of expiration of the current term of office, if applicable, and the period during which
the person has served in that office.

16.2

Information about members of the administrative, management or supervisory bodies' service contracts with the issuer or any of its subsidiaries providing for benefits upon termination of employment, or an appropriate negative statement.

16.3

Information about the issuer's audit committee and remuneration committee, including the
names of committee members and a summary of the terms of reference under which the
committee operates.

16.4

A statement as to whether or not the issuer complies with its countrys of incorporation corporate governance regime(s). In the event that the issuer does not comply with such a regime, a statement to that effect together with an explanation regarding why the issuer does
not comply with such regime.

17

EMPLOYEES

17.1

Either the number of employees at the end of the period or the average for each financial
year for the period covered by the historical financial information up to the date of the prospectus (and changes in such numbers, if material) and, if possible and material, a breakdown of persons employed by main category of activity and geographic location. If the issuer employs a significant number of temporary employees, include disclosure of the number
of temporary employees on average during the most recent financial year.

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17.2

Shareholdings and stock options

With respect to each person referred to in points (a) and (b) of the first subparagraph of
item 14.1, provide information as to their share ownership and any options over such shares
in the issuer as of the most recent practicable date.

17.3

Description of any arrangements for involving the employees in the capital of the issuer.

18

MAJOR SHAREHOLDERS

18.1

In so far as is known to the issuer, the name of any person other than a member of the administrative, management or supervisory bodies who, directly or indirectly, has an interest
notifiable under the issuer's national law in the issuers capital or voting rights, together

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with the amount of each such persons interest or, if there are no such persons, an appropriate negative statement.
18.2

Whether the issuer's major shareholders have different voting rights, or an appropriate negative statement.

18.3

To the extent known to the issuer, state whether the issuer is directly or indirectly owned or
controlled and by whom and describe the nature of such control and describe the measures
in place to ensure that such control is not abused.

18.4

A description of any arrangements, known to the issuer, the operation of which may at a
subsequent date result in a change in control of the issuer.

19

RELATED PARTY TRANSACTIONS

Details of related party transactions (which for these purposes are those set out in the
Standards adopted according to Regulation (EC) No 1606/2002), that the issuer has entered
into during the period covered by the historical financial information and up to the date of
the prospectus must be disclosed in accordance with the respective standard adopted according to Regulation (EC) No 1606/2002 if applicable.
If such standards do not apply to the issuer the following information must be disclosed:
a)

the nature and extent of any transactions which are - as a single transaction or in their
entirety - material to the issuer. Where such related party transactions are not concluded at arm's length provide an explanation of why these transactions were not concluded
at arms length. In the case of outstanding loans including guarantees of any kind indicate the amount outstanding;

b)

the amount or the percentage to which related party transactions form part of the turnover of the issuer.

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20

FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES,

FINANCIAL POSITION AND PROFITS AND LOSSES

20.1

Historical financial information

Audited historical financial information covering the latest 3 financial years (or such shorter
period that the issuer has been in operation), and the audit report in respect of each year.
M2 If the issuer has changed its accounting reference date during the period for which historical financial information is required, the audited historical information shall cover at least
36 months, or the entire period for which the issuer has been in operation, whichever is the
shorter. Such financial information must be prepared according to Regulation (EC) No
1606/2002, or if not applicable to a Member States national accounting standards for issuers

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from the Community. For third country issuers, such financial information must be prepared
according to the international accounting standards adopted pursuant to the procedure of
Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards. If such financial information is not equivalent to these
standards, it must be presented in the form of restated financial statements.
The last two years audited historical financial information must be presented and prepared in
a form consistent with that which will be adopted in the issuers next published annual financial statements having regard to accounting standards and policies and legislation applicable to such annual financial statements.
If the issuer has been operating in its current sphere of economic activity for less than one
year, the audited historical financial information covering that period must be prepared in
accordance with the standards applicable to annual financial statements under Regulation
(EC) No 1606/2002, or if not applicable to a Member States national accounting standards
where the issuer is an issuer from the Community. For third country issuers, the historical
financial information must be prepared according to the international accounting standards
adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third
countrys national accounting standards equivalent to these standards. This historical financial information must be audited.
If the audited financial information is prepared according to national accounting standards,
the financial information required under this heading must include at least the following:
a)

the balance sheet;

b)

the income statement;

c)

a statement showing either all changes in equity or changes in equity other than those
arising from capital transactions with owners and distributions to owners;

d)

the cash flow statement;

e)

the accounting policies and explanatory notes.

The historical annual financial information must be independently audited or reported on as

to whether or not, for the purposes of the prospectus, it gives a true and fair view, in accordance with auditing standards applicable in a Member State or an equivalent standard.
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20.1a

This paragraph may be used only for issues of depository receipts having a denomination per
unit of at least EUR M5 100 000 .
Audited historical financial information covering the latest three financial years (or such
shorter period that the issuer has been in operation), and the audit report in respect of each

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year. M2 If the issuer has changed its accounting reference date during the period for
which historical financial information is required, the audited historical information shall
cover at least 36 months, or the entire period for which the issuer has been in operation,
whichever is the shorter. Such financial information must be prepared according to Regulation (EC) No 1606/2002, or if not applicable to a Member States national accounting
standards for issuers from the Community. For third country issuers, such financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys
national accounting standards equivalent to these standards. Otherwise, the following information must be included in the prospectus:
a)

a prominent statement that the financial information included in the registration document has not been prepared in accordance with the international accounting standards
adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 and
that there may be material differences in the financial information had Regulation (EC)
No 1606/2002 been applied to the historical financial information;

b)

immediately following the historical financial information a narrative description of the

differences between the international accounting standards adopted pursuant to the
procedure of Article 3 of Regulation (EC) No 1606/2002 and the accounting principles
adopted by the issuer in preparing its annual financial statements.

The last two years audited historical financial information must be presented and prepared in
a form consistent with that which will be adopted in the issuers next published annual financial statements having regard to accounting standards and policies and legislation applicable to such annual financial statements.
If the audited financial information is prepared according to national accounting standards,
the financial information required under this heading must include at least the following:
a)

the balance sheet;

b)

the income statement;

c)

a statement showing either all changes in equity or changes in equity other than those
arising from capital transactions with owners and distributions to owners;

d)

the cash flow statement;

e)

the accounting policies and explanatory notes.

The historical annual financial information must be independently audited or reported on as

to whether or not, for the purposes of the prospectus, it gives a true and fair view, in accordance with auditing standards applicable in a Member State or an equivalent standard.
Otherwise, the following information must be included in the prospectus:

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a)

a prominent statement disclosing which auditing standards have been applied;

b)

an explanation of any significant departures from international standards on auditing.

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20.2

Financial statements
If the issuer prepares both own and consolidated annual financial statements, include at
least the consolidated annual financial statements in the prospectus.

20.3

Auditing of historical annual financial information

20.3.1

A statement that the historical financial information has been audited. If audit reports on the
historical financial information have been refused by the statutory auditors or if they contain
qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given.

20.3.2

Indication of other information in the prospectus which has been audited by the auditors.

20.3.3

Where financial data in the prospectus is not extracted from the issuer's audited financial
statements state the source of the data and state that the data is unaudited.

20.4

Age of latest financial information

20.4.1

The last year of audited financial information may not be older than:
a)

18 months from the date of the prospectus if the issuer includes audited interim financial statements in the prospectus;

b)

15 months from the date of the prospectus if the issuer includes unaudited interim financial statements in the prospectus.

20.5

Interim and other financial information

20.5.1

If the issuer has published quarterly or half yearly financial information since the date of its
last audited financial statements, these must be included in the prospectus. If the quarterly
or half yearly financial information has been reviewed or audited the audit or review report
must also be included. If the quarterly or half yearly financial information is unaudited or
has not been reviewed, state that fact.

20.5.2

If the prospectus is dated more than nine months after the end of the last audited financial
year, it must contain interim financial information, which may be unaudited (in which case
that fact shall be stated) covering at least the first six months of the financial year.

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The interim financial information must include comparative statements for the same period
in the prior financial year, except that the requirement for comparative balance sheet information may be satisfied by presenting the years end balance sheet.
20.6

Dividend policy
A description of the issuers policy on dividend distributions and any restrictions thereon.

20.6.1

The amount of the dividend per share for each financial year for the period covered by the
historical financial information adjusted, where the number of shares in the issuer has
changed, to make it comparable.

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20.7

Legal and arbitration proceedings

Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period
covering at least the previous 12 months which may have, or have had in the recent past
significant effects on the issuer and/or group's financial position or profitability, or provide
an appropriate negative statement.

20.8

Significant change in the issuers financial or trading position

A description of any significant change in the financial or trading position of the group which
has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published, or provide an appropriate
negative statement.

21

ADDITIONAL INFORMATION

21.1

Share capital
The following information as of the date of the most recent balance sheet included in the
historical financial information:

21.1.1

The amount of issued capital, and for each class of share capital:
a)

the number of shares authorised;

b)

the number of shares issued and fully paid and issued but not fully paid;

c)

the par value per share, or that the shares have no par value;

d)

a reconciliation of the number of shares outstanding at the beginning and end of the
year. If more than 10 % of capital has been paid for with assets other than cash within
the period covered by the historical financial information, state that fact.

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21.1.2

If there are shares not representing capital, state the number and main characteristics of
such shares.

21.1.3

The number, book value and face value of shares in the issuer held by or on behalf of the issuer itself or by subsidiaries of the issuer.

21.1.4

The amount of any convertible securities, exchangeable securities or securities with warrants, with an indication of the conditions governing and the procedures for conversion, exchange or subscription.

21.1.5

Information about and terms of any acquisition rights and or obligations over authorised but
unissued capital or an undertaking to increase the capital.

21.1.6

Information about any capital of any member of the group which is under option or agreed
conditionally or unconditionally to be put under option and details of such options including
those persons to whom such options relate.

21.1.7

A history of share capital, highlighting information about any changes, for the period covered by the historical financial information.

21.2

Memorandum and Articles of Association

21.2.1

A description of the issuers objects and purposes and where they can be found in the memorandum and articles of association.

21.2.2

A summary of any provisions of the issuer's articles of association, statutes or charter and
bylaws with respect to the members of the administrative, management and supervisory
bodies.

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21.2.3

A description of the rights, preferences and restrictions attaching to each class of the existing shares.

21.2.4

A description of what action is necessary to change the rights of holders of the shares, indicating where the conditions are more significant than is required by law.

21.2.5

A description of the conditions governing the manner in which annual general meetings and
extraordinary general meetings of shareholders are called including the conditions of admission.

21.2.6

A brief description of any provision of the issuer's articles of association, statutes, charter or
bylaws that would have an effect of delaying, deferring or preventing a change in control of
the issuer.

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21.2.7

An indication of the articles of association, statutes, charter or bylaws provisions, if any,

governing the ownership threshold above which shareholder ownership must be disclosed.

21.2.8

A description of the conditions imposed by the memorandum and articles of association statutes, charter or bylaws governing changes in the capital, where such conditions are more
stringent than is required by law.

22

MATERIAL CONTRACTS
A summary of each material contract, other than contracts entered into in the ordinary
course of business, to which the issuer or any member of the group is a party, for the two
years immediately preceding publication of the prospectus.
A summary of any other contract (not being a contract entered into in the ordinary course of
business) entered into by any member of the group which contains any provision under
which any member of the group has any obligation or entitlement which is material to the
group as at the date of the prospectus.

23

THIRD PARTY INFORMATION, STATEMENT BY EXPERTS AND DECLARATIONS OF ANY

INTEREST

23.1

Where a statement or report attributed to a person as an expert is included in the prospectus provide such persons name, business address, qualifications and material interest if any
in the issuer. If the report has been produced at the issuers request a statement to that effect that such statement or report is included, in the form and context in which it is included, with the consent of that person who has authorised the contents of that part of the prospectus.

23.2

Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able
to ascertain from information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or misleading. In addition, the issuer shall identify the source(s) of the information.

24

DOCUMENTS ON DISPLAY
A statement that for the life of the prospectus the following documents (or copies thereof),
where applicable, may be inspected:
a)

the memorandum and articles of association of the issuer;

b)

all reports, letters, and other documents, historical financial information, valuations and
statements prepared by any expert at the issuers request any part of which is included
or referred to in the prospectus;

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c)

the historical financial information of the issuer or, in the case of a group, the historical
financial information for the issuer and its subsidiary undertakings for each of the two
financial years preceding the publication of the prospectus.

An indication of where the documents on display may be inspected, by physical or electronic

means.
25

INFORMATION ON HOLDINGS

25.1

Information relating to the undertakings in which the issuer holds a proportion of the capital
likely to have a significant effect on the assessment of its own assets and liabilities, financial
position or profits and losses.

26

INFORMATION ABOUT THE ISSUER OF THE DEPOSITORY RECEIPTS

26.1

Name, registered office and principal administrative establishment if different from the registered office.

26.2

Date of incorporation and length of life of the issuer, except where indefinite.

26.3

Legislation under which the issuer operates and legal form which it has adopted under that
legislation.

27

INFORMATION ABOUT THE UNDERLYING SHARES

27.1

A description of the type and the class of the underlying shares, including the ISIN (International Security Identification Number) or other such security identification code.

27.2

Legislation under which the underlying shares have been created.

27.3

An indication whether the underlying shares are in registered form or bearer form and
whether the underlying shares are in certificated form or book-entry form. In the latter case,
name and address of the entity in charge of keeping the records.

27.4

Currency of the underlying shares.

27.5

A description of the rights, including any limitations of these, attached to the underlying
shares and procedure for the exercise of said rights.

27.6

Dividend rights:
a)

fixed date(s) on which the entitlement arises;

b)

time limit after which entitlement to dividend lapses and an indication of the person in
whose favour the lapse operates;

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c)

dividend restrictions and procedures for non-resident holders;

d)

rate of dividend or method of its calculation, periodicity and cumulative or noncumulative nature of payments.

27.7

Voting rights
Pre-emption rights in offers for subscription of securities of the same class
Right to share in the issuers profits
Rights to share in any surplus in the event of liquidation
Redemption provisions
Conversion provisions.

27.8

The issue date of the underlying shares if new underlying shares are being created for the
issue of the depository receipts and they are not in existence at the time of issue of the depository receipts.

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27.9

If new underlying shares are being created for the issue of the depository receipts, state the
resolutions, authorisations and approvals by virtue of which the new underlying shares have
been or will be created and/or issued.

27.10

A description of any restrictions on the free transferability of the underlying shares.

27.11

In respect of the country of registered office of the issuer and the country(ies) where the offer is being made or admission to trading is being sought:
a)

information on taxes on the income from the underlying shares withheld at source;

b)

indication as to whether the issuer assumes responsibility for the withholding of taxes at
the source.

27.12

An indication of the existence of any mandatory takeover bids and/or squeeze-out and sellout rules in relation to the underlying shares.

27.13

An indication of public takeover bids by third parties in respect of the issuers equity, which
have occurred during the last financial year and the current financial year. The price or exchange terms attaching to such offers and the outcome thereof must be stated.

27.14

Lock up agreements:

the parties involved,

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content and exceptions of the agreement,

indication of the period of the lock up.

27.15

Information about selling share holders if any

27.15.1

Name and business address of the person or entity offering to sell the underlying shares, the
nature of any position office or other material relationship that the selling persons has had
within the past three years with the issuer of the underlying shares or any of its predecessors or affiliates.

27.16

Dilution

27.16.1

Amount and percentage of immediate dilution resulting from the offer of the depository receipts.

27.16.2

In the case of a subscription offer of the depository receipts to existing shareholders, disclose the amount and percentage of immediate dilutions if they do not subscribe to the offer
of depository receipts.

27.17

Additional information where there is a simultaneous or almost simultaneous offer or admission to trading of the same class of underlying shares as those underlying shares over which
the depository receipts are being issued.

27.17.1

If simultaneously or almost simultaneously with the creation of the depository receipts for
which admission to a regulated market is being sought underlying shares of the same class
as those over which the depository receipts are being issued are subscribed for or placed
privately, details are to be given of the nature of such operations and of the number and
characteristics of the underlying shares to which they relate.

27.17.2

Disclose all regulated markets or equivalent markets on which, to the knowledge of the issuer of the depository receipts, underlying shares of the same class of those over which the
depository receipts are being issued are offered or admitted to trading.

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27.17.3

To the extent known to the issuer of the depository receipts, indicate whether major shareholders, members of the administrative, management or supervisory bodies intended to subscribe in the offer, or whether any person intends to subscribe for more than five per cent of
the offer.

28

INFORMATION REGARDING THE DEPOSITORY RECEIPTS

28.1

A description of the type and class of depository receipts being offered and/or admitted to
trading.

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28.2

Legislation under which the depository receipts have been created.

28.3

An indication whether the depository receipts are in registered or bearer form and whether
the depository receipts are in certificated or book-entry form. In the latter case, include the
name and address of the entity in charge of keeping the records.

28.4

Currency of the depository receipts.

28.5

Describe the rights attaching to the depository receipts, including any limitations of these
attached to the depository receipts and the procedure if any for the exercise of these rights.

28.6

If the dividend rights attaching to depository receipts are different from the dividend rights
disclosed in relation to the underlying disclose the following about the dividend rights:
a)

fixed date(s) on which the entitlement arises;

b)

time limit after which entitlement to dividend lapses and an indication of the person in
whose favour the lapse operates;

c)

dividend restrictions and procedures for non-resident holders;

d)

rate of dividend or method of its calculation, periodicity and cumulative or noncumulative nature of payments.

28.7

If the voting rights attaching to the depository receipts are different from the voting rights
disclosed in relation to the underlying shares disclose the following about those rights:

28.8

Voting rights.

Pre-emption rights in offers for subscription of securities of the same class.

Right to share in the issuers profits.

Rights to share in any surplus in the event of liquidation.

Redemption provisions.

Conversion provisions.

Describe the exercise of and benefit from the rights attaching to the underlying shares, in
particular voting rights, the conditions on which the issuer of the depository receipts may
exercise such rights, and measures envisaged to obtain the instructions of the depository receipt holders - and the right to share in profits and any liquidation surplus which are not
passed on to the holder of the depository receipt.

28.9

The expected issue date of the depository receipts.

28.10

A description of any restrictions on the free transferability of the depository receipts.

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28.11

In respect of the country of registered office of the issuer and the country(ies) where the offer is being made or admission to trading is being sought:
a)

information on taxes on the income from the depository receipts withheld at source;

b)

indication as to whether the issuer assumes responsibility for the withholding of taxes at
the source.

28.12

Bank or other guarantees attached to the depository receipts and intended to underwrite the
issuer's obligations.

28.13

Possibility of obtaining the delivery of the depository receipts into original shares and procedure for such delivery.

29

INFORMATION ABOUT THE TERMS AND CONDITIONS OF THE OFFER OF THE DEPOSITORY RECEIPTS

29.1

Conditions, offer statistics, expected timetable and action required to apply for the offer

29.1.1

Total amount of the issue/offer, distinguishing the securities offered for sale and those offered for subscription; if the amount is not fixed, description of the arrangements and time
for announcing to the public the definitive amount of the offer.

29.1.2

The time period, including any possible amendments, during which the offer will be open and
description of the application process.

29.1.3

An indication of when, and under what circumstances, the offer may be revoked or suspended and whether revocation can occur after dealing has begun.

29.1.4

A description of the possibility to reduce subscriptions and the manner for refunding excess
amount paid by applicants.

29.1.5

Details of the minimum and/or maximum amount of application (whether in number of securities or aggregate amount to invest).

29.1.6

An indication of the period during which an application may be withdrawn, provided that investors are allowed to withdraw their subscription.

29.1.7

Method and time limits for paying up the securities and for delivery of the securities.

29.1.8

A full description of the manner and date in which results of the offer are to be made public.

29.1.9

The procedure for the exercise of any right of pre-emption, the negotiability of subscription
rights and the treatment of subscription rights not exercised.

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29.2

Plan of distribution and allotment

29.2.1

The various categories of potential investors to which the securities are offered. If the offer
is being made simultaneously in the markets of two or more countries and if a tranche has
been or is being reserved for certain of these, indicate any such tranche.

29.2.2

To the extent known to the issuer, indicate whether major shareholders or members of the
issuer's management, supervisory or administrative bodies intended to subscribe in the offer, or whether any person intends to subscribe for more than five per cent of the offer.

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29.2.3

Pre-allotment Disclosure:

29.2.3.1

The division into tranches of the offer including the institutional, retail and issuers employee
tranches and any other tranches.

29.2.3.2

The conditions under which the claw-back may be used, the maximum size of such claw back
and any applicable minimum percentages for individual tranches.

29.2.3.3

The allotment method or methods to be used for the retail and issuers employee tranche in
the event of an over-subscription of these tranches.

29.2.3.4

A description of any pre-determined preferential treatment to be accorded to certain classes

of investors or certain affinity groups (including friends and family programmes) in the allotment, the percentage of the offer reserved for such preferential treatment and the criteria
for inclusion in such classes or groups.

29.2.3.5

Whether the treatment of subscriptions or bids to subscribe in the allotment may be determined on the basis of which firm they are made through or by.

29.2.3.6

A target minimum individual allotment if any within the retail tranche.

29.2.3.7

The conditions for the closing of the offer as well as the date on which the offer may be
closed at the earliest;

29.2.3.8

Whether or not multiple subscriptions are admitted, and where they are not, how any multiple subscriptions will be handled.

29.2.3.9

Process for notification to applicants of the amount allotted and indication whether dealing
may begin before notification is made.

29.2.4

Over-allotment and green shoe:

29.2.4.1

The existence and size of any over-allotment facility and/or green shoe.

29.2.4.2

The existence period of the over-allotment facility and/or green shoe.

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29.2.4.3

Any conditions for the use of the over-allotment facility or exercise of the green shoe.

29.3

Pricing

29.3.1

An indication of the price at which the securities will be offered. When the price is not known
or when there is not an established and/or liquid market for the securities, indicate the
method for determination of the offer price, including who has set the criteria or is formally
responsible for its determination. Indication of the amount of any expenses and taxes specifically charged to the subscriber or purchaser.

29.3.2

Process for the disclosure of the offer price.

29.3.3

Where there is or could be a material disparity between the public offer price and the effective cash cost to members of the administrative, management or supervisory bodies or senior management, or affiliated persons, of securities acquired by them in transactions during
the past year, or which they have the right to acquire, include a comparison of the public
contribution in the proposed public offer and the effective cash contributions of such persons.

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29.4

Placing and underwriting

29.4.1

Name and address of the co-coordinator(s) of the global offer and of single parts of the offer
and, to the extend known to the issuer, of the placers in the various countries where the offer takes place.

29.4.2

Name and address of any paying agents and depository agents in each country.

29.4.3

Name and address of the entities agreeing to underwrite the issue on a firm commitment
basis, and name and address of the entities agreeing to place the issue without a firm commitment or under best efforts arrangements. Indication of the material features of the
agreements, including the quotas. Where not all of the issue is underwritten, a statement of
the portion not covered. Indication of the overall amount of the underwriting commission
and of the placing commission.

29.4.4

When the underwriting agreement has been or will be reached.

30

ADMISSION TO TRADING AND DEALING ARRANGEMENTS IN THE DEPOSITORY RECEIPTS

30.1

An indication as to whether the securities offered are or will be the object of an application
for admission to trading, with a view to their distribution in a regulated market or other
equivalent markets with indication of the markets in question. This circumstance must be
mentioned, without creating the impression that the admission to trading necessarily will be

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approved. If known, the earliest dates on which the securities will be admitted to trading
must be given.
30.2

All the regulated markets or equivalent markets on which, to the knowledge of the issuer,
securities of the same class of the securities to be offered or admitted to trading are already
admitted to trading.

30.3

If simultaneously or almost simultaneously with the creation of the securities for which admission to a regulated market is being sought securities of the same class are subscribed for
or placed privately or if securities of other classes are created for public or private placing,
details must be given of the nature of such operations and of the number and characteristics
of the securities to which they relate.

30.4

Name and address of the entities which have a firm commitment to act as intermediaries in
secondary trading, providing liquidity through bid and offer rates and description of the main
terms of their commitment.

30.5

Stabilisation: where an issuer or a selling shareholder has granted an over-allotment option

or it is otherwise proposed that price stabilising activities may be entered into in connection
with an offer:

30.6

The fact that stabilisation may be undertaken, that there is no assurance that it will be undertaken and that it may be stopped at any time.

30.7

The beginning and the end of the period during which stabilisation may occur.

30.8

The identity of the stabilisation manager for each relevant jurisdiction unless this is not
known at the time of publication.

30.9

The fact that stabilisation transactions may result in a market price that is higher than would
otherwise prevail.

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31

ESSENTIAL INFORMATION ABOUT THE ISSUE OF THE DEPOSITORY RECEIPTS C1

31.1

Reasons for the offer and use of proceeds

31.1.1

Reasons for the offer and, where applicable, the estimated net amount of the proceeds broken into each principal intended use and presented by order of priority of such uses. If the
issuer is aware that the anticipated proceeds will not be sufficient to fund all the proposed
uses, state the amount and sources of other funds needed. Details must be given with regard to the use of the proceeds, in particular when they are being used to acquire assets,
other than in the ordinary course of business, to finance announced acquisitions of other
business, or to discharge, reduce or retire indebtedness.

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31.2

Interest of natural and legal persons involved in the issue/offer

31.2.1

A description of any interest, including conflicting ones, that is material to the issue/offer,
detailing the persons involved and the nature of the interest.

31.3

Risk factors

31.3.1

Prominent disclosure of risk factors that are material to the securities being offered and/or
admitted to trading in order to assess the market risk associated with these securities in a
section headed Risk factors.

32

EXPENSE OF THE ISSUE/OFFER OF THE DEPOSITORY RECEIPTS

32.1

The total net proceeds and an estimate of the total expenses of the issue/offer.

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ANNEX XI
Minimum Disclosure Requirements for the Banks Registration Document (schedule)
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the registration document and, as the
case may be, for certain parts of it, with, in the latter case, an indication of such parts. In
the case of natural persons including members of the issuer's administrative, management
or supervisory bodies indicate the name and function of the person; in case of legal persons
indicate the name and registered office.

1.2

A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the registration
document is, to the best of their knowledge, in accordance with the facts and contains no
omission likely to affect its import. As the case may be, declaration by those responsible for
certain parts of the registration document that, having taken all reasonable care to ensure
that such is the case, the information contained in the part of the registration document for
which they are responsible is, to the best of their knowledge, in accordance with the facts
and contains no omission likely to affect its import.

STATUTORY AUDITORS

2.1

Names and addresses of the issuers auditors for the period covered by the historical financial information (together with their membership in a professional body).

2.2

If auditors have resigned, been removed or not been reappointed during the period covered
by the historical financial information, details if material.

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RISK FACTORS

3.1

Prominent disclosure of risk factors that may affect the issuers ability to fulfil its obligations
under the securities to investors in a section headed Risk factors.

INFORMATION ABOUT THE ISSUER

4.1

History and development of the Issuer

4.1.1

the legal and commercial name of the issuer;

4.1.2

the place of registration of the issuer and its registration number;

4.1.3

the date of incorporation and the length of life of the issuer, except where indefinite;

4.1.4

the domicile and legal form of the issuer, the legislation under which the issuer operates, its
country of incorporation, and the address and telephone number of its registered office (or
principal place of business if different from its registered office);

4.1.5

any recent events particular to the issuer which are to a material extent relevant to the
evaluation of the issuers solvency.

BUSINESS OVERVIEW

5.1

Principal activities:

5.1.1

A brief description of the issuers principal activities stating the main categories of products
sold and/or services performed;

5.1.2

An indication of any significant new products and/or activities.

5.1.3

Principal markets
A brief description of the principal markets in which the issuer competes.

5.1.4

The basis for any statements in the registration document made by the issuer regarding its
competitive position.

ORGANISATIONAL STRUCTURE

6.1

If the issuer is part of a group, a brief description of the group and of the issuer's position
within it.

6.2

If the issuer is dependent upon other entities within the group, this must be clearly stated
together with an explanation of this dependence.

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TREND INFORMATION

7.1

Include a statement that there has been no material adverse change in the prospects of the
issuer since the date of its last published audited financial statements.
In the event that the issuer is unable to make such a statement, provide details of this material adverse change.

7.2

Information on any known trends, uncertainties, demands, commitments or events that are
reasonably likely to have a material effect on the issuer's prospects for at least the current
financial year.

PROFIT FORECASTS OR ESTIMATES

If an issuer chooses to include a profit forecast or a profit estimate the registration document must contain the information items 8.1 and 8.2.

8.1

A statement setting out the principal assumptions upon which the issuer has based its forecast, or estimate.
There must be a clear distinction between assumptions about factors which the members of
the administrative, management or supervisory bodies can influence and assumptions about
factors which are exclusively outside the influence of the members of the administrative,
management or supervisory bodies; be readily understandable by investors; be specific and
precise; and not relate to the general accuracy of the estimates underlying the forecast.

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8.2

A report prepared by independent accountants or auditors stating that in the opinion of the
independent accountants or auditors the forecast or estimate has been properly compiled on
the basis stated, and that the basis of accounting used for the profit forecast or estimate is
consistent with the accounting policies of the issuer.
Where financial information relates to the previous financial year and only contains nonmisleading figures substantially consistent with the final figures to be published in the next
annual audited financial statements for the previous financial year, and the explanatory information necessary to assess the figures, a report shall not be required provided that the
prospectus includes all of the following statements:
a)

the person responsible for this financial information, if different from the one which is
responsible for the prospectus in general, approves that information;

b)

independent accountants or auditors have agreed that this information is substantially

consistent with the final figures to be published in the next annual audited financial
statements;

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c)
8.3

this financial information has not been audited.

The profit forecast or estimate must be prepared on a basis comparable with the historical
financial information.

ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES

9.1

Names, business addresses and functions in the issuer of the following persons, and an indication of the principal activities performed by them outside the issuer where these are significant with respect to that issuer:
a)

members of the administrative, management or supervisory bodies;

b)

partners with unlimited liability, in the case of a limited partnership with a share capital.

9.2

Administrative, Management, and Supervisory bodies conflicts of interests

9.3

Potential conflicts of interests between any duties to the issuing entity of the persons referred to in item 9.1 and their private interests and or other duties must be clearly stated.
In the event that there are no such conflicts, make a statement to that effect.

10

MAJOR SHAREHOLDERS

10.1

To the extent known to the issuer, state whether the issuer is directly or indirectly owned or
controlled and by whom, and describe the nature of such control, and describe the measures
in place to ensure that such control is not abused.

10.2

A description of any arrangements, known to the issuer, the operation of which may at a
subsequent date result in a change in control of the issuer.

11

FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES,

FINANCIAL POSITION AND PROFITS AND LOSSES

11.1

Historical Financial Information

Audited historical financial information covering the latest two financial years (or such shorter period that the issuer has been in operation), and the audit report in respect of each
year. M2 If the issuer has changed its accounting reference date during the period for
which historical financial information is required, the audited historical information shall
cover at least 24 months, or the entire period for which the issuer has been in operation,
whichever is the shorter. Such financial information must be prepared according to Regulation (EC) No 1606/2002, or if not applicable to a Member State national accounting standards for issuers from the Community. For third country issuers, such financial information
must be prepared according to the international accounting standards adopted pursuant to
the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national
accounting standards equivalent to these standards. If such financial information is not

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equivalent to these standards, it must be presented in the form of restated financial statements.
The most recent year's audited historical financial information must be presented and prepared in a form consistent with that which will be adopted in the issuers next published annual financial statements having regard to accounting standards and policies and legislation
applicable to such annual financial statements.
If the issuer has been operating in its current sphere of economic activity for less than one
year, the audited historical financial information covering that period must be prepared in
accordance with the standards applicable to annual financial statements under Regulation
(EC) No 1606/2002, or if not applicable to a Member State national accounting standards
where the issuer is an issuer from the Community. For third country issuers, the historical
financial information must be prepared according to the international accounting standards
adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third
countrys national accounting standards equivalent to these standards. This historical financial information must be audited.
If the audited financial information is prepared according to national accounting standards,
the financial information required under this heading must include at least the following:
a)

the balance sheet;

b)

the income statement;

c)

in the case of an admission of securities to trading on a regulated market only, a cash

flow statement;

d)

the accounting policies and explanatory notes.

The historical annual financial information must be independently audited or reported on as

to whether or not, for the purposes of the registration document, it gives a true and fair
view, in accordance with auditing standards applicable in a Member State or an equivalent
standard.
11.2

Financial statements
If the issuer prepares both own and consolidated financial statements, include at least the
consolidated financial statements in the registration document.

11.3

Auditing of historical annual financial information

11.3.1

A statement that the historical financial information has been audited. If audit reports on the
historical financial information have been refused by the statutory auditors or if they contain
qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given.

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11.3.2

An indication of other information in the registration document which has been audited by
the auditors.

11.3.3

Where financial data in the registration document is not extracted from the issuer's audited
financial statements state the source of the data and state that the data is un-audited.

11.4

Age of latest financial information

11.4.1

The last year of audited financial information may not be older than 18 months from the
date of the registration document.

11.5

Interim and other financial information

11.5.1

If the issuer has published quarterly or half yearly financial information since the date of its
last audited financial statements, these must be included in the registration document. If the
quarterly or half yearly financial information has been reviewed or audited the audit or review report must also be included. If the quarterly or half yearly financial information is
unaudited or has not been reviewed state that fact.

11.5.2

If the registration document is dated more than nine months after the end of the last audited financial year, it must contain interim financial information, covering at least the first six
months of the financial year. If the interim financial information is un-audited state that
fact.
The interim financial information must include comparative statements for the same period
in the prior financial year, except that the requirement for comparative balance sheet information may be satisfied by presenting the years end balance sheet.

11.6

Legal and arbitration proceedings

Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period
covering at least the previous 12 months which may have, or have had in the recent past,
significant effects on the issuer and/or group's financial position or profitability, or provide
an appropriate negative statement.

11.7

Significant change in the issuers financial position

A description of any significant change in the financial position of the group which has occurred since the end of the last financial period for which either audited financial information
or interim financial information have been published, or an appropriate negative statement.

12

MATERIAL CONTRACTS
A brief summary of all material contracts that are not entered into in the ordinary course of
the issuer's business, which could result in any group member being under an obligation or

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entitlement that is material to the issuers ability to meet its obligation to security holders in
respect of the securities being issued.
13

THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF

ANY INTEREST

13.1

Where a statement or report attributed to a person as an expert is included in the registration document, provide such persons name, business address, qualifications and material
interest if any in the issuer. If the report has been produced at the issuers request a statement to that effect that such statement or report is included, in the form and context in
which it is included, with the consent of that person who has authorised the contents of that
part of the registration document.

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13.2

Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able
to ascertain from information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or misleading In addition, the issuer shall identify the source(s) of the information.

14

DOCUMENTS ON DISPLAY
A statement that for the life of the registration document the following documents (or copies
thereof), where applicable, may be inspected:
a)

the memorandum and articles of association of the issuer;

b)

all reports, letters, and other documents, historical financial information, valuations and
statements prepared by any expert at the issuer's request any part of which is included
or referred to in the registration document;

c)

the historical financial information of the issuer or, in the case of a group, the historical
financial information of the issuer and its subsidiary undertakings for each of the two financial years preceding the publication of the registration document.

An indication of where the documents on display may be inspected, by physical or electronic

means.

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ANNEX XII
Minimum Disclosure Requirements for the Securities Note for derivative securities (schedule)
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the prospectus and, as the case may be,
for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuers administrative, management or supervisory
bodies indicate the name and function of the person; in case of legal persons indicate the
name and registered office.

1.2

A declaration by those responsible for the prospectus that, having taken all reasonable care
to ensure that such is the case, the information contained in the prospectus is, to the best of
their knowledge, in accordance with the facts and contains no omission likely to affect its
import. As the case may be, declaration by those responsible for certain parts of the prospectus that, having taken all reasonable care to ensure that such is the case, the information contained in the part of the prospectus for which they are responsible is, to the best
of their knowledge, in accordance with the facts and contains no omission likely to affect its
import.

RISK FACTORS
Prominent disclosure of risk factors that are material to the securities being offered and/or
admitted to trading in order to assess the market risk associated with these securities in a
section headed risk factors. This must include a risk warning to the effect that investors
may lose the value of their entire investment or part of it, as the case may be, and/or, if the
investors liability is not limited to the value of his investment, a statement of that fact, together with a description of the circumstances in which such additional liability arises and
the likely financial effect.

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3

ESSENTIAL INFORMATION

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3.1

Interest of natural and legal persons involved in the issue/offer

A description of any interest, including conflicting ones that is material to the issue/offer,
detailing the persons involved and the nature of the interest.

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3.2

Reasons for the offer and use of proceeds when different from making profit and/or hedging
certain risks
If reasons for the offer and use of proceeds are disclosed provide the total net proceeds and
an estimate of the total expenses of the issue/ offer.

INFORMATION CONCERNING THE SECURITIES TO BE OFFERED/ADMITTED TO TRADING

4.1

Information concerning the securities

4.1.1

A description of the type and the class of the securities being offered and/or admitted to
trading, including the ISIN (International Security Identification Number) or other such security identification code.

4.1.2

A clear and comprehensive explanation to help investors understand how the value of their
investment is affected by the value of the underlying instrument (s), especially under the
circumstances when the risks are most evident unless the securities have a denomination
per unit of at least EUR M5 100 000 or can only be acquired for at least EUR M5 100
000 per security.

4.1.3

Legislation under which the securities have been created.

4.1.4

An indication whether the securities are in registered form or bearer form and whether the
securities are in certificated form or book-entry form. In the latter case, name and address
of the entity in charge of keeping the records.

4.1.5

Currency of the securities issue.

4.1.6

Ranking of the securities being offered and/or admitted to trading, including summaries of
any clauses that are intended to affect ranking or subordinate the security to any present or
future liabilities of the issuer.

4.1.7

A description of the rights, including any limitations of these, attached to the securities and
procedure for the exercise of said rights.

4.1.8

In the case of new issues, a statement of the resolutions, authorisations and approvals by
virtue of which the securities have been or will be created and/or issued.

4.1.9

The issue date of the securities.

4.1.10

A description of any restrictions on the free transferability of the securities.

4.1.11

The expiration or maturity date of the derivative securities.

The exercise date or final reference date.

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4.1.12

A description of the settlement procedure of the derivative securities.

4.1.13

A description of how any return on derivative securities takes place, the payment or delivery
date, and the way it is calculated.

4.1.14

In respect of the country of registered office of the issuer and the country(ies) where the offer is being made or admission to trading is being sought:
a)

information on taxes on the income from the securities withheld at source;

b)

indication as to whether the issuer assumes responsibility for the withholding of taxes at
the source.

4.2

Information concerning the underlying

4.2.1

The exercise price or the final reference price of the underlying.

4.2.2

A statement setting out the type of the underlying and details of where information on the
underlying can be obtained:

an indication where information about the past and the further performance of the underlying and its volatility can be obtained,

where the underlying is a security,

the name of the issuer of the security,

the ISIN (international security identification number) or other such security identification code,

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where the underlying is an index:

the name of the index,

a description of the index if it is composed by the issuer or by any legal entity belonging
to the same group,

a description of the index provided by a legal entity or a natural person acting in association with, or on behalf of, the issuer, unless the prospectus contains the following
statements:

the complete set of rules of the index and information on the performance of the index
are freely accessible on the issuers or on the index providers website,

and

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the governing rules (including methodology of the index for the selection and the rebalancing of the components of the index, description of market disruption events and
adjustment rules) are based on predetermined and objective criteria.

If the index is not composed by the issuer, where information about the index can be obtained.

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where the underlying is an interest rate,

a description of the interest rate,

others:

Where the underlying does not fall within the categories specified above the securities
note shall contain equivalent information.

4.2.3

where the underlying is a basket of underlyings,

disclosure of the relevant weightings of each underlying in the basket.

A description of any market disruption or settlement disruption events that affect the underlying.

4.2.4

Adjustment rules with relation to events concerning the underlying.

TERMS AND CONDITIONS OF THE OFFER

5.1

Conditions, offer statistics, expected timetable and action required to apply for the offer

5.1.1

Conditions to which the offer is subject.

5.1.2

Total amount of the issue/offer; if the amount is not fixed, description of the arrangements
and time for announcing to the public the amount of the offer.

5.1.3

The time period, including any possible amendments, during which the offer will be open and
description of the application process.

5.1.4

Details of the minimum and/or maximum amount of application, (whether in number of securities or aggregate amount to invest).

5.1.5

Method and time limits for paying up the securities and for delivery of the securities.

5.1.6

A full description of the manner and date in which results of the offer are to be made public.

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5.2

Plan of distribution and allotment

5.2.1

The various categories of potential investors to which the securities are offered. If the offer
is being made simultaneously in the markets of two or more countries and if a tranche has
been or is being reserved for certain of these, indicate any such tranche.

5.2.2

Process for notification to applicants of the amount allotted and indication whether dealing
may begin before notification is made.

5.3

Pricing
Indication of the expected price at which the securities will be offered or the method of determining the price and the process for its disclosure. Indicate the amount of any expenses
and taxes specifically charged to the subscriber or purchaser.

5.4

Placing and underwriting

5.4.1

Name and address of the coordinator(s) of the global offer and of single parts of the offer
and, to the extend known to the issuer or to the offeror, of the placers in the various countries where the offer takes place.

5.4.2

Name and address of any paying agents and depository agents in each country.

5.4.3

Entities agreeing to underwrite the issue on a firm commitment basis, and entities agreeing
to place the issue without a firm commitment or under best efforts arrangements. Where
not all of the issue is underwritten, a statement of the portion not covered.

5.4.4

When the underwriting agreement has been or will be reached.

5.4.5

Name and address of a calculation agent.

ADMISSION TO TRADING AND DEALING ARRANGEMENTS

6.1

An indication as to whether the securities offered are or will be the object of an application
for admission to trading, with a view to their distribution in a regulated market or other
equivalent markets with indication of the markets in question. This circumstance shall be
mentioned, without creating the impression that the admission to trading necessarily will be
approved. If known, the earliest dates on which the securities will be admitted to trading
shall be given.

6.2

All the regulated markets or equivalent markets on which, to the knowledge of the issuer,
securities of the same class of the securities to be offered or admitted to trading are already
admitted to trading.

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6.3

Name and address of the entities which have a firm commitment to act as intermediaries in
secondary trading, providing liquidity through bid and offer rates and description of the main
terms of their commitment.

ADDITIONAL INFORMATION

7.1

If advisors connected with an issue are mentioned in the Securities Note, a statement of the
capacity in which the advisors have acted.

7.2

An indication of other information in the Securities Note which has been audited or reviewed
by statutory auditors and where auditors have produced a report. Reproduction of the report
or, with permission of the competent authority, a summary of the report.

7.3

Where a statement or report attributed to a person as an expert is included in the Securities

Note, provide such persons name, business address, qualifications and material interest, if
any, in the issuer. If the report has been produced at the issuers request a statement to
that effect that such statement or report is included, in the form and context in which it is
included, with the consent of that person who has authorised the contents of that part of the
Securities Note.

7.4

Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able
to ascertain from information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or misleading. In addition, the issuer shall identify the source(s) of the information.

7.5

An indication in the prospectus whether or not the issuer intends to provide post-issuance
information. Where the issuer has indicated that it intends to report such information, the
issuer shall specify in the prospectus what information will be reported and where such information can be obtained.

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ANNEX XIII
Minimum Disclosure Requirements for the Securities Note for debt securities with a denomination per unit of at least EUR M5 100 000 (Schedule)
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the prospectus and, as the case may be,
for certain parts of it, with, in the latter case, an indication of such parts. In case of natural
persons including members of the issuers administrative, management or supervisory bodies indicate the name and function of the person; in case of legal persons indicate the name
and registered office.

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1.2

A declaration by those responsible for the prospectus that, having taken all reasonable care
to ensure that such is the case, the information contained in the prospectus is, to the best of
their knowledge, in accordance with the facts and contains no omission likely to affect its
import. As the case may be, declaration by those responsible for certain parts of the prospectus that the information contained in the part of the prospectus for which they are responsible is, to the best of their knowledge, in accordance with the facts and contains no
omission likely to affect its import.

RISK FACTORS
Prominent disclosure of risk factors that are material to the securities admitted to trading in
order to assess the market risk associated with these securities in a section headed Risk
factors.

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3

ESSENTIAL INFORMATION

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Interest of natural and legal persons involved in the issue
A description of any interest, including conflicting ones, that is material to the issue, detailing the persons involved and the nature of the interest.
4

INFORMATION CONCERNING THE SECURITIES TO BE ADMITTED TO TRADING

4.1

Total amount of securities being admitted to trading.

4.2

A description of the type and the class of the securities being admitted to trading, including
the ISIN (international security identification number) or other such security identification
code.

4.3

Legislation under which the securities have been created.

4.4

An indication of whether the securities are in registered or bearer form and whether the securities are in certificated or book-entry form. In the latter case, name and address of the
entity in charge of keeping the records.

4.5

Currency of the securities issue.

4.6

Ranking of the securities being admitted to trading, including summaries of any clauses that
are intended to affect ranking or

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4.7

A description of the rights, including any limitations of these, attached to the securities and
procedure for the exercise of said rights.

M5
4.8

The nominal interest rate and provisions relating to interest payable:

the date from which interest becomes payable and the due dates for interest,

the time limit on the validity of claims to interest and repayment of principal.

Where the rate is not fixed, a statement setting out the type of underlying and a description
of the underlying on which it is based and of the method used to relate the underlying and
the rate:

a description of any market disruption or settlement disruption events that affect the
underlying,

adjustment rules with relation to events concerning the underlying,

name of the calculation agent.

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4.9

Maturity date and arrangements for the amortisation of the loan, including the repayment
procedures. Where advance amortisation is contemplated, on the initiative of the issuer or of
the holder, it must be described, stipulating amortisation terms and conditions.

4.10

An indication of yield.

4.11

Representation of debt security holders including an identification of the organisation representing the investors and provisions applying to such representation. Indication of where investors may have access to the contracts relating to these forms of representation.

4.12

A statement of the resolutions, authorisations and approvals by virtue of which the securities have been created and/or issued.

4.13

The issue date of the securities.

4.14

A description of any restrictions on the free transferability of the securities.

ADMISSION TO TRADING AND DEALING ARRANGEMENTS

5.1

Indication of the market where the securities will be traded and for which prospectus has
been published. If known, give the earliest dates on which the securities will be admitted to
trading.

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5.2

Name and address of any paying agents and depository agents in each country.

EXPENSE OF THE ADMISSION TO TRADING

An estimate of the total expenses related to the admission to trading.

ADDITIONAL INFORMATION

7.1

If advisors are mentioned in the Securities Note, a statement of the capacity in which the
advisors have acted.

7.2

An indication of other information in the Securities Note which has been audited or reviewed
by auditors and where auditors have produced a report. Reproduction of the report or, with
permission of the competent authority, a summary of the report.

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7.3

Where a statement or report attributed to a person as an expert is included in the Securities

Note, provide such persons name, business address, qualifications and material interest if
any in the issuer. If the report has been produced at the issuers request a statement to that
effect that such statement or report is included, in the form and context in which it is included, with the consent of that person who has authorised the contents of that part of the
Securities Note.

7.4

Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able
to ascertain from information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or misleading. In addition, identify the source(s) of the information.

7.5

Credit ratings assigned to an issuer or its debt securities at the request or with the cooperation of the issuer in the rating process.

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ANNEX XIV
Additional information building block on underlying share for some equity securities
1

Description of the underlying share

1.1

Describe the type and the class of the shares

1.2

Legislation under which the shares have been or will be created

1.3

Indication whether the securities are in registered form or bearer form and whether the securities are in certificated form or book-entry form. In the latter case, name and address of
the entity in charge of keeping the records

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1.4

Indication of the currency of the shares issue

1.5

A description of the rights, including any limitations of these, attached to the securities and
procedure for the exercise of those rights:

Dividend rights:

fixed date(s) on which the entitlement arises,

time limit after which entitlement to dividend lapses and an indication of the person
in whose favour the lapse operates,

dividend restrictions and procedures for non resident holders,

rate of dividend or method of its calculation, periodicity and cumulative or noncumulative nature of payments.

1.6

Voting rights.

Pre-emption rights in offers for subscription of securities of the same class.

Right to share in the issuers profits.

Rights to share in any surplus in the event of liquidation.

Redemption provisions.

Conversion provisions.

In the case of new issues, a statement of the resolutions, authorisations and approvals by
virtue of which the shares have been or will be created and/or issued and indication of the
issue date.

1.7

Where and when the shares will be or have been admitted to trading.

1.8

Description of any restrictions on the free transferability of the shares.

1.9

Indication of the existence of any mandatory takeover bids/or squeeze-out and sell-out rules
in relation to the shares.

1.10

Indication of public takeover bids by third parties in respect of the issuers equity, which
have occurred during the last financial year and the current financial year. The price or exchange terms attaching to such offers and the outcome thereof must be stated.

1.11

Impact on the issuer of the underlying share of the exercise of the right and potential dilution effect for the shareholders.

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When the issuer of the underlying is an entity belonging to the same group, the information to provide on this issuer is the one required by the share registration
document schedule.

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ANNEX XV
Minimum disclosure requirements for the registration document for securities issued by collective investment undertakings of the closed-end type (schedule)
In addition to the information required in this schedule, the collective investment undertaking must provide the following information as required under paragraphs and items 1, 2, 3,
4, 5.1, 7, 9.1, 9.2.1, 9.2.3, 10.4, 13, 14, 15, 16, 17.2, 18, 19, 20, 21, 22, 23, 24, 25 in Annex I (minimum disclosure requirements for the share registration document schedule).
1

Investment objective and policy

1.1

A detailed description of the investment objective and policy which the collective investment
undertaking will pursue and a description of how that investment objectives and policy may
be varied including any circumstances in which such variation requires the approval of investors. A description of any techniques and instruments that may be used in the management
of the collective investment undertaking.

1.2

The borrowing and/or leverage limits of the collective investment undertaking. If there are
no such limits, include a statement to that effect.

1.3

The regulatory status of the collective investment undertaking together with the name of
any regulator in its country of incorporation.

1.4

The profile of a typical investor for whom the collective investment undertaking is designed.

Investment Restrictions

2.1

A statement of the investment restrictions which apply to the collective investment undertaking, if any, and an indication of how the holders of securities will be informed of the actions that the investment manager will take in the event of a breach.

2.2

Where more than 20 % of the gross assets of any collective investment undertaking (except
where items 2.3 or 2.5 apply) may be:
a)

invested in, either directly or indirectly, or lent to any single underlying issuer (including
the underlying issuers subsidiaries or affiliates);
or

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b)

invested in one or more collective investment undertakings which may invest in excess
of 20 % of its gross assets in other collective investment undertakings (open-end and/or
closed-end type);
or

c)

exposed to the creditworthiness or solvency of any one counterparty (including its subsidiaries or affiliates);

the following information must be disclosed:

(i)

information

relating

to

each

underlying

issuer/collective

investment

undertak-

ing/counterparty as if it were an issuer for the purposes of the minimum disclosure requirements for the share registration document schedule (in the case of (a)) or minimum disclosure requirements for the registration document schedule for securities issued by collective investment undertaking of the closed-end type (in the case of (b)) or
the minimum disclosure requirements for the debt and derivative securities with an individual denomination per unit of at least EUR M5 100 000 registration document
schedule (in the case of (c));
or
(ii) if the securities issued by the underlying issuer/collective investment undertaking/counterparty have already been admitted to trading on a regulated or equivalent
market or the obligations are guaranteed by an entity admitted to trading on a regulated or equivalent market, the name, address, country of incorporation, nature of business and name of the market in which its securities are admitted.
This requirement shall not apply where the 20 % is exceeded due to appreciations or depreciations, changes in exchange rates, or by reason of the receipt of rights, bonuses, benefits
in the nature of capital or by reason of any other action affecting every holder of that investment, provided the investment manager has regard to the threshold when considering
changes in the investment portfolio.
2.3

Where a collective investment undertaking may invest in excess of 20 % of its gross assets
in other collective investment undertakings (open ended and/or closed ended), a description
of if and how risk is spread in relation to those investments. In addition, item 2.2 shall apply, in aggregate, to its underlying investments as if those investments had been made directly.

2.4

With reference to point (c) of item 2.2, if collateral is advanced to cover that portion of the
exposure to any one counterparty in excess of 20 % of the gross assets of the collective investment undertaking, details of such collateral arrangements.

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2.5

Where a collective investment undertaking may invest in excess of 40 % of its gross assets
in another collective investment undertaking either of the following must be disclosed:
a)

information relating to each underlying collective investment undertaking as if it were

an issuer under minimum disclosure requirements for the registration document schedule for securities issued by collective investment undertaking of the closed-end type;

b)

if securities issued by an underlying collective investment undertaking have already

been admitted to trading on a regulated or equivalent market or the obligations are
guaranteed by an entity admitted to trading on a regulated or equivalent market, the
name, address, country of incorporation, nature of business and name of the market in
which its securities are admitted.

2.6

Physical Commodities
Where a collective investment undertaking invests directly in physical commodities a disclosure of that fact and the percentage that will be so invested.

2.7

Property Collective investment undertakings

Where a collective investment undertaking is a property collective investment undertaking,
disclosure of that fact, the percentage of the portfolio that is to be invested in the property,
as well as a description of the property and any material costs relating to the acquisition and
holding of such property. In addition, a valuation report relating to the properties must be
included.
Disclosure of item 4.1. applies to:

2.8

a)

the valuation entity;

b)

any other entity responsible for the administration of the property.

Derivatives Financial instruments/Money Market Instruments/Currencies

Where a collective investment undertaking invests in derivatives financial instruments, money market instruments or currencies other than for the purposes of efficient portfolio management (i.e. solely for the purpose of reducing, transferring or eliminating investment risk
in the underlying investments of a collective investment undertaking, including any technique or instrument used to provide protection against exchange and credit risks), a statement whether those investments are used for hedging or for investment purposes, and a description of if and how risk is spread in relation to those investments.

2.9

Item 2.2 does not apply to investment in securities issued or guaranteed by a government,
government agency or instrumentality of any Member State, its regional or local authorities,
or OECD Member State.

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M6
2.10

Point (a) of item 2.2 does not apply to a collective investment undertaking whose investment objective is to track, without material modification, that of a broadly based and recognised published index. A statement setting out details of where information about the index
can be obtained shall be included.

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3

The applicants service providers

3.1

The actual or estimated maximum amount of all material fees payable directly or indirectly
by the collective investment undertaking for any services under arrangements entered into
on or prior to the date of the registration document and a description of how these fees are
calculated.

3.2

A description of any fee payable directly or indirectly by the collective investment undertaking which cannot be quantified under item 3.1 and which is or may be material.

3.3

If any service provider to the collective investment undertaking is in receipt of any benefits
from third parties (other than the collective investment undertaking) by virtue of providing
any services to the collective investment undertaking, and those benefits may not accrue to
the collective investment undertaking, a statement of that fact, the name of that third party,
if available, and a description of the nature of the benefits.

3.4

The name of the service provider which is responsible for the determination and calculation
of the net asset value of the collective investment undertaking.

3.5

A description of any material potential conflicts of interest which any of the service providers
to the collective investment undertaking may have as between their duty to the collective
investment undertaking and duties owed by them to third parties and their other interests. A
description of any arrangements which are in place to address such potential conflicts.

Investment Manager/Advisers

4.1

In respect of any Investment Manager such information as is required to be disclosed under

items 5.1.1 to 5.1.4 and, if material, under item 5.1.5 of Annex I together with a description
of its regulatory status and experience.

4.2

In respect of any entity providing investment advice in relation to the assets of the collective
investment undertaking, the name and a brief description of such entity.

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5

Custody

5.1

A full description of how the assets of the collective investment undertaking will be held and
by whom and any fiduciary or similar relationship between the collective investment undertaking and any third party in relation to custody:
Where a custodian, trustee, or other fiduciary is appointed:
a)

such information as is required to be disclosed under items 5.1.1 to 5.1.4 and, if material, under item 5.1.5 of Annex I;

5.2

b)

a description of the obligations of such party under the custody or similar agreement;

c)

ny delegated custody arrangements;

d)

he regulatory status of such party and delegates.

Where any entity other than those entities mentioned in item 5.1, holds any assets of the
collective investment undertaking, a description of how these assets are held together with a
description of any additional risks.

Valuation

6.1

A description of how often, and the valuation principles and the method by which, the net
asset value of the collective investment undertaking will be determined, distinguishing between categories of investments and a statement of how such net asset value will be communicated to investors.

6.2

Details of all circumstances in which valuations may be suspended and a statement of how
such suspension will be communicated or made available to investors.

Cross Liabilities

7.1

In the case of an umbrella collective investment undertaking, a statement of any cross liability that may occur between classes or investments in other collective investment undertakings and any action taken to limit such liability.

Financial Information

8.1

Where, since the date of incorporation or establishment, a collective investment undertaking

has not commenced operations and no financial statements have been made up as at the
date of the registration document, a statement to that effect.

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Where a collective investment undertaking has commenced operations, the provisions of

item 20 of Annex I on the Minimum Disclosure Requirements for the share registration document apply.
8.2

A comprehensive and meaningful analysis of the collective investment undertakings portfolio (if un-audited, clearly marked as such).

8.3

An indication of the most recent net asset value per security must be included in the securities note schedule (and, if un-audited, clearly marked as such).

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ANNEX XVI
Minimum disclosure requirements for the registration document for securities issued by Member States, third countries and their regional and local authorities (schedule)
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the registration document and, as the
case may be, for certain parts of it, with, in the latter case, an indication of such parts. In
the case of natural persons including members of the issuer's administrative, management
or supervisory bodies indicate the name and function of the person; in case of legal persons
indicate the name and registered office.

1.2

A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the registration
document is, to the best of their knowledge in accordance with the facts and contains no
omission likely to affect its import. As the case may be, declaration by those responsible for
certain parts of the registration document that, having taken all reasonable care to ensure
that such is the case the information contained in the part of the registration document for
which they are responsible is, to the best of their knowledge, in accordance with the facts
and contains no omission likely to affect its import.

RISK FACTORS
Prominent disclosure of risk factors that may affect the issuers ability to fulfil its obligations
under the securities to investors in a section headed Risk factors.

INFORMATION ABOUT THE ISSUER

3.1

The legal name of the issuer and a brief description of the issuers position within the national governmental framework.

3.2

The domicile or geographical location and legal form of the issuer and its contact address
and telephone number.

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3.3

Any recent events relevant to the evaluation of the issuers solvency.

3.4

A description of the issuers economy including:

a)

the structure of the economy with details of the main sectors of the economy;

b)

gross domestic product with a breakdown by the issuers economic sectors over for the
previous two fiscal years.

3.5

A general description of the issuers political system and government including details of the
governing body of the issuer.

PUBLIC FINANCE AND TRADE

Information on the following for the two fiscal years prior to the date of the registration
document:
a)

the tax and budgetary systems;

b)

gross public debt including a summary of the debt, the maturity structure of outstanding
debt (particularly noting debt with a residual maturity of less than one year) and debt
payment record, and of the parts of debt denominated in the domestic currency of the
issuer and in foreign currencies;

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c)

foreign trade and balance of payment figures;

d)

foreign exchange reserves including any potential encumbrances to such foreign exchange reserves as forward contracts or derivatives;

e)

financial position and resources including liquid deposits available in domestic currency;

f)

income and expenditure figures.

Description of any auditing or independent review procedures on the accounts of the issuer.
5

SIGNIFICANT CHANGE

5.1

Details of any significant changes to the information provided pursuant to item 4 which have
occurred since the end of the last fiscal year, or an appropriate negative statement.

LEGAL AND ARBITRATION PROCEEDINGS

Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period
covering at least the previous 12 months which may have, or have had in the recent past,

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557

significant effects on the issuer financial position, or provide an appropriate negative statement.
6.1

Information on any immunity the issuer may have from legal proceedings.

STATEMENT BY EXPERTS AND DECLARATIONS OF ANY INTEREST

Where a statement or report attributed to a person as an expert is included in the registration document, provide such persons name, business address and qualifications. If the report has been produced at the issuers request a statement to that effect, that such statement or report is included, in the form and context in which it is included, with the consent
of that person, who has authorised the contents of that part of the registration document.
To the extent known to the issuer, provide information in respect of any interest relating to
such expert which may have an effect on the independence of the expert in the preparation
of the report.

DOCUMENTS ON DISPLAY
A statement that for the life of the registration document the following documents (or copies
thereof), where applicable, may be inspected:
a)

financial and audit reports for the issuer covering the last two fiscal years and the budget for the current fiscal year;

b)

all reports, letters, and other documents, valuations and statements prepared by any
expert at the issuer's request any part of which is included or referred to in the registration document.

An indication of where the documents on display may be inspected, by physical or electronic

means.

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ANNEX XVII
Minimum disclosure requirements for the registration document for securities issued by public international bodies and for debt securities guaranteed by a Member State of the OECD
(schedule)
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the registration document and, as the
case may be, for certain parts of it, with, in the latter case, an indication of such parts. In
the case of natural persons including members of the issuers administrative, management
or supervisory bodies indicate the name and function of the person; in case of legal persons
indicate the name and registered office.

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558

1.2

A declaration by those responsible for the registration document, that, having taken all reasonable care to ensure that such is the case, the information contained in the registration
document is, to the best of their knowledge, in accordance with the facts and contains no
omission likely to materially affect its import. As the case may be, declaration by those responsible for certain parts of the registration document that, having taken all reasonable
care to ensure that such is the case the information contained in the part of the registration
document for which they are responsible is, to the best of their knowledge, in accordance
with the facts and contains no omission likely to affect its import.

RISK FACTORS
Prominent disclosure of risk factors that may affect the issuers ability to fulfil its obligations
under the securities to investors in a section headed Risk factors.

INFORMATION ABOUT THE ISSUER

3.1

The legal name of the issuer and a brief description of the issuers legal status.

3.2

The location of the principal office and the legal form of the issuer and its contact address
and telephone number.

3.3

Details of the governing body of the issuer and a description of its governance arrangements, if any.

3.4

A brief description of the issuers purpose and functions.

3.5

The sources of funding, guarantees and other obligations owed to the issuer by its members.

3.6

Any recent events relevant to the evaluation of the issuers solvency.

3.7

A list of the issuers members.

FINANCIAL INFORMATION

4.1

The two most recently published audited annual financial statements prepared in accordance
with the accounting and auditing principles adopted by the issuer, and a brief description of
those accounting and auditing principles.
Details of any significant changes to the issuers financial position which has occurred since
the end of the latest published audited annual financial statement, or an appropriate negative statement.

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5

LEGAL AND ARBITRATION PROCEEDINGS

5.1

Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period
covering at least the previous 12 months which are likely to have, or have had in the recent
past, significant effects on the issuers financial position, or provide an appropriate negative
statement.

5.2

Information on any immunity the issuer may have from legal proceedings pursuant to its
constituent document.

STATEMENT BY EXPERTS AND DECLARATION OF ANY INTERESTS

Where a statement or report attributed to a person as an expert is included in the registration document, provide such persons name, business address and qualifications. If the report has been produced at the issuers request a statement to that effect, that such statement or report is included, in the form and context in which it is included, with the consent
of that person.
To the extent known to the issuer, provide information in respect of any conflict of interests
relating to such expert which may have an effect on the independence of the expert in the
preparation of the report.

DOCUMENT ON DISPLAY
A statement that for the life of the registration document the following documents (or copies
thereof), where applicable, will be made available on request:
a)

annual and audit reports of the issuer for each of the last two financial years prepared
in accordance with the accounting and auditing principles adopted by the issuer;

b)

all reports, letters, and other documents, valuations and statements prepared by any
expert at the issuers request any part of which is included or referred to in the registration document;

c)

he issuers constituent document.

An indication of where the documents on display may be inspected, by physical or electronic

means.
ANNEX XVIII
Table of combinations

REGISTRATION DOCUMENT

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560

BUILD-

SCHEDULES

ING

BLOCK

TYPES OF SECURITIES

Shares

(preference

shares,

redeemable

Share

Debt and deriva-

Debt and deriva-

tive (< EUR M5

tive (> or = EUR

100 000 )

M5 100 000 )

Asset -

Banks

backed

debt and

securi-

deriva-

ties

tive

Pro forma
information

shares, shares with preferential

subscription

rights; etc.)
Bonds (vanilla bonds, income bonds,

structured

bonds, etc.) with a denomination of less than

OR

OR

EUR
M5 100 000
Bonds (vanilla bonds, income bonds,

structured

bonds, etc.) with a denomination

of

at

OR

OR

OR

OR

OR

OR

OR

OR

OR

OR

OR

least

EUR
M5 100 000
Debt

securities

guaran-

teed by a third party

Derivative
guaranteed

securities
by

third

party
Asset-backed securities
Bonds

exchangeable

convertible

into

or

third-

party shares or issuers'

or

group

shares

which

are admitted on a regu-

140

561

lated market
Bonds

exchangeable

or

convertible into the issuer's shares not admitted

on a regulated market
Bonds

exchangeable

convertible

into

or

group's

shares not admitted on a

OR

OR

OR

OR

OR

OR

OR

OR

OR

regulated market
Bonds with warrants to
acquire
shares

the

issuer's

not admitted to

trading on

regulated

market
Shares with warrants to
acquire
shares

the

issuer's

not admitted to

trading on

regulated

market
Derivatives securities giving the right to subscribe
or to acquire the issuer's
shares not admitted on a
regulated market
Derivatives securities giving the right to acquire
group's shares
mitted

on

not

ad-

regulated

market
Derivatives securities giving the right to subscribe
or to acquire issuer's or
group shares which are
admitted on a regulated
market

and

derivatives

141

562

sec. linked to any other

underlying than issuer's
or

group

shares

which

are not admitted on a

regulated market (including any derivatives sec.
entitling to cash settlement)

REGISTRATION DOCUMENT
SCHEDULES
Collective investment

TYPES OF SECURITIES

undertaking of the
closed-end type

Shares

(preference

deemable

shares,

preferential

shares,
shares

subscription

Public international bodStates and their regional

ies/Debt Securities

and local authorities

guaranteed by a Member State of the OECD

rewith

rights;

etc.)
Bonds

(vanilla

bonds,

income

bonds, structured bonds, etc with

a denomination of less than EUR
M5 100 000
Bonds

(vanilla

bonds,

income

bonds, structured bonds, etc.)

with a denomination of at least
EUR M5 100 000
Debt securities guaranteed by a
third party
Derivative securities guaranteed by
a third party
Asset-backed securities
Bonds exchangeable or convertible

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563

into third party shares or issuers'

or group shares which are admitted on a regulated market
Bonds exchangeable or convertible
into the issuer's shares not admitted on a regulated market
Bonds exchangeable or convertible
into group's shares not admitted
on a regulated market
Bonds with warrants to

acquire

the issuer's shares not admitted to

trading on a regulated market
Shares with warrants to acquire
the issuer's shares not admitted to
trading on a regulated market
Derivatives

securities

giving

the

right to subscribe or to acquire the

issuer's shares not admitted on a
regulated market
Derivatives

securities

giving

the

right to acquire group's shares not

admitted on a regulated market
Derivatives

securities

giving

the

right to subscribe or to acquire issuer's or group shares which are

admitted on a regulated market
and derivatives sec. linked to any
other underlying than issuer's or
group shares which are not admitted on a regulated market (including any derivatives securities entitling to cash settlement)

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564

SECURITIES NOTE
SCHEDULES
Share

TYPES OF SECURITIES

ADDITIONAL BUILDING BLOCKS

Debt

Debt

Derivatives

Guaran-

Asset-

Underlying

(<eur

(> or =

sec.

tees

backed

share

M5

eur

securi-

100

M5

ties

000

100

000 )

OR

OR

OR

OR

OR

OR

Shares (preference shares,

redeemable shares, shares
with preferential subscription rights; etc.)
Bonds (vanilla bonds, income

bonds,

structured

bonds, etc with a denomination

of

less

than

EUR

M5 100 000
Bonds (vanilla bonds, income

bonds,

structured

bonds, etc) with a denomination of at least EUR M5

100 000
Debt securities guaranteed
by a third party
Derivative securities guaranteed by a third party
Asset-backed securities
Bonds

exchangeable

or

convertible into third party

144

only item
4.2.2

565

shares or issuers' or group

shares which are admitted
on a regulated market
Bonds

exchangeable

or

convertible into the issuer's

shares not admitted on a

OR

OR

OR

OR

OR

OR

regulated market
Bonds

exchangeable

convertible

into

or

group's

shares not admitted on a

regulated market
Bonds with warrants to acquire

the

issuer's

shares

not admitted to trading on

and except
item 4.2.2

a regulated market
Shares

with

warrants

to

acquire the issuer's shares

and except

not admitted to trading on

item 4.2.2

a regulated market
Derivatives securities giving the right to subscribe
or to acquire the issuer's

except

shares not admitted on a

item 4.2.2

regulated market
Derivatives securities giving

the

right

to

acquire

except

group's shares not admit-

item 4.2.2

ted on a regulated market

Derivatives securities giving the right to subscribe
or to acquire issuer's or
group

shares

admitted

on

which
a

are

regulated

market and derivatives securities linked to any other

underlying than issuer's or

145

566

group shares which are not

admitted

on

regulated

market (including any derivatives securities entitling

to cash settlement)

Annex XIX
List of specialist issuers

Property companies

Mineral companies

Investment companies

Scientific research based companies

Companies with less than 3 years of existence (Start-up companies)

Shipping companies

M5
ANNEX XX
List of securities note schedules and building block(s)
Annex V

Instructions

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the prospectus and, Category A
as the case may be, for certain parts of it, with, in the latter case, an
indication of such parts. In the case of natural persons including members of the issuers administrative, management or supervisory bodies
indicate the name and function of the person; in case of legal persons
indicate the name and registered office.

1.2

A declaration by those responsible for the prospectus that, having tak- Category A
en all reasonable care to ensure that such is the case, the information
contained in the prospectus is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. As the case may be, declaration by those responsible for certain
parts of the prospectus that the information contained in the part of the
prospectus for which they are responsible is, to the best of their

146

567

knowledge, in accordance with the facts and contains no omission likely

to affect its import.
2

RISK FACTORS

2.1

Prominent disclosure of risk factors that are material to the securities Category A
being offered and/or admitted to trading in order to assess the market
risk associated with these securities in a section headed Risk Factors.

ESSENTIAL INFORMATION

3.1

Interest of natural and legal persons involved in the issue/offer

A description of any interest, including conflicting ones, that is material Category C
to the issue/offer, detailing the persons involved and the nature of the
interest.

3.2

Reasons for the offer and use of proceeds

Reasons for the offer if different from making profit and/or hedging cer- Category C
tain risks. Where applicable, disclosure of the estimated total expenses
of the issue/offer and the estimated net amount of the proceeds. These
expenses and proceeds shall be broken into each principal intended use
and presented by order of priority of such uses. If the issuer is aware
that the anticipated proceeds will not be sufficient to fund all the proposed uses, state the amount and sources of other funds needed.

INFORMATION

CONCERNING

THE

SECURITIES

TO

BE

OF-

FERED/ADMITTED TO TRADING
4.1

(i)

A description of the type and the class of the securities being of- Category B
fered and/or admitted to trading,

(ii)

the ISIN (International Security Identification Number) or other Category C

such security identification code.

4.2

Legislation under which the securities have been created

4.3

(i)

Category A

An indication of whether the securities are in registered form or Category A

bearer form and whether the securities are in certificated form or
book-entry form.

(ii)

In the latter case, name and address of the entity in charge of Category C
keeping the records.

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568

4.4

Currency of the securities issue

Category C

4.5

Ranking of the securities being offered and/or admitted to trading, in- Category A
cluding summaries of any clauses that are intended to affect ranking or
subordinate the security to any present or future liabilities of the issuer.

4.6

A description of the rights attached to the securities, including any limi- Category B
tations of those rights, and procedure for the exercise of those rights.

4.7

(i)

Nominal interest rate

Category C

(ii)

Provisions relating to interest payable

Category B

(iii)

The date from which interest becomes payable

Category C

(iv)

The due dates for interest

Category C

(v)

The time limit on the validity of claims to interest and repayment Category B
of principal

Where the rate is not fixed,

(vi)

statement setting out the type of underlying

Category A

(vii) description of the underlying on which it is based

Category C

(viii) and of the method used to relate the two

Category B

(ix)

an indication where information about the past and the further Category C
performance of the underlying and its volatility can be obtained

(x)

Description of any market disruption or settlement disruption Category B

events that affect the underlying

(xi)

Adjustment rules with relation to events concerning the underly- Category B

ing

(xii) Name of the calculation agent

Category C

(xiii) If the security has a derivative component in the interest pay- Category B
ment, provide a clear and comprehensive explanation to help investors understand how the value of their investment is affected
by the value of the underlying instrument(s), especially under the
circumstances when the risks are most evident.

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569

4.8

(i)

maturity date

Category C

(ii)

arrangements for the amortisation of the loan, including the re- Category B
payment procedures. Where advance amortisation is contemplated, on the initiative of the issuer or of the holder, it shall be described, stipulating amortisation terms and conditions

4.9

(i)

An indication of yield

Category C

(ii)

Describe the method whereby that yield is calculated in summary Category B

form.

4.10

Representation of debt security holders including an identification of Category B

the organisation representing the investors and provisions applying to
such representation. Indication of where the public may have access to
the contracts relating to these forms of representation.

4.11

In the case of new issues, a statement of the resolutions, authorisa- Category C

tions and approvals by virtue of which the securities have been or will
be created and/or issued.

4.12

In the case of new issues, the expected issue date of the securities.

Category C

4.13

A description of any restrictions on the free transferability

Category A

4.14

In respect of the country of registered office of the issuer and the coun- Category A
try(ies) where the offer being made or admission to trading is being
sought:

information on taxes on the income from the securities withheld at

source

indication as to whether the issuer assumes responsibility for the

withholding of taxes at source

TERMS AND CONDITIONS OF THE OFFER

5.1

Conditions, offer statistics, expected timetable and action required to apply for the offer

5.1.1

Conditions to which the offer is subject

Category C

5.1.2

Total amount of the issue/offer; if the amount is not fixed, description Category C
of the arrangements and time for announcing to the public the definitive amount of the offer.

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570

5.1.3

(i)

The time period, including any possible amendments, during Category C

which the offer will be open

(ii)
5.1.4

description of the application process.

Category C

A description of the possibility to reduce subscriptions and the manner Category C

for refunding excess amount paid by applicants.

5.1.5

Details

of

the

minimum

and/or maximum

amount

of

application Category C

(whether in number of securities or aggregate amount to invest)

5.1.6

Method and time limits for paying up the securities and for delivery of Category C
the securities

5.1.7

A full description of the manner and date in which results of the offer Category C
are to be made public.

5.1.8

The procedure for the exercise of any right of pre-emption, the nego- Category C
tiability of subscription rights and the treatment of subscription rights
not exercised

5.2

Plan of distribution and allotment

5.2.1

(i)

The various categories of potential investors to which the securi- Category A

ties are offered

(i)

If the offer is being made simultaneously in the markets of two or Category C

more countries and if a tranche has been or is being reserved for
certain of these, indicate any such tranche.

5.2.2

Process for notification to applicants of the amount allotted and the in- Category C
dication whether dealing may begin before notification is made

5.3

Pricing

5.3.1

(i)

An indication of the expected price at which the securities will be Category C

offered or

(ii)

the method of determining the price and the process for its dis- Category B
closure

(iii)

Indicate the amount of any expenses and taxes specifically Category C

charged to the subscriber or purchaser.

5.4

Placing and Underwriting

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571

5.4.1

Name and address of the coordinator(s) of the global offer and of single Category C
parts of the offer and, to the extend known to the issuer or to the offeror, of the placers in the various countries where the offer takes place.

5.4.2

Name and address of any paying agents and depository agents in each Category C
country

5.4.3

Name and address of the entities agreeing to underwrite the issue on a Category C
firm commitment basis, and name and address of the entities agreeing
to place the issue without a firm commitment or under best efforts arrangements. Indication of the material features of the agreements, including the quotas.
Where not all of the issue is underwritten, a statement of the portion
not covered. Indication of the overall amount of the underwriting commission and of the placing commission.

5.4.4

When the underwriting agreement has been or will be reached.

ADMISSION TO TRADING AND DEALING ARRANGEMENTS

6.1

(i)

Category C

An indication as to whether the securities offered are or will be Category B

the object of an application for admission to trading, with a view
to their distribution in a regulated market or other equivalent
markets with indication of the markets in question. This circumstance must be mentioned, without creating the impression that
the admission to trading will necessarily be approved.

(ii)

If known, give the earliest dates on which the securities will be Category C
admitted to trading

6.2

All regulated markets or equivalent markets on which, to the knowledge Category C

of the issuer, securities of the same class of the securities to be offered
or admitted to trading are already admitted to trading

6.3

Name and address of the entities which have a firm commitment to act Category C
as intermediaries in secondary trading, providing liquidity through bid
and offer rates and description of the main terms of their commitment.

ADDITIONAL INFORMATION

7.1

If advisors connected with an issue are mentioned in the Securities Category C

Note, a statement of the capacity in which the advisors have acted.

151

572

7.2

An indication of other information in the Securities Note which has been Category A
audited or reviewed by statutory auditors and where auditors have produced a report. Reproduction of the report or, with permission of the
competent authority, a summary of the report

7.3

Where a statement or report attributed to a person as an expert is in- Category A

cluded in the Securities Note, provide such persons name, business
address, qualifications and material interest if any in the issuer. If the
report has been produced at the issuers request a statement to that
effect that such statement or report is included, in the form and context in which it is included, with the consent of that person who has authorised the contents of that part of the Securities Note.

7.4

Where information has been sourced from a third party, provide a con- Category C
firmation that this information has been accurately reproduced and that
as far as the issuer is aware and is able to ascertain from information
published by that third party, no facts have been omitted which would
render the reproduced information inaccurate or misleading. In addition, identify the source(s) of the information.

7.5.

(i)

Credit ratings assigned to an issuer at the request or with the co- Category A
operation of the issuer in the rating process and brief explanation
of the meaning of the rating if this has previously been published
by the rating provider

(ii)

Credit ratings assigned to securities at the request or with the Category C

cooperation of the issuer in the rating process and brief explanation of the meaning of the rating if this has previously been published by the rating provider
Annex XII

Instructions

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the prospectus and, Category A
as the case may be, for certain parts of it, with, in the latter case, an
indication of such parts. In the case of natural persons including members of the issuers administrative, management or supervisory bodies
indicate the name and function of the person; in case of legal persons
indicate the name and registered office.

1.2

A declaration by those responsible for the prospectus that, having tak- Category A
en all reasonable care to ensure that such is the case, the information
contained in the prospectus is, to the best of their knowledge, in ac-

152

573

cordance with the facts and contains no omission likely to affect its import. As the case may be, declaration by those responsible for certain
parts of the prospectus that, having taken all reasonable care to ensure
that such is the case, the information contained in the part of the prospectus for which they are responsible is, to the best of their
knowledge, in accordance with the facts and contains no omission likely
to affect its import.
2

RISK FACTORS

2.1

Prominent disclosure of risk factors that are material to the securities Category A
being offered and/or admitted to trading in order to assess the market
risk associated with these securities in a section headed risk factors.
This must include a risk warning to the effect that investors may lose
the value of their entire investment or part of it, as the case may be,
and/or, if the investors liability is not limited to the value of his investment, a statement of that fact, together with a description of the
circumstances in which such additional liability arises and the likely financial effect

ESSENTIAL INFORMATION

3.1

Interest of natural and legal persons involved in the issue/offer

A description of any interest, including conflicting ones that is material Category C
to the issue/offer, detailing the persons involved and the nature of the
interest

3.2

Reasons for the offer and use of proceeds when different from
making profit and/or hedging certain risks
If reasons for the offer and use of proceeds are disclosed provide the Category C
total net proceeds and an estimate of the total expenses of the issue/offer.

4.

INFORMATION CONCERNING THE SECURITIES TO BE OFFERED AND

ADMITTED TO TRADING

4.1

Information concerning the securities

4.1.1

(i)

A description of the type and the class of the securities being of- Category B
fered and/or admitted to trading,

(ii)

the ISIN (International Security Identification Number) or other Category C

153

574

such security identification code.

4.1.2

A clear and comprehensive explanation to help investors understand Category B

how the value of their investment is affected by the value of the underlying instrument(s), especially under the circumstances when the risks
are most evident unless the securities have a denomination per unit of
at least EUR 100 000 or can only be acquired for at least EUR 100 000
per security.

4.1.3

Legislation under which the securities have been created.

4.1.4

(i)

Category A

An indication of whether the securities are in registered form or Category A

bearer form and whether the securities are in certificated form or
book-entry form.

(ii)

In the latter case, name and address of the entity in charge of Category C
keeping the records.

4.1.5

Currency of the securities issue

Category C

4.1.6

Ranking of the securities being offered and/or admitted to trading, in- Category A
cluding summaries of any clauses that are intended to affect ranking or
subordinate the security to any present or future liabilities of the issuer.

4.1.7

A description of the rights attached to the securities, including any limi- Category B
tations of those rights, and procedure for the exercise of said rights.

4.1.8

In the case of new issues, a statement of the resolutions, authorisa- Category C

tions and approvals by virtue of which the securities have been or will
be created and/or issued.

4.1.9

The issue date of the securities

Category C

4.1.10

A description of any restrictions on the free transfer-

Category A

ability of the securities

4.1.11

(i)

The expiration date of the derivative securities

Category C

(ii)

The exercise date or final reference date

Category C

4.1.12

A description of the settlement procedure of the derivative securities

4.1.13

(i)

Category B

A description of how any return on derivative securities takes Category B

154

575

place
(ii)

the payment or delivery date

(iii)
4.1.14

Category C

the way it is calculated

Category B

In respect of the country of registered office of the issuer and the coun- Category A
try(ies) where the offer being made or admission to trading is being
sought:

information on taxes on the income from the securities withheld at

source

indication as to whether the issuer assumes responsibility for the

withholding of taxes at source

4.2

Information concerning the underlying

4.2.1

The exercise price or the final reference price of the underlying

Category C

4.2.2

A statement setting out the type of the underlying

Category A

an indication where information about the past and the further per- Category C
formance of the underlying and its volatility can be obtained
(i)

where the underlying is a security

the name of the issuer of the security

Category C

the ISIN (international security identification number) or other Category C

such security identification code

155

576

(ii)

where the underlying is an index:

the name of the index,

Category C

a description of the index if it is composed by the issuer or by Category A

any legal entity belonging to the same group,

a description of the index provided by a legal entity or a nat- Category A

ural person acting in association with, or on behalf of, the issuer, unless the prospectus contains the following statements:
C

the complete set of rules of the index and information on the

performance of the index are freely accessible on the issuers
or on the index providers website,

and

the governing rules (including methodology of the index for

the selection and the re-balancing of the components of the
index, description of market disruption events and adjustment rules) are based on predetermined and objective criteCategory

ria,

if the index is not composed by the issuer, an indication of

where to obtain information about the index.

(iii)

where the underlying is an interest rate

(iv)

a description of the interest rate

Category C

others

Where the underlying does not fall within the categories Category C
specified above the securities note shall contain equivalent
information.

(v)

where the underlying is a basket of underlyings

disclosure of the relevant weightings of each underlying in Category C

the basket

4.2.3

A description of any market disruption or settlement disruption events Category B

that affect the underlying

4.2.4

Adjustment rules with relation to events concerning the underlying.

156

Category B

577

TERMS AND CONDITIONS OF THE OFFER

5.1

Conditions, offer statistics, expected timetable and action required to apply for the offer

5.1.1

Conditions to which the offer is subject

Category C

5.1.2

Total amount of the issue/offer; if the amount is not fixed, description Category C
of the arrangements and time for announcing to the public the definitive amount of the offer.

5.1.3

(i)

The time period, including any possible amendments, during Category C

which the offer will be open

(ii)
5.1.4

description of the application process.

Details

of

the

minimum

and/or maximum

Category C
amount

of

application Category C

(whether in number of securities or aggregate amount to invest)

5.1.5

Method and time limits for paying up the securities and for delivery of Category C
the securities

5.1.6

A full description of the manner and date in which results of the offer Category C
are to be made public.

5.2.

Plan of distribution and allotment

5.2.1

(i)

The various categories of potential investors to which the securi- Category A Catties are offered

(ii)

egory C

If the offer is being made simultaneously in the markets of two or

more countries and if a tranche has been or is being reserved for
certain of these, indicate any such tranche.

5.2.2

Process for notification to applicants of the amount allotted and the in- Category C
dication whether dealing may begin before notification is made

5.3

Pricing

5.3.1

(i)

An indication of the expected price at which the securities will be Category C

offered or

(ii)

the method of determining the price and the process for its dis- Category B
closure

157

578

(iii)

Indicate the amount of any expenses and taxes specifically Category C

charged to the subscriber or purchaser.

5.4

Placing and Underwriting

5.4.1

Name and address of the coordinator(s) of the global offer and of single Category C
parts of the offer and, to the extend known to the issuer or to the offeror, of the placers in the various countries where the offer takes place.

5.4.2

Name and address of any paying agents and depository agents in each Category C
country

5.4.3

Entities agreeing to underwrite the issue on a firm commitment basis, Category C

and entities agreeing to place the issue without a firm commitment or
under best efforts arrangements. Where not all of the issue is underwritten, a statement of the portion not covered

5.4.4

When the underwriting agreement has been or will be reached.

Category C

5.4.5

Name and address of a calculation agent.

Category C

ADMISSION TO TRADING AND DEALING ARRANGEMENTS

6.1

(i)

An indication as to whether the securities offered are or will be Category B

the object of an application for admission to trading, with a view
to their distribution in a regulated market or other equivalent
markets with indication of the markets in question. This circumstance shall be mentioned, without creating the impression that
the admission to trading necessarily will be approved.

(ii)

If known, give the earliest dates on which the securities will be Category C
admitted to trading

6.2

All the regulated markets or equivalent markets on which, to the Category C

knowledge of the issuer, securities of the same class of the securities to
be offered or admitted to trading are already admitted to trading

6.3

Name and address of the entities which have a firm commitment to act Category C
as intermediaries in secondary trading, providing liquidity through bid
and offer rates and description of the main terms of their commitment.

ADDITIONAL INFORMATION

7.1

If advisors connected with an issue are mentioned in the Securities Category C

158

579

Note, a statement of the capacity in which the advisors have acted.

7.2

An indication of other information in the Securities Note which has been Category A
audited or reviewed by statutory auditors and where auditors have produced a report. Reproduction of the report or, with permission of the
competent authority, a summary of the report.

7.3

Where a statement or report attributed to a person as an expert is in- Category A

cluded in the Securities Note, provide such persons name, business
address, qualifications and material interest, if any, in the issuer. If the
report has been produced at the issuers request a statement to that
effect that such statement or report is included, in the form and context in which it is included, with the consent of that person who has authorised the contents of that part of the Securities Note.

7.4

Where information has been sourced from a third party, provide a con- Category C
firmation that this information has been accurately reproduced and that
as far as the issuer is aware and is able to ascertain from information
published by that third party, no facts have been omitted which would
render the reproduced information inaccurate or misleading. In addition, the issuer shall identify the source(s) of the information

7.5

An indication in the prospectus whether or not the issuer intends to Category C

provide post-issuance information. Where the issuer has indicated that
it intends to report such information, the issuer shall specify in the prospectus what information will be reported and where such information
can be obtained.
Annex XIII

Instructions

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the prospectus and, Category A
as the case may be, for certain parts of it, with, in the latter case, an
indication of such parts. In case of natural persons including members
of the issuers administrative, management or supervisory bodies indicate the name and function of the person; in case of legal persons indicate the name and registered office.

1.2

A declaration by those responsible for the prospectus that, having tak- Category A
en all reasonable care to ensure that such is the case, the information
contained in the prospectus is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. As the case may be, declaration by those responsible for certain

159

580

parts of the prospectus that the information contained in the part of the
prospectus for which they are responsible is, to the best of their
knowledge, in accordance with the facts and contains no omission likely
to affect its import.
2

RISK FACTORS
Prominent disclosure of risk factors that are material to the securities Category A
admitted to trading in order to assess the market risk associated with
these securities in a section headed Risk factors.

ESSENTIAL INFORMATION
Interest of natural and legal persons involved in the issue
A description of any interest, including conflicting ones, that is material Category C
to the issue, detailing the persons involved and the nature of the interest.

INFORMATION CONCERNING THE SECURITIES TO BE ADMITTED TO

TRADING

4.1

Total amount of securities being admitted to trading.

4.2

(i)

Category C

A description of the type and the class of the securities being of- Category B
fered and/or admitted to trading,

(ii)

the ISIN (International Security Identification Number) or other Category C

such security identification code.

4.3

Legislation under which the securities have been created

4.4

(i)

Category A

An indication of whether the securities are in registered form or Category A

bearer form and whether the securities are in certificated form or
book-entry form.

(ii)

In the latter case, name and address of the entity in charge of Category C
keeping the records.

4.5

Currency of the securities issue

Category C

4.6

Ranking of the securities being offered and/or admitted to trading, in- Category A
cluding summaries of any clauses that are intended to affect ranking or
subordinate the security to any present or future liabilities of the issuer.

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581

4.7

A description of the rights attached to the securities, including any limi- Category B
tations of those rights, and procedure for the exercise of those rights.

4.8

(i)

Nominal interest rate

Category C

(ii)

Provisions relating to interest payable

Category B

(iii)

The date from which interest becomes payable

Category C

(iv)

The due dates for interest

Category C

(v)

The time limit on the validity of claims to interest and repayment Category B
of principal

Where the rate is not fixed

(vi)

Statement setting out the type of the underlying

Category A

(vii) description of the underlying on which it is based

Category C

(viii) and of the method used to relate the two

Category B

(ix)

Description of any market disruption or settlement disruption Category B

events that affect the underlying

(x)

Adjustment rules with relation to events concerning the underly- Category B

ing

(xi)
4.9

(i)
(ii)

Name of the calculation agent

Category C

maturity date

Category C

arrangements for the amortisation of the loan, including the re- Category B
payment procedures. Where advance amortisation is contemplated, on the initiative of the issuer or of the holder, it shall be described, stipulating amortisation terms and conditions

4.10

(i)

An indication of yield

Category C

4.11

Representation of debt security holders including an identification of Category B

the organisation representing the investors and provisions applying to
such representation. Indication of where the public may have access to
the contracts relating to these forms of representation.

4.12

A statement of the resolutions, authorisations and approvals by virtue Category C

of which the securities have been created and/or issued.

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582

4.13

The issue date of the securities

Category C

4.14

A description of any restrictions on the free transferability of the securi- Category A

ties

ADMISSION TO TRADING AND DEALING ARRANGEMENTS

5.1

(i)

Indication of the market where the securities will be traded and Category B
for which prospectus has been published.

(ii)

If known, give the earliest dates on which the securities will be Category C
admitted to trading.

5.2

Name and address of any paying agents and depository agents in each Category C
country.

EXPENSE OF THE ADMISSION TO TRADING

An estimate of the total expenses related to the admission to trading

Category C

ADDITIONAL INFORMATION

7.1

If advisors are mentioned in the Securities Note, a statement of the ca- Category C
pacity in which the advisors have acted.

7.2

An indication of other information in the Securities Note which has been Category A
audited or reviewed by auditors and where auditors have produced a
report. Reproduction of the report or, with permission of the competent
authority, a summary of the report.

7.3

Where a statement or report attributed to a person as an expert is in- Category A

cluded in the Securities Note, provide such persons name, business
address, qualifications and material interest if any in the issuer. If the
report has been produced at the issuers request a statement to that
effect that such statement or report is included, in the form and context in which it is included, with the consent of that person who has authorised the contents of that part of the Securities Note.

7.4

Where information has been sourced from a third party, provide a con- Category C
firmation that this information has been accurately reproduced and that
as far as the issuer is aware and is able to ascertain from information
published by that third party, no facts have been omitted which would
render the reproduced information inaccurate or misleading. In addition, identify the source(s) of the information

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7.5

(i)

Credit ratings assigned to an issuer at the request or with the co- Category A
operation of the issuer in the rating process

(ii)

Credit ratings assigned to securities at the request or with the Category C

cooperation of the issuer in the rating process
Annex VIII

Instructions

THE SECURITIES

1.1

The minimum denomination of an issue.

1.2

Where information is disclosed about an undertaking/ obligor which is Category C

Category C

not involved in the issue, provide a confirmation that the information

relating to the undertaking/obligor has been accurately reproduced
from information published by the undertaking/ obligor. So far as the
issuer is aware and is able to ascertain from information published by
the undertaking/obligor no facts have been omitted which would render
the reproduced information misleading.
In addition, identify the source(s) of information in the Securities Note Category C
that has been reproduced from information published by an undertaking/obligor.
2

THE UNDERLYING ASSETS

2.1

Confirmation that the securitised assets backing the issue have charac- Category A
teristics that demonstrate capacity to produce funds to service any
payments due and payable on the securities.

2.2

In respect of a pool of discrete assets backing the issue:

2.2.1

The legal jurisdiction by which the pool of assets is governed

2.2.2

(a)

Category C

In the case of a small number of easily identifiable obligors, a Category A

general description of each obligor

(b)

In all other cases, a description of: the general characteristics of Category B

the obligors; and the economic environment,

as well as global statistical data referred to the securitised assets.

Category C

2.2.3

the legal nature of the assets

Category C

2.2.4

the expiry or maturity date(s) of the assets

Category C

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2.2.5

the amount of the assets

Category C

2.2.6

loan to value ratio or level of collateralisation

Category C

2.2.7

the method of origination or creation of the assets, and for loans and Category B
credit agreements, the principal lending criteria and an indication of
any loans which do not meet these criteria and any rights or obligations
to make further advances

2.2.8

an indication of significant representations and collaterals given to the Category C

issuer relating to the assets

2.2.9

any rights to substitute the assets and a description of the manner in Category B
which and the type of assets which may be so substituted; if there is
any capacity to substitute assets with a different class or quality of assets a statement to that effect together with a description of the impact
of such substitution

2.2.10

a description of any relevant insurance policies relating to the assets. Category B

Any concentration with one insurer must be disclosed if it is material to
the transaction

2.2.11

Where the assets comprise obligations of 5 or fewer obligors which are

legal persons or where an obligor accounts for 20 % or more of the assets, or where an obligor accounts for a material portion of the assets,
so far as the issuer is aware and/or is able to ascertain from information published by the obligor(s) indicate either of the following:
(a)

information relating to each obligor as if it were an issuer draft- Category A

ing a registration document for debt and derivative securities with
an individual denomination of at least EUR 100 000

(b)

if an obligor or guarantor has securities already admitted to trad- Category C

ing on a regulated or equivalent market or the obligations are
guaranteed by an entity admitted to trading on a regulated or
equivalent market, the name, address, country of incorporation,
nature of business and name of the market in which its securities
are admitted.

2.2.12

If a relationship exists that is material to the issue, between the issuer, Category C
guarantor and obligor, details of the principal terms of that relationship

2.2.2

(a)

In the case of a small number of easily identifiable obligors, a Category A

general description of each obligor

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585

(b)

In all other cases, a description of: the general characteristics of Category B

the obligors; and the economic environment,
Category C

as well as global statistical data referred to the securitised assets.

2.2.3

the legal nature of the assets

Category C

2.2.4

the expiry or maturity date(s) of the assets

Category C

2.2.5

the amount of the assets

Category C

2.2.6

loan to value ratio or level of collateralisation

Category C

2.2.7

the method of origination or creation of the assets, and for loans and Category B
credit agreements, the principal lending criteria and an indication of
any loans which do not meet these criteria and any rights or obligations
to make further advances

2.2.8

an indication of significant representations and collaterals given to the Category C

issuer relating to the assets

2.2.9

any rights to substitute the assets and a description of the manner in Category B
which and the type of assets which may be so substituted; if there is
any capacity to substitute assets with a different class or quality of assets a statement to that effect together with a description of the impact
of such substitution

2.2.10

a description of any relevant insurance policies relating to the assets. Category B

Any concentration with one insurer must be disclosed if it is material to
the transaction

2.2.11

Where the assets comprise obligations of 5 or fewer obligors which are

legal persons or where an obligor accounts for 20 % or more of the assets, or where an obligor accounts for a material portion of the assets,
so far as the issuer is aware and/or is able to ascertain from information published by the obligor(s) indicate either of the following:
(a)

information relating to each obligor as if it were an issuer drafting Category A

a registration document for debt and derivative securities with an
individual denomination of at least EUR 100 000

(b)

if an obligor or guarantor has securities already admitted to trad- Category C

ing on a regulated or equivalent market or the obligations are
guaranteed by an entity admitted to trading on a regulated or
equivalent market, the name, address, country of incorporation,

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nature of business and name of the market in which its securities

are admitted.
2.2.12

If a relationship exists that is material to the issue, between the issuer, Category C
guarantor and obligor, details of the principal terms of that relationship

2.2.13

Where the assets comprise obligations that are not traded on a regulat- Category B
ed or equivalent market, a description of the principal terms and conditions of the obligations

2.2.14

Where the assets comprise equity securities that are admitted to trading on a regulated or equivalent market indicate the following:
(a)

a description of the securities

Category C

(b)

a description of the market on which they are traded including its Category C
date of establishment, how price information is published, an indication of daily trading volumes, information as to the standing
of the market in the country and the name of the markets regulatory authority

(c)

the frequency with which prices of the relevant securities, are Category C
published.

2.2.15

Where more than ten (10) per cent of the assets comprise equity secu- Category A
rities that are not traded on a regulated or equivalent market, a description of those equity securities and equivalent information to that
contained in the schedule for share registration document in respect of
each issuer of those securities

2.2.16

Where a material portion of the assets are secured on or backed by real Category A
property, a valuation report relating to the property setting out both
the valuation of the property and cash flow/income streams. Compliance with this disclosure is not required if the issue is of securities
backed by mortgage loans with property as security, where there has
been no revaluation of the properties for the purpose of the issue, and
it is clearly stated that the valuations quoted are as at the date of the
original initial mortgage loan origination

2.3

In respect of an actively managed pool of assets backing the issue

2.3.1

equivalent information to that contained in items 2.1 and 2.2 to allow see

items

2.1

an assessment of the type, quality, sufficiency and liquidity of the asset and 2.2

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types in the portfolio which will secure the issue

2.3.2

the parameters within which investments can be made, the name and Category B
description of the entity responsible for such management including a
description of that entitys expertise and experience, a summary of the
provisions relating to the termination of the appointment of such entity
and the appointment of an alternative management entity, and a description of that entitys relationship with any other parties to the issue

2.4

Where an issuer proposes to issue further securities backed by the Category C

same assets, a prominent statement to that effect and unless those further securities are fungible with or are subordinated to those classes of
existing debt, a description of how the holders of that class will be informed

STRUCTURE AND CASH FLOW

3.1

Description of the structure of the transaction, including, if necessary, a Category A

structure diagram

3.2

Description of the entities participating in the issue and description of Category A

the functions to be performed by them

3.3

Description of the method and date of the sale, transfer, novation or Category B
assignment of the assets or of any rights and/or obligations in the assets to the issuer or, where applicable, the manner and time period in
which the proceeds from the issue will be fully invested by the issuer

3.4

An explanation of the flow of funds including:

3.4.1

how the cash flow from the assets will meet the issuers obligations to Category B
holders of the securities, including, if necessary, a financial service table and a description of the assumptions used in developing the table

3.4.2

information on any credit enhancements, an indication of where mate- Category B

rial potential liquidity shortfalls may occur and the availability of any liquidity supports and indication of provisions designed to cover interest/principal shortfall risks

3.4.3

without prejudice to item 3.4.2, details of any subordinated debt fi- Category C
nance

3.4.4

an indication of any investment parameters for the investment of tem- Category B

porary liquidity surpluses and description of the parties responsible for

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such investment
3.4.5

how payments are collected in respect of the assets

Category B

3.4.6

the order of priority of payments made by the issuer to the holders of Category A
the class of securities in question

3.4.7

details of any other arrangements upon which payments of interest and Category A
principal to investors are dependent

3.5

the name, address and significant business activities of the originators Category C
of the securitised assets

3.6

Where the return on, and/or repayment of the security is linked to the See

items

2.2

performance or credit of other assets which are not assets of the issu- and 2.3
er, items 2.2 and 2.3 are necessary
3.7

the name, address and significant business activities of the administra- Category C
tor, calculation agent or equivalent, together with a summary of the
administrators/calculation agents

responsibilities,

their

relationship

with the originator or the creator of the assets and a summary of the
provisions relating to the termination of the appointment of the administrator/calculation agent and the appointment of an alternative administrator/calculation agent
3.8

the names and addresses and brief description of:

(a)

any swap counterparties and any providers of other material Category A

forms of credit/liquidity enhancement

(b)

the banks with which the main accounts relating to the transac- Category C
tion are held.

POST ISSUANCE REPORTING

4.1

Indication in the prospectus whether or not it intends to provide post- Category C

issuance transaction information regarding securities to be admitted to
trading and the performance of the underlying collateral. Where the issuer has indicated that it intends to report such information, specify in
the prospectus what information will be reported, where such information can be obtained, and the frequency with which such information
will be reported
Annex XIV

168

Instructions

589

Description of the underlying share

1.1

Describe the type and the class of the shares

Category A

1.2

Legislation under which the shares have been or will be created

Category A

1.3

Indication whether the securities are in registered form or bearer form Category A
and whether the securities are in certificated form or book-entry form.
In the latter case, name and address of the entity in charge of keeping
the records

1.4

Indication of the currency of the shares issue

Category A

1.5

A description of the rights, including any limitations of these, attached Category A

to the securities and procedure for the exercise of those rights:

Dividend rights:

fixed date(s) on which the entitlement arises,

time limit after which entitlement to dividend lapses and an indication of the person in whose favour the lapse operates,

dividend restrictions and procedures for non resident holders,

rate of dividend or method of its calculation, periodicity and cumulative or non-cumulative nature of payments.

Voting rights.

Pre-emption rights in offers for subscription of securities of the

same class.

1.6

Right to share in the issuers profits.

Rights to share in any surplus in the event of liquidation.

Redemption provisions.

Conversion provisions.

In the case of new issues, a statement of the resolutions, authorisa- Category C

tions and approvals by virtue of which the shares have been or will be
created and/ or issued and indication of the issue date.

1.7

Where and when the shares will be or have been admitted to trading

169

Category C

590

1.8

Description of any restrictions on the free transferability of the shares

Category A

1.9

Indication of the existence of any mandatory takeover bids/or squeeze- Category A

out and sell-out rules in relation to the shares

1.10

Indication of public takeover bids by third parties in respect of the issu- Category A
ers equity, which have occurred during the last financial year and the
current financial year. The price or exchange terms attaching to such
offers and the outcome thereof must be stated

1.11

Impact on the issuer of the underlying share of the exercise of the right Category C
and potential dilution effect for the shareholders.

When the issuer of the underlying is an entity belonging to the same Category A
group, the information to provide on this issuer is the one required by
the share registration document schedule
Annex VI

Instructions

NATURE OF THE GUARANTEE

A description of any arrangement intended to ensure that any obliga- Category B
tion material to the issue will be duly serviced, whether in the form of
guarantee, surety, Keep well Agreement, Mono-line Insurance policy or
other equivalent commitment (hereafter referred to generically as
guarantees and their provider as guarantor for convenience).
Without prejudice to the generality of the foregoing, such arrangements
encompass commitments to ensure obligations to repay debt securities
and/or the payment of interest and the description shall set out how
the arrangement is intended to ensure that the guaranteed payments
will be duly serviced.

SCOPE OF THE GUARANTEE

Details shall be disclosed about the terms and conditions and scope of
the guarantee. Without prejudice to the generality of the foregoing,
these details should cover any conditionality on the application of the

Category B

guarantee in the event of any default under the terms of the security
and the material terms of any mono-line insurance or keep well agreement between the issuer and the guarantor. Details must also be disclosed of any guarantors power of veto in relation to changes to the
security holders rights, such as is often found in Mono-line Insurance.

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INFORMATION TO BE DISCLOSED ABOUT THE GUARANTOR

The guarantor must disclose information about itself as if it were the is- Category A
suer of that same type of security that is the subject of the guarantee.

DOCUMENTS ON DISPLAY
Indication of the places where the public may have access to the mate- Category A
rial contracts and other documents relating to the guarantee.
Annex XXX

Instructions

INFORMATION TO BE PROVIDED REGARDING CONSENT BY THE ISSUER

OR PERSON RESPONSIBLE FOR DRAWING UP THE PROSPECTUS

1.1

Express consent by the issuer or person responsible for drawing up the Category A
prospectus to the use of the prospectus and statement that it accepts
responsibility for the content of the prospectus also with respect to
subsequent resale or final placement of securities by any financial intermediary which was given consent to use the prospectus.

1.2

Indication of the period for which consent to use the prospectus is giv- Category A
en.

1.3

Indication of the offer period upon which subsequent resale or final Category C
placement of securities by financial intermediaries can be made.

1.4

Indication of the Member States in which financial intermediaries may Category A

use the prospectus for subsequent resale or final placement of securities.

1.5

Any other clear and objective conditions attached to the consent which Category C
are relevant for the use of the prospectus.

1.6

Notice in bold informing investors that, in the event of an offer being Category A
made by a financial intermediary, this financial intermediary will provide information to investors on the terms and conditions of the offer at
the time the offer is made.

2A

ADDITIONAL INFORMATION TO BE PROVIDED WHERE A CONSENT IS

GIVEN TO ONE OR MORE SPECIFIED FINANCIAL INTERMEDIARIES

2A.1

List and identity (name and address) of the financial intermediary or in- Category C
termediaries that are allowed to use the prospectus.

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592

2A.2

Indication how any new information with respect to financial intermedi- Category A
aries unknown at the time of the approval of the prospectus, the base
prospectus or the filing of the final terms, as the case may be, is to be
published and where it can be found.

2B

ADDITIONAL INFORMATION TO BE PROVIDED WHERE A CONSENT IS

GIVEN TO ALL FINANCIAL INTERMEDIARIES

2B.1

Notice in bold informing investors that any financial intermediary using Category A
the prospectus has to state on its website that it uses the prospectus in
accordance with the consent and the conditions attached thereto.

If a component of the formula is 0 or 1 and the respective component is not used for a specific issue, there should
be the possibility to render the formula in the final terms without the unapplied component.

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M5
ANNEX XXI
List of additional information in final terms
ADDITIONAL INFORMATION
Example(s) of complex derivatives securities as referred to in recital 18 of the Prospectus Regulation
Additional provisions, not required by the relevant securities note, relating to the underlying
Country(ies) where the offer(s) to the public takes place
Country(ies) where admission to trading on the regulated market(s) is being sought
Country(ies) into which the relevant base prospectus has been notified
Series Number
Tranche Number

M5
ANNEX XXII
Disclosure requirements in summaries
GUIDE TO USING THE TABLES
1)

Summaries are constructed on a modular basis according to the Annexes from this Regulation on
which the prospectus has been based. For example, the summary for a share prospectus would disclosure the information required for the Elements for Annexes I and III.

2)

Each summary will be made up of five tables as detailed below.

3)

The order of the sections A-E is mandatory. Within each of the sections the elements shall be disclosed in the order they appear in the Tables.

4)

Where an element is not applicable to a prospectus the element should appear in the summary with
the mention not applicable.

5)

To the extent required by an element, descriptions should be brief.

6)

Summaries should not contain cross-references to specific parts of the prospectus.

7)

Where a prospectus relates to the admission to trading on a regulated market of non-equity securities having a denomination of at least EUR 100 000 in accordance with either or both of Annexes IX
or XIII and a summary is required by a Member State in accordance with Articles 5(2) and 19(4) of
Directive 2003/71/EC, or is produced on a voluntary basis, the disclosure requirements for the

594

summary in relation to Annexes IX and XIII are as set out in the Tables. Where an issuer is not under an obligation to include a summary in a prospectus but wishes to produce some overview section in the prospectus, it should ensure that it is not titled summary unless it complies with all the
disclosure requirements for summaries.
Section A Introduction and warnings
Annexes

Element

Disclosure requirement

All

A.1

Warning that:

[this] summary should be read as introduction to the prospectus;

any decision to invest in the securities should be based on consideration of the prospectus as a whole by the investor;

where a claim relating to the information contained in [the] prospectus is brought before a court, the plaintiff investor might, under the
national legislation of the Member States, have to bear the costs of
translating the prospectus before the legal proceedings are initiated;
and

civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is
misleading, inaccurate or inconsistent when read together with the
other parts of the prospectus or it does not provide, when read together with the other parts of the prospectus, key information in order
to aid investors when considering whether to invest in such securities.

All

A.2

Consent by the issuer or person responsible for drawing up the prospectus to the use of the prospectus for subsequent resale or final
placement of securities by financial intermediaries.

Indication of the offer period within which subsequent resale or final

placement of securities by financial intermediaries can be made and
for which consent to use the prospectus is given.

Any other clear and objective conditions attached to the consent which
are relevant for the use of the prospectus.

Notice in bold informing investors that information on the terms and

conditions of the offer by any financial intermediary is to be provided
at the time of the offer by the financial intermediary.

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Section B Issuer and any guarantor

Annexes

Element

1, 4, 7, 9, B.1

Disclosure requirement

The legal and commercial name of the issuer.

11

1, 4, 7, 9, B.2

The domicile and legal form of the issuer, the legislation under which the

11

issuer operates and its country of incorporation.

B.3

A description of, and key factors relating to, the nature of the issuers current operations and its principal activities, stating the main categories of
products sold and/or services performed and identification of the principal
markets in which the issuer competes.

B.4a

A description of the most significant recent trends affecting the issuer and
the industries in which it operates.

4, 11

B.4b

A description of any known trends affecting the issuer and the industries in
which it operates.

1, 4, 9, 11

B.5

If the issuer is part of a group, a description of the group and the issuers
position within the group.

B.6

In so far as is known to the issuer, the name of any person who, directly
or indirectly, has an interest in the issuers capital or voting rights which is
notifiable under the issuers national law, together with the amount of
each such persons interest.

Whether the issuers major shareholders have different voting rights if

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596

any.

To the extent known to the issuer, state whether the issuer is directly or
indirectly owned or controlled and by whom and describe the nature of
such control.

B.7

Selected historical key financial information regarding the issuer, presented for each financial year of the period covered by the historical financial
information, and any subsequent interim financial period accompanied by
comparative data from the same period in the prior financial year except
that the requirement for comparative balance sheet information is satisfied
by presenting the year-end balance sheet information.

This should be accompanied by a narrative description of significant

change to the issuers financial condition and operating results during or
subsequent to the period covered by the historical key financial information.

1, 2

B.8

Selected key pro forma financial information, identified as such.

The selected key pro forma financial information must clearly state the
fact that because of its nature, the pro forma financial information addresses a hypothetical situation and, therefore, does not represent the
companys actual financial position or results.

1, 4, 9, 11

B.9

Where a profit forecast or estimate is made, state the figure.

1, 4, 9, 11

B.10

A description of the nature of any qualifications in the audit report on the

historical financial information.

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597

B.11

If the issuers working capital is not sufficient for the issuers present requirements an explanation should be included.

4, 9, 11

B.12

Use only the first paragraph of B.7, plus:

A statement that there has been no material adverse change in the prospects of the issuer since the date of its last published audited financial
statements or a description of any material adverse change.
A description of significant changes in the financial or trading position
subsequent to the period covered by the historical financial information.

4, 9, 11

B.13

A description of any recent events particular to the issuer which are to a

material extent relevant to the evaluation of the issuers solvency.

4, 9, 11

B.14

B.5 plus:
If the issuer is dependent upon other entities within the group, this must
be clearly stated.

4, 9, 11

B.15

A description of the issuers principal activities.

4, 7, 9, 11

B.16

Use only the final paragraph of B.6

5, 13

B.17

Credit ratings assigned to an issuer or its debt securities at the request or

with the cooperation of the issuer in the rating process.

B.18

A description of the nature and scope of the guarantee.

B.19

Section B information about the guarantor as if it were the issuer of the

same type of security that is the subject of the guarantee. Therefore provide such information as required for a summary for the relevant annex.

B.20

A statement whether the issuer has been established as a special purpose

vehicle or entity for the purpose of issuing asset backed securities.

B.21

A description of the issuers principal activities including a global overview

of the parties to the securitisation program including information on the
direct or indirect ownership or control between those parties.

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598

B.22

Where, since the date of incorporation or establishment, an issuer has not

commenced operations and no financial statements have been made up as
at the date of the registration document, a statement to that effect.

B.23

Use only the first paragraph of B.7

B.24

A description of any material adverse change in the prospects of the issuer

since the date of its last published audited financial statements.

B.25

A description of the underlying assets including:

confirmation that the securitised assets backing the issue have characteristics that demonstrate capacity to produce funds to service any
payments due and payable on the securities

a description of the general characteristics of the obligors and in the

case of a small number of easily identifiable obligors, a general description of each obligor

a description of the legal nature of the assets

loan to value ratio or level of collateralisation

Where a valuation report relating to real property is included in the

prospectus, a description of the valuation.

B.26

In respect of an actively managed pool of assets backing the issue a description of the parameters within which investments can be made, the
name and description of the entity responsible for such management including a brief description of that entitys relationship with any other parties to the issue.

B.27

Where an issuer proposes to issue further securities backed by the same

assets a statement to that effect.

B.28

A description of the structure of the transaction, including, if necessary, a

structure diagram.

B.29

A description of the flow of funds including information on swap counterparties and any other material forms of credit/liquidity enhancements and
the providers thereof.

B.30

The name and a description of the originators of the securitised assets.

10

B.31

Information about the issuer of the underlying shares:

178

599

10

B.32

B.1

B.2

B.3

B.4

B.5

B.6

B.7

B.9

B.10

D.4

Information about the issuer of the depository receipts:

Name and registered office of the issuer of the depository receipts.
Legislation under which the issuer of the depository receipts operates
and legal form which it has adopted under the legislation.

15

B.33

The following information from Annex 1:

B.1

B.2

B.5

B.6

B.7

B.8

B.9

B.10

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600

15

B.34

C.3

C.7

D.2

A description of the investment objective and policy, including any investment restrictions, which the collective investment undertaking will pursue
with a description of the instruments used.

15

B.35

The borrowing and/or leverage limits of the collective investment undertaking. If there are no such limits, include a statement to that effect.

15

B.36

A description of the regulatory status of the collective investment undertaking together with the name of any regulator in its country of incorporation.

15

B.37

A brief profile of a typical investor for whom the collective investment undertaking is designed.

15

B.38

Where the main body of the prospectus discloses that more than 20 % of
the gross assets of the collective investment undertaking may be:
a)

invested, directly or indirectly, in a single underlying asset, or

b)

invested in one or more collective investment undertakings which may

in turn invest more than 20 % of gross assets in other collective investment undertakings, or

c)

exposed to the creditworthiness or solvency of any one counterparty

the identity of the entity should be disclosed together with a description of

the exposure (e.g. counter-party) as well as information on the market in
which its securities are admitted.
15

B.39

Where a collective investment undertaking may invest in excess of 40 % of

its gross assets in another collective investment undertaking the summary
should briefly explain either:
(a) the exposure, the identity of the underlying collective investment undertaking, and provide such information as would be required in a summary note by that collective investment undertaking; or
(b) where the securities issued by an underlying collective investment undertaking have already been admitted to trading on a regulated or equivalent market, the identity of the underlying collective investment undertak-

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ing.
15

B.40

A description of the applicants service providers including the maximum

fees payable.

15

B.41

The identity and regulatory status of any investment manager, investment

advisor, custodian, trustee or fiduciary (including and delegated custody
arrangements).

15

B.42

A description of how often the net asset value of the collective investment
undertaking will be determined and how such net asset value will be communicated to investors.

15

B.43

In the case of an umbrella collective investment undertaking, a statement

of any cross liability that may occur between classes or investment in other collective investment undertaking.

15

B.44

B.7 plus:

Where a collective investment undertaking has not commenced operations and no financial statements have been made up as at the date of
the registration document, a statement to that effect.

15

B.45

A description of the collective investment undertakings portfolio.

15

B.46

An indication of the most recent net asset value per security (if applicable).

16

B.47

A description of the issuer, including:

The legal name of the issuer and a description of the issuers position
within the national government framework.

The legal form of the issuer.

Any recent events relevant to the evaluation of the issuers solvency.

A description of the issuers economy including its structure with details of its main sectors.

16

B.48

A description/the key facts of public finance and trade information for the
2 fiscal years prior to the date of the prospectus. With a description of any
significant changes to that information since the end of the last fiscal year.

17

B.49

A description of the issuer, including:

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The legal name of the issuer and a description of the issuers legal
status.

The legal form of the issuer.

A description of the issuers purpose and functions.

The sources of funding, guarantees and other obligations owed to the

issuer by its members.

17

B.50

Any recent events relevant to the evaluation of the issuers solvency.

Selected key historical financial information covering the latest 2 financial

years. This should be accompanied by a description of any significant
changes to the issuers financial position since the last audited financial information.

Section C Securities
Annexes
3,

5,

Element
12, C.1

13
3,

Disclosure requirement
A description of the type and the class of the securities being offered
and/or admitted to trading, including any security identification number.

5,

12, C.2

Currency of the securities issue.

13
1

C.3

The number of shares issued and fully paid and issued but not fully paid.
The par value per share, or that the shares have not par value.

3
3,

C.4
5,

12, C.5

13
3

A description of the rights attached to the securities.

A description of any restrictions on the free transferability of the securities.

C.6

An indication as to whether the securities offered are or will be the object

of an application for admission to trading on a regulated market and the
identity of all the regulated markets where the securities are or are to be
traded.

C.7

A description of dividend policy.

5, 12, 13

C.8

C.4 plus:

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5, 13

C.9

including ranking

including limitations to those rights

C.8 plus:

the nominal interest rate

the date from which interest becomes payable and the due dates for
interest

where the rate is not fixed, description of the underlying on which it

is based

maturity date and arrangements for the amortisation of the loan, including the repayment procedures

C.10

an indication of yield

name of representative of debt security holders

C.9 plus:

if the security has a derivative component in the interest payment,

provide a clear and comprehensive explanation to help investors understand how the value of their investment is affected by the value of
the underlying instrument(s), especially under the circumstances when
the risks are most evident

5, 12

C.11

An indication as to whether the securities offered are or will be the object

of an application for admission to trading, with a view to their distribution
in a regulated market or other equivalent markets with indication of the
markets in question.

C.12

The minimum denomination of an issue.

10

C.13

Information about the underlying shares:

C.1

C.2

C.3

C.4

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10

C.14

C.5

C.6

C.7

Information about the depository receipts:

C.1

C.2

C.4

C.5

Describe the exercise of and benefit from the rights attaching to the
underlying shares, in particular voting rights, the conditions on which
the issuer of the depository receipts may exercise such rights, and
measures envisaged to obtain the instructions of the depository receipt holders and the right to share in profits and any liquidations
surplus which are not passed on to the holder of the depository receipt.

Description of the bank or other guarantee attached to the depository

receipt and intended to underwrite the issuers obligations.

12

C.15

A description of how the value of the investment is affected by the value

of the underlying instrument(s), unless the securities have a denomination
of at least EUR 100 000.

12

C.16

The expiration or maturity date of the derivative securities the exercise

date or final reference date.

12

C.17

A description of the settlement procedure of the derivative securities.

12

C.18

A description of how the return on derivative securities takes place.

12

C.19

The exercise price or the final reference price of the underlying.

12

C.20

A description of the type of the underlying and where the information on

the underlying can be found.

13

C.21

Indication of the market where the securities will be traded and for which
prospectus has been published.

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C.22

Information about the underlying share:

A description of the underlying share.

C.2

C.4 plus the words and procedure for the exercise of those rights.

Where and when the shares will be or have been admitted to trading.

C.5

Where the issuer of the underlying is an entity belonging to the same

group, the information to provide on this issuer is the information required by the share registration document. Therefore provide such information required for a summary for Annex 1.

Section D Risks
Annexes

Element

Disclosure requirement

D.1

Key information on the key risks that are specific to the issuer or its industry

4, 7, 9, 11,

D.2

Key information on the key risks that are specific to the issuer.

3, 5, 13

D.3

Key information on the key risks that are specific to the securities.

10

D.4

Information about the issuer of the underlying shares:

16, 17

10

D.5

Information about the depository receipts:

12

D.6

D.2

D.3

D.3 plus:

This must include a risk warning to the effect that investors may lose
the value of their entire investment or part of it, as the case may be,
and/or, if the investors liability is not limited to the value of his investment, a statement of that fact, together with a description of the
circumstances in which such additional liability arises and the likely fi-

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nancial effect.

Section E Offer
Annexes

Element

Disclosure requirement

3, 10

E.1

The total net proceeds and an estimate of the total expenses of the issue/offer, including estimated expenses charged to the investor by the issuer or the offeror.

3, 10

E.2a

Reasons for the offer, use of proceeds, estimated net amount of the proceeds.

5, 12

E.2b

Reasons for the offer and use of proceeds when different from making
profit and/or hedging certain risks.

3,

5,

10, E.3

A description of the terms and conditions of the offer.

5,

10, E.4

A description of any interest that is material to the issue/offer including

12
3,

12, 13
3, 10

conflicting interests.
E.5

Name of the person or entity offering to sell the security.

Lock-up agreements: the parties involved; and indication of the period of
the lock up.

3, 10

E.6

The amount and percentage of immediate dilution resulting from the offer.
In the case of a subscription offer to existing equity holders, the amount
and percentage of immediate dilution if they do not subscribe to the new
offer.

All

E.7

Estimated expenses charged to the investor by the issuer or the offeror.

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ANNEX XXIII
Proportionate Schedule for Minimum Disclosure Requirements for the Share Registration Document for Rights Issues
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the Registration Document and, as the
case may be, for certain parts of it, with, in the latter case, an indication of such parts. In
the case of natural persons including members of the issuers administrative, management
or supervisory bodies indicate the name and function of the person; in case of legal persons
indicate the name and registered office.

1.2

A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the registration
document is, to the best of their knowledge, in accordance with the facts and contains no
omission likely to affect its import. As the case may be, a declaration by those responsible
for certain parts of the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the part of the registration document for which they are responsible is, to the best of their knowledge, in accordance with
the facts and contains no omission likely to affect its import.

STATUTORY AUDITORS

2.1

Names and addresses of the issuers auditors for the period covered by the historical financial information (together with their membership in a professional body).

2.2

If auditors have resigned, been removed or not been re-appointed during the period covered
by the historical financial information, indicate details if material.

RISK FACTORS
Prominent disclosure of risk factors that are specific to the issuer or its industry in a section
headed Risk Factors.

INFORMATION ABOUT THE ISSUER

4.1

The legal and commercial name of the issuer

4.2

Investments

4.2.1

A description, (including the amount) of the principal investments made since the end of the
period covered by the latest published audited financial statements and up to the date of the
registration document.

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4.2.2

A description of the issuers principal investments that are in progress, including the geographic distribution of these investments (home and abroad) and the method of financing
(internal or external)

4.2.3

Information concerning the issuers principal future investments on which its management
bodies have already made firm commitments.

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5

BUSINESS OVERVIEW

5.1

Principal Activities
A brief description of the issuers operations and principal activities and of any significant
changes impacting these operations and activities since the end of the period covered by the
latest published audited financial statements, including an indication of any significant new
products and services that have been introduced and, to the extent the development of new
products or services has been publicly disclosed, the status of development.

5.2

Principal Markets
A brief description of the principal markets in which the issuer competes and of any significant changes impacting these markets since the end of period covered by the latest published audited financial statements.

5.3

Where the information given pursuant to items 5.1. and 5.2. has been influenced by extraordinary factors since the end of period covered by the latest published audited financial
statements, mention that fact.

5.4

If material to the issuers business or profitability, summary information regarding the extent to which the issuer is dependent, on patents or licenses, industrial, commercial or financial contracts or new manufacturing processes.

5.5

The basis for any statements made by the issuer regarding its competitive position.

ORGANISATIONAL STRUCTURE

6.1

If the issuer is part of a group, a brief description of the group and the issuers position
within the group.

TREND INFORMATION

7.1

The most significant recent trends in production, sales and inventory, and costs and selling
prices since the end of the last financial year to the date of the registration document.

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7.2

Information on any known trends, uncertainties, demands, commitments or events that are
reasonably likely to have a material effect on the issuers prospects for at least the current
financial year.

PROFIT FORECASTS OR ESTIMATES

If an issuer chooses to include a profit forecast or a profit estimate the registration document must contain the information set out in items 8.1 and 8.2:

8.1

A statement setting out the principal assumptions upon which the issuer has based its forecast, or estimate.
There must be a clear distinction between assumptions about factors which the members of
the administrative, management or supervisory bodies can influence and assumptions about
factors which are exclusively outside the influence of the members of the administrative,
management or supervisory bodies; the assumptions must be readily understandable by investors, be specific and precise and not relate to the general accuracy of the estimates underlying the forecast.

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8.2

A report prepared by independent accountants or auditors stating that in the opinion of the
independent accountants or auditors the forecast or estimate has been properly compiled on
the basis stated, and that the basis of accounting used for the profit forecast or estimate is
consistent with the accounting policies of the issuer.

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Where financial information relates to the previous financial year and only contains nonmisleading figures substantially consistent with the final figures to be published in the next
annual audited financial statements for the previous financial year, and the explanatory information necessary to assess the figures, a report shall not be required provided that the
prospectus includes all of the following statements:
a)

the person responsible for this financial information, if different from the one which is
responsible for the prospectus in general, approves that information;

b)

independent accountants or auditors have agreed that this information is substantially

consistent with the final figures to be published in the next annual audited financial
statements;

c)

this financial information has not been audited.

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8.3

The profit forecast or estimate must be prepared on a basis comparable with the historical
financial information.

8.4

If a profit forecast in a prospectus has been published which is still outstanding, then provide a statement setting out whether or not that forecast is still correct as at the time of the
registration document, and an explanation of why such forecast is no longer valid if that is
the case.

ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES AND SENIOR MANAGEMENT

9.1

Names, business addresses and functions in the issuer of the following persons and an indication of the principal activities performed by them outside that issuer where these are significant with respect to that issuer:
a)

members of the administrative, management or supervisory bodies;

b)

partners with unlimited liability, in the case of a limited partnership with a share capital;

c)

founders, if the issuer has been established for fewer than 5 years; and

d)

any senior manager who is relevant to establishing that the issuer has the appropriate
expertise and experience for the management of the issuers business.

The nature of any family relationship between any of those persons.

In the case of each member of the administrative, management or supervisory bodies of the
issuer and of each person mentioned in points (b) and (d) of the first subparagraph, details
of that persons relevant management expertise and experience and the following information:
a)

the names of all companies and partnerships of which such person has been a member
of the administrative, management or supervisory bodies or partner at any time in the
previous 5 years, indicating whether or not the individual is still a member of the administrative, management or supervisory bodies or partner. It is not necessary to list all the
subsidiaries of an issuer of which the person is also a member of the administrative,
management or supervisory bodies;

b)

any convictions in relation to fraudulent offences for at least the previous 5 years;

c)

details of any bankruptcies, receiverships or liquidations with which a person described

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in (a) and (d) of the first subparagraph who was acting in the capacity of any of the po-

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sitions set out in (a) and(d) of the first subparagraph was associated for at least the
previous 5 years;
d)

details of any official public incrimination and/or sanctions of such person by statutory
or regulatory authorities (including designated professional bodies) and whether such
person has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management
or conduct of the affairs of any issuer for at least the previous 5 years.

If there is no such information to be disclosed, a statement to that effect is to be made.

9.2

Administrative, Management, and Supervisory bodies and Senior Management conflicts of interests
Potential conflicts of interests between any duties to the issuer, of the persons referred to in
item 9.1., and their private interests and or other duties must be clearly stated. In the event
that there are no such conflicts, a statement to that effect must be made.
Any arrangement or understanding with major shareholders, customers, suppliers or others,
pursuant to which any person referred to in item 9.1 was selected as a member of the administrative, management or supervisory bodies or member of senior management.
Details of any restrictions agreed by the persons referred to in item 9.1 on the disposal
within a certain period of time of their holdings in the issuers securities.

10

REMUNERATION AND BENEFITS

In case of issuers not listed on a regulated market and in relation to the last full financial
year for those persons referred to in points (a) and (d) of the first subparagraph of item 9.1.

10.1

The amount of remuneration paid (including any contingent or deferred compensation), and
benefits in kind granted to such persons by the issuer and its subsidiaries for services in all
capacities to the issuer and its subsidiaries by any person.
That information must be provided on an individual basis unless individual disclosure is not
required in the issuers home country or when the issuer has already publicly disclosed that
information.

10.2

The total amounts set aside or accrued by the issuer or its subsidiaries to provide pension,
retirement or similar benefits.

11

BOARD PRACTICES
In case of issuers not listed on a regulated market and in relation to the issuers last completed financial year, and unless otherwise specified, with respect to those persons referred
to in point (a) of the first subparagraph of 9.1.:

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11.1

Date of expiration of the current term of office, if applicable, and the period during which
the person has served in that office.

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Information about members of the administrative, management or supervisory bodies service contracts with the issuer or any of its subsidiaries providing for benefits upon termination of employment, or an appropriate negative statement.
11.2

Information about the issuers audit committee and remuneration committee, including the
names of committee members and a summary of the terms of reference under which the
committee operates.

11.3

A statement as to whether or not the issuer complies with its countrys of incorporation corporate governance regime(s). In the event that the issuer does not comply with such a regime, a statement to that effect must be included together with an explanation regarding
why the issuer does not comply with such regime.

12

EMPLOYEES

12.1

Shareholdings and stock options with respect to each person referred to in points (a) and
(d) of the first subparagraph of item 9.1. provide information as to their share ownership
and any options over such shares in the issuer as of the most recent practicable date.

12.2

Description of any arrangements for involving the employees in the capital of the issuer.

13

MAJOR SHAREHOLDERS

13.1

In so far as is known to the issuer, the name of any person other than a member of the administrative, management or supervisory bodies who, directly or indirectly, has an interest
in the issuers capital or voting rights which is notifiable under the issuers national law, together with the amount of each such persons interest or, if there are no such persons, an
appropriate negative statement.

13.2

Whether the issuers major shareholders have different voting rights, or an appropriate negative statement.

13.3

To the extent known to the issuer, state whether the issuer is directly or indirectly owned or
controlled and by whom and describe the nature of such control and describe the measures
in place to ensure that such control is not abused.

13.4

A description of any arrangements, known to the issuer, the operation of which may at a
subsequent date result in a change in control of the issuer.

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14

RELATED PARTY TRANSACTIONS

If International Financial Reporting Standards adopted according to the Regulation (EC) No
1606/2002 do not apply to the issuer, the following information must be disclosed for the
period covered by the historical financial information and up to the date of the registration
document:
a)

The nature and extent of any transactions which are as a single transaction or in their
entirety material to the issuer. Where such related party transactions are not concluded at arms length provide an explanation of why these transactions were not concluded
at arms length. In the case of outstanding loans including guarantees of any kind indicate the amount outstanding.

b)

The amount or the percentage to which related party transactions form part of the turnover of the issuer.

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If international Financial Reporting Standards adopted according to the Regulation (EC) No
1606/2002 apply to the issuer, the above information must be disclosed only for the transactions occurred since the end of the last financial period for which audited financial information have been published.
15

FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES,

FINANCIAL POSITION AND PROFITS AND LOSSES

15.1

Historical Financial Information

Audited historical financial information covering the last financial year (or such shorter period that the issuer has been in operation and the audit report. If the issuer has changed its
accounting reference date during the period for which historical financial information is required, the audited historical information shall cover at least 12 months, or the entire period
for which the issuer has been in operation, whichever is the shorter. Such financial information must be prepared according to Regulation (EC) No 1606/2002, or if not applicable to
a Member State national accounting standards for issuers from the European Union.
For third country issuers, such financial information must be prepared according to the international accounting standards adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to
these standards. If such financial information is not equivalent to these standards, it must
be presented in the form of restated financial statements.
The audited historical financial information must be presented and prepared in a form consistent with that which will be adopted in the issuers next published annual financial state-

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ments having regard to accounting standards and policies and legislation applicable to such
annual financial statements.
If the issuer has been operating in its current area of economic activity for less than 1 year,
the audited historical financial information covering that period must be prepared in accordance with the standards applicable to annual financial statements under the Regulation (EC)
No 1606/2002, or if not applicable to a Member State national accounting standards where
the issuer is an issuer from the European Union. For third country issuers, the historical financial information must be prepared according to the international accounting standards
adopted pursuant to the procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third
countrys national accounting standards equivalent to these standards. This historical financial information must be audited.
If the audited financial information is prepared according to national accounting standards,
the financial information required under this heading must include at least:
a)

balance sheet;

b)

income statement;

c)

a statement showing either all changes in equity or changes in equity other than those
arising from capital transactions with owners and distributions to owners;

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d)

cash flow statement;

e)

accounting policies and explanatory notes

The historical annual financial information must be independently audited or reported on as

to whether or not, for the purposes of the registration document, it gives a true and fair
view, in accordance with auditing standards applicable in a Member State or an equivalent
standard.
15.2

Pro forma financial information

In the case of a significant gross change, a description of how the transaction might have affected the assets and liabilities and earnings of the issuer, had the transaction been undertaken at the commencement of the period being reported on or at the date reported.
This requirement will normally be satisfied by the inclusion of pro forma financial information.
This pro forma financial information is to be presented as set out in Annex II and must include the information indicated therein.

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Pro forma financial information must be accompanied by a report prepared by independent

accountants or auditors.
15.3

Financial statements
If the issuer prepares both own and consolidated annual financial statements, include at
least the consolidated annual financial statements in the registration document.

15.4

Auditing of historical annual financial information

15.4.1

A statement that the historical financial information has been audited. If audit reports on the
historical financial information have been refused by the statutory auditors or if they contain
qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given.

15.4.2

Indication of other information in the registration document which has been audited by the
auditors.

15.4.3

Where financial data in the registration document is not extracted from the issuers audited
financial statements state the source of the data and state that the data is unaudited.

15.5

Age of latest financial information

15.5.1

The last year of audited financial information may not be older than one of the following:
a)

18 months from the date of the registration document if the issuer includes audited interim financial statements in the registration document;

b)

15 months from the date of the registration document if the issuer includes unaudited
interim financial statements in the registration document.

15.6

Interim and other financial information

15.6.1

If the issuer has published quarterly or half yearly financial information since the date of its
last audited financial statements, these must be included in the registration document. If the
quarterly or half yearly financial information has been reviewed or audited, the audit or review report must also be included. If the quarterly or half yearly financial information is
unaudited or has not been reviewed state that fact.

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15.6.2

If the registration document is dated more than 9 months after the end of the last audited
financial year, it must contain interim financial information, which may be unaudited (in
which case that fact must be stated) covering at least the first 6 months of the financial
year.

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The interim financial information must include comparative statements for the same period
in the prior financial year, except that the requirement for comparative balance sheet information may be satisfied by presenting the year end balance sheet.
15.7

Dividend policy
A description of the issuers policy on dividend distributions and any restrictions thereon.

15.7.1

The amount of the dividend per share for the period covered by the historical financial information adjusted, where the number of shares in the issuer has changed, to make it comparable.

15.8

Legal and arbitration proceedings

Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period
covering at least the previous 12 months which may have, or have had in the recent past
significant effects on the issuer and/or groups financial position or profitability, or provide
an appropriate negative statement.

15.9

Significant change in the issuers financial or trading position

A description of any significant change in the financial or trading position of the group which
has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published, or provide an appropriate
negative statement.

16

ADDITIONAL INFORMATION

16.1

Share Capital
The following information as of the date of the most recent balance sheet included in the
historical financial information:

16.1.1

The amount of issued capital, and for each class of share capital:
a)

the number of shares authorised;

b)

the number of shares issued and fully paid and issued but not fully paid;

c)

the par value per share, or that the shares have no par value; and

d)

a reconciliation of the number of shares outstanding at the beginning and end of the
year. If more than 10 % of capital has been paid for with assets other than cash within
the period covered by the historical financial information, state that fact.

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16.1.2

If there are shares not representing capital, state the number and main characteristics of
such shares.

16.1.3

The amount of any convertible securities, exchangeable securities or securities with warrants, with an indication of the conditions governing and the procedures for conversion, exchange or subscription.

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16.1.4

Information about and terms of any acquisition rights and or obligations over authorised but
unissued capital or an undertaking to increase the capital.

16.1.5

Information about any capital of any member of the group which is under option or agreed
conditionally or unconditionally to be put under option and details of such options including
those persons to whom such options relate.

17

MATERIAL CONTRACTS
A summary of each material contract, other than contracts entered into in the ordinary
course of business, to which the issuer or any member of the group is a party, for the last
year immediately preceding publication of the registration document.
A summary of any other contract (not being a contract entered into in the ordinary course of
business) entered into by any member of the group which contains any provision under
which any member of the group has any obligation or entitlement which is material to the
group as at the date of the registration document.

18

THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF

ANY INTEREST

18.1

Where a statement or report attributed to a person as an expert is included in the Registration Document, provide such persons name, business address, qualifications and material
interest if any in the issuer. If the report has been produced at the issuers request a statement to the effect that such statement or report is included, in the form and context in
which it is included, with the consent of the person who has authorised the contents of that
part of the Registration Document.

18.2

Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able
to ascertain from information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or misleading. In addition, identify the source(s) of the information.

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19

DOCUMENTS ON DISPLAY
A statement that for the life of the registration document the following documents (or copies
thereof), where applicable, may be inspected:
a)

the memorandum and articles of association of the issuer;

b)

all reports, letters, and other documents, historical financial information, valuations and
statements prepared by any expert at the issuers request any part of which is included
or referred to in the registration document.

An indication of where the documents on display may be inspected, by physical or electronic

means.

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ANNEX XXIV
Proportionate Schedule for Minimum Disclosure Requirements for the Share Securities Note
for Rights Issues
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the prospectus and, as the case may be,
for certain parts of it, with, in the latter case, an indication of such parts. In the case of natural persons including members of the issuers administrative, management or supervisory
bodies indicate the name and function of the person; in case of legal persons indicate the
name and registered office.

1.2

A declaration by those responsible for the prospectus that, having taken all reasonable care
to ensure that such is the case the information contained in the prospectus is, to the best of
their knowledge, in accordance with the facts and contains no omission likely to affect its
import. As the case may be, declaration by those responsible for certain parts of the prospectus that, having taken all reasonable care to ensure that such is the case the information contained in the part of the prospectus for which they are responsible is, to the best
of their knowledge, in accordance with the facts and contains no omission likely to affect its
import.

RISK FACTORS
Prominent disclosure of risk factors that are material to the securities being offered and/or
admitted to trading in order to assess the market risk associated with these securities in a
section headed Risk Factors.

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3

ESSENTIAL INFORMATION

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3.1

Working capital Statement

Statement by the issuer that, in its opinion, the working capital is sufficient for the issuers
present requirements or, if not, how it proposes to provide the additional working capital
needed.

3.2

Capitalisation and indebtedness

A statement of capitalisation and indebtedness (distinguishing between guaranteed and unguaranteed, secured and unsecured indebtedness) as of a date no earlier than 90 days prior
to the date of the document. Indebtedness also includes indirect and contingent indebtedness.

3.3

Interest of natural and legal persons involved in the issue/offer

A description of any interest, including conflicting ones that is material to the issue/offer,
detailing the persons involved and the nature of the interest.

3.4

Reasons for the offer and use of proceeds

Reasons for the offer and, where applicable, the estimated net amount of the proceeds broken into each principal intended use and presented by order of priority of such uses. If the
issuer is aware that the anticipated proceeds will not be sufficient to fund all the proposed
uses, state the amount and sources of other funds needed. Details must be given with regard to the use of the proceeds, in particular when they are being used to acquire assets,
other than in the ordinary course of business, to finance announced acquisitions of other
business, or to discharge, reduce or retire indebtedness.

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4

INFORMATION CONCERNING THE SECURITIES TO BE OFFERED/ADMITTED TO TRADING

4.1

A description of the type and the class of the securities being offered and/or admitted to
trading, including the ISIN (International Security Identification Number) or other such security identification code.

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4.2

Legislation under which the securities have been created.

4.3

An indication whether the securities are in registered form or bearer form and whether the
securities are in certificated form or book-entry form. In the latter case, name and address
of the entity in charge of keeping the records.

4.4

Currency of the securities issue.

4.5

A description of the rights attached to the securities, including any limitations of those
rights, and procedure for the exercise of those rights.
Dividend rights:

Fixed date(s) on which the entitlement arises,

Time limit after which entitlement to dividend lapses and an indication of the person in
whose favour the lapse operates,

Dividend restrictions and procedures for non-resident holders,

Rate of dividend or method of its calculation, periodicity and cumulative or noncumulative nature of payments.

Voting rights.
Pre-emption rights in offers for subscription of securities of the same class.
Right to share in the issuers profits.
Rights to share in any surplus in the event of liquidation.
Redemption provisions.
Conversion provisions.
4.6

A statement of the resolutions, authorisations and approvals by virtue of which the securities have been or will be created and/or issued.

4.7

The expected issue date of the securities

4.8

A description of any restrictions on the free transferability of the securities

4.9

In respect of the country of registered office of the issuer and the country(ies) where the offer is being made or admission to trading is being sought:

Information on taxes on the income from the securities withheld at source,

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Indication as to whether the issuer assumes responsibility for the withholding of taxes
at the source.

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5

TERMS AND CONDITIONS OF THE OFFER

5.1

Conditions, offer statistics, expected timetable and action required to apply for the offer

5.1.1

Conditions to which the offer is subject.

5.1.2

Total amount of the issue/offer.

5.1.3

The time period, including any possible amendments, during which the offer will be open and
description of the application process.

5.1.4

An indication of when, and under which circumstances, the offer may be revoked or suspended and whether revocation can occur after dealing has begun.

5.1.5

A description of the possibility to reduce subscriptions and the manner for refunding excess
amount paid by applicants.

5.1.6

Details of the minimum and/or maximum amount of application (whether in number of securities or aggregate amount to invest).

5.1.7

An indication of the period during which an application may be withdrawn, provided that investors are allowed to withdraw their subscription.

5.1.8

Method and time limits for paying up the securities and for delivery of the securities.

5.1.9

A full description of the manner and date in which results of the offer are to be made public.

5.1.10

The procedure for the exercise of any right of pre-emption, the negotiability of subscription
rights and the treatment of subscription rights not exercised.

5.2

Allotment

5.2.1

To the extent known to the issuer, an indication of whether major shareholders or members
of the issuers management, supervisory or administrative bodies intended to subscribe in
the offer, or whether any person intends to subscribe for more than five per cent of the offer.

5.2.2

Process for notification to applicants of the amount allotted and indication whether dealing
may begin before notification is made.

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5.3

Pricing

5.3.1

An indication of the price at which the securities will be offered. If the price is not known or
if there is no established and/or liquid market for the securities, indicate the method for determining the offer price, including a statement as to who has set the criteria or is formally
responsible for the determination. Indication of the amount of any expenses and taxes specifically charged to the subscriber or purchaser.

5.3.2

Process for the disclosure of the offer price.

5.3.3

If the issuers equity holders have pre-emptive purchase rights and this right is restricted or
withdrawn, indication of the basis for the issue price if the issue is for cash, together with
the reasons for and beneficiaries of such restriction or withdrawal.

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5.4

Placing and Underwriting

5.4.1

Name and address of the coordinator(s) of the global offer and of single parts of the offer
and, to the extend known to the issuer or to the offeror, of the placers in the various countries where the offer takes place

5.4.2

Name and address of any paying agents and depository agents in each country.

5.4.3

Name and address of the entities agreeing to underwrite the issue on a firm commitment
basis, and name and address of the entities agreeing to place the issue without a firm commitment or under best efforts arrangements. Indication of the material features of the
agreements, including the quotas. Where not all of the issue is underwritten, a statement of
the portion not covered. Indication of the overall amount of the underwriting commission
and of the placing commission.

5.4.4

When the underwriting agreement has been or will be reached.

ADMISSION TO TRADING AND DEALING ARRANGEMENTS

6.1

An indication as to whether the securities offered are or will be the object of an application
for admission to trading, with a view to their distribution in a regulated market or other
equivalent markets with indication of the markets in question. This circumstance must be
mentioned, without creating the impression that the admission to trading will necessarily be
approved. If known, the earliest dates on which the securities will be admitted to trading.

6.2

All the regulated markets or equivalent markets on which, to the knowledge of the issuer,
securities of the same class of the securities to be offered or admitted to trading are already
admitted to trading.

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6.3

If simultaneously or almost simultaneously with the creation of the securities for which admission to a regulated market is being sought, securities of the same class are subscribed
for or placed privately or if securities of other classes are created for public or private placing, give details of the nature of such operations and of the number and characteristics of
the securities to which they relate.

6.4

Details of the entities which have a firm commitment to act as intermediaries in secondary
trading, providing liquidity through bid and offer rates and description of the main terms of
their commitment.

LOCK-UP AGREEMENTS

7.1

Lock-up agreements
The parties involved.
Content and exceptions of the agreement.
Indication of the period of the lock up.

EXPENSE OF THE ISSUE/OFFER

8.1

The total net proceeds and an estimate of the total expenses of the issue/offer.

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9

DILUTION

9.1

The amount and percentage of immediate dilution resulting from the issue/offer.

9.2

The amount and percentage of immediate dilution if they do not subscribe to the new offer.

10

ADDITIONAL INFORMATION

10.1

If advisors connected with an issue are mentioned in the Securities Note, a statement of the
capacity in which the advisors have acted.

10.2

An indication of other information in the Securities Note which has been audited or reviewed
by statutory auditors and where auditors have produced a report. Reproduction of the report
or, with permission of the competent authority, a summary of the report.

10.3

Where a statement or report attributed to a person as an expert is included in the Securities

Note, provide such persons name, business address, qualifications and material interest if
any in the issuer. If the report has been produced at the issuers request a statement to the
effect that such statement or report is included, in the form and context in which it is included, with the consent of the person who has authorised the contents of that part of the
Securities Note.

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10.4

Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able
to ascertain from information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or misleading. In addition, identify the source(s) of the information.

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ANNEX XXV
Proportionate Schedule for Minimum Disclosure Requirements for the Share Registration Document for SMEs and companies with reduced market capitalisation
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the Registration Document and, as the
case may be, for certain parts of it, with, in the latter case, an indication of such parts. In
the case of natural persons including members of the issuers administrative, management
or supervisory bodies indicate the name and function of the person; in case of legal persons
indicate the name and registered office.

1.2

A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the registration
document is, to the best of their knowledge, in accordance with the facts and contains no
omission likely to affect its import. As the case may be, a declaration by those responsible
for certain parts of the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the part of the registration document for which they are responsible is, to the best of their knowledge, in accordance with
the facts and contains no omission likely to affect its import.

STATUTORY AUDITORS

2.1

Names and addresses of the issuers auditors for the period covered by the historical financial information (together with their membership in a professional body).

2.2

If auditors have resigned, been removed or not been re-appointed during the period covered
by the historical financial information, indicate details if material.

SELECTED FINANCIAL INFORMATION

3.1

Selected historical financial information regarding the issuer, presented for each financial
year for the period covered by the historical financial information, and any subsequent interim financial period, in the same currency as the financial information.
The selected historical financial information must provide the key figures that summarise the
financial condition of the issuer.

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3.2

If selected financial information for interim periods is provided, comparative data from the
same period in the prior financial year must also be provided, except that the requirement
for comparative balance sheet information is satisfied by presenting the year end balance
sheet information.

RISK FACTORS
Prominent disclosure of risk factors that are specific to the issuer or its industry in a section
headed Risk Factors.

INFORMATION ABOUT THE ISSUER

5.1

History and Development of the Issuer

5.1.1

the legal and commercial name of the issuer;

5.1.2

the place of registration of the issuer and its registration number;

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5.1.3

the date of incorporation and the length of life of the issuer, except where indefinite;

5.1.4

the domicile and legal form of the issuer, the legislation under which the issuer operates, its
country of incorporation, and the address and telephone number of its registered office (or
principal place of business if different from its registered office);

5.1.5

the important events in the development of the issuers business.

5.2

Investments

5.2.1

A description (including the amount) of the issuers principal investments for each financial
year for the period covered by the historical financial information up to the date of the registration document.

5.2.2

A description of the issuers principal investments that are in progress, including the geographic distribution of these investments (home and abroad) and the method of financing
(internal or external).

5.2.3

Information concerning the issuers principal future investments on which its management
bodies have already made firm commitments and the anticipated sources of funds needed to
fulfil these commitments.

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BUSINESS OVERVIEW

6.1

Principal Activities
A brief description of the issuers operations and principal activities and of any significant
changes impacting these operations and activities since latest two published audited financial statements, including an indication of any significant new products and services that
have been introduced and, to the extent the development of new products or services has
been publicly disclosed, the status of development.

6.2

Principal Markets
A brief description of the principal markets in which the issuer competes and of any significant changes impacting these markets since latest two published audited financial statements.

6.3

Where the information given pursuant to items 6.1. and 6.2. has been influenced by extraordinary factors, mention that fact.

6.4

If material to the issuers business or profitability, summary information regarding the extent to which the issuer is dependent, on patents or licenses, industrial, commercial or financial contracts or new manufacturing processes.

6.5

The basis for any statements made by the issuer regarding its competitive position.

ORGANISATIONAL STRUCTURE

7.1

If the issuer is part of a group, a brief description of the group and the issuers position
within the group.

7.2

If not included in the financial statements, a list of the issuers significant subsidiaries, including name, country of incorporation or residence, proportion of ownership interest and, if
different, proportion of voting power held.

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8

PROPERTY, PLANTS AND EQUIPMENT

8.1

A description of any environmental issues that may affect the issuers utilisation of the tangible fixed assets.

OPERATING AND FINANCIAL REVIEW

The issuer must disclose the following information if the Annual Reports, presented and prepared in accordance with Article 46 of Directive 78/660/EEC and Article 36 of Directive
83/349/EEC for the periods covered by the historical financial information, are not included
in or annexed to the prospectus:

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9.1

Financial Condition
To the extent not covered elsewhere in the registration document, provide a description of
the issuers financial condition, changes in financial condition and results of operations for
each year and interim period, for which historical financial information is required, including
the causes of material changes from year to year in the financial information to the extent
necessary for an understanding of the issuers business as a whole.

9.2

Operating Results

9.2.1

Information regarding significant factors, including unusual or infrequent events or new developments, materially affecting the issuers income from operations, indicating the extent
to which income was so affected.

9.2.2

Where the financial statements disclose material changes in net sales or revenues, provide a
narrative discussion of the reasons for such changes.

9.2.3

Information regarding any governmental, economic, fiscal, monetary or political policies or

factors that have materially affected, or could materially affect, directly or indirectly, the issuers operations.

10

CAPITAL RESOURCES

10.1

An explanation of the sources and amounts of and a narrative description of the issuers
cash flows;

10.2

Information regarding any restrictions on the use of capital resources that have materially
affected, or could materially affect, directly or indirectly, the issuers operations.

11

RESEARCH AND DEVELOPMENT, PATENTS AND LICENCES

Where material, provide a description of the issuers research and development policies for
each financial year for the period covered by the historical financial information, including
the amount spent on issuer-sponsored research and development activities.

12

TREND INFORMATION

12.1

The most significant recent trends in production, sales and inventory, and costs and selling
prices since the end of the last financial year to the date of the registration document.

12.2

Information on any known trends, uncertainties, demands, commitments or events that are
reasonably likely to have a material effect on the issuers prospects for at least the current
financial year.

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13

PROFIT FORECASTS OR ESTIMATES

If an issuer chooses to include a profit forecast or a profit estimate the registration document must contain the information set out in items 13.1 and 13.2:

13.1

A statement setting out the principal assumptions upon which the issuer has based its forecast, or estimate.
There must be a clear distinction between assumptions about factors which the members of
the administrative, management or supervisory bodies can influence and assumptions about
factors which are exclusively outside the influence of the members of the administrative,
management or supervisory bodies; the assumptions must be readily understandable by investors, be specific and precise and not relate to the general accuracy of the estimates underlying the forecast.

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13.2

A report prepared by independent accountants or auditors stating that in the opinion of the
independent accountants or auditors the forecast or estimate has been properly compiled on
the basis stated, and that the basis of accounting used for the profit forecast or estimate is
consistent with the accounting policies of the issuer.
Where financial information relates to the previous financial year and only contains nonmisleading figures substantially consistent with the final figures to be published in the next
annual audited financial statements for the previous financial year, and the explanatory information necessary to assess the figures, a report shall not be required provided that the
prospectus includes all of the following statements:
a)

the person responsible for this financial information, if different from the one which is
responsible for the prospectus in general, approves that information;

b)

independent accountants or auditors have agreed that this information is substantially

consistent with the final figures to be published in the next annual audited financial
statements;

c)

his financial information has not been audited.

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13.3

The profit forecast or estimate must be prepared on a basis comparable with the historical
financial information

13.4

If a profit forecast in a prospectus has been published which is still outstanding, then provide a statement setting out whether or not that forecast is still correct as at the time of the

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registration document, and an explanation of why such forecast is no longer valid if that is
the case.
14

ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES AND SENIOR MANAGEMENT

14.1

Names, business addresses and functions in the issuer of the following persons and an indication of the principal activities performed by them outside that issuer where these are significant with respect to that issuer:
a)

members of the administrative, management or supervisory bodies;

b)

partners with unlimited liability, in the case of a limited partnership with a share capital;

c)

founders, if the issuer has been established for fewer than 5 years; and

d)

any senior manager who is relevant to establishing that the issuer has the appropriate

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expertise and experience for the management of the issuers business.

The nature of any family relationship between any of those persons.
In the case of each member of the administrative, management or supervisory bodies of the
issuer and of each person mentioned in points (b) and (d) of the first subparagraph, details
of that persons relevant management expertise and experience and the following information:
a)

the names of all companies and partnerships of which such person has been a member
of the administrative, management or supervisory bodies or partner at any time in the
previous 5 years, indicating whether or not the individual is still a member of the administrative, management or supervisory bodies or partner. It is not necessary to list all the
subsidiaries of an issuer of which the person is also a member of the administrative,
management or supervisory bodies;

b)

any convictions in relation to fraudulent offences for at least the previous 5 years;

c)

details of any bankruptcies, receiverships or liquidations with which a person described

in (a) and (d) of the first subparagraph who was acting in the capacity of any of the positions set out in (a) and (d) of the first subparagraph was associated for at least the
previous 5 years;

d)

details of any official public incrimination and/or sanctions of such person by statutory
or regulatory authorities (including designated professional bodies) and whether such
person has ever been disqualified by a court from acting as a member of the administra-

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tive, management or supervisory bodies of an issuer or from acting in the management

or conduct of the affairs of any issuer for at least the previous 5 years.
If there is no such information to be disclosed, a statement to that effect is to be made.
14.2

Administrative, Management, and Supervisory bodies and Senior Management conflicts of interests
Potential conflicts of interests between any duties to the issuer, of the persons referred to in
item 14.1., and their private interests and or other duties must be clearly stated. In the
event that there are no such conflicts, a statement to that effect must be made.
Any arrangement or understanding with major shareholders, customers, suppliers or others,
pursuant to which any person referred to in item 14.1 was selected as a member of the administrative, management or supervisory bodies or member of senior management.
Details of any restrictions agreed by the persons referred to in item 14.1 on the disposal
within a certain period of time of their holdings in the issuers securities.

15

REMUNERATION AND BENEFITS

In relation to the last full financial year for those persons referred to in points (a) and (d) of
the first subparagraph of item 14.1.

15.1

The amount of remuneration paid (including any contingent or deferred compensation), and
benefits in kind granted to such persons by the issuer and its subsidiaries for services in all
capacities to the issuer and its subsidiaries by any person.

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That information must be provided on an individual basis unless individual disclosure is not
required in the issuers home country or when the issuer has already publicly disclosed that
information.
15.2

The total amounts set aside or accrued by the issuer or its subsidiaries to provide pension,
retirement or similar benefits.

16

BOARD PRACTICES
In relation to the issuers last completed financial year, and unless otherwise specified, with
respect to those persons referred to in point (a) of the first subparagraph of item 14.1.

16.1

Date of expiration of the current term of office, if applicable, and the period during which
the person has served in that office.

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16.2

Information about members of the administrative, management or supervisory bodies service contracts with the issuer or any of its subsidiaries providing for benefits upon termination of employment, or an appropriate negative statement.

16.3

Information about the issuers audit committee and remuneration committee, including the
names of committee members and a summary of the terms of reference under which the
committee operates.

16.4

A statement as to whether or not the issuer complies with its countrys of incorporation corporate governance regime(s). In the event that the issuer does not comply with such a regime, a statement to that effect must be included together with an explanation regarding
why the issuer does not comply with such regime.

17

EMPLOYEES

17.1

Either the number of employees at the end of the period or the average for each financial
year for the period covered by the historical financial information up to the date of the registration document (and changes in such numbers, if material) and, if possible and material, a
breakdown of persons employed by main category of activity and geographic location. If the
issuer employs a significant number of temporary employees, include disclosure of the number of temporary employees on average during the most recent financial year.

17.2

Shareholdings and stock options with respect to each person referred to in points (a) and
(d) of the first subparagraph of item 14.1. provide information as to their share ownership
and any options over such shares in the issuer as of the most recent practicable date.

17.3

Description of any arrangements for involving the employees in the capital of the issuer.

18

MAJOR SHAREHOLDERS

18.1

In so far as is known to the issuer, the name of any person other than a member of the administrative, management or supervisory bodies who, directly or indirectly, has an interest
in the issuers capital or voting rights which is notifiable under the issuers national law, together with the amount of each such persons interest or, if there are no such persons, an
appropriate negative statement.

18.2

Whether the issuers major shareholders have different voting rights, or an appropriate negative statement.

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18.3

To the extent known to the issuer, state whether the issuer is directly or indirectly owned or
controlled and by whom and describe the nature of such control and describe the measures
in place to ensure that such control is not abused.

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18.4

A description of any arrangements, known to the issuer, the operation of which may at a
subsequent date result in a change in control of the issuer.

19

RELATED PARTY TRANSACTIONS

If International Financial Reporting Standards adopted according to the Regulation (EC) No
1606/2002 do not apply to the issuer, the following information must be disclosed for the
period covered by the historical financial information and up to the date of the registration
document:
a)

The nature and extent of any transactions which are as a single transaction or in their
entirety material to the issuer. Where such related party transactions are not concluded at arms length provide an explanation of why these transactions were not concluded
at arms length. In the case of outstanding loans including guarantees of any kind indicate the amount outstanding.

b)

The amount or the percentage to which related party transactions form part of the turnover of the issuer.

If international Financial Reporting Standards adopted according to the Regulation (EC) No

1606/2002 apply to the issuer, the above information must be disclosed only for the transactions occurred since the end of the last financial period for which audited financial information have been published.
20

FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES,

FINANCIAL POSITION AND PROFITS AND LOSSES

20.1

Historical Financial Information

A statement that audited historical financial information covering the latest 2 financial years
(or such shorter period that the issuer has been in operation) have been prepared according
to Regulation (EC) No 1606/2002, or, if not applicable, to a Member State national accounting standards for issuers from the European Union, and where own and consolidated financial statements as the case may be can be obtained.
The audit report in respect of each year must be included.
For third country issuers, a statement that such financial information have been prepared
and audited according to the international accounting standards adopted pursuant to the
procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards, and where it can be obtained. If such financial information is not equivalent to these standards, a statement that it has been prepared in the form of restated financial statements, and where it can be obtained.

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20.2

Pro forma financial information

In the case of a significant gross change, a description of how the transaction might have affected the assets and liabilities and earnings of the issuer, had the transaction been undertaken at the commencement of the period being reported on or at the date reported.
This requirement will normally be satisfied by the inclusion of pro forma financial information.

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This pro forma financial information is to be presented as set out in Annex II and must include the information indicated therein.
Pro forma financial information must be accompanied by a report prepared by independent
accountants or auditors.
20.3

Auditing of historical annual financial information

20.3.1

A statement that the historical financial information has been audited. If audit reports on the
historical financial information have been refused by the statutory auditors or if they contain
qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given.

20.3.2

Indication of other information in the registration document which has been audited by the
auditors.

20.3.3

Where financial data in the registration document is not extracted from the issuers audited
financial statements state the source of the data and state that the data is unaudited.

20.4

Age of latest financial information

20.4.1

The last year of audited financial information may not be older than one of the following:
a)

18 months from the date of the registration document if the issuer includes audited interim financial statements in the registration document;

b)

15 months from the date of the registration document if the issuer includes unaudited
interim financial statements in the registration document.

20.5

Interim and other financial information

20.5.1

If the issuer has published quarterly or half yearly financial information since the date of its
last audited financial statements, a statement in that respect must be included in the registration document, and where it can be obtained. If the quarterly or half yearly financial information has been reviewed or audited, the audit or review report must be included. If the

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quarterly or half yearly financial information is unaudited or has not been reviewed state
that fact.
20.6

Dividend policy
A description of the issuers policy on dividend distributions and any restrictions thereon.

20.6.1

The amount of the dividend per share for each financial year for the period covered by the
historical financial information adjusted, where the number of shares in the issuer has
changed, to make it comparable.

20.7

Legal and arbitration proceedings

Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period
covering at least the previous 12 months which may have, or have had in the recent past
significant effects on the issuer and/or groups financial position or profitability, or provide
an appropriate negative statement.

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20.8

Significant change in the issuers financial or trading position

A description of any significant change in the financial or trading position of the group which
has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published, or provide an appropriate
negative statement.

21

ADDITIONAL INFORMATION

21.1

Share Capital
The following information as of the date of the most recent balance sheet included in the
historical financial information:

21.1.1

The amount of issued capital, and for each class of share capital:
a)

the number of shares authorised;

b)

the number of shares issued and fully paid and issued but not fully paid;

c)

the par value per share, or that the shares have no par value; and

d)

a reconciliation of the number of shares outstanding at the beginning and end of the
year. If more than 10 % of capital has been paid for with assets other than cash within
the period covered by the historical financial information, state that fact.

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21.1.2

If there are shares not representing capital, state the number and main characteristics of
such shares.

21.1.3

The number, book value and face value of shares in the issuer held by or on behalf of the issuer itself or by subsidiaries of the issuer.

21.1.4

The amount of any convertible securities, exchangeable securities or securities with warrants, with an indication of the conditions governing and the procedures for conversion, exchange or subscription.

21.1.5

Information about and terms of any acquisition rights and or obligations over authorised but
unissued capital or an undertaking to increase the capital.

21.1.6

Information about any capital of any member of the group which is under option or agreed
conditionally or unconditionally to be put under option and details of such options including
those persons to whom such options relate.

21.1.7

A history of share capital, highlighting information about any changes, for the period covered by the historical financial information.

21.2

Memorandum and Articles of Association

21.2.1

A description of the issuers objects and purposes and where they can be found in the memorandum and articles of association.

21.2.2

A summary of any provisions of the issuers articles of association, statutes, charter or bylaws with respect to the members of the administrative, management and supervisory bodies.

21.2.3

A description of the rights, preferences and restrictions attaching to each class of the existing shares.

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21.2.4

A description of what action is necessary to change the rights of holders of the shares, indicating where the conditions are more significant than is required by law.

21.2.5

A description of the conditions governing the manner in which annual general meetings and
extraordinary general meetings of shareholders are called including the conditions of admission.

21.2.6

A brief description of any provision of the issuers articles of association, statutes, charter or
bylaws that would have an effect of delaying, deferring or preventing a change in control of
the issuer.

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21.2.7

An indication of the articles of association, statutes, charter or bylaw provisions, if any, governing the ownership threshold above which shareholder ownership must be disclosed.

21.2.8

A description of the conditions imposed by the memorandum and articles of association statutes, charter or bylaw governing changes in the capital, where such conditions are more
stringent than is required by law.

22

MATERIAL CONTRACTS
A summary of each material contract, other than contracts entered into in the ordinary
course of business, to which the issuer or any member of the group is a party, for the 2
years immediately preceding publication of the registration document.
A summary of any other contract (not being a contract entered into in the ordinary course of
business) entered into by any member of the group which contains any provision under
which any member of the group has any obligation or entitlement which is material to the
group as at the date of the registration document.

23

THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF

ANY INTEREST

23.1

Where a statement or report attributed to a person as an expert is included in the Registration Document, provide such persons name, business address, qualifications and material
interest if any in the issuer. If the report has been produced at the issuers request a statement to the effect that such statement or report is included, in the form and context in
which it is included, with the consent of the person who has authorised the contents of that
part of the Registration Document.

23.2

Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able
to ascertain from information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or misleading. In addition, identify the source(s) of the information.

24

DOCUMENTS ON DISPLAY
A statement that for the life of the registration document the following documents (or copies
thereof), where applicable, may be inspected:
a)

the memorandum and articles of association of the issuer;

b)

all reports, letters, and other documents, historical financial information, valuations and
statements prepared by any expert at the issuers request any part of which is included
or referred to in the registration document;

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c)

the historical financial information of the issuer or, in the case of a group, the historical
financial information for the issuer and its subsidiary undertakings for each of the 2 financial years preceding the publication of the registration document.

An indication of where the documents on display may be inspected, by physical or electronic

means.
25

INFORMATION ON HOLDINGS
Information relating to the undertakings in which the issuer holds a proportion of the capital
likely to have a significant effect on the assessment of its own assets and liabilities, financial
position or profits and losses.

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ANNEX XXVI
Proportionate Schedule for Minimum Disclosure Requirements for the Debt and Derivative Securities < 100 000 EUR Registration Document for SMEs and companies with reduced market
capitalisation 1
1

PERSONS RESPONSIBLE

STATUTORY AUDITORS

SELECTED FINANCIAL INFORMATION

RISK FACTORS

INFORMATION ABOUT THE ISSUER

BUSINESS OVERVIEW

ORGANISATIONAL STRUCTURE

TREND INFORMATION

PROFIT FORECASTS OR ESTIMATES

10

ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES

11

BOARD PRACTICES

12

MAJOR SHAREHOLDERS

Sub-items as in Annex IV of Regulation (EC) No 809/2004, except the amendment in item 13 (Financial Information).

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13

FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES

13.1

Historical Financial Information

A statement that audited historical financial information covering the last financial year (or
such shorter period that the issuer has been in operation) have been prepared according to
Regulation (EC) No 1606/2002, or, if not applicable, to a Member State national accounting
standards for issuers from the European Union, and where own and consolidated financial
statements as the case may be can be obtained.
The audit report must be included.
For third country issuers, a statement that such financial information have been prepared
and audited according to the international accounting standards adopted pursuant to the
procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards, and where it can be obtained. If such financial information is not equivalent to these standards, a statement that it has been prepared in the form of restated financial statements, and where it can be obtained.

13.2

Auditing of historical annual financial information

13.2.1

A statement that the historical financial information has been audited. If audit reports on the
historical financial information have been refused by the statutory auditors or if they contain
qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given.

13.2.2

Indication of other information in the registration document which has been audited by the
auditors.

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13.2.3

Where financial data in the registration document is not extracted from the issuers audited
financial statements state the source of the data and state that the data is unaudited.

13.3

Interim and other financial information

If the issuer has published quarterly or half yearly financial information since the date of its
last audited financial statements, a statement in that respect must be included in the registration document and where it can be obtained. If the quarterly or half yearly financial information has been reviewed or audited, the audit or review report must be included. If the
quarterly or half yearly financial information is unaudited or has not been reviewed state
that fact.

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13.4

Legal and arbitration proceedings

Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period
covering at least the previous 12 months which may have, or have had in the recent past
significant effects on the issuer and/or groups financial position or profitability, or provide
an appropriate negative statement.

13.5

Significant change in the issuers financial or trading position

A description of any significant change in the financial or trading position of the group which
has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published, or provide an appropriate
negative statement.

14

ADDITIONAL INFORMATION

15

MATERIAL CONTRACTS

16

THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF ANY INTEREST

17

DOCUMENTS ON DISPLAY

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ANNEX XXVII
Proportionate Schedule for Minimum Disclosure Requirements for the Debt and Derivative Securities 100 000 EUR Registration Document for SMEs and companies with reduced market
capitalisation (schedule) 2
1

PERSONS RESPONSIBLE

STATUTORY AUDITORS

RISK FACTORS

INFORMATION ABOUT THE ISSUER

BUSINESS OVERVIEW

ORGANISATIONAL STRUCTURE

TREND INFORMATION

Sub-items as in Annex IX of Regulation (EC) No 809/2004, except the amendment in item 11 (Financial Information).

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PROFIT FORECASTS OR ESTIMATES

ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES

10

MAJOR SHAREHOLDERS

11

FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES

11.1

Historical Financial Information

A statement that audited historical financial information covering the last financial year (or
such shorter period that the issuer has been in operation) have been prepared according to
Regulation (EC) No 1606/2002, or, if not applicable, to a Member State national accounting
standards for issuers from the European Union, and where own and consolidated financial
statements as the case may be can be obtained.
The audit report must be included.
For third country issuers, a statement that such financial information have been prepared
and audited according to the international accounting standards adopted pursuant to the
procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national accounting standards equivalent to these standards, and where it can be obtained. If such financial information is not equivalent to these standards, a statement that it has been prepared in the form of restated financial statements, and where it can be obtained.

11.2

Auditing of historical annual financial information

11.2.1

A statement that the historical financial information has been audited. If audit reports on the
historical financial information have been refused by the statutory auditors or if they contain
qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given.

11.2.2

Indication of other information in the registration document which has been audited by the
auditors.

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11.2.3

Where financial data in the registration document is not extracted from the issuers audited
financial statements state the source of the data and state that the data is unaudited.

11.3

Interim and other financial information

If the issuer has published quarterly or half yearly financial information since the date of its
last audited financial statements, a statement in that respect must be included in the registration document and where it can be obtained. If the quarterly or half yearly financial in-

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formation has been reviewed or audited, the audit or review report must be included. If the
quarterly or half yearly financial information is unaudited or has not been reviewed state
that fact.
11.4

Legal and arbitration proceedings

Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period
covering at least the previous 12 months which may have, or have had in the recent past
significant effects on the issuer and/or groups financial position or profitability, or provide
an appropriate negative statement.

11.5

Significant change in the issuers financial or trading position

A description of any significant change in the financial or trading position of the group which
has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published, or provide an appropriate
negative statement.

12

MATERIAL CONTRACTS

13

THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF ANY INTEREST

14

DOCUMENTS ON DISPLAY

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ANNEX XXVIII
Proportionate Schedule for Minimum Disclosure Requirements for the Depositary Receipts issued over shares for SMEs and companies with reduced market capitalisation 3
1

PERSONS RESPONSIBLE

1.1

All persons responsible for the information given in the Registration Document and, as the
case may be, for certain parts of it, with, in the latter case, an indication of such parts. In
the case of natural persons including members of the issuers administrative, management
or supervisory bodies indicate the name and function of the person; in case of legal persons
indicate the name and registered office.

1.2

A declaration by those responsible for the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the registration
document is, to the best of their knowledge, in accordance with the facts and contains no
omission likely to affect its import. As the case may be, a declaration by those responsible

For Items 26-32, Sub-items as in Annex X of Regulation (EC) No 809/2004.

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for certain parts of the registration document that, having taken all reasonable care to ensure that such is the case, the information contained in the part of the registration document for which they are responsible is, to the best of their knowledge, in accordance with
the facts and contains no omission likely to affect its import.
2

STATUTORY AUDITORS

2.1

Names and addresses of the issuers auditors for the period covered by the historical financial information (together with their membership in a professional body).

2.2

If auditors have resigned, been removed or not been re-appointed during the period covered
by the historical financial information, indicate details if material.

SELECTED FINANCIAL INFORMATION

3.1

Selected historical financial information regarding the issuer, presented for each financial
year for the period covered by the historical financial information, and any subsequent interim financial period, in the same currency as the financial information.
The selected historical financial information must provide the key figures that summarise the
financial condition of the issuer.

3.2

If selected financial information for interim periods is provided, comparative data from the
same period in the prior financial year shall also be provided, except that the requirement
for comparative balance sheet information is satisfied by presenting the year end balance
sheet information.

RISK FACTORS
Prominent disclosure of risk factors that are specific to the issuer or its industry in a section
headed Risk Factors.

INFORMATION ABOUT THE ISSUER

5.1

History and Development of the Issuer

5.1.1

the legal and commercial name of the issuer;

5.1.2

the place of registration of the issuer and its registration number;

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5.1.3

the date of incorporation and the length of life of the issuer, except where indefinite;

5.1.4

the domicile and legal form of the issuer, the legislation under which the issuer operates, its
country of incorporation, and the address and telephone number of its registered office (or
principal place of business if different from its registered office);

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5.1.5

the important events in the development of the issuers business.

5.2

Investments

5.2.1

A description, (including the amount) of the issuers principal investments for each financial
year for the period covered by the historical financial information up to the date of the prospectus.

5.2.2

A description of the issuers principal investments that are currently in progress, including
the distribution of these investments geographically (home and abroad) and the method of
financing (internal or external);

5.2.3

Information concerning the issuers principal future investments on which its management
bodies have already made firm commitments and the anticipated sources of funds needed to
fulfil these commitments.

BUSINESS OVERVIEW

6.1

Principal Activities

6.1.1

A brief description of the issuers operations and principal activities and of any significant
changes impacting these operations and activities since latest two published audited financial statements, including an indication of any significant new products and services that
have been introduced and, to the extent the development of new products or services has
been publicly disclosed, the status of development.

6.2

Principal Markets
A brief description of the principal markets in which the issuer competes and of any significant changes impacting these markets since latest two published audited financial statements.

6.3

Where the information given pursuant to items 6.1. and 6.2. has been influenced by extraordinary factors, mention that fact.

6.4

If material to the issuers business or profitability, summary information regarding the extent to which the issuer is dependent, on patents or licenses, industrial, commercial or financial contracts or new manufacturing processes.

6.5

The basis for any statements made by the issuer regarding its competitive position.

ORGANISATIONAL STRUCTURE

7.1

If the issuer is part of a group, a brief description of the group and the issuers position
within the group.

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PROPERTY, PLANTS AND EQUIPMENT

8.1

A description of any environmental issues that may affect the issuers utilisation of the tangible fixed assets.

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9

OPERATING AND FINANCIAL REVIEW

The issuer must disclose the following information if the Annual Reports, presented and prepared in accordance with Article 46 of Directive 78/660/EEC and Article 36 of Directive
83/349/EEC for the periods covered by the historical financial information, are not included
in or annexed to the prospectus:

9.1

Financial Condition
To the extent not covered elsewhere in the registration document, provide a description of
the issuers financial condition, changes in financial condition and results of operations for
each year and interim period, for which historical financial information is required, including
the causes of material changes from year to year in the financial information to the extent
necessary for an understanding of the issuers business as a whole.

9.2

Operating Results

9.2.1

Information regarding significant factors, including unusual or infrequent events or new developments, materially affecting the issuers income from operations, indicating the extent
to which income was so affected.

9.2.2

Where the financial statements disclose material changes in net sales or revenues, provide a
narrative discussion of the reasons for such changes.

9.2.3

Information regarding any governmental, economic, fiscal, monetary or political policies or

factors that have materially affected, or could materially affect, directly or indirectly, the issuers operations.

10

CAPITAL RESOURCES

10.1

An explanation of the sources and amounts of and a narrative description of the issuers
cash flows;

10.2

Information regarding any restrictions on the use of capital resources that have materially
affected, or could materially affect, directly or indirectly, the issuers operations.

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11

RESEARCH AND DEVELOPMENT, PATENTS AND LICENCES

Where material, provide a description of the issuers research and development policies for
each financial year for the period covered by the historical financial information, including
the amount spent on issuer-sponsored research and development activities.

12

TREND INFORMATION

12.1

The most significant recent trends in production, sales and inventory, and costs and selling
prices since the end of the last financial year to the date of the registration document.

12.2

Information on any known trends, uncertainties, demands, commitments or events that are
reasonably likely to have a material effect on the issuers prospects for at least the current
financial year.

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13

PROFIT FORECASTS OR ESTIMATES

If an issuer chooses to include a profit forecast or a profit estimate the registration document must contain the information set out in items 13.1 and 13.2:

13.1

A statement setting out the principal assumptions upon which the issuer has based its forecast, or estimate.
There must be a clear distinction between assumptions about factors which the members of
the administrative, management or supervisory bodies can influence and assumptions about
factors which are exclusively outside the influence of the members of the administrative,
management or supervisory bodies; the assumptions must be readily understandable by investors, be specific and precise and not relate to the general accuracy of the estimates underlying the forecast.

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13.2

A report prepared by independent accountants or auditors stating that in the opinion of the
independent accountants or auditors the forecast or estimate has been properly compiled on
the basis stated, and that the basis of accounting used for the profit forecast or estimate is
consistent with the accounting policies of the issuer.
Where financial information relates to the previous financial year and only contains nonmisleading figures substantially consistent with the final figures to be published in the next
annual audited financial statements for the previous financial year, and the explanatory information necessary to assess the figures, a report shall not be required provided that the
prospectus includes all of the following statements:

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a)

the person responsible for this financial information, if different from the one which is
responsible for the prospectus in general, approves that information;

b)

independent accountants or auditors have agreed that this information is substantially

consistent with the final figures to be published in the next annual audited financial
statements;

c)

his financial information has not been audited.

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13.3

The profit forecast or estimate must be prepared on a basis comparable with the historical
financial information.

13.4

If a profit forecast in a prospectus has been published which is still outstanding, then provide a statement setting out whether or not that forecast is still correct as at the time of the
registration document, and an explanation of why such forecast is no longer valid if that is
the case.

14

ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES AND SENIOR MANAGEMENT

14.1

Names, business addresses and functions in the issuer of the following persons and an indication of the principal activities performed by them outside that issuer where these are significant with respect to that issuer:
a)

members of the administrative, management or supervisory bodies;

b)

partners with unlimited liability, in the case of a limited partnership with a share capital;

c)

founders, if the issuer has been established for fewer than 5 years; and

d)

any senior manager who is relevant to establishing that the issuer has the appropriate

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expertise and experience for the management of the issuers business.

The nature of any family relationship between any of those persons.
In the case of each member of the administrative, management or supervisory bodies of the
issuer and of each person mentioned in points (b) and (d) of the first subparagraph, details
of that persons relevant management expertise and experience and the following information:
a)

the names of all companies and partnerships of which such person has been a member
of the administrative, management or supervisory bodies or partner at any time in the
previous 5 years, indicating whether or not the individual is still a member of the administrative, management or supervisory bodies or partner. It is not necessary to list all the

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subsidiaries of an issuer of which the person is also a member of the administrative,

management or supervisory bodies;
b)

any convictions in relation to fraudulent offences for at least the previous 5 years;

c)

details of any bankruptcies, receiverships or liquidations with which a person described

in (a) and (d) of the first subparagraph who was acting in the capacity of any of the positions set out in (a) and (d) of the first subparagraph was associated for at least the
previous 5 years;

d)

details of any official public incrimination and/or sanctions of such person by statutory
or regulatory authorities (including designated professional bodies) and whether such
person has ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management
or conduct of the affairs of any issuer for at least the previous 5 years.

If there is no such information to be disclosed, a statement to that effect is to be made.

14.2

Administrative, Management, and Supervisory bodies and Senior Management conflicts of interests
Potential conflicts of interests between any duties to the issuer, of the persons referred to in
item 14.1, and their private interests and or other duties must be clearly stated. In the
event that there are no such conflicts, a statement to that effect must be made.
Any arrangement or understanding with major shareholders, customers, suppliers or others,
pursuant to which any person referred to in item 14.1 was selected as a member of the administrative, management or supervisory bodies or member of senior management.

15

REMUNERATION AND BENEFITS

In relation to the last full financial year for those persons referred to in points (a) and (d) of
the first subparagraph of item 14.1.

15.1

The amount of remuneration paid (including any contingent or deferred compensation), and
benefits in kind granted to such persons by the issuer and its subsidiaries for services in all
capacities to the issuer and its subsidiaries by any person.

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This information must be provided on an individual basis unless individual disclosure is not
required in the issuers home country or when the issuer has already publicly disclosed that
information.
15.2

The total amounts set aside or accrued by the issuer or its subsidiaries to provide pension,
retirement or similar benefits.

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16

BOARD PRACTICES
In relation to the issuers last completed financial year, and unless otherwise specified, with
respect to those persons referred to in point (a) of the first subparagraph of item 14.1:

16.1

Date of expiration of the current term of office, if applicable, and the period during which
the person has served in that office.

16.2

Information about members of the administrative, management or supervisory bodies service contracts with the issuer or any of its subsidiaries providing for benefits upon termination of employment, or an appropriate negative statement.

16.3

Information about the issuers audit committee and remuneration committee, including the
names of committee members and a summary of the terms of reference under which the
committee operates.

16.4

A statement as to whether or not the issuer complies with its countrys of incorporation corporate governance regime(s). In the event that the issuer does not comply with such a regime, a statement to that effect must be included together with an explanation regarding
why the issuer does not comply with such regime.

17

EMPLOYEES

17.1

Either the number of employees at the end of the period or the average for each financial
year for the period covered by the historical financial information up to the date of the registration document (and changes in such numbers, if material) and, if possible and material, a
breakdown of persons employed by main category of activity and geographic location. If the
issuer employs a significant number of temporary employees, include disclosure of the number of temporary employees on average during the most recent financial year.

17.2

Shareholdings and stock options with respect to each person referred to in points (a) and
(d) of the first subparagraph of item 14.1. provide information as to their share ownership
and any options over such shares in the issuer as of the most recent practicable date.

17.3

Description of any arrangements for involving the employees in the capital of the issuer.

18

MAJOR SHAREHOLDERS

18.1

In so far as is known to the issuer, the name of any person other than a member of the administrative, management or supervisory bodies who, directly or indirectly, has an interest
in the issuers capital or voting rights which is notifiable under the issuers national law, together with the amount of each such persons interest or, if there are no such persons, an
appropriate negative statement.

18.2

Whether the issuers major shareholders have different voting rights, or an appropriate negative statement.

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18.3

To the extent known to the issuer, state whether the issuer is directly or indirectly owned or
controlled and by whom and describe the nature of such control and describe the measures
in place to ensure that such control is not abused.

18.4

A description of any arrangements, known to the issuer, the operation of which may at a
subsequent date result in a change in control of the issuer.

19

RELATED PARTY TRANSACTIONS

If International Financial Reporting Standards adopted according to the Regulation (EC) No
1606/2002 do not apply to the issuer, the following information must be disclosed for the
period covered by the historical financial information and up to the date of the registration
document:
a)

The nature and extent of any transactions which are as a single transaction or in their
entirety material to the issuer. Where such related party transactions are not concluded at arms length provide an explanation of why these transactions were not concluded
at arms length. In the case of outstanding loans including guarantees of any kind indicate the amount outstanding.

b)

The amount or the percentage to which related party transactions form part of the turnover of the issuer.

If international Financial Reporting Standards adopted according to the Regulation (EC) No

1606/2002 apply to the issuer, the above information must be disclosed only for the transactions occurred since the end of the last financial period for which audited financial information have been published.
20

FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES

20.1

Historical Financial Information

A statement that audited historical financial information covering the latest 2 financial years
(or such shorter period that the issuer has been in operation) have been prepared according
to Regulation (EC) No 1606/2002, or, if not applicable, to a Member State national accounting standards for issuers from the European Union, and where own and consolidated financial statements as the case may be can be obtained.
The audit report in respect of each year must be included.
For third country issuers, a statement that such financial information have been prepared
and audited according to the international accounting standards adopted pursuant to the
procedure of Article 3 of Regulation (EC) No 1606/2002 or to a third countrys national ac-

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counting standards equivalent to these standards, and where it can be obtained. If such financial information is not equivalent to these standards, a statement that it has been prepared in the form of restated financial statements, and where it can be obtained.
20.2

Auditing of historical annual financial information

20.2.1

A statement that the historical financial information has been audited. If audit reports on the
historical financial information have been refused by the statutory auditors or if they contain
qualifications or disclaimers, such refusal or such qualifications or disclaimers must be reproduced in full and the reasons given.

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20.2.2

Indication of other information in the registration document which has been audited by the
auditors.

20.2.3

Where financial data in the registration document is not extracted from the issuers audited
financial statements state the source of the data and state that the data is unaudited.

20.3

Age of latest financial information

20.3.1

The last year of audited financial information may not be older than one of the following:
a)

18 months from the date of the registration document if the issuer includes audited interim financial statements in the registration document;

b)

15 months from the date of the registration document if the issuer includes unaudited
interim financial statements in the registration document.

20.4

Interim and other financial information

20.4.1

If the issuer has published quarterly or half yearly financial information since the date of its
last audited financial statements, a statement in that respect must be included in the registration document and where it can be obtained. If the quarterly or half yearly financial information has been reviewed or audited, the audit or review report must be included. If the
quarterly or half yearly financial information is unaudited or has not been reviewed state
that fact.

20.5

Dividend policy
A description of the issuers policy on dividend distributions and any restrictions thereon.

20.5.1

The amount of the dividend per share for each financial year for the period covered by the
historical financial information adjusted, where the number of shares in the issuer has
changed, to make it comparable.

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20.6

Legal and arbitration proceedings

Information on any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period
covering at least the previous 12 months which may have, or have had in the recent past
significant effects on the issuer and/or groups financial position or profitability, or provide
an appropriate negative statement.

20.7

Significant change in the issuers financial or trading position

A description of any significant change in the financial or trading position of the group which
has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published, or provide an appropriate
negative statement.

21

ADDITIONAL INFORMATION

21.1

Share Capital
The following information as of the date of the most recent balance sheet included in the
historical financial information:

21.1.1

The amount of issued capital, and for each class of share capital:
a)

the number of shares authorised;

b)

the number of shares issued and fully paid and issued but not fully paid;

c)

the par value per share, or that the shares have no par value; and

d)

a reconciliation of the number of shares outstanding at the beginning and end of the

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year. If more than 10 % of capital has been paid for with assets other than cash within
the period covered by the historical financial information, state that fact.
21.1.2

If there are shares not representing capital, state the number and main characteristics of
such shares.

21.1.3

The number, book value and face value of shares in the issuer held by or on behalf of the issuer itself or by subsidiaries of the issuer.

21.1.4

The amount of any convertible securities, exchangeable securities or securities with warrants, with an indication of the conditions governing and the procedures for conversion, exchange or subscription.

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21.1.5

Information about and terms of any acquisition rights and or obligations over authorised but
unissued capital or an undertaking to increase the capital.

21.1.6

Information about any capital of any member of the group which is under option or agreed
conditionally or unconditionally to be put under option and details of such options including
those persons to whom such options relate.

21.1.7

A history of share capital, highlighting information about any changes, for the period covered by the historical financial information.

21.2

Memorandum and Articles of Association

21.2.1

A description of the issuers objects and purposes and where they can be found in the memorandum and articles of association.

21.2.2

A summary of any provisions of the issuers articles of association, statutes, charter or bylaws with respect to the members of the administrative, management and supervisory bodies.

21.2.3

A description of the rights, preferences and restrictions attaching to each class of the existing shares.

21.2.4

A description of what action is necessary to change the rights of holders of the shares, indicating where the conditions are more significant than is required by law.

21.2.5

A description of the conditions governing the manner in which annual general meetings and
extraordinary general meetings of shareholders are called including the conditions of admission.

21.2.6

A brief description of any provision of the issuers articles of association, statutes, charter or
bylaws that would have an effect of delaying, deferring or preventing a change in control of
the issuer.

21.2.7

An indication of the articles of association, statutes, charter or bylaw provisions, if any, governing the ownership threshold above which shareholder ownership must be disclosed.

21.2.8

A description of the conditions imposed by the memorandum and articles of association statutes, charter or bylaw governing changes in the capital, where such conditions are more
stringent than is required by law.

232

653

M5
22

MATERIAL CONTRACTS
A summary of each material contract, other than contracts entered into in the ordinary
course of business, to which the issuer or any member of the group is a party, for the 2
years immediately preceding publication of the registration document.
A summary of any other contract (not being a contract entered into in the ordinary course of
business) entered into by any member of the group which contains any provision under
which any member of the group has any obligation or entitlement which is material to the
group as at the date of the registration document.

23

THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF ANY INTEREST

23.1

Where a statement or report attributed to a person as an expert is included in the Registration Document, provide such persons name, business address, qualifications and material
interest if any in the issuer. If the report has been produced at the issuers request a statement to the effect that such statement or report is included, in the form and context in
which it is included, with the consent of the person who has authorised the contents of that
part of the Registration Document.

23.2

Where information has been sourced from a third party, provide a confirmation that this information has been accurately reproduced and that as far as the issuer is aware and is able
to ascertain from information published by that third party, no facts have been omitted
which would render the reproduced information inaccurate or misleading. In addition, identify the source(s) of the information.

24

DOCUMENTS ON DISPLAY
A statement that for the life of the registration document the following documents (or copies
thereof), where applicable, may be inspected:
a)

the memorandum and articles of association of the issuer;

b)

all reports, letters, and other documents, historical financial information, valuations and
statements prepared by any expert at the issuers request any part of which is included
or referred to in the registration document;

c)

the historical financial information of the issuer or, in the case of a group, the historical
financial information for the issuer and its subsidiary undertakings for each of the 2 financial years preceding the publication of the registration document.

An indication of where the documents on display may be inspected, by physical or electronic

means.

233

654

25

INFORMATION ON HOLDINGS
Information relating to the undertakings in which the issuer holds a proportion of the capital
likely to have a significant effect on the assessment of its own assets and liabilities, financial
position or profits and losses.

26

INFORMATION ABOUT THE ISSUER OF THE DEPOSITARY RECEIPTS

27

INFORMATION ABOUT THE UNDERLYING SHARES

M5
28

INFORMATION REGARDING THE DEPOSITARY RECEIPTS

29

INFORMATION ABOUT THE TERMS AND CONDITIONS OF THE OFFER OF THE DEPOSITARY
RECEIPTS

30

ADMISSION TO TRADING AND DEALING ARRANGEMENTS IN THE DEPOSITARY RECEIPTS

M6
31

ESSENTIAL INFORMATION ABOUT THE ISSUE OF THE DEPOSITORY RECEIPTS

M5
32

EXPENSE OF THE ISSUE/OFFER OF THE DEPOSITARY RECEIPTS

M5
ANNEX XXIX
Proportionate Schedule for Minimum Disclosure Requirements for Issues by Credit Institutions referred to in Article 1(2)(j) of Directive 2003/71/EC
Minimum Disclosure Requirements for issues by credit institutions referred to in Article 1(2)(j) of Directive 2003/71/EC
1

PERSONS RESPONSIBLE

STATUTORY AUDITORS

RISK FACTORS

INFORMATION ABOUT THE ISSUER

BUSINESS OVERVIEW

Sub-items as in Annex XI of Regulation (EC) No 809/2004, except the amendment in item 11.1 (Historical Financial Information).

234

655

ORGANISATIONAL STRUCTURE

TREND INFORMATION

PROFIT FORECASTS OR ESTIMATES

ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES

10

MAJOR SHAREHOLDERS

11

FINANCIAL INFORMATION CONCERNING THE ISSUERS ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES
Audited historical financial information covering the last financial year (or such shorter period that the issuer has been in operation), and the audit report. If the issuer has changed its
accounting reference date during the period for which historical financial information is required, the audited historical information shall cover at least 12 months, or the entire period
for which the issuer has been in operation, whichever is the shorter. Such financial information must be prepared according to Regulation (EC) No 1606/2002, or if not applicable to
a Member States national accounting standards for issuers from the European Union.

12

MATERIAL CONTRACTS

13

THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF ANY INTEREST

14

DOCUMENTS ON DISPLAY

M6
ANNEX XXX
Additional information regarding consent as referred to in Article 20a
(Additional building block)
1

INFORMATION TO BE PROVIDED REGARDING CONSENT BY THE ISSUER OR PERSON RESPONSIBLE FOR DRAWING UP THE PROSPECTUS

1.1

Express consent by the issuer or person responsible for drawing up the prospectus to the
use of the prospectus and statement that it accepts responsibility for the content of the prospectus also with respect to subsequent resale or final placement of securities by any financial intermediary which was given consent to use the prospectus.

1.2

Indication of the period for which consent to use the prospectus is given.

1.3

Indication of the offer period upon which subsequent resale or final placement of securities
by financial intermediaries can be made.

235

656

1.4

Indication of the Member States in which financial intermediaries may use the prospectus for
subsequent resale or final placement of securities.

1.5

Any other clear and objective conditions attached to the consent which are relevant for the
use of the prospectus.

1.6

Notice in bold informing investors that, in the event of an offer being made by a financial intermediary, the financial intermediary will provide information to investors on the terms and
conditions of the offer at the time the offer is made.

2A

ADDITIONAL INFORMATION TO BE PROVIDED WHERE A CONSENT IS GIVEN TO ONE OR

MORE SPECIFIED FINANCIAL INTERMEDIARIES

2A.1

List and identity (name and address) of the financial intermediary or intermediaries that are
allowed to use the prospectus.

2A.2

Indication how any new information with respect to financial intermediaries unknown at the
time of the approval of the prospectus, the base prospectus or the filing of the final terms,
as the case may be, is to be published and where it can be found.

2B

ADDITIONAL INFORMATION TO BE PROVIDED WHERE A CONSENT IS GIVEN TO ALL FINANCIAL INTERMEDIARIES

Notice in bold informing investors that any financial intermediary using the prospectus has
to state on its website that it uses the prospectus in accordance with the consent and the
conditions attached thereto.

236

657

This translation was partly carried out by the professional translation agency GlobalDenmark Translations on behalf of the Danish Financial Supervisory Authority, and updated by Plesner's state-authorised
translators. The text is to be regarded as an unofficial translation based on the latest official Executive
Order. Only the Danish document has legal validity.

Executive Order on Major Shareholders1

Executive Order no. 668 of 25 June 2012

The following shall be laid down pursuant to section 29(3) and (4), and section 93(4) of the Securities
Trading, etc. Act, cf. Consolidating Act no. 883 of 9 August 2011:

Scope
1

(1) This Executive Order is to lay down which shareholders, natural and legal persons are covered by the duty to notify pursuant to section 29 of the Securities Trading, etc. Act and to
lay down more detailed regulations regarding which holdings of shares etc. shall be notified.
(2) This Executive Order shall apply to shareholders, natural and legal persons, who notify holdings of shares etc. in companies, which
1)

have shares admitted to trading on a regulated market within the European Union or
countries with which the Union has entered into an agreement for the financial area, and

2)

have Denmark as home country.

(3) Denmark shall be deemed the home country when the company
1)

has its registered office in Denmark, or

2)

is registered in a country outside the European Union with which the Union has not entered into an agreement for the financial area (third countries), and the company has
Denmark as home country in pursuance of Article 2(1)(m)(iii) of Directive 2003/71/EC.

(4) Notwithstanding subsection (3) the regulations in this Executive Order shall also apply to
holdings of shares, etc. in companies which have shares admitted to trading on a regulated

This Executive Order contains provisions that implement parts of European Parliament and Council Directive
2004/109/EC of 15 December 2004 on the harmonisation of transparency requirements in relation to information
about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC
(Official Journal 2004, no. L 390, p. 38) (Transparency Directive) and parts of European Commission Directive
2007/14/EC of 8 March 2007 on implementation of certain provisions of Directive 2004/109/EC (Official Journal,
no. L 69, p. 27) and parts of Directive 2010/73/EU of the European Parliament and of the Council of 24 November
2010 amending Directives 2003/71/EC on the prospectus to be published when securities are offered to the public
or admitted to trading and 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (Official Journal, no. L 327,
p. 1).

658

market in Denmark, but which do not have Denmark as home country. Section 15 shall not,
however, apply in such situations.
(5) This Executive Order shall also lay down regulations governing notifications of holdings of
shares, etc. in companies which have shares admitted to trading on an alternative market
place in Denmark.
Notification of holdings
2

(1) Anyone holding shares in a company as mentioned in section 1(2) and (5) shall give notice
to the company of holdings of shares in the company, if
1)

the voting rights conferred on the shares represent no less than 5 percent of the share
capital's voting rights or their nominal value accounts for no less than 5 percent of the
share capital, or

2)

changes in a holding already notified mean that the thresholds of 5, 10, 15, 20, 25, 50
or 90 percent, or thresholds of one-third or two-thirds of the voting rights or nominal
value of the share capital are reached or are not longer reached, or the changes mean
that the thresholds defined in no. 1) are no longer reached.

(2) Anyone holding shares in a company, cf. subsection (1) and section 3(1) shall mean a natural or legal person who, directly or indirectly, holds
1)

shares in the company on behalf of himself and for own account,

2)

shares in the company on behalf of himself, but for the account of other natural or legal
persons, or

3)

share certificates, where the holder of the share certificate is considered a shareholder
regarding the underlying securities represented by the certificate.

(3) Notification pursuant to subsection (1) shall be as soon as possible. "As soon as possible"
shall mean:
1)

within the trading day for transactions entered into on a regulated market within the European Union or countries with which the Community has entered into an agreement for
the financial area, or an alternative market place in Denmark, or

2)

in other circumstances within the trading day on which the holding, cf. subsection (1), is
established or changed.

(4) Notwithstanding subsection (3), no. 1, this notification will be deemed as in due time, if the
notification is issued within the trading day on which the shareholder, the natural or legal
person learns of the acquisition, sale or the possibility to exercise voting rights, however no
later than two trading days after the transaction.

659

(5) With regard to a company as mentioned in section 1(2), the notification shall be deemed in
due time, notwithstanding subsection (3), no. 2, if the notification is issued no later than
within the trading day on which the shareholder or the natural or legal person has
knowledge of this or is advised of this. Notification shall be deemed to have taken place
when the total number of voting rights or the total amount of capital, respectively, is published in accordance with the Executive Order on Issuers' Duty to Provide Information.
(6) With regard to a company as mentioned in section 1(5), the notification shall be deemed in
due time, notwithstanding subsection (3), no. 2, if the notification is issued within the trading day on which the shareholder or the natural or legal person has knowledge of this, however, no later than the last trading day in the calendar month.
3

(1) Anyone holding shares in a company as mentioned in section 1(4) shall, as soon as possible,
but no later than within four trading days, notify the company of holdings of shares in the
company when
1)

the voting rights of the shares represent 5 percent or more of the voting rights of the
share capital, or

2)

changes in a holding already notified mean that the thresholds of 5, 10, 15, 20, 25, or
50 percent, or thresholds of one-third or two-thirds of the voting rights of the share
capital are reached or are not longer reached, or the changes mean that the threshold
defined in no. 1 is no longer reached.

(2) In circumstances in which the shareholder, the natural or legal person shall provide notification at the thresholds of 30 percent or 75 percent according to the regulations of the home
country of the company, cf. article 2(1)(1) of Directive 2004/109/EC, the shareholder, the
natural or legal person shall not provide notification at the thresholds of one-third and twothirds.
(3) The time limit in subsection (1) shall run from the day after the date on which the shareholder, the natural or legal person,
1)

learns of the acquisition or sale or possibility to exercise voting rights, however no later
than two trading days after the transaction, or

2)

receives notification of an established or changed holding.

(4) Notification in subsection (3), no. 2 shall mean the publication of the total number of voting rights and the total amount of capital which the company shall carry out pursuant to the
Executive Order on Issuers' Duty to Provide Information.
4

The duty to notify according to sections 2 and 3 shall apply correspondingly for natural and
legal persons who are entitled to acquire, sell or exercise voting rights which

660

1)

are held by a third party with whom that natural or legal person has concluded an
agreement, which obliges them to adopt, by concerted exercise of the voting rights they
hold, a lasting common policy towards the management of the company in question,

2)

are held by a third party under an agreement concluded with that natural or legal person providing for the temporary transfer of the voting rights in question in return for
consideration,

3)

are attached to shares which are lodged as collateral for that natural or legal person,
provided the natural or legal person controls the voting rights and declares an intention
to exercise them,

4)

are attached to shares in which that natural or legal person has the life interest,

5)

are held, or may be exercised within the meaning of points 1) to 4), by an undertaking
controlled by that person,

6)

are attached to shares deposited with that natural or legal person and which the person
can exercise at his own discretion in the absence of specific instructions from the shareholders,

7)

are held by a third party on behalf itself and on the account of that person, or

8)

that person may exercise through power of attorney, and which that person may exercise at his own discretion in the absence of specific instructions from the shareholders.

(1) The duty to notify according to sections 2 and 3 shall rest upon each shareholder covered by
sections 2 and 3 as well as natural and legal persons covered by section 4.
(2) In the circumstances mentioned in section 4, no. 1, the duty to notify about holdings shall
be a common duty for all parties to the agreement.
(3) In the circumstances mentioned in section 4, no. 8, provided a shareholder appoints a proxy
for a meeting of the shareholders, the notification may be carried out using a single notification at the time when the proxy is appointed, provided that the notification specifies the situation following from the change with regard to voting rights when the proxy can no longer
exercise the voting rights at his own discretion. If the proxy receives one or more powers of
attorney in relation to a meeting of the shareholders, the notification may be carried out using a single notification at the time at which the powers of attorney are received, provided
that the notification specifies the subsequent situation when the proxy can no longer exercise the voting rights at his own discretion.
(4) When the duty to notify rests upon more than one shareholder or natural or legal person,
notification may be through a single, joint notification, provided the provisions of section 16
are fulfilled. Use of a single, joint notification shall not, however, exempt the individual

661

shareholders or natural or legal persons from their responsibilities in connection with the duty to notify or the contents of the notification.
6

(1) The duty to notify under sections 2 and 3 shall apply correspondingly to natural or legal persons who directly or indirectly hold securities attached to a right to acquire shares already in
issue with voting rights in a company as mentioned in section 1, if, according to an agreement, this right rests exclusively on the initiative of the holder himself.
(2) Securities mentioned in subsection (1) shall cover all instruments covered by section C in
Annex I of Directive 2004/39/EC.
(3) With regard to notification according to subsection (1), the holder shall aggregate and notify
all the securities covered by subsection (2) and which relate to the same underlying issuer.
(4) If a security relates to more than one underlying share, separate notification of the underlying shares shall be made to each company as mentioned in section 1.
Calculation of significant shareholdings

(1) The voting rights under sections 2 and 3 shall be calculated on the basis of all the shares
with voting rights attached, including when the exercise of these rights is suspended.
(2) Calculation of the proportion of the voting rights or share capital, respectively, under sections 2 and 3 shall include the voting rights which the shareholder in question may exercise
on the basis of one or more of the circumstances listed in section 4.
(3) In the application of the definition of a controlled undertaking in section 11(2), calculation of
the voting rights and rights attaching to appointment and removal shall include the rights
held by any other natural or legal person acting on behalf of the shareholder, or on behalf of
an undertaking controlled by the shareholder, including if this takes place in own name.
Exemptions

(1) The duty to notify under sections 2 and 3 shall not apply for:
1)

Shares exclusively acquired for clearing and settlement within three trading days.

2)

Depositaries which hold shares in their capacity as depositaries, provided such depositaries may only exercise the voting rights attached to such shares according to written
or electronic instructions.

3)

Acquisition or disposal of a major holding amounting to 5 percent or more by a marketmaker acting in its capacity as a market maker, cf. subsection (3), provided that:
a)

the

market

maker

is

authorised

to

trade

on

own

account

under

Directive

2004/39/EC, and

662

b)

the market maker neither intervenes in the management of the company concerned
as mentioned in section 1, nor exerts any influence on the company as mentioned in
section 1 to buy such shares or back the share price.

(2) A market maker who wishes to be exempted pursuant to subsection (1), no. 3 shall notify
the Danish FSA as soon as possible, and no later than within four trading days, that the
market maker is carrying out, or intends to carry out, activities as a market maker regarding
a specific share. When the market maker ceases to carry out activities as a market maker
regarding the specific share, the market maker shall also notify the Danish FSA.
(3) Market maker shall mean a person who holds himself out on the financial markets on a
continuous basis as being willing to deal on own account by buying and selling securities
against his proprietary capital at prices defined by him.
9

The voting rights held in the trading portfolio of a bank, an investment firm or a credit institution as defined in Directive 2006/48/EC or an investment company with authorisation according to Directive 2004/39/EC shall not be included in statements of holdings in
proprietary capital, provided that
1)

the voting rights held in the trading portfolio do not exceed 5 per cent, and

2)

the bank, investment firm, credit institution or investment company ensures that the
voting rights attaching to shares held in the trading portfolio are not exercised nor otherwise used to intervene in the management of the company.

10

The duty to notify under sections 2 and 3 and section 4(1), no. 3 shall not apply to shares
provided to or by the members of the ESCB in carrying out their functions as monetary authorities, including shares provided to or by members of the ESCB under a pledge or repurchase or repurchase agreement or a similar agreement for liquidity granted for monetary
policy purposes or within a payment system. The exemption shall apply to the above transactions lasting for a short period and provided that the voting rights attaching to such
shares are not exercised.
Special provisions for group undertakings

11

(1) An undertaking shall be exempted from the duty to notify under sections 2-4 if the notification is carried out by the parent undertaking, or if the parent undertaking itself is a controlled subsidiary of its own parent undertaking.
(2) "Controlled undertaking", cf. subsection (1), section 4, no. 5, section 12(2), and section
13(2), shall mean any undertaking
1)

in which a natural or legal person has a majority of the voting rights,

663

2)

in which a natural or legal person has the right to appoint or remove a majority of the
members of the administrative, management or supervisory body and in which, at the
same time, such person is a shareholder or participant,

3)

in which a natural or legal person is a shareholder or participant and in which such person alone controls a majority of the shareholders' or participants' voting rights, respectively, pursuant to an agreement entered into with other shareholders or participants in
the undertaking, or

4)

over which a natural or legal person has the power to exercise, or actually exercises
controlling influence.

12

(1) The parent undertaking of an investment management company or a management company

as defined in Directive 85/611/EEC shall not be required to aggregate its holdings under sections 2-4 with the holdings managed by the investment management company or the management company, respectively, under the conditions laid down in Directive 85/611/EEC,
provided such investment management company or management company exercises its voting rights independently of the parent undertaking and that the provisions of section 14 are
fulfilled.
(2) Notwithstanding subsection (1), sections 2-4 shall apply if the parent undertaking, or another controlled undertaking of the parent undertaking, has invested in holdings managed by an
investment management company or management company as mentioned in subsection (1)
and the company has no discretion to exercise the voting rights attached to such holdings,
but may only exercise such voting rights under direct or indirect instructions from the parent
or another controlled undertaking of the parent undertaking.

13

(1) The parent undertaking of an investment firm or an investment company authorised under
Directive 2004/39/EC shall not be required to aggregate its holdings under sections 2-4 with
the holdings which such investment firm or investment company manages on a client-byclient basis, provided that the provisions of section 14 are fulfilled, and that:
1)

the investment firm or investment company is authorised to provide portfolio management,

2)

it may only exercise the voting rights attached to such shares under instructions given
in writing or by electronic means or it ensures that individual portfolio management services are conducted independently of any other services under conditions equivalent to
those provided for under Directive 85/611/EEC by putting into place appropriate mechanisms, and

3)

the investment company or investment firm exercises its voting rights independently of
the parent undertaking.

664

(2) Notwithstanding subsection (1), sections 2-4 shall apply if the parent undertaking, or another controlled undertaking of the parent undertaking, has invested in holdings managed by a
company as mentioned in subsection (1) and the company has no discretion to exercise the
voting rights attached to such holdings, but may only exercise such voting rights under direct or indirect instructions from the parent or another controlled undertaking of the parent
undertaking.
14

(1) For exemption from aggregation of holdings under section 12(1) and section 13(1), a parent
undertaking shall fulfil the following conditions:
1)

The parent undertaking may not, through direct or indirect instructions, or in any other
way involve itself in the exercise of the voting rights held by the controlled company.

2)

The controlled company shall freely and independently of the parent undertaking beable
to exercise the voting rights attached to the shares it manages.

(2) A parent undertaking which wishes to be exempted from aggregation under section 12(1)
and section 13(1) shall submit to the Danish FSA without delay the following:
1)

A list of the names of group undertakings stating the competent authorities which supervise them, or a statement that there is no competent authority which supervises
them, but without statement of the issuing companies as mentioned in section 1.

2)

A statement that, for each of the companies mentioned in section 12(1) or section
13(1), the parent undertaking fulfils the conditions stipulated in subsection (1).

(3) The parent undertaking shall keep the list mentioned in subsection (2), no. 1 up to date.
(4) When the parent undertaking only intends to exploit the exemptions in relation to securities as mentioned in section 6(2), the parent undertaking shall only submit the list as
mentioned in subsection (2), no. 1.
(5) For subsection (1), no. 1, section 12(2) and section 13(2):
1)

"direct instructions" shall mean any instruction given by the parent undertaking, or another controlled undertaking of the parent undertaking, specifying how the company
covered by section 12(1) or section 13(1) is to exercise the voting rights in particular
cases.

2)

"indirect instructions" shall mean any general or particular instruction, regardless of the
form, given by the parent undertaking, or another controlled undertaking of the parent
undertaking, and that limits the discretion of the company covered by section 12(1) or
section 13(1) in relation to the exercise of the voting rights in order to serve specific
business interests of the parent undertaking or another controlled undertaking of the
parent undertaking.

665

(6)

In the circumstances mentioned in section 1(2) and (5), a parent undertaking wishing to be exempted from aggregation under section 12(1) and section 13(1) shall be able to demonstrate to the Danish FSA that
1)

the structure of the parent undertaking and the subsidiary means that the voting rights
are exercised independently of the parent undertaking,

2)

the persons who decide how the voting rights are to be exercised act independently,
and

3)

there is a clear written mandate for a client relationship on normal market terms between the parent undertaking and the subsidiary in the circumstances where the parent
undertaking is a client of the subsidiary or holds assets which are managed by the subsidiary.

(7) With regard to subsection (6), no. 1, as a minimum there shall be written procedures prepared with a view to preventing disclosure of information between the parent undertaking
and the subsidiary.
Submission of information
15

(1) At the same time as notification is submitted to the company according to sections 2, 4 and
6, the shareholder or the natural or legal person shall submit the information to the Danish
FSA. Submission shall be digitally to the Danish FSA IT system by using a digital signature
which fulfils the technical specifications set by the Danish FSA. Notification to the Danish
FSA shall include standard form 1, which is reproduced in Annex 1. In the event of joint notification, cf. section 5(4), the notification shall also include standard form 2, which is reproduced in Annex 1.
(2) Notwithstanding subsection (1), legal persons who are not domiciled in Denmark or natural
persons who are not recorded in the Danish CPR register (Danish civil registration numbers)
shall not be obliged to submit the information using a digital signature.
(3) Information which pursuant to section 8(2) and section 14(2) and (6) shall be submitted to
Danish FSA shall be submitted digitally and regarding notification on market makers under
section 8(2) by using standard form 3, which is reproduced in Annex 1.
Form and content of the notification

16

(1) Notification pursuant to sections 2-4 shall contain the following information:
1)

The situation following from the change with regard to the voting rights or share capital,
respectively, including the proportion held by the shareholder or natural or legal person,
the division of the voting rights between class A and class B shares, as well as direct
and indirect ownership.

666

2)

The date on which the thresholds under section 2(1) and section 3(1) are reached or no
longer reached.

3)

The identity of the shareholder, notwithstanding whether the shareholder is entitled to

exercise voting rights pursuant to section 4, as well as the identity of the natural or legal person who is entitled to exercise voting rights on behalf of the shareholder.

(2) For groups, the chain of controlled undertakings through which voting rights are effectively
held shall also be stated.
(3) The shareholder obligated to give notification pursuant to sections 2 or 3 shall notify ownership of the share capital even if the shareholder is not entitled to exercise the voting rights
pursuant to the provisions of section 4.
(4) The notification pursuant to section 6 shall, in addition to the information stated in subsection (1), nos. 1 and 2 and subsection (2), contain the following:
1)

The identity of the holder.

2)

The name of the company as mentioned in section 1.

3)

The due date or date of maturity of the instrument.

4)

With respect to instruments with an exercise period, a statement of the date on which
the shares are to be acquired or may be acquired.
Specifically for companies registered in a third country

17

(1) Undertakings with their registered office in a third country, cf. section 1(3), no. 2, and which
should have been approved in accordance with article 5(1) of Directive 85/611/EEC or, with
respect to portfolio management, in accordance with point 4 of section A of annex I of Directive 2004/39/EC, if they had had their registered office or, with respect to an investment
company, head office, in a country as mentioned in section 1(3), no. 2, shall be exempt
from the obligation to aggregate their holdings with the holdings of the parent undertaking
under the provisions of section 12(1) and section 13(1), provided they fulfil equivalent independence requirements as management companies or investment companies.
(2) A

third

country

shall

be

deemed

to

have

established

independence

requirements

equivalent to the provisions under sections 12 and 13 when the legislation of the country requires that a management company or investment company as mentioned in subsection (1)
is to fulfil the following conditions:
1)

The management company or investment company shall, in all situations, freely and independently of its parent undertaking be able to exercise the voting rights attaching to
the shares it manages.

10

667

2)

The management company or investment company shall, in the event of conflicts of interest, disregard the interests of the parent undertaking or the interests of any other
undertaking controlled by the parent undertaking.

(3) The parent undertaking shall fulfil the notification requirements laid down in section 14(2),
no. 1. The parent undertaking shall also issue a statement that it fulfils the requirements of
subsection (2) with regard to each of the management companies or investment companies
affected.
(4) The parent undertaking shall be in a position to demonstrate that the requirements of section 14(6) have been fulfilled.
Trading day calendar
18

A trading day calendar for regulated markets and alternative market places in Denmark is
published on the website of the Danish FSA.
Language

19

Notification of holdings according to sections 2-4 and 6 shall be in Danish or English.

Penalties

20

(1) Violation of section 2(1) and (3), section 3(1), section 4, section 6(1), section 8(2), section
14(2) and (3), section 15(1) and (3), section 16(1), (2) and (4) and section 17(3) shall be
liable to a fine.
(2) Companies, etc. (legal persons) may incur criminal liability according to the regulations in
chapter 5 of the Criminal Code.
Entry into force

21

This Executive Order shall enter into force on 1 July 2012. At the same time Executive Order
no. 224 of 10 March 2010 on Major Shareholders shall be repealed.

Danish Financial Supervisory Authority, 25 June 2012

Ulrik Ndgaard
/ Hanne Re Larsen

11

668

Annex 1
STANDARD FORM 1
1)

The identity of the company issuing the underlying shares with voting rights, including the
full name of the company and the type of company:

2)

Background for duty to notify (please cross one or more of the following boxes):
[ ]

acquisition or sale of voting rights or share capital

[ ]

acquisition or sale of financial instruments which can enable acquisition of existing shares
with voting rights

[ ]
3)

an event which establishes or changes the ratio of share capital or voting rights
The identity of the shareholder or the natural or legal persons covered by the duty to notify:1

4)

The identity of the shareholder (if this is different from the person under point 3):2

5)

The date where the transaction took place and the date on which the threshold was
equalled or crossed:3

6)

The threshold which was equalled or crossed (as percent or fraction):

7)

More information about the possession:

(shareholders mentioned in section 3 must not notify possession of share capital)

A) Shares with voting rights attached

Information on the voting rights

Share class

Situation as previously

(ISIN)

Reported
Number

Situation after the transaction or the event has tak-

en effect
Voting rights

Number of shares

Voting rights

of
Shares
in

in percent or fraction

percent or fraction

Information on the share capital

Direct

Indirect

Direct

Indirect

Share class

Situation as previously

Situation after the transaction or the event has tak-

(ISIN)

reported

en effect

12

669

Number

Share capital

Number of shares

Share capital in

of
shares

in percent

percent or fraction
10

or fraction

Direct

Indirect

Direct

11

Indirect

TOTAL A) Based
on the total holding
B) Financial instruments
Situation after acquisition or sale
Type

of

instrument

12

financial Date of ces- Date when the instrument Percentage

13

sation

14

can be exercised. For in- shares

16

of Percentage

of

voting

rights

struments with an exercise

period,

state

the

date on which the shares

are acquired or can be
acquired

15

TOTAL B (in relation to all

cessation dates)

Total 1(A+B)

8)

17

Percentage

Percentage of voting

Percentage of

Percentage of

of shares

rights

shares

voting rights

If there are group considerations, state the chain of the controlling undertakings through
which the voting rights or share capital are actually:18

9)

If there are group considerations, state the chain of the controlling undertakings through
which the financial instruments are actually held:

13

19

670

10)

In cases involving proxies, cf. section 4, no. 8 and section 5(3):

the date for cessation of the proxy right, the situation after cessation of the proxy right as
well as the identity of the shareholder, if relevant:

Situation after cessation of proxy rights:

Full name of

Cessation

Percentage of voting

Percentage of shares

rights
a) the proxy and

date

Direct

Indirect

Direct

Indirect

b) the
shareholder(s)
a)
b)
b)
b)
Total (for the proxy)

11)

Further information

12)

Date, place and signature

14

671

Standard form 2

20

A) Shares with voting rights attached

Information on the voting rights
Share class

21

Situation as previously reported Situation after the transaction or the event has tak-

(ISIN)

en effect
Number

Voting rights

Number of shares

Voting rights

of shares
in

percent or fraction

in percent or fraction Direct

Information on the share capital

Indirect

Direct

Indirect

22

Class of share

Situation as previously

Situation after the transaction or the event has tak-

(ISIN)

reported

en effect

Number

Share capital

Number of shares

The share capital is in

percent

Direct

percent or fraction
Direct
Indirect

of shares

Indirect

or fraction

TOTAL A) Based
on the total holding
B) Financial instruments
Situation after acquisition or sale
Type of
financial
ment

Cessation
instru- date

Date when the instrument

Percentage of

can be exercised. For instru- shares

Percantage

of

voting rights

ments with an exercise period,

state the date on which the
shares are acquired or can be
acquired

JHKJHKHJK

TOTAL B
(In relation to all cessation
dates)

15

672

Total 2 (A+B)

Percentage of Percentage of voting

Percentage of

Percentage

shares

shares

of

rights

voting

rights

Supplementary form
a)

23

The identity of the person(s) covered by the duty to notify:

Full name, including type of company, if relevant:
Contact address (registered office for legal persons):
Telephone number:
Any further information (representatives for legal persons etc.):

b)

The identity of the person notifying, if this is different from the person under point a:

24

Full name, including type of company, if relevant:

Contact address (registered office for legal persons):
Telephone number:
Any changes in information (e.g. relations to the natural or legal person(s) subject to the
duty to notify):

16

673

Standard form 3
a)

25

The identity of the market maker who must notify pursuant to section 8(2):
Full name, including type of company, if relevant:
Contact address (registered office for legal persons):
Telephone number:
Any further information (representatives for legal persons etc.)):

b)

The identity of the person notifying, if this is different from the person under point a:
Full name, including type of company, if relevant:
Contact address:
Telephone number:
Any further information (e.g. the relationship with the market maker):

c)

Background for the notification (please insert cross):

[ ]

The market maker intends to carry out activities as a market maker in relation to the underlying issuer

[ ]

The market maker is carrying out activities as a market maker in relation to the underlying issuer

Name of the underlying issuer

d)

The competent authority,

which has authorised the market maker to carry out activities as a market maker:
Date of the authority for the market maker to carry out activities as a market maker:

17

674

e)

The market maker hereby declares,

that the market maker will neither intervene in the management of the company in question nor in any way put pressure on the company to make it purchase such shares or back
such shares (maintain a high share price).
Date, place and signature

Full name of:

a)

the shareholder according to section 2 or section 3,

b) the natural or legal person acquiring, selling or exercising voting rights in circumstances mentioned in section
4, nos. 2-8,
c)

all parties to agreements dealt with in section 4, no. 1, or

d) the holder of the financial instruments which grant rights to acquire issued shares with voting rights, as described in section 6.
Below is a list of the persons to be stated under b) as well as point 4 on the form:
-

in all the circumstances dealt with in section 4, no. 2, the natural or legal person who acquires the voting
rights and is entitled to exercise them in accordance with the agreement as well as the natural or legal person
who temporarily transfers the voting rights, must be stated,

in the circumstances dealt with in section 4, no. 3, the natural or legal person who has the shares lodged as
collateral, provided the person controls the voting rights or declares his intention to exercise them as well as
the natural or legal person who places the voting rights as collateral under these circumstances must be stated,

in the circumstances dealt with in section 4, no. 4, the natural or legal person who has a life interest in the
shares, if this person is entitled to exercise the voting rights as well as the natural or legal person who sells
the voting rights when the right of disposal is surrendered, must be stated,

in the circumstances dealt with in section 4, no. 5, the natural or legal person who controls the undertaking as
well as the subsidiary undertaking in circumstances where the subsidiary has an independent duty to notify
according to sections 2, 3 or 4, nos. 1-4, or a combination hereof, must be stated,

in the circumstances dealt with in section 4, no. 6, the natural or legal person with whom the shares are deposited, if this person himself may exercise the attached voting rights at his own discretion as well as the
shareholder who deposits the shares with the natural or legal person must be stated,

in the circumstances dealt with in section 4, no. 7, the natural or legal person who controls the voting rights
as well as the person for whose account the voting rights are exercised must be stated,

in the circumstances dealt with in section 4, no. 8, the proxy must be stated, if the proxy himself may exercise the voting rights at his own discretion as well as shareholders who have appointed the proxy. For circumstances dealt with in section 5(3), 2nd clause, the names of the shareholders must be stated under point 8 on
the form.

18

675

ln circumstances where the voting right is exercised according to section 4, the notification must contain the
name of the shareholder who is the counterparty in this relationship, cf. above, unless the shareholders holding is
less than 5 percent.

This means:
a) the day on which the order was matched on a market place. In circumstances where there is a transaction
outside a market place, the day on which the agreement was entered into, (sections 2 and 3),
b) the day on which the voting rights are surrendered (section 4), or
c)

the day on which the shareholding is established or changed, when the duty to notify takes effect due to non
action.

This part of the form must be completed if the thresholds stipulated regarding voting rights have been crossed.

This means a restatement of the information included in the most recent notification. The box must only be filled
out for the threshold which is crossed (voting rights/share capital). In circumstances where the situation before
the transaction was less than 5 percent, this should be stated. Therefore it is not necessary to state the exact
threshold.

In circumstances where the percentage of the share capital or the percentage of the voting rights comes below 5
percent, the duty will be fulfilled by stating that the holding is less than 5 percent. In circumstances dealt with in
section 4, no. 1, a notification should not be submitted of holdings of each of the individual parties to the agreement, unless one or more cross the threshold according to section 2(2). This shall apply on the date the agreement is made, the date it is changed, or the date it ceases.

Both direct and indirect holdings should be disclosed.

In circumstances where the percentage of voting rights is a combination of direct and indirect holdings, the holdings should be stated separately. If the voting rights are only held as either direct or indirect holdings, the total
holding should be entered in the relevant box.

This form must be completed in circumstances where one of the thresholds stipulated is crossed regarding the
share capital.

10

Both direct and indirect holdings should be disclosed. This information is not mandatory for circumstances dealt
with in section 3.

11

In circumstances where the percentage of the share capital is a combination of direct and indirect holdings, the
holdings should be stated separately. If the share capital is only held as either direct or indirect holdings, the total holding should be entered in the relevant box.

12

In circumstances where the holding comes below 5 percent, this should be stated.
Therefore, it is not necessary to state the exact threshold.

13

In circumstances where several types of instrument are held, each holding must be reported.

14

The date the instrument matures/ceases, i.e. the date on which the right to acquire shares lapses.

15

In circumstances where such a period is attached to the financial instrument, a description of the period must be
stated. For example once every third month commencing dd/mm/yy.

16

Notifications submitted pursuant to section 3 only relate to voting rights.

17

Notifications submitted pursuant to section 3 only relate to voting rights.

18

Including name(s) of the controlling undertaking(s) through which the voting rights or share capital are held. If
the notification should also contain a notification for the controlling undertaking(s), this should also contain separate statements of the holding of voting rights and of the percentage of the share capital (this does not apply for

19

676

circumstances dealt with in section 3) in these controlled undertakings when the undertakings' holdings cross the
thresholds stipulated.
19

Including name(s) of the controlling undertaking(s) through which the voting rights or share capital are held. If
the notification should also contain a notification for the controlling undertaking(s), this should also contain separate statements of the holding of the percentage of the share capital (this does not apply for circumstances dealt
with in section 3) or voting rights held in these controlled undertakings, when the undertakings' holdings cross
the threshold of 5 percent.

20

In circumstances where a joint notification is submitted, cf. section 5(4), this form should be used for the shareholder, natural or legal person, who is also subject to the duty to notify under sections 2, 3 or 4.

21

This part of the form must be completed if the thresholds stipulated regarding voting rights have been crossed.

22

This part of the form must be completed if the thresholds stipulated regarding voting rights have been crossed.

23

The supplementary form is only for company use and to record and file the information. The supplementary form
should not, therefore, be published with the standard form.

24

Must be stated in circumstances where a natural or legal person also submits a notification on behalf of a shareholder or a natural or legal person.

25

Standard form 3 is for market makers who, cf. section 8(2) of the Executive Order, must submit notifications to
the Danish FSA that the market maker is carrying out or intends to carry out activities as a market maker.

20

677

This translation was carried out by the professional translation agency GlobalDenmark Translations on
behalf of the Danish Financial Supervisory Authority. The text is to be regarded as an unofficial translation based on the latest official Executive Order. Only the Danish document has legal validity.

Executive Order on Takeover bids

Executive Order no. 221 of 10 March 2010

The following shall be laid down in pursuance of section 32(4), section 32a(2) and section 93(4) of the
Securities Trading etc. Act, cf. Consolidated Act no. 795 of 20 August 2009:

Definitions
1

For the purposes of this Executive Order, the following definitions shall apply:
1)

Takeover bid or bid:

A public offer made to the holders of the shares of a company, which has one or more
share classes admitted to trading on a regulated market or an alternative market, to acquire all or some of those shares, whether mandatory or voluntary, which follows or has
as its objective the acquisition of control of the offeree company.

2)

Offeree company:
The company, the shares of which are the subject of a bid.

3)

Offeror:
Any natural or legal person making a bid.

4)

Persons acting in concert:

Natural or legal persons who cooperate with the offeror or the offeree company on the
basis of an agreement, either express or tacit, either oral or written, aimed either at acquiring control of the offeree company or at frustrating the successful outcome of a bid.
Compulsory bids

(1)

If a shareholding is to be transferred directly or indirectly in a company which has several

share classes admitted to trading on a regulated market or an alternative market to an acquirer or to persons who act in concert with him, the acquirer shall give all the shareholders
of the company the possibility of selling their shares on identical terms, if the transfer
means that the acquirer acquires a controlling influence on the company, cf. section 31(2)(5) of the Securities Trading Act etc.

(2)

The acquirer shall, as soon as possible and no later than four weeks after acquisition, publish an offer document which complies with the provisions of section 5.

678

(3)

For conversion of convertible debt instruments, cf. part 10 of the Companies Act, exercising
subscription rights, options or warrants etc. to shares, the acquirer shall, as quickly as possible and no later than four weeks after the day on which the acquirer may the exercise voting rights, publish an offer document which complies with the provisions of section 5.

(4)

Acquisition by inheritance, gift, creditor suits, transfer within the same group or similar is
not covered by the obligation to make a bid of subsection (1).

(5)

The obligation to make a bid according to subsection (1) shall not apply if the transfer is the
result of a voluntary bid to all the shareholders to acquire all their shares pursuant to section 3.

(6)

The obligation to make a bid according to subsection (1) shall not apply to securities traders, credit institutions or investment companies that acquires shares as a result of underwriting in connection with issues or as a result of an agreement with the issuer or one or
more shareholders regarding resale of shares. The exception according to the first sentence
is subject to the shares being sold within 5 days and the voting rights not being exercised in
the period or used in any other manner for intervening in the management of the company.
Voluntary bids

An offeror who makes a bid which is not subject to the obligation to make a bid of section
2(1) shall as soon as possible and no later than four weeks after publication of the decision
to make a bid, cf. section 4(2), publish an offer document which complies with the provisions of section 5.
Announcement of bid

(1)

The acquirer of a controlling shareholding which occasions an obligation to make a bid pursuant to section 2(1) shall publish an announcement of this immediately after acquisition.

(2)

The offeror shall immediately publish an announcement of a decision to make a voluntary

bid subject to section 3.

(3)

Publication pursuant to subsections (1) and (2) shall be via electronic media in such a manner that the announcement reaches the public in the countries in which the shares of the offeree company are admitted to trading on a regulated market or an alternative market.

(4)

Offerors shall, no later than publication, cf. subsection (3), send the announcement pursuant
to subsection (1) or (2) to the Danish FSA and the regulated market or the alternative market to which the shares are admitted to trading. The Danish FSA shall publish the announcement on its website.

(5)

Immediately after publication of an announcement pursuant to subsection (1) or (2) the

central governing bodies of the offeree company and the acquirer or offeror shall inform

679

their respective employee representatives or, where there are no such representatives, the
employees themselves.
(6)

Before announcing a bid covered by subsection (1) or (2), the acquirer or offeror shall ensure that he/she can fulfil in full any cash consideration and after taking all reasonable
measures to secure the implementation of any other type of consideration.
Form and content of the bid

(1)

An offer document shall contain information on the financial terms and other terms of the
bid as well as other information which is deemed necessary for shareholders to arrive at an
informed judgment on the bid. As a minimum the bid shall contain information on:
1)

name, address and company registration no. (CVR-nr.). of the offeree company.

2)

name and address of the offeror, or where the offeror is a company, the name, address
and company registration no. (CVR-nr.) of that company, registered office and type of
that company as well as a list of the persons or companies acting in concert with the offeror or, if possible, with the offeree company and, in the case of companies, their
types, names and registered offices and relationships with the offeror and, where possible, with the offeree company.

3)

name and address of the person or the company which, on behalf of the offeror, manages implementation of the bid.

4)

the proportion of the voting rights or the scope of the controlling interest which the offeror has already acquired or has charge of in some other way, including as yet unimplemented transfer agreements as well as on special terms linked to the voting rights or
the controlling interest acquired. As yet unimplemented transfer agreements shall include convertible debt instruments, cf. part 10 of the Companies Act, subscription
rights, options and warrants etc.

5)

consideration, cf. section 9, for mandatory bids.

6)

the price offered, cf. section 8, for mandatory bids.

7)

the shares or, where appropriate, the share class or classes for which the bid is made.

8)

the compensation offered by the offeror to the shareholders and the method of calculation of the compensation, cf. section 344(2) of the Companies Act.

9)

how the bid is to be financed.

10) how the cash payment is to be disbursed or, if shares in another company are offered,
how the conversion ratio is determined, or, if a combination of cash and shares is offered, how the combination of cash and conversion of shares is determined.

680

11) the date of settlement.

12) from which date shares are entitled to dividends and from which date voting rights may
be exercised, if the consideration is shares.
13) the maximum and minimum percentages or quantities of shares which the offeror undertakes to acquire, cf. section 3 regarding voluntary bids.
14) any conditions to which the bid is subject, cf. section 10, including circumstances under
which the bid may be withdrawn.
15) the period of the bid, cf. section 6.
16) action to be taken by shareholders to accept the bid.
17) where and when the result of the bid will be published, including where and when fulfilment of any conditions linked to the bid will be published.
18) the offeror's intentions with regard to the future business of the offeree company and,
in so far as it is relevant, the offeror company, including trading in the companies'
shares on a regulated market or an alternative market, safeguarding of the jobs of their
employees and management, including any material change in the conditions of employment, and in particular the offeror's strategic plans for the two companies and the
likely repercussions on employment and the locations of the companies' places of business.
19) payment from the funds of the offeree company after completion of the takeover bid, cf.
section 12.
20) any agreements with others regarding exercise of voting rights linked to the shares of
the company, if the offeror is part of, or has knowledge of, these agreements.
21) the national law which will govern contracts concluded between the offeror and the
holders of the offeree company's shares as a result of the bid, and the competent
courts.
(2)

In addition to the information stated in subsection (1), the offer document shall also state
whether the shareholders who accept the bid are bound by this acceptance in the event of a
competing bid pursuant to section 16.

(3)

If the bid fulfils the conditions of section 2(5), the offer document shall contain information
that the offeror is not obliged subsequently to make a mandatory bid if, on the basis of the
voluntary bid, control is acquired pursuant to section 31(1) of the Securities Trading etc.
Act.

681

(4)

If there are material changes in the information issued which cannot be deemed as terms
and which are deemed necessary for shareholders to arrive at an informed judgment on the
bid, the offeror shall publish an announcement of these as soon as possible in the manner
stipulated in section 4(3) and (4).

The time allowed for acceptance of the bid shall be no less than four weeks and no more
than ten weeks from the date of publication of the offer document, cf. however, section
15(3).

(1)

The offeror shall afford all holders of the shares of an offeree company of the same class
equivalent treatment.

(2)

If the offeror or a person who acts in concert with the offeror, after the offer document has
been published and before the time allowed for acceptance of the bid has expired, enters into agreements with shareholders or others regarding purchases and sales of shares in the
offeree company, the offeror shall, as a minimum, raise his bid to the other shareholders
correspondingly if these shares are covered by the bid and if the agreements are made on
more favourable terms than those offered to shareholders in the offer document.

(3)

If the offeror decides that a takeover bid is to include convertible debt instruments, cf. part
10 of the Companies Act, subscription rights, options and warrants etc., the provisions of
subsections (1) and (2) shall apply correspondingly, with the necessary adjustments, to
these securities.

(4)

If the bid includes convertible debt instruments as mentioned in subsection (3), the owners
shall be offered a price which affords them proportionally mutually equivalent treatment.
The price offered shall also afford the owners of these securities proportionally equivalent
treatment in relation to the price offered to shareholders in the company.

(1)

The price offered shall correspond to no less than the highest price the offeror or persons
acting in concert with the offeror, have paid for shares already acquired in the six months
preceding the date the offer is made.

(2)

The Danish FSA may adjust the price set pursuant to subsection (1) upwards or downwards,
if
1)

the price of the shares in question has been manipulated,

2)

the price in general or in the particular circumstances has been affected by exceptional
occurrences,

3)

the bid is made to enable a firm in difficulty to be rescued,

4)

the price set is an evasion of the principle of equivalent treatment, or

5)

the bid price is significantly lower than the market price.

682

(3)

If the offeror requests adjustment of the highest price pursuant to subsection (2), such request shall be submitted to the Danish FSA immediately after the offeror publishes an announcement pursuant to section 4(1) and (3).

(4)

The Danish FSA may, when setting the bid price pursuant to subsection (2) apply,
1)

the highest price paid by the offeror to acquire shares in the 12 months preceding the
announcement by the offeror pursuant to section 4(1) and (3),

2)

the average price over the 12 months preceding the announcement by the offeror pursuant to section 4(1) and (3),

(5)

3)

the break-up value of the offeree company, or

4)

other objective criteria.

If the offeree company has several share classes, a bid price shall be set for each share
class. For the share classes in which the offeror has acquired shares, the principle of highest
price, cf. subsection (1) shall be applied. If all share classes are admitted to trading on a
regulated market or an alternative market, for share classes in which the offeror has not acquired shares on the basis of the prices on a regulated market or an alternative market, a
bid price shall be set which proportionally corresponds to the highest price for the share
class(es) in which the offeror has acquired shares.

(6)

If one or more of several share classes are admitted to trading on a regulated market or an
alternative market, the price set for the share classes not admitted in connection with a majority transfer shall not be more than 50 per cent higher than the price offered to the minority shareholders.

(7)

A voluntary bid pursuant to section 3 shall not be subject to the requirements of subsections
(1)-(6).

(1)

As consideration in a mandatory bid covered by section 2, the offeror may offer shares with
voting rights, cash or a combination of both.

(2)

If the consideration offered does not consist of liquid shares admitted to trading on a regulated market, the consideration shall consist of a cash alternative. For offers of transfers of
shares in a company which is admitted to trading on a regulated market or on an alternative
market, the consideration may also consist of liquid shares which are admitted to trading on
an alternative market.

(3)

Notwithstanding subsections (1) and (2), the offeror shall offer a cash consideration at least
as an alternative where the offeror or persons acting in concert with the offeror, over a period of six months preceding the date the bid was made and ending when the offer closes for

683

acceptance, has purchased for cash securities carrying 5 per cent or more of the voting
rights in the offeree company.
(4)

A voluntary bid pursuant to section 3 shall not be subject to the requirements of subsections
(1)-(3).

10

(1)

No conditions may be linked to a takeover bid.

(2)

A voluntary bid pursuant to section 3 shall not be subject to the requirement of subsection
(1).

Agreements on bonuses and similar benefits and payments from offeree company's funds
11

The offeror or persons acting in concert with the offeror and the central governing bodies of
the offeree company may, from the date on which the offeror or persons acting in concert
with the offeror initiate negotiations with the offeree company and until the negotiations are
stopped, or a takeover bid is implemented, not enter into agreements or change existing
agreements on bonuses and similar benefits for the central governing body of the offeree
company.

12

(1)

If the offeror intends to allow the offeree company to make payments from the funds of the
offeree company, cf. section 179(1) of the Companies Act, in the first 12 months after implementation of the takeover bid, this shall be stated in the offer document. At the same
time as this, the offeror shall provide information on the type and size of the intended payment.

(2)

If the offeror has not provided information about the intended payment in accordance with
subsection (1), the offeror may not permit the offeree company to make payments during
the first 12 months after implementation of the takeover bid unless the payment from the
funds of the company is made on the basis of specific circumstances, which improve the financial situation of the company and which could not be anticipated by the offeror during
preparation of the offer document, cf. section 184 of the Companies Act.
Publication of bids and the bid results

13

(1)

A bid covered by sections 2 and 3 shall be made public in the manner mentioned in subsection (4) before other publication is permitted.

(2)

The offeror shall submit the offer document and an announcement which mentions the bid
(bid announcement) to the Danish FSA. The Danish FSA shall ensure that, before publication, the requirements regarding the offer document and the bid announcement have been
fulfilled.

(3)

The bid announcement, cf. subsection (2), shall contain information on the time limit for acceptance of the bid, a website from which the offer document can be retrieved, and information on where shareholders can refer in order to obtain a copy of the offer document.

684

(4)

Immediately after receiving authorisation of the offer document and the bid announcement
from the Danish FSA, the offeror shall make public the bid announcement via electronic media in such a manner that the bid announcement reaches the public in the countries in which
the offeree company's shares are admitted to trading on a regulated market or an alternative market.

(5)

At the same time as publication, cf. subsection (4), the offeror shall send the bid announcement to the regulated market or the alternative market on which the offeree company's
shares are admitted to trading and publish the offer document on the website stated in the
bid announcement. The Danish FSA shall publish the offer document and the bid announcement on its website.

(6)

When the bid is made public, the central governing bodies of the offeree company and the
offeror shall submit the offer document to their respective employee representatives or,
where there are no such representatives, to the employees themselves.

(7)

The offeree company shall send the bid announcement to the registered shareholders at the
expense of the offeror.

(8)

Not later than three days after expiry of the bid period, the offeror shall make public the result of the bid. Publication shall be in the manner stipulated in subsections (3) and (4).
Reports from the central governing body of the offeree company

14

(1)

The central governing body of the offeree company shall draw up a document setting out its
opinion of the bid and the reasons on which it is based, including its views on the effects of
implementation of the bid on all the company's interests and specifically employment, and
on the offeror's strategic plans for the offeree company and their likely repercussions on
employment and the locations of the company's places of business as set out in the offer
document, cf. section 5(1), no. 18.

(2)

The central governing body of the offeree company shall make public and submit the document, cf. subsection (1), in the manner stipulated in section 4(3) and (4). The document
shall be made public before expiry of the first half of the bid period, cf. section 6.

(3)

At the same time as publication of the document, the central governing body of the offeree
company shall communicate its opinion, cf. subsection (1), to the representatives of its employees or, where there are no such representatives, to the employees themselves. Where
the central governing body of the offeree company receives a separate statement from the
representatives of its employees on the effects of the bid on employment, that statement
shall be made public immediately in the manner stipulated in section 4(3) and (4).

(4)

Immediately after publication, the offeree company shall publish the document on a website.

685

(5)

The offeree company shall send the document to the registered shareholders at the expense
of the offeror.
Changes in the bid

15

(1)

The offeror may change the conditions linked to the bid at any time up to expiry of the bid
period, cf. section 6 and section 16(2), if the conditions offered are improved. If the change
takes place within the last two weeks of the bid period, the bid period shall be extended
such that it expires 14 days after publication of the changed bid.

(2)

The offeror may extend the bid period by no less than 14 days at a time. The total bid period
may not, however, extend for more than ten weeks from the date of publication of the offer
document.

(3)

The offeror may extend the bid period for more than the ten weeks calculated from the date
of publication of the offer document, cf. section 6, by four weeks at a time, however no
more than four months from publication of the offer document, with a view to authorisation
from the competition authorities.

(4)

The offeror may cancel or reduce conditions set, cf. section 5(1), no. 14 and section 10, under compliance with subsection (1), if this possibility is stated in the original offer document.

(5)

The offeror shall draw up a supplement to the offer document which shall be made public as
stipulated in section 13.

(6)

The central governing body of the offeree company shall, in the event of changes pursuant
to subsection (1) or (4), publish a supplementary report for the shareholders of the company on the changes. The report shall be made public before expiry of one-half of the remaining bid period or, if the remaining bid period is 14 days or less, within seven days of publication of the change document. Publication of the supplementary report shall be in the manner
stipulated in section 14.

(7)

For bids covered by subsection (1), shareholders who have already accepted the original bid
from the offeror shall be provided with the same improved conditions as are contained in the
change document.
Competing bids

16

(1)

A competing bid shall be submitted before expiry of the bid period for the existing bid with
the latest date of expiry. Otherwise the provisions of this Executive Order shall apply correspondingly for competing bids.

(2)

In the event that the original offeror does not withdraw his bid, the bid period of the original
bid shall be extended automatically to the date of expiry of the competing bid. This automatic extension of the original bid period shall be made public as stipulated in section 13.

686

Language, competence, choice of law and delegation

17

Documents requiring preparation in pursuance of this Executive Order shall be drawn up in

Danish.

18

(1)

The Danish FSA shall supervise bids for which the offeree company has its registered office
in Denmark or in a country outside the European Union with which the Community has not
entered into an agreement for the financial area, if the shares of the offeree company are
admitted to trading on a regulated market in Denmark. Furthermore, the Danish FSA shall
supervise bids for which the shares of the offeree company are admitted to trading on an alternative market.

(2)

The Danish FSA shall supervise bids for which the shares of the offeree company are admitted to trading on a regulated market in Denmark and if the shares of the offeree company
are not admitted to trading on a regulated market in the country in which the offeree company has its registered office. If the shares of the offeree company are both admitted to
trading on a regulated market in Denmark and in a country within the European Union or
countries with which the Community has entered into an agreement for the financial area,
the Danish FSA shall supervise bids for which the shares were first admitted to trading in
Denmark.

(3)

If the shares of the offeree company are at the same time admitted to trading for the first
time on regulated markets in Denmark and one or more countries within the European Union
or countries with which the Community has entered into an agreement for the financial area,
the offeree company shall determine which of the supervisory authorities of these countries
shall be the authority competent to supervise the bid by notifying these regulated markets,
the Danish FSA and supervisory authorities in the other countries on the first day of trading.

(4)

If shares of the offeree company have already been admitted to trading on a regulated market in Denmark and on a regulated market in one or more countries within the European Union or countries with which the Community has entered into an agreement for the financial
area on the date of entry into force of this Executive Order, and were admitted simultaneously, the offeree company shall determine on the first day of trading which of the supervisory authorities of these countries shall be the authority competent to supervise the bid, if
the supervisory authorities have not decided the matter within four weeks of the date of entry into force.

(5)

The offeree company shall, as soon as possible, make public the decision of the company
under subsections (3) and (4). Publication must be in accordance with section 4(3).

19

(1)

In the circumstances mentioned in section 18(1), the takeover bid shall be treated in accordance with Danish regulations.

(2)

In the circumstances mentioned in section 18(2)-(4), in which the Danish FSA is the competent authority, matters relating to the consideration to be offered in connection with a bid,

10

687

including in particular the price, and matters related to the procedure for the bid, in particular information about the decision of the offeror to make a bid, the content of the offer document and disclosure of the bid shall be dealt with pursuant to Danish regulations.
(3)

Notwithstanding section 18(2)-(4), matters relating to the information to be provided to the

employees of the offeree company, acquisition of control and any derogation from the obligation to make a bid shall be dealt with by the supervisory authority in the country within
the European Union, or country with which the Community has entered into an agreement
for the financial area, in which the offeree company has its registered office, in accordance
with the regulations of this country.
Exemptions and penalties

20

In exceptional circumstances the Danish FSA may grant exemptions from section 2(1),(2)
and (6), paragraph 2, section 3, section 6, section 9(2) and (3), section 10(1), section
13(8), paragraph 1, section 14(2), paragraph 2 section 15(1)-(3) and section 16(1).

21

(1)

Any person who violates section 2(1)-(3), sections 3-7, section 8(1), (5) and (6), section
9(2), paragraph 1, and (3), section 10(1), section 11, section 12(1), section 13, section 14,
section 15(5)-(7), section 16(2), paragraph 2, section 17 and section 18(5) shall be liable to
a fine.

(2)

Companies, etc. (legal persons) may incur criminal liability according to the regulations in
chapter 5 of the Criminal Code, cf. section 93(5) of the Securities Trading etc. Act.
Entry into force

22

(1)

This Executive Order shall enter into force on 15 March 2010.

(2)

At the same time Executive Order no. 947 of 23 September 2008 on takeover bids shall be
repealed.

11

688

DIRECTIVE 2004/25/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 21 April 2004
on takeover bids
(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 44(1) thereof,
Having regard to the proposal from the Commission 1,
Having regard to the opinion of the European Economic and Social Committee 2,
Acting in accordance with the procedure laid down in Article 251 of the Treaty 3,
Whereas:
(1)

In accordance with Article 44(2)(g) of the Treaty, it is necessary to coordinate certain safeguards
which, for the protection of the interests of members and others, Member States require of companies governed by the law of a Member State the securities of which are admitted to trading on
a regulated market in a Member State, with a view to making such safeguards equivalent
throughout the Community.

(2)

It is necessary to protect the interests of holders of the securities of companies governed by the
law of a Member State when those companies are the subject of takeover bids or of changes of
control and at least some of their securities are admitted to trading on a regulated market in a
Member State.

(3)

It is necessary to create Community-wide clarity and transparency in respect of legal issues to be

settled in the event of takeover bids and to prevent patterns of corporate restructuring within the
Community from being distorted by arbitrary differences in governance and management cultures.

(4)

In view of the public-interest purposes served by the central banks of the Member States, it
seems inconceivable that they should be the targets of takeover bids. Since, for historical reasons, the securities of some of those central banks are listed on regulated markets in Member
States, it is necessary to exclude them explicitly from the scope of this Directive.

OJ C 45 E, 25.2.2003, p. 1.

OJ C 208, 3.9.2003, p. 55.

Opinion of the European Parliament of 16 December 2003 (not yet published in the Official Journal) and Council
decision of 30 March 2004.

689

(5)

Each Member State should designate an authority or authorities to supervise those aspects of
bids that are governed by this Directive and to ensure that parties to takeover bids comply with
the rules made pursuant to this Directive. All those authorities should cooperate with one another.

(6)

In order to be effective, takeover regulation should be flexible and capable of dealing with new
circumstances as they arise and should accordingly provide for the possibility of exceptions and
derogations. However, in applying any rules or exceptions laid down or in granting any derogations, supervisory authorities should respect certain general principles.

(7)

Self-regulatory bodies should be able to exercise supervision.

(8)

In accordance with general principles of Community law, and in particular the right to a fair hearing, decisions of a supervisory authority should in appropriate circumstances be susceptible to
review by an independent court or tribunal. However, Member States should be left to determine
whether rights are to be made available which may be asserted in administrative or judicial proceedings, either in proceedings against a supervisory authority or in proceedings between parties
to a bid.

(9)

Member States should take the necessary steps to protect the holders of securities, in particular
those with minority holdings, when control of their companies has been acquired. The Member
States should ensure such protection by obliging the person who has acquired control of a company to make an offer to all the holders of that company's securities for all of their holdings at an
equitable price in accordance with a common definition. Member States should be free to establish further instruments for the protection of the interests of the holders of securities, such as the
obligation to make a partial bid where the offeror does not acquire control of the company or the
obligation to announce a bid at the same time as control of the company is acquired.

(10)

The obligation to make a bid to all the holders of securities should not apply to those controlling
holdings already in existence on the date on which the national legislation transposing this Directive enters into force.

(11)

The obligation to launch a bid should not apply in the case of the acquisition of securities which
do not carry the right to vote at ordinary general meetings of shareholders. Member States
should, however, be able to provide that the obligation to make a bid to all the holders of securities relates not only to securities carrying voting rights but also to securities which carry voting
rights only in specific circumstances or which do not carry voting rights.

(12)

To reduce the scope for insider dealing, an offer or should be required to announce his/her decision to launch a bid as soon as possible and to inform the supervisory authority of the bid.

(13)

The holders of securities should be properly informed of the terms of a bid by means of an offer
document. Appropriate information should also be given to the representatives of the company's
employees or, failing that, to the employees directly.

690

(14)

The time allowed for the acceptance of a bid should be regulated.

(15)

To be able to perform their functions satisfactorily, supervisory authorities should at all times be
able to require the parties to a bid to provide information concerning themselves and should cooperate and supply information in an efficient and effective manner, without delay, to other authorities supervising capital markets.

(16)

In order to prevent operations which could frustrate a bid, the powers of the board of an offeree
company to engage in operations of an exceptional nature should be limited, without unduly hindering the offeree company in carrying on its normal business activities.

(17)

The board of an offeree company should be required to make public a document setting out its
opinion of the bid and the reasons on which that opinion is based, including its views on the effects of implementation on all the company's interests, and specifically on employment.

(18)

In order to reinforce the effectiveness of existing provisions concerning the freedom to deal in
the securities of companies covered by this Directive and the freedom to exercise voting rights, it
is essential that the defensive structures and mechanisms envisaged by such companies be
transparent and that they be regularly presented in reports to general meetings of shareholders.

(19)

Member States should take the necessary measures to afford any offeror the possibility of acquiring majority interests in other companies and of fully exercising control of them. To that end, restrictions on the transfer of securities, restrictions on voting rights, extraordinary appointment
rights and multiple voting rights should be removed or suspended during the time allowed for the
acceptance of a bid and when the general meeting of shareholders decides on defensive
measures, on amendments to the articles of association or on the removal or appointment of
board members at the first general meeting of shareholders following closure of the bid. Where
the holders of securities have suffered losses as a result of the removal of rights, equitable compensation should be provided for in accordance with the technical arrangements laid down by
Member States.

(20)

All special rights held by Member States in companies should be viewed in the framework of the
free movement of capital and the relevant provisions of the Treaty. Special rights held by Member States in companies which are provided for in private or public national law should be exempted from the 'breakthrough' rule if they are compatible with the Treaty.

(21)

Taking into account existing differences in Member States' company law mechanisms and structures, Member States should be allowed not to require companies established within their territories to apply the provisions of this Directive limiting the powers of the board of an offeree company during the time allowed for the acceptance of a bid and those rendering ineffective barriers,
provided for in the articles of association or in specific agreements. In that event Member States
should at least allow companies established within their territories to make the choice, which
must be reversible, to apply those provisions. Without prejudice to international agreements to
which the European Community is a party, Member States should be allowed not to require com-

691

panies which apply those provisions in accordance with the optional arrangements to apply them
when they become the subject of offers launched by companies which do not apply the same provisions, as a consequence of the use of those optional arrangements.
(22)

Member States should lay down rules to cover the possibility of a bid's lapsing, the offeror's right
to revise his/her bid, the possibility of competing bids for a company's securities, the disclosure
of the result of a bid, the irrevocability of a bid and the conditions permitted.

(23)

The disclosure of information to and the consultation of representatives of the employees of the
offeror and the offeree company should be governed by the relevant national provisions, in particular those adopted pursuant to Council Directive 94/45/EC of 22 September 1994 on the establishment of a European Works Council or a procedure in Community-scale undertakings and
Community-scale groups of undertakings for the purposes of informing and consulting employees 1, Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member
States relating to collective redundancies 2, Council Directive 2001/86/EC of 8 October 2001 supplementing the statute for a European Company with regard to the involvement of employees

and Directive 2002/14/EC of the European Parliament and of the Council of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community
Joint declaration of the European Parliament, the Council and the Commission on employee
representation 4. The employees of the companies concerned, or their representatives, should
nevertheless be given an opportunity to state their views on the foreseeable effects of the bid on
employment. Without prejudice to the rules of Directive 2003/6/EC of the European Parliament
and of the Council of 28 January 2003 on insider dealing and market manipulation (market
abuse) 5, Member States may always apply or introduce national provisions concerning the disclosure of information to and the consultation of representatives of the employees of the offeror before an offer is launched.
(24)

Member States should take the necessary measures to enable an offeror who, following a takeover bid, has acquired a certain percentage of a company's capital carrying voting rights to require
the holders of the remaining securities to sell him/her their securities. Likewise, where, following
a takeover bid, an offeror has acquired a certain percentage of a company's capital carrying voting rights, the holders of the remaining securities should be able to require him/her to buy their
securities. These squeeze-out and sell-out procedures should apply only under specific conditions
linked to takeover bids. Member States may continue to apply national rules to squeeze-out and
sell-out procedures in other circumstances.

OJ L 254, 30.9.1994, p. 64. Directive as amended by Directive 97/74/EC (OJ L 10, 16.1.1998, p. 22).

OJ L 225, 12.8.1998, p. 16.

OJ L 294, 10.11.2001, p. 22.

OJ L 80, 23.3.2002, p. 29.

OJ L 96, 12.4.2003, p. 16.

692

(25)

Since the objectives of the action envisaged, namely to establish minimum guidelines for the
conduct of takeover bids and ensure an adequate level of protection for holders of securities
throughout the Community, cannot be sufficiently achieved by the Member States because of the
need for transparency and legal certainty in the case of cross-border takeovers and acquisitions
of control, and can therefore, by reason of the scale and effects of the action, be better achieved
at Community level, the Community may adopt measures, in accordance with the principle of
subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality as set out in that Article, this Directive does not go beyond what is necessary to achieve those
objectives.

(26)

The adoption of a Directive is the appropriate procedure for the establishment of a framework
consisting of certain common principles and a limited number of general requirements which
Member States are to implement through more detailed rules in accordance with their national
systems and their cultural contexts.

(27)

Member States should, however, provide for sanctions for any infringement of the national
measures transposing this Directive.

(28)

Technical guidance and implementing measures for the rules laid down in this Directive may from
time to time be necessary, to take account of new developments on financial markets. For certain
provisions, the Commission should accordingly be empowered to adopt implementing measures,
provided that these do not modify the essential elements of this Directive and the Commission
acts in accordance with the principles set out in this Directive, after consulting the European Securities Committee established by Commission Decision 2001/528/EC 1. The measures necessary
for the implementation of this Directive should be adopted in accordance with Council Decision
1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission

and with due regard to the declaration made by the Commis-

sion in the European Parliament on 5 February 2002 concerning the implementation of financial
services legislation. For the other provisions, it is important to entrust a contact committee with
the task of assisting Member States and the supervisory authorities in the implementation of this
Directive and of advising the Commission, if necessary, on additions or amendments to this Directive. In so doing, the contact committee may make use of the information which Member
States are to provide on the basis of this Directive concerning takeover bids that have taken
place on their regulated markets.
(29)

The Commission should facilitate movement towards the fair and balanced harmonisation of rules
on takeovers in the European Union. To that end, the Commission should be able to submit proposals for the timely revision of this Directive,

HAVE ADOPTED THIS DIRECTIVE:

OJ L 191, 13.7.2001, p. 45. Decision as amended by Decision 2004/8/EC (OJ L 3, 7.1.2004, p. 33).

OJ L 184, 17.7.1999, p. 23.

693

Article 1
Scope
(1)

This Directive lays down measures coordinating the laws, regulations, administrative provisions,
codes of practice and other arrangements of the Member States, including arrangements established by organisations officially authorised to regulate the markets (hereinafter referred to as
'rules'), relating to takeover bids for the securities of companies governed by the laws of Member
States, where all or some of those securities are admitted to trading on a regulated market within the meaning of Directive 93/22/EEC

in one or more Member States (hereinafter referred to as

a 'regulated market').
(2)

This Directive shall not apply to takeover bids for securities issued by companies, the object of
which is the collective investment of capital provided by the public, which operate on the principle of risk-spreading and the units of which are, at the holders' request, repurchased or redeemed, directly or indirectly, out of the assets of those companies. Action taken by such companies to ensure that the stock exchange value of their units does not vary significantly from
their net asset value shall be regarded as equivalent to such repurchase or redemption.

(3)

This Directive shall not apply to takeover bids for securities issued by the Member States' central
banks.
Article 2
Definitions

(1)

For the purposes of this Directive:

a)

'takeover bid' or 'bid' shall mean a public offer (other than by the offeree company itself)
made to the holders of the securities of a company to acquire all or some of those securities,
whether mandatory or voluntary, which follows or has as its objective the acquisition of control of the offeree company in accordance with national law;

b)

'offeree company' shall mean a company, the securities of which are the subject of a bid;

c)

'offeror' shall mean any natural or legal person governed by public or private law making a
bid;

d)

'persons acting in concert' shall mean natural or legal persons who cooperate with the offeror or the offeree company on the basis of an agreement, either express or tacit, either oral
or written, aimed either at acquiring control of the offeree company or at frustrating the successful outcome of a bid;

Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field (OJ L 141, 11.6.1993,
p. 27). Directive as last amended by Directive 2002/87/EC of the European Parliament and of the Council (OJ L
35, 11.2.2003, p. 1).

694

e)

'securities' shall mean transferable securities carrying voting rights in a company;

f)

'parties to the bid' shall mean the offeror, the members of the offeror's board if the offeror is
a company, the offeree company, holders of securities of the offeree company and the members of the board of the offeree company, and persons acting in concert with such parties;

g)

'multiple-vote securities' shall mean securities included in a distinct and separate class and
carrying more than one vote each.

(2)

For the purposes of paragraph 1(d), persons controlled by another person within the meaning of
Article 87 of Directive 2001/34/EC

shall be deemed to be persons acting in concert with that

other person and with each other.

Article 3
General principles
(1)

For the purpose of implementing this Directive, Member States shall ensure that the following
principles are complied with:
a)

all holders of the securities of an offeree company of the same class must be afforded equivalent treatment; moreover, if a person acquires control of a company, the other holders of
securities must be protected;

b)

the holders of the securities of an offeree company must have sufficient time and information to enable them to reach a properly informed decision on the bid; where it advises the
holders of securities, the board of the offeree company must give its views on the effects of
implementation of the bid on the company's places of business;

c)

the board of an offeree company must act in the interests of the company as a whole and
must not deny the holders of securities the opportunity to decide on the merits of the bid;

d)

false markets must not be created in the securities of the offeree company, of the offeror
company or of any other company concerned by the bid in such a way that the rise or fall of
the prices of the securities becomes artificial and the normal functioning of the markets is
distorted;

e)

an offeror must announce a bid only after ensuring that he/she can fulfil in full any cash consideration, if such is offered, and after taking all reasonable measures to secure the implementation of any other type of consideration;

Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the admission of securities to official stock exchange listing and on information to be published on those securities (OJ L 184, 6.7.2001,
p. 1). Directive as last amended by Directive 2003/71/EC (OJ L 345, 31.12.2003, p. 64).

695

f)

an offeree company must not be hindered in the conduct of its affairs for longer than is reasonable by a bid for its securities.

(2)

With a view to ensuring compliance with the principles laid down in paragraph 1, Member States:
a)

shall ensure that the minimum requirements set out in this Directive are observed;

b)

may lay down additional conditions and provisions more stringent than those of this Directive
for the regulation of bids.
Article 4
Supervisory authority and applicable law

(1)

Member States shall designate the authority or authorities competent to supervise bids for the
purposes of the rules which they make or introduce pursuant to this Directive. The authorities
thus designated shall be either public authorities, associations or private bodies recognised by
national law or by public authorities expressly empowered for that purpose by national law. Member States shall inform the Commission of those designations, specifying any divisions of functions that may be made. They shall ensure that those authorities exercise their functions impartially and independently of all parties to a bid.

(2)

a)

The authority competent to supervise a bid shall be that of the Member State in which the
offeree company has its registered office if that company's securities are admitted to trading
on a regulated market in that Member State.

b)

If the offeree company's securities are not admitted to trading on a regulated market in the
Member State in which the company has its registered office, the authority competent to supervise the bid shall be that of the Member State on the regulated market of which the company's securities are admitted to trading.
If the offeree company's securities are admitted to trading on regulated markets in more
than one Member State, the authority competent to supervise the bid shall be that of the
Member State on the regulated market of which the securities were first admitted to trading.

c)

If the offeree company's securities were first admitted to trading on regulated markets in
more than one Member State simultaneously, the offeree company shall determine which of
the supervisory authorities of those Member States shall be the authority competent to supervise the bid by notifying those regulated markets and their supervisory authorities on the
first day of trading.
If the offeree company's securities have already been admitted to trading on regulated markets in more than one Member State on the date laid down in Article 21(1) and were admitted simultaneously, the supervisory authorities of those Member States shall agree which
one of them shall be the authority competent to supervise the bid within four weeks of the
date laid down in Article 21(1). Otherwise, the offeree company shall determine which of

696

those authorities shall be the competent authority on the first day of trading following that
four-week period.
d)

Member States shall ensure that the decisions referred to in (c) are made public.

e)

In the cases referred to in (b) and (c), matters relating to the consideration offered in the
case of a bid, in particular the price, and matters relating to the bid procedure, in particular
the information on the offeror's decision to make a bid, the contents of the offer document
and the disclosure of the bid, shall be dealt with in accordance with the rules of the Member
State of the competent authority. In matters relating to the information to be provided to
the employees of the offeree company and in matters relating to company law, in particular
the percentage of voting rights which confers control and any derogation from the obligation
to launch a bid, as well as the conditions under which the board of the offeree company may
undertake any action which might result in the frustration of the bid, the applicable rules and
the competent authority shall be those of the Member State in which the offeree company
has its registered office.

(3)

Member States shall ensure that all persons employed or formerly employed by their supervisory
authorities are bound by professional secrecy. No information covered by professional secrecy
may be divulged to any person or authority except under provisions laid down by law.

(4)

The supervisory authorities of the Member States for the purposes of this Directive and other authorities supervising capital markets, in particular in accordance with Directive 93/22/EEC, Directive 2001/34/EC, Directive 2003/6/EC and Directive 2003/71/EC of the European Parliament
and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading shall cooperate and supply each other with information
wherever necessary for the application of the rules drawn up in accordance with this Directive
and in particular in cases covered by paragraph 2(b), (c) and (e). Information thus exchanged
shall be covered by the obligation of professional secrecy to which persons employed or formerly
employed by the supervisory authorities receiving the information are subject. Cooperation shall
include the ability to serve the legal documents necessary to enforce measures taken by the
competent authorities in connection with bids, as well as such other assistance as may reasonably be requested by the supervisory authorities concerned for the purpose of investigating any
actual or alleged breaches of the rules made or introduced pursuant to this Directive.

(5)

The supervisory authorities shall be vested with all the powers necessary for the purpose of carrying out their duties, including that of ensuring that the parties to a bid comply with the rules
made or introduced pursuant to this Directive.
Provided that the general principles laid down in Article 3(1) are respected, Member States may
provide in the rules that they make or introduce pursuant to this Directive for derogations from
those rules:

697

(i)

by including such derogations in their national rules, in order to take account of circumstances determined at national level
and/or

(ii)

by granting their supervisory authorities, where they are competent, powers to waive such
national rules, to take account of the circumstances referred to in (i) or in other specific circumstances, in which case a reasoned decision must be required.

(6)

This Directive shall not affect the power of the Member States to designate judicial or other authorities responsible for dealing with disputes and for deciding on irregularities committed in the
course of bids or the power of Member States to regulate whether and under which circumstances
parties to a bid are entitled to bring administrative or judicial proceedings. In particular, this Directive shall not affect the power which courts may have in a Member State to decline to hear legal proceedings and to decide whether or not such proceedings affect the outcome of a bid. This
Directive shall not affect the power of the Member States to determine the legal position concerning the liability of supervisory authorities or concerning litigation between the parties to a bid.
Article 5
Protection of minority shareholders, the mandatory bid and the equitable price

(1)

Where a natural or legal person, as a result of his/her own acquisition or the acquisition by persons acting in concert with him/her, holds securities of a company as referred to in Article 1(1)
which, added to any existing holdings of those securities of his/hers and the holdings of those securities of persons acting in concert with him/her, directly or indirectly give him/her a specified
percentage of voting rights in that company, giving him/her control of that company, Member
States shall ensure that such a person is required to make a bid as a means of protecting the minority shareholders of that company. Such a bid shall be addressed at the earliest opportunity to
all the holders of those securities for all their holdings at the equitable price as defined in paragraph 4.

(2)

Where control has been acquired following a voluntary bid made in accordance with this Directive
to all the holders of securities for all their holdings, the obligation laid down in paragraph 1 to
launch a bid shall no longer apply.

(3)

The percentage of voting rights which confers control for the purposes of paragraph 1 and the
method of its calculation shall be determined by the rules of the Member State in which the company has its registered office.

(4)

The highest price paid for the same securities by the offeror, or by persons acting in concert with
him/her, over a period, to be determined by Member States, of not less than six months and not
more than 12 before the bid referred to in paragraph 1 shall be regarded as the equitable price.
If, after the bid has been made public and before the offer closes for acceptance, the offeror or
any person acting in concert with him/her purchases securities at a price higher than the offer

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price, the offeror shall increase his/her offer so that it is not less than the highest price paid for
the securities so acquired.
Provided that the general principles laid down in Article 3(1) are respected, Member States may
authorise their supervisory authorities to adjust the price referred to in the first subparagraph in
circumstances and in accordance with criteria that are clearly determined. To that end, they may
draw up a list of circumstances in which the highest price may be adjusted either upwards or
downwards, for example where the highest price was set by agreement between the purchaser
and a seller, where the market prices of the securities in question have been manipulated, where
market prices in general or certain market prices in particular have been affected by exceptional
occurrences, or in order to enable a firm in difficulty to be rescued. They may also determine the
criteria to be applied in such cases, for example the average market value over a particular period, the break-up value of the company or other objective valuation criteria generally used in financial analysis.
Any decision by a supervisory authority to adjust the equitable price shall be substantiated and
made public.
(5)

By way of consideration the offeror may offer securities, cash or a combination of both.
However, where the consideration offered by the offeror does not consist of liquid securities admitted to trading on a regulated market, it shall include a cash alternative.
In any event, the offeror shall offer a cash consideration at least as an alternative where he/she
or persons acting in concert with him/her, over a period beginning at the same time as the period
determined by the Member State in accordance with paragraph 4 and ending when the offer closes for acceptance, has purchased for cash securities carrying 5 % or more of the voting rights in
the offeree company.
Member States may provide that a cash consideration must be offered, at least as an alternative,
in all cases.

(6)

In addition to the protection provided for in paragraph 1, Member States may provide for further
instruments intended to protect the interests of the holders of securities in so far as those instruments do not hinder the normal course of a bid.
Article 6
Information concerning bids

(1)

Member States shall ensure that a decision to make a bid is made public without delay and that
the supervisory authority is informed of the bid. They may require that the supervisory authority
must be informed before such a decision is made public. As soon as the bid has been made public, the boards of the offeree company and of the offeror shall inform the representatives of their
respective employees or, where there are no such representatives, the employees themselves.

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(2)

Member States shall ensure that an offeror is required to draw up and make public in good time
an offer document containing the information necessary to enable the holders of the offeree company's securities to reach a properly informed decision on the bid. Before the offer document is
made public, the offeror shall communicate it to the supervisory authority. When it is made public, the boards of the offeree company and of the offeror shall communicate it to the representatives of their respective employees or, where there are no such representatives, to the employees themselves.
Where the offer document referred to in the first subparagraph is subject to the prior approval of
the supervisory authority and has been approved, it shall be recognised, subject to any translation required, in any other Member State on the market of which the offeree company's securities
are admitted to trading, without its being necessary to obtain the approval of the supervisory authorities of that Member State. Those authorities may require the inclusion of additional information in the offer document only if such information is specific to the market of a Member State
or Member States on which the offeree company's securities are admitted to trading and relates
to the formalities to be complied with to accept the bid and to receive the consideration due at
the close of the bid as well as to the tax arrangements to which the consideration offered to the
holders of the securities will be subject.

(3)

The offer document referred to in paragraph 2 shall state at least:

a)

the terms of the bid;

b)

the identity of the offeror and, where the offeror is a company,

c)

the securities or, where appropriate, the class or classes of securities for which the bid is
made;

d)

the consideration offered for each security or class of securities and, in the case of a mandatory bid, the method employed in determining it, with particulars of the way in which that
consideration is to be paid;

e)

the compensation offered for the rights which might be removed as a result of the breakthrough rule laid down in Article 11(4), with particulars of the way in which that compensation is to be paid and the method employed in determining it;

f)

the maximum and minimum percentages or quantities of securities which the offeror undertakes to acquire;

g)

details of any existing holdings of the offeror, and of persons acting in concert with him/her,
in the offeree company;

h)

all the conditions to which the bid is subject;

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i)

the offeror's intentions with regard to the future business of the offeree company and, in so
far as it is affected by the bid, the offeror company and with regard to the safeguarding of
the jobs of their employees and management, including any material change in the conditions of employment, and in particular the offeror's strategic plans for the two companies
and the likely repercussions on employment and the locations of the companies' places of
business;

j)

the time allowed for acceptance of the bid;

k)

where the consideration offered by the offeror includes securities of any kind, information
concerning those securities;

l)

information concerning the financing for the bid;

m)

the identity of persons acting in concert with the offeror or with the offeree company and, in
the case of companies, their types, names, registered offices and relationships with the offeror and, where possible, with the offeree company;

n)

the national law which will govern contracts concluded between the offeror and the holders
of the offeree company's securities as a result of the bid and the competent courts.

(4)

The Commission shall adopt rules for the application of paragraph 3 in accordance with the procedure referred to in Article 18(2).

(5)

Member States shall ensure that the parties to a bid are required to provide the supervisory authorities of their Member State at any time on request with all the information in their possession
concerning the bid that is necessary for the supervisory authority to discharge its functions.
Article 7
Time allowed for acceptance

(1)

Member States shall provide that the time allowed for the acceptance of a bid may not be less
than two weeks nor more than 10 weeks from the date of publication of the offer document. Provided that the general principle laid down in Article 3(1)(f) is respected, Member States may provide that the period of 10 weeks may be extended on condition that the offeror gives at least two
weeks' notice of his/her intention of closing the bid.

(2)

Member States may provide for rules changing the period referred to in paragraph 1 in specific
cases. A Member State may authorise a supervisory authority to grant a derogation from the period referred to in paragraph 1 in order to allow the offeree company to call a general meeting of
shareholders to consider the bid.

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Article 8
Disclosure
(1)

Member States shall ensure that a bid is made public in such a way as to ensure market transparency and integrity for the securities of the offeree company, of the offeror or of any other
company affected by the bid, in particular in order to prevent the publication or dissemination of
false or misleading information.

(2)

Member States shall provide for the disclosure of all information and documents required by Article 6 in such a manner as to ensure that they are both readily and promptly available to the
holders of securities at least in those Member States on the regulated markets of which the offeree company's securities are admitted to trading and to the representatives of the employees of
the offeree company and the offeror or, where there are no such representatives, to the employees themselves.
Article 9
Obligations of the board of the offeree company

(1)

Member States shall ensure that the rules laid down in paragraphs 2 to 5 are complied with.

(2)

During the period referred to in the second subparagraph, the board of the offeree company shall
obtain the prior authorisation of the general meeting of shareholders given for this purpose before taking any action, other than seeking alternative bids, which may result in the frustration of
the bid and in particular before issuing any shares which may result in a lasting impediment to
the offeror's acquiring control of the offeree company.
Such authorisation shall be mandatory at least from the time the board of the offeree company
receives the information referred to in the first sentence of Article 6(1) concerning the bid and
until the result of the bid is made public or the bid lapses. Member States may require that such
authorisation be obtained at an earlier stage, for example as soon as the board of the offeree
company becomes aware that the bid is imminent.

(3)

As regards decisions taken before the beginning of the period referred to in the second subparagraph of paragraph 2 and not yet partly or fully implemented, the general meeting of shareholders shall approve or confirm any decision which does not form part of the normal course of the
company's business and the implementation of which may result in the frustration of the bid.

(4)

For the purpose of obtaining the prior authorisation, approval or confirmation of the holders of
securities referred to in paragraphs 2 and 3, Member States may adopt rules allowing a general
meeting of shareholders to be called at short notice, provided that the meeting does not take
place within two weeks of notification's being given.

(5)

The board of the offeree company shall draw up and make public a document setting out its opinion of the bid and the reasons on which it is based, including its views on the effects of implementation of the bid on all the company's interests and specifically employment, and on the offe-

14

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ror's strategic plans for the offeree company and their likely repercussions on employment and
the locations of the company's places of business as set out in the offer document in accordance
with Article 6(3)(i). The board of the offeree company shall at the same time communicate that
opinion to the representatives of its employees or, where there are no such representatives, to
the employees themselves.
Where the board of the offeree company receives in good time a separate opinion from the representatives of its employees on the effects of the bid on employment, that opinion shall be appended to the document.
(6)

For the purposes of paragraph 2, where a company has a two-tier board structure 'board' shall
mean both the management board and the supervisory board.
Article 10
Information on companies as referred to in Article 1(1)

(1)

Member States shall ensure that companies as referred to in Article 1(1) publish detailed information on the following:
a)

the structure of their capital, including securities which are not admitted to trading on a regulated market in a Member State, where appropriate with an indication of the different classes of shares and, for each class of shares, the rights and obligations attaching to it and the
percentage of total share capital that it represents;

b)

any restrictions on the transfer of securities, such as limitations on the holding of securities
or the need to obtain the approval of the company or other holders of securities, without
prejudice to Article 46 of Directive 2001/34/EC;

c)

significant direct and indirect shareholdings (including indirect shareholdings through pyramid structures and cross shareholdings) within the meaning of Article 85 of Directive
2001/34/EC;

d)

the holders of any securities with special control rights and a description of those rights;

e)

the system of control of any employee share scheme where the control rights are not exercised directly by the employees;

f)

any restrictions on voting rights, such as limitations of the voting rights of holders of a given
percentage or number of votes, deadlines for exercising voting rights, or systems whereby,
with the company's cooperation, the financial rights attaching to securities are separated
from the holding of securities;

g)

any agreements between shareholders which are known to the company and may result in
restrictions on the transfer of securities and/or voting rights within the meaning of Directive
2001/34/EC;

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703

h)

the rules governing the appointment and replacement of board members and the amendment
of the articles of association;

i)

the powers of board members, and in particular the power to issue or buy back shares;

j)

any significant agreements to which the company is a party and which take effect, alter or
terminate upon a change of control of the company following a takeover bid, and the effects
thereof, except where their nature is such that their disclosure would be seriously prejudicial
to the company; this exception shall not apply where the company is specifically obliged to
disclose such information on the basis of other legal requirements;

k)

any agreements between the company and its board members or employees providing for
compensation if they resign or are made redundant without valid reason or if their employment ceases because of a takeover bid.

(2)

The information referred to in paragraph 1 shall be published in the company's annual report as
provided for in Article 46 of Directive 78/660/EEC

(3)

and Article 36 of Directive 83/349/EEC 2.

Member States shall ensure, in the case of companies the securities of which are admitted to
trading on a regulated market in a Member State, that the board presents an explanatory report
to the annual general meeting of shareholders on the matters referred to in paragraph 1.
Article 11
Breakthrough

(1)

Without prejudice to other rights and obligations provided for in Community law for the companies referred to in Article 1(1), Member States shall ensure that the provisions laid down in paragraphs 2 to 7 apply when a bid has been made public.

(2)

Any restrictions on the transfer of securities provided for in the articles of association of the offeree company shall not apply vis--vis the offeror during the time allowed for acceptance of the
bid laid down in Article 7(1).
Any restrictions on the transfer of securities provided for in contractual agreements between the
offeree company and holders of its securities, or in contractual agreements between holders of
the offeree company's securities entered into after the adoption of this Directive, shall not apply
vis--vis the offeror during the time allowed for acceptance of the bid laid down in Article 7(1).

Fourth Council Directive 78/660/EEC of 25 July 1978 on the annual accounts of certain types of companies (OJ L
222, 14.8.1978, p. 11). Directive as last amended by Directive 2003/51/EC of the European Parliament and of the
Council (OJ L 178, 17.7.2003, p. 16).

Seventh Council Directive 83/349/EEC of 13 June 1983 on consolidated accounts (OJ L 193, 18.7.1983, p.1). Directive as last amended by Directive 2003/51/EC.

16

704

(3)

Restrictions on voting rights provided for in the articles of association of the offeree company
shall not have effect at the general meeting of shareholders which decides on any defensive
measures in accordance with Article 9.
Restrictions on voting rights provided for in contractual agreements between the offeree company
and holders of its securities, or in contractual agreements between holders of the offeree company's securities entered into after the adoption of this Directive, shall not have effect at the general meeting of shareholders which decides on any defensive measures in accordance with Article
9.
Multiple-vote securities shall carry only one vote each at the general meeting of shareholders
which decides on any defensive measures in accordance with Article 9.

(4)

Where, following a bid, the offeror holds 75 % or more of the capital carrying voting rights, no
restrictions on the transfer of securities or on voting rights referred to in paragraphs 2 and 3 nor
any extraordinary rights of shareholders concerning the appointment or removal of board members provided for in the articles of association of the offeree company shall apply; multiple-vote
securities shall carry only one vote each at the first general meeting of shareholders following
closure of the bid, called by the offeror in order to amend the articles of association or to remove
or appoint board members.
To that end, the offeror shall have the right to convene a general meeting of shareholders at
short notice, provided that the meeting does not take place within two weeks of notification.

(5)

Where rights are removed on the basis of paragraphs 2, 3, or 4 and/or Article 12, equitable compensation shall be provided for any loss suffered by the holders of those rights. The terms for determining such compensation and the arrangements for its payment shall be set by Member
States.

(6)

Paragraphs 3 and 4 shall not apply to securities where the restrictions on voting rights are compensated for by specific pecuniary advantages.

(7)

This Article shall not apply either where Member States hold securities in the offeree company
which confer special rights to special rights provided for in national law which are compatible with
the Treaty or to cooperatives.
Article 12
Optional arrangements

(1)

Member States may reserve the right not to require companies as referred to in Article 1(1)
which have their registered offices within their territories to apply Article 9(2) and (3) and/or Article 11.

(2)

Where Member States make use of the option provided for in paragraph 1, they shall nevertheless grant companies which have their registered offices within their territories the option, which

17

705

shall be reversible, of applying Article 9(2) and (3) and/or Article 11, without prejudice to Article
11(7).
The decision of the company shall be taken by the general meeting of shareholders, in accordance with the law of the Member State in which the company has its registered office in accordance with the rules applicable to amendment of the articles of association.
The decision shall be communicated to the supervisory authority of the Member State in which
the company has its registered office and to all the supervisory authorities of Member States in
which its securities are admitted to trading on regulated markets or where such admission has
been requested.
(3)

Member States may, under the conditions determined by national law, exempt companies which
apply Article 9(2) and (3) and/or Article 11 from applying Article 9(2) and (3) and/or Article 11 if
they become the subject of an offer launched by a company which does not apply the same Articles as they do, or by a company controlled, directly or indirectly, by the latter, pursuant to Article 1 of Directive 83/349/EEC.

(4)

Member States shall ensure that the provisions applicable to the respective companies are disclosed without delay.

(5)

Any measure applied in accordance with paragraph 3 shall be subject to the authorisation of the
general meeting of shareholders of the offeree company, which must be granted no earlier than
18 months before the bid was made public in accordance with Article 6(1).
Article 13
Other rules applicable to the conduct of bids

Member States shall also lay down rules which govern the conduct of bids, at least as regards the following:
a)

the lapsing of bids;

b)

the revision of bids;

c)

competing bids;

d)

the disclosure of the results of bids;

e)

the irrevocability of bids and the conditions permitted.

Article 14
Information for and consultation of employees' representatives

This Directive shall be without prejudice to the rules relating to information and to consultation of representatives of and, if Member States so provide, co-determination with the employees of the offeror

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706

and the offeree company governed by the relevant national provisions, and in particular those adopted
pursuant to Directives 94/45/EC, 98/59/EC, 2001/86/EC and 2002/14/EC.
Article 15
The right of squeeze-out
(1)

Member States shall ensure that, following a bid made to all the holders of the offeree company's
securities for all of their securities, paragraphs 2 to 5 apply.

(2)

Member States shall ensure that an offeror is able to require all the holders of the remaining securities to sell him/her those securities at a fair price. Member States shall introduce that right in
one of the following situations:
a)

where the offeror holds securities representing not less than 90 % of the capital carrying
voting rights and 90 % of the voting rights in the offeree company, or

b)

where, following acceptance of the bid, he/she has acquired or has firmly contracted to acquire securities representing not less than 90 % of the offeree company's capital carrying
voting rights and 90 % of the voting rights comprised in the bid.

In the case referred to in (a), Member States may set a higher threshold that may not, however,
be higher than 95 % of the capital carrying voting rights and 95 % of the voting rights.
(3)

Member States shall ensure that rules are in force that make it possible to calculate when the
threshold is reached.
Where the offeree company has issued more than one class of securities, Member States may
provide that the right of squeeze-out can be exercised only in the class in which the threshold
laid down in paragraph 2 has been reached.

(4)

If the offeror wishes to exercise the right of squeeze-out he/she shall do so within three months
of the end of the time allowed for acceptance of the bid referred to in Article 7.

(5)

Member States shall ensure that a fair price is guaranteed.

That price shall take the same form as the consideration offered in the bid or shall be in cash.
Member States may provide that cash shall be offered at least as an alternative.
Following a voluntary bid, in both of the cases referred to in paragraph 2(a) and (b), the consideration offered in the bid shall be presumed to be fair where, through acceptance of the bid, the
offeror has acquired securities representing not less than 90 % of the capital carrying voting
rights comprised in the bid.
Following a mandatory bid, the consideration offered in the bid shall be presumed to be fair.

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Article 16
The right of sell-out
(1)

Member States shall ensure that, following a bid made to all the holders of the offeree company's
securities for all of their securities, paragraphs 2 and 3 apply.

(2)

Member States shall ensure that a holder of remaining securities is able to require the offeror to
buy his/her securities from him/her at a fair price under the same circumstances as provided for
in Article 15(2).

(3)

Article 15(3) to (5) shall apply mutatis mutandis.

Article 17
Sanctions

Member States shall determine the sanctions to be imposed for infringement of the national measures
adopted pursuant to this Directive and shall take all necessary steps to ensure that they are put into effect. The sanctions thus provided for shall be effective, proportionate and dissuasive. Member States
shall notify the Commission of those measures no later than the date laid down in Article 21(1) and of
any subsequent change thereto at the earliest opportunity.
Article 18
Committee procedure
(1)

The Commission shall be assisted by the European Securities Committee established by Decision
2001/528/EC (hereinafter referred to as 'the Committee').

(2)

Where reference is made to this paragraph, Articles 5 and 7 of Decision 1999/468/EC shall apply,
having regard to Article 8 thereof, provided that the implementing measures adopted in accordance with this procedure do not modify the essential provisions of this Directive.
The period referred to in Article 5(6) of Decision 1999/468/EC shall be three months.

(3)

Without prejudice to the implementing measures already adopted, four years after the entry into
force of this Directive, the application of those of its provisions that require the adoption of technical rules and decisions in accordance with paragraph 2 shall be suspended. On a proposal from
the Commission, the European Parliament and the Council may renew the provisions concerned in
accordance with the procedure laid down in Article 251 of the Treaty and, to that end, they shall
review them before the end of the period referred to above.
Article 19
Contact committee

(1)

A contact committee shall be set up which has as its functions:

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708

a)

to facilitate, without prejudice to Articles 226 and 227 of the Treaty, the harmonised application of this Directive through regular meetings dealing with practical problems arising in
connection with its application;

b)
(2)

to advise the Commission, if necessary, on additions or amendments to this Directive.

It shall not be the function of the contact committee to appraise the merits of decisions taken by
the supervisory authorities in individual cases.
Article 20
Revision

Five years after the date laid down in Article 21(1), the Commission shall examine this Directive in the
light of the experience acquired in applying it and, if necessary, propose its revision. That examination
shall include a survey of the control structures and barriers to takeover bids that are not covered by
this Directive.
To that end, Member States shall provide the Commission annually with information on the takeover
bids which have been launched against companies the securities of which are admitted to trading on
their regulated markets. That information shall include the nationalities of the companies involved, the
results of the offers and any other information relevant to the understanding of how takeover bids operate in practice.
Article 21
Transposition
(1)

Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive no later than 20 May 2006. They shall forthwith inform the
Commission thereof.
When Member States adopt those provisions, they shall contain a reference to this Directive or
shall be accompanied by such reference on the occasion of their official publication. The methods
of making such reference shall be laid down by the Member States.

(2)

Member States shall communicate to the Commission the text of the main provisions of national
law that they adopt in the fields covered by this Directive.
Article 22
Entry into force

This Directive shall enter into force on the 20th day after that of its publication in the Official Journal of
the European Union.

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Article 23
Addressees
This Directive is addressed to the Member States.

Done at Strasbourg, 21 April 2004.

For the European Parliament

For the Council

The President

The President

P. COX

D. ROCHE

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710

COMMISSION REGULATION (EC) No 2273/2003 of 22 December 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards exemptions
for buy-back programmes and stabilisation of financial instruments
(Text with EEA relevance)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,
Having regard to Directive 2003/6/EC of the European Parliament and the Council of 28 January 2003
on insider dealing and market manipulation (market abuse)1, and in particular Article 8 thereof,
After consulting the Committee of European Securities Regulators (CESR)

for technical advice,

Whereas:
(1)

Article 8 of Directive 2003/6/EC provides that the prohibitions provided therein shall not apply to
trading in own shares in 'buy back' programmes or to the stabilisation of a financial instrument,
provided such trading is carried out in accordance with implementing measures adopted to that effect.

(2)

Activities of trading in own shares in 'buy-back' programmes and of stabilisation of a financial instrument which would not benefit from the exemption of the prohibitions of Directive 2003/6/EC as
provided for by Article 8 thereof, should not in themselves be deemed to constitute market abuse.

(3)

On the other hand, the exemptions created by this Regulation only cover behaviour directly related
to the purpose of the buy-back and stabilisation activities.
Behaviour which is not directly related to the purpose of the buy-back and stabilisation activities
shall therefore be considered as any other action covered by Directive 2003/6/EC and may be the
object of administrative measures or sanctions, if the competent authority establishes that the action in question constitutes market abuse.

(4)

As regards trading in own shares in 'buy-back' programmes, the rules provided for by this Regulation are without prejudice to the application of Council Directive 77/91/EEC on coordination of
safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, in
respect of the formation of public limited liability companies and the maintenance and alteration of
their capital, with a view to making such safeguards equivalent 3.

11

OJ L 96, 12.4.2003, p. 16.

2 CESR was established by Commission Decision 2001/527/EC (OJ L 191,13.7.2001, p. 43).

3

OJ L 26, 31.1.1977, p. 1.

711

(5)

Allowable 'buy back' activities in order to benefit from the exemption of the prohibitions of Directive 2003/6/ EC include issuers needing the possibility to reduce their capital, to meet obligations arising from debt financial instruments exchangeable into equity instruments, and to meet
obligations arising from allocations of shares to employees.

(6)

Transparency is a prerequisite for prevention of market abuse. To this end Member States may officially appoint mechanisms to be used for public disclosure of information required to be publicly
disclosed under this Regulation.

(7)

Issuers having adopted 'buy-back' programmes shall inform their competent authority and, wherever required, the public.

(8)

Trading in own shares in 'buy-back' programmes may be carried out through derivative financial
instruments.

(9)

In order to prevent market abuse, the daily volume of trading in own shares in 'buy-back' programmes shall be limited. However, some flexibility is necessary in order to respond to given market conditions such as a low level of transactions.

(10) Particular attention has to be paid to the selling of own shares during the life of a 'buy-back' programme, to the possible existence of closed periods within issuers during which transactions are
prohibited and to the fact that an issuer may have legitimate reasons to delay public disclosure of
inside information.
(11) Stabilisation transactions mainly have the effect of providing support for the price of an offering of
relevant securities during a limited time period if they come under selling pressure, thus alleviating sales pressure generated by short term investors and maintaining an orderly market in the relevant securities. This is in the interest of those investors having subscribed or purchased those
relevant securities in the context of a significant distribution, and of issuers. In this way, stabilisation can contribute to greater confidence of investors and issuers in the financial markets.
(12) Stabilisation activity may be carried out either on or off a regulated market and may be carried out
by use of financial instruments other than those admitted or to be admitted to the regulated market which may influence the price of the instrument admitted or to be admitted to trading on a
regulated market.
(13) Relevant securities shall include financial instruments that become fungible after an initial period
because they are substantially the same, although they have different initial dividend or interest
payment rights.
(14) In relation to stabilisation, block trades shall not be considered as a significant distribution of relevant securities as they are strictly private transactions.
(15) When Member States permit, in the context of an initial public offer, trading prior to the beginning
of the official trading on a regulated market, the permission covers 'when issued trading'.

712

(16) Market integrity requires the adequate public disclosure of stabilisation activity by issuers or by
entities undertaking stabilisation, acting or not on behalf of these issuers. Methods used for adequate public disclosure of such information should be efficient and can take into account market
practices accepted by competent authorities.
(17) There should be adequate coordination in place between all investment firms and credit institutions
undertaking stabilisation. During stabilisation, one investment firm or credit institution shall act as
a central point of inquiry for any regulatory intervention by the competent authority in each Member State concerned.
(18) In order to avoid confusion of market participants, stabilisation activity should be carried out by
taking into account the market conditions and the offering price of the relevant security and transactions to liquidate positions established as a result of stabilisation activity should be undertaken
to minimise market impact having due regard to prevailing market conditions.
(19) Overallotment facilities and 'greenshoe options' are closely related to stabilisation, by providing
resources and hedging for stabilisation activity.
(20) Particular attention should be paid to the exercise of an overallotment facility by an investment
firm or a credit institution for the purpose of stabilisation when it results in a position uncovered
by the 'greenshoe option'.
(21) The measures provided for in this Regulation are in accordance with the opinion of the European
Securities Committee,
HAS ADOPTED THIS REGULATION:
CHAPTER I
DEFINITIONS

Article 1
Subject matter
This Regulation lays down the conditions to be met by buyback programmes and the stabilisation of financial instruments in order to benefit from the exemption provided for in Article 8 of Directive
2003/6/EC.
Article 2
Definitions
For the purposes of this Regulation, the following definitions shall apply in addition to those laid down in
Directive 2003/6/EC:

713

(1)

'investment firm' means any legal person as defined in point (2) of Article 1 of Council Directive
93/22/EEC 4;

(2)

'credit institution' means a legal person as defined in Article 1(1) of Directive 2000/12/EC of the
European Parliament and the Council 5;

(3)

'buy-back programmes' means trading in own shares in accordance with Articles 19 to 24 of Council Directive 77/91/EEC;

(4)

'time-scheduled 'buy-back' programme' means a 'buy-back' programme where the dates and quantities of securities to be traded during the time period of the programme are set out at the time of
the public disclosure of the 'buy-back' programme;

(5)

'adequate public disclosure' means disclosure made in accordance with the procedure laid down in
Articles 102(1) and 103 of Directive 2001/34/EC of the European Parliament and of the Council 6;

(6)

relevant securities' means transferable securities as defined in Directive 93/22/EEC, which are admitted to trading on a regulated market or for which a request for admission to trading on such a
market has been made, and which are the subject of a significant distribution;

(7)

'stabilisation' means any purchase or offer to purchase relevant securities, or any transaction in
associated instruments equivalent thereto, by investment firms or credit institutions, which is undertaken in the context of a significant distribution of such relevant securities exclusively for supporting the market price of these relevant securities for a predetermined period of time, due to a
selling pressure in such securities;

(8)

'associated instruments' means the following financial instruments (including those which are not
admitted to trading on a regulated market, or for which a request for admission to trading on such
a market has not been made, provided that the relevant competent authorities have agreed to
standards of transparency for transactions in such financial instruments):
a)

contracts or rights to subscribe for, acquire or dispose of relevant securities;

b)

financial derivatives on relevant securities;

c)

where the relevant securities are convertible or exchangeable debt instruments, the securities
into which such convertible or exchangeable debt instruments may be converted or exchanged;

OJ L 141, 11.6.1993, p. 27.

OJ L 126, 26.5.2000, p. 1.

OJ L 184, 6.7.2001, p. 1.

714

d)

instruments which are issued or guaranteed by the issuer or guarantor of the relevant securities and whose market price is likely to materially influence the price of the relevant securities, or vice versa;

e)

where the relevant securities are securities equivalent to shares, the shares represented by
those securities (and any other securities equivalent to those shares).

(9)

'significant distribution' means an initial or secondary offer of relevant securities, publicly announced and distinct from ordinary trading both in terms of the amount in value of the securities
offered and the selling methods employed;

(10) 'offeror' means the prior holders of, or the entity issuing, the relevant securities;
(11) 'allotment' means the process or processes by which the number of relevant securities to be received by investors who have previously subscribed or applied for them is determined;
(12) 'ancillary stabilisation' means the exercise of an overallotment facility or of a 'greenshoe option' by
investment firms or credit institutions, in the context of a significant distribution of relevant securities, exclusively for facilitating stabilisation activity;
(13) 'overallotment facility' means a clause in the underwriting agreement or lead management agreement which permits acceptance of subscriptions or offers to purchase a greater number of relevant
securities than originally offered; 'greenshoe option' means an option granted by the offeror in favour of the investment firm(s) or credit institution(s) involved in the offer for the purpose of covering overallotments, under the terms of which such firm(s) or institution institution(s) may purchase up to a certain amount of relevant securities at the offer price for a certain period of time
after the offer of the relevant securities.
(14) 'greenshoe option' means an option granted by the offeror in favour of the investment firm(s) or
credit institution(s) involved in the offer for the purpose of covering overallotments, under the
terms of which such firm(s) or institutions) may purchase up to a certain amount of relevant securities at the offer price for a certain period of time after the offer of the relevant securities.
CHAPTER II
'BUY-BACK' PROGRAMMES

Article 3
Objectives of buy-back programmes
In order to benefit from the exemption provided for in Article 8 of Directive 2003/6/EC, a buy-back programme must comply with Articles 4, 5 and 6 of this Regulation and the sole purpose of that buy-back
programme must be to reduce the capital of an issuer (in value or in number of shares) or to meet obligations arising from any of the following:

715

a)

debt financial instruments exchangeable into equity instruments;

b)

employee share option programmes or other allocations of shares to employees of the issuer
or of an associate company.
Article 4
Conditions for 'buy-back' programmes and disclosure

(1)

The 'buy-back' programme must comply with the conditions laid down by Article 19(1) of Directive
77/91/EEC.

(2)

Prior to the start of trading, full details of the programme approved in accordance with Article
19(1) of Directive 77/91/ EEC must be adequately disclosed to the public in Member States in
which an issuer has requested admission of its shares to trading on a regulated market.
Those details must include the objective of the programme as referred to in Article 3, the maximum consideration, the maximum number of shares to be acquired and the duration of the period
for which authorisation for the programme has been given.
Subsequent changes to the programme must be subject to adequate public disclosure in Member
States.

(3)

The issuer must have in place the mechanisms ensuring that it fulfils trade reporting obligations to
the competent authority of the regulated market on which the shares have been admitted to trading. These mechanisms must record each transaction related to 'buy-back' programmes, including
the information specified in Article 20(1) of Directive 93/22/EEC.

(4)

The issuer must publicly disclose details of all transactions as referred to in paragraph 3 no later
than the end of the seventh daily market session following the date of execution of such transactions.
Article 5
Conditions for trading

(1)

In so far as prices are concerned, the issuer must not, when executing trades under a 'buy-back'
programme, purchase shares at a price higher than the higher of the price of the last independent
trade and the highest current independent bid on the trading venues where the purchase is carried
out.
If the trading venue is not a regulated market, the price of the last independent trade or the highest current independent bid taken in reference shall be the one of the regulated market of the
Member State in which the purchase is carried out.
Where the issuer carries out the purchase of own shares through derivative financial instruments,
the exercise price of those derivative financial instruments shall not be above the higher of the
price of the last independent trade and the highest current independent bid.

716

(2)

In so far as volume is concerned, the issuer must not purchase more than 25 % of the average
daily volume of the shares in any one day on the regulated market on which the purchase is carried out.
The average daily volume figure must be based on the average daily volume traded in the month
preceding the month of public disclosure of that programme and fixed on that basis for the authorised period of the programme.
Where the programme makes no reference to that volume, the average daily volume figure must
be based on the average daily volume traded in the 20 trading days preceding the date of purchase.

(3)

For the purposes of paragraph 2, in cases of extreme low liquidity on the relevant market, the issuer may exceed the 25 % limit, provided that the following conditions are met:
a)

the issuer informs the competent authority of the relevant market, in advance, of its intention
to deviate from the 25 % limit;

b)

the issuer discloses adequately to the public the fact that it may deviate from the 25 % limit;

c)

the issuer does not exceed 50 % of the average daily volume.

Article 6
Restrictions

(1)

In order to benefit from the exemption provided by Article 8 of Directive 2003/6/EC, the issuer
shall not, during its participation in a buy-back programme, engage in the following trading:
a)

selling of own shares during the life of the programme;

b)

trading during a period which, under the law of the Member State in which trading takes
place, is a closed period;

c)

trading where the issuer has decided to delay the public disclosure of inside information in accordance with Article 6(2) of Directive 2003/6/EC.

(2)

Paragraph 1(a) shall not apply if the issuer is an investment firm or credit institution and has established effective information barriers (Chinese Walls) subject to supervision by the competent
authority, between those responsible for the handling of inside information related directly or indirectly to the issuer and those responsible for any decision relating to the trading of own shares
(including the trading of own shares on behalf of clients), when trading in own shares on the basis
of such any decision.
Paragraphs 1(b) and (c) shall not apply if the issuer is an investment firm or credit institution and
has established effective information barriers (Chinese Walls) subject to supervision by the competent authority, between those responsible for the handling of inside information related directly or

717

indirectly to the issuer (including trading decisions under the 'buy-back' programme) and those responsible for the trading of own shares on behalf of clients, when trading in own shares on behalf
of those clients.
(3)

Paragraph 1 shall not apply if:

a)

the issuer has in place a time-scheduled 'buy-back' programme; or

b)

the 'buy-back' programme is lead-managed by an investment firm or a credit institution which

makes its trading decisions in relation to the issuer's shares independently of, and without influence by, the issuer with regard to the timing of the purchases.
CHAPTER III
STABILISATION OF A FINANCIAL INSTRUMENT
Article 7
Conditions for stabilisation

In order to benefit from the exemption provided for in Article 8 of Directive 2003/6/EC, stabilisation of a
financial instrument must be carried out in accordance with Articles 8, 9 and 10 of this Regulation.
Article 8
Time-related conditions for stabilisation
(1)

Stabilisation shall be carried out only for a limited time period.

(2)

In respect of shares and other securities equivalent to shares, the time period referred to in paragraph 1 shall, in the case of an initial offer publicly announced, start on the date of commencement of trading of the relevant securities on the regulated market and end no later than 30 calendar days thereafter.
Where the initial offer publicly announced takes place in a Member State that permits trading prior
to the commencement of trading on a regulated market, the time period referred to in paragraph 1
shall start on the date of adequate public disclosure of the final price of the relevant securities and
end no later than 30 calendar days thereafter, provided that any such trading is carried out in
compliance with the rules, if any, of the regulated market on which the relevant securities are to
be admitted to trading, including any rules concerning public disclosure and trade reporting.

(3)

In respect of shares and other securities equivalent to shares, the time period referred to in paragraph 1 shall, in the case of a secondary offer, start on the date of adequate public disclosure of
the final price of the relevant securities and end no later than 30 calendar days after the date of
allotment.

(4)

In respect of bonds and other forms of securitised debt (which are not convertible or exchangeable
into shares or into other securities equivalent to shares), the time period referred to in paragraph
1 shall start on the date of adequate public disclosure of the terms of the offer of the relevant se-

718

curities (i.e. including the spread to the benchmark, if any, once it has been fixed) and end, whatever is earlier, either no later than 30 calendar days after the date on which the issuer of the instruments received the proceeds of the issue, or no later than 60 calendar days after the date of
allotment of the relevant securities.
(5)

In respect of securitised debt convertible or exchangeable into shares or into other securities
equivalent to shares, the time period referred to in paragraph 1 shall start on the date of adequate
public disclosure of the final terms of the offer of the relevant securities and end, whatever is earlier, either no later than 30 calendar days after the date on which the issuer of the instruments received the proceeds of the issue, or no later than 60 calendar days after the date of allotment of
the relevant securities.
Article 9
Disclosure and reporting conditions for stabilisation

(1)

The following information shall be adequately publicly disclosed by issuers, offerors, or entities undertaking the stabilisation acting, or not, on behalf of such persons, before the opening of the offer period of the relevant securities:
a)

the fact that stabilisation may be undertaken, that there is no assurance that it will be undertaken and that it may be stopped at any time;

b)

the fact that stabilisation transactions are aimed to support the market price of the relevant
securities;

c)

the beginning and end of the period during which stabilisation may occur;

d)

the identity of the stabilisation manager, unless this is not known at the time of publication in
which case it must be publicly disclosed before any stabilisation activity begins;

e)

the existence and maximum size of any overallotment facility or 'greenshoe option', the exercise period of the 'greenshoe option' and any conditions for the use of the overallotment facility or exercise of the 'greenshoe option'.

The application of the provisions of this paragraph shall be suspended for offers under the scope of
application of the measures implementing Directive 2004//EC (prospectus Directive), from the
date of application of these measures.
(2)

Without prejudice to Article 12(1)(c) of Directive 2003/6/EC, the details of all stabilisation transactions must be notified by issuers, offerors, or entities undertaking the stabilisation acting, or not,
on behalf of such persons, to the competent authority of the relevant market no later than the end
of the seventh daily market session following the date of execution of such transactions.

719

(3)

Within one week of the end of the stabilisation period, the following information must be adequately disclosed to the public by issuers, offerors, or entities undertaking the stabilisation acting,
or not, on behalf of such persons:
a)

whether or not stabilisation was undertaken;

b)

the date at which stabilisation started;

c)

the date at which stabilisation last occurred;

d)

the price range within which stabilisation was carried out, for each of the dates during which
stabilisation transactions were carried out.

(4)

Issuers, offerors, or entities undertaking the stabilisation, acting or not, on behalf of such persons,
must record each stabilisation order or transaction with, as a minimum, the information specified
in Article 20(1) of Directive 93/22/EEC extended to financial instruments other than those admitted or going to be admitted to the regulated market.

(5)

Where several investment firms or credit institutions undertake the stabilisation acting, or not, on
behalf of the issuer or offeror, one of those persons shall act as central point of inquiry for any request from the competent authority of the regulated market on which the relevant securities have
been admitted to trading.
Article 10
Specific price conditions

(1)

In the case of an offer of shares or other securities equivalent to shares, stabilisation of the relevant securities shall not in any circumstances be executed above the offering price.

(2)

In the case of an offer of securitised debt convertible or exchangeable into instruments as referred
to in paragraph 1, stabilisation of those instruments shall not in any circumstances be executed
above the market price of those instruments at the time of the public disclosure of the final terms
of the new offer.
Article 11
Conditions for ancillary stabilisation

In order to benefit from the exemption provided for in Article 8 of Directive 2003/6/EC, ancillary stabilisation must be undertaken in accordance with Article 9 of this Regulation and with the following:
a)

relevant securities may be overallotted only during the subscription period and at the offer
price;

b)

a position resulting from the exercise of an overallotment facility by an investment firm or

credit institution which is not covered by the 'greenshoe option' may not exceed 5 % of the
original offer;

10

720

c)

the greenshoe option may be exercised by the beneficiaries of such an option only where relevant securities have been overallotted;

d)

the greenshoe option may not amount to more than 15 % of the original offer;

e)

the exercise period of the greenshoe option must be the same as the stabilisation period required under Article 8;

f)

the exercise of the greenshoe option must be disclosed to the public promptly, together with
all appropriate details, including in particular the date of exercise and the number and nature
of relevant securities involved.
CHAPTER IV
FINAL PROVISION
Article 12
Entry into force

This Regulation shall enter into force in Member States on the day of its publication in the Official Journal of the European Union.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 22 December 2003.
For the Commission
Frederik BOLKESTEIN
Member of the Commission

11

721

This translation was carried out by the professional translation agency GlobalDenmark Translations on
behalf of the Danish Financial Supervisory Authority. The text is to be regarded as an unofficial translation based on the latest official Executive Order. Only the Danish document has legal validity.

Executive Order on Issuers' Duty to Provide Information1

Executive Order no. 657 of 22 June 2012

The following shall be laid down pursuant to section 27(7), section 30 and section 93(4) of the Securities Trading etc. Act, cf. Consolidating Act no. 883 of 9 August 2011:

Scope, etc.
1

(1) This Executive Order stipulates which issuers are covered by the requirements of section
27(7) and (8), section 27a, section 28 and section 29(1), 3rd clause of the Securities Trading etc. Act and lays down more detailed regulations regarding the obligations of such issuers. The Executive Order does not, however, lay down the scope of obligations for issuers of
securities admitted to trading on alternative market places.
(2) The requirements in section 27(7) and (8), section 27a, section 28 and section 29(1), 3rd
clause of the Securities Trading etc. Act and of this Executive Order shall only apply to issuers of securities admitted to trading on a regulated market and which have Denmark as
home country, cf. subsection (3).
(3) Denmark shall be considered the home country in the following circumstances:
1)

For issuers of shares and for issuers of debt instruments the nominal value per unit of
which is less than EUR 1,000 (or in a currency other than euro, provided that the nominal value per unit is less than EUR 1,000 at the date of issue, unless this value is almost
equivalent to EUR 1,000), if
a)

the issuer has its registered office in Denmark, or

This Executive Order contains provisions that implement parts of European Parliament and Council Directive
2004/109/EC of 15 December 2004 on the harmonisation of transparency requirements in relation to information
about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC
(Official Journal 2004, no. L 390, p. 38) (Transparency Directive) and parts of European Commission Directive
2007/14/EC of 8 March 2007 on implementation of certain provisions of Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (Official Journal, no. L 69, p. 27) and parts of Directive 2010/73/EU of the European
Parliament and of the Council of 24 November 2010 amending Directives 2003/71/EC on the prospectus to be
published when securities are offered to the public or admitted to trading and 2004/109/EC on the harmonisation
of transparency requirements in relation to information about issuers whose securities are admitted to trading on
a regulated market (Official Journal 2010, no. L 327, p. 1).

722

b)

the issuer is registered in a country outside the European Union with which the Union has not entered into an agreement for the financial area (third country) and has
Denmark as home country in accordance with Article 2(1)(m)(iii) of Directive
2003/71/EC.

2)

For issuers not covered by no. 1, if the issuer has chosen Denmark as its home country,
and the issuer
a)

has its registered office in Denmark, or

b)

has securities admitted to trading on a regulated market in Denmark.

(4) Issuers not covered by subsection (3), no. 1 and which have their registered office in Denmark shall choose a home country within the European Union or a country with which the
Union has entered into an agreement for the financial area. The choice shall be binding for 3
years. If an issuer chooses Denmark as its home country, the issuer may not choose other
countries as its home country. The issuer shall publish the choice pursuant to section 2.
(5) Notwithstanding subsection (2), the requirements in section 27(7) and (8), section 27a(1),
section 28 and section 29(1), 3rd clause of the Securities Trading etc. Act and the requirements of this Executive Order shall apply to issuers with securities admitted to trading on a
regulated market in Denmark, even if the issuers do not have Denmark as their home country, with the deviations consequential upon this Executive Order.
(6) In this Executive Order, securities" shall mean negotiable securities covered by section
2(1), no. 1 of the Securities Trading etc. Act.
(7) Debt securities shall mean bonds or other forms of transferable debt instruments, with the
exception of securities which are equivalent to shares in companies or which, if converted or
if the rights conferred by them are exercised, give rise to a right to acquire shares or securities equivalent to shares.
(8) If an issuer's securities have been admitted to trading on a regulated market without the
consent of the issuer, compliance with the disclosure obligations for issuers under the Securities Trading etc. Act and this Executive Order shall rest with the person instigating admission to trading of the security.
(9) This Executive Order shall not apply to units in collective investment schemes covered by
the Investment Associations etc. Act.
Publication requirements
2

(1) A securities issuer required to publish information in the manner prescribed in section
27a(1) of the Securities Trading etc. Act, or pursuant to section 1(4), section 5 or section 6
of this Executive Order shall ensure that the dissemination of the information takes place in
accordance with subsections (2) to (8).

723

(2) The information shall be disseminated in a manner that ensures that, as far as possible, the
information reaches the public throughout the European Union and countries with which the
Union has entered into an agreement for the financial area. As far as possible, dissemination
shall take place simultaneously in Denmark and in other Member States of the European Union and countries with which the Union has entered into an agreement for the financial area.
Dissemination shall be as quickly as possible and on a non-discriminatory basis.
(3) The information shall be distributed by use of such media as may reasonably be relied upon
for the effective dissemination of information to the public throughout the European Union
and countries with which the Union has entered into an agreement for the financial area.
(4) The information shall be announced to the media as a complete and unedited text. However,
publication of annual reports, half-year interim reports, interim management statements and
quarterly interim reports, which an issuer is required to publish pursuant to section 27(7)
and (8) of the Securities Trading etc. Act, may be through an announcement via these media
indicating the website where the relevant documents are accessible. The reference may not,
however, solely be to the location at which the information is stored pursuant to section
27a(3) of the Securities Trading etc. Act.
(5) The announcement to the media shall be in such a way as to:
1)

ensure the security of the announcement,

2)

minimise the risk of data corruption and unauthorised access, and

3)

provide clear reference to the source of the information.

(6) The issuer shall ensure safe receipt by rectifying as quickly as possible any errors or disruptions in forwarding the information. The issuer shall not be responsible for systematic errors
or omissions in the media to which the information has been announced.
(7) The announcement to the media shall be in such a way as to:
1)

make it clear that the information is subject to a requirement to publish pursuant to

section 27a(1) of the Securities Trading etc. Act or pursuant to this Executive Order,

2)

clearly identify the relevant issuer, and

3)

clearly state the topic of the information as well as the time and date that the issuer
announced the information.

(8) Issuers shall be able to document the following for the Danish FSA in relation to any publication of information:
1)

The name of the person who sent the information to the media.

724

2)

Detailed information on approval of the security.

3)

The time and date at which the information was sent to the media.

4)

The medium in which the information was forwarded.

5)

If relevant, detailed information about any restrictions the issuer has imposed on the information.

Information on holdings of shares etc. issued by issuers which do not have Denmark as their
home country
3

(1) Issuers which do not have Denmark as their home country, which are covered by section
1(5), and which pursuant to section 28(1) of the Securities Trading etc. Act, shall publish information regarding holdings of own shares, shall publish this information as soon as possible and no later than four trading days after the acquisition or disposal.
(2) Issuers which do not have Denmark as their home country, which are covered by section
1(5), and which pursuant to section 29(1), 3rd clause of the Securities Trading etc. Act,
shall publish announcements regarding holdings of shares, shall publish the announcement
no later than three trading days after receipt.
Interim management statements

(1) An issuer of shares which, pursuant to section 27(8) of the Securities Trading etc. Act, is required to publish interim management statements, shall ensure that the content of the interim management statements complies with subsection (2). An issuer which publishes quarterly interim reports is not required to publish interim management statements.
(2) The interim management statement shall contain information covering the period between
the beginning of the relevant six-month period and the date of publication of the interim
management statement. The interim management statement shall provide:
1)

An account of significant events and transactions in the relevant period, and their impact on the financial position of the issuer and the financial position of undertakings
controlled by the issuer.

2)

A general description of the financial position and results of the issuer during the relevant period and the financial position and results of undertakings controlled by the issuer during the relevant period.
Additional information

(1) An issuer of shares shall make public without delay all changes in the rights attaching to the
various classes of shares, including changes in the rights attaching to derivative instruments
issued by the issuer itself and giving access to acquire the shares of that issuer.

725

(2) An issuer of securities other than shares shall make public without delay all changes in the
rights of holders of these, including changes in the terms and conditions of these securities
which could indirectly affect those rights, resulting in particular from a change in loan terms
or in interest rates.
(3) An issuer shall make public without delay new loan issues and any guarantees or collateral
in respect thereof. Without prejudice to Directive 2003/6/EC, this section shall not, however,
apply to a public international body of which at least one Member State of the European Union or countries with which the Union has entered into an agreement for the financial area,
is a member.
6.

At the end of each calendar month, an issuer of shares shall publish the total number of voting rights and the total amount of capital in the company in which an increase or decrease
has occurred.
Languages

(1) An issuer which is required to publish information in the manner prescribed in section 27a(1)
of the Securities Trading etc. Act, or pursuant to section 1(4), section 5 and section 6 of this
Executive Order, shall ensure that the publication takes place in one or more languages in
accordance with subsections (2) to (6).
(2) An issuer which has Denmark as its home country and whose securities have alone been
admitted to trading on a regulated market in Denmark shall publish information in Danish.
(3) An issuer which has Denmark as its home country and whose securities have been admitted
to trading on a regulated market in Denmark and on a regulated market in one or more
Member States of the European Union or countries with which the Union has entered into an
agreement for the financial area, shall publish information in Danish. In addition, the issuer
shall publish information in English, or a language accepted by the competent authority in
the relevant Member State(s) of the European Union or countries with which the Union has
entered into an agreement for the financial area where the securities have been admitted to
trading.
(4) An issuer which has Denmark as its home country and whose securities have not been admitted to trading on a regulated market in Denmark, but on a regulated market in one or
more Member States of the European Union or countries with which the Union has entered
into an agreement for the financial area, shall either publish information in English or a language accepted by the competent authority in the relevant Member State(s) of the European
Union or countries with which the Union has entered into an agreement for the financial area. Furthermore, the issuer shall publish information in Danish or English.
(5) An issuer which does not have Denmark as its home country and whose securities have been
admitted to trading on a regulated market in Denmark shall publish information in English,
Danish, Norwegian or Swedish.

726

(6) An issuer of debt instruments, the nominal value per unit of which is at least EUR 100,000 or
the nominal value per unit of which at the date of issue corresponds to at least EUR 100,000
when the debt instruments have been issued in another currency than euro and whose debt
instruments have been admitted to trading on a regulated market in Denmark or in one or
more Member States of the European Union or countries with which the Union has entered
into an agreement for the financial area, may, notwithstanding subsections (1) to (5), publish information in English, cf. however, subsection (7). Furthermore, the issuer may publish
information in Danish, Swedish or Norwegian, if this language is also accepted by the competent authority in the relevant countries.
(7) An issuer of debt instruments, the nominal value per unit of which is at least EUR 50,000,
or, with regard to debt instruments in another currency than euro, the nominal value per
unit of which at the date of issue corresponds to at least EUR 50,000, if the debt instruments had already been admitted to trading on a regulated market in the European Union or
countries with which the Union has entered into an agreement for the financial area, before
31 December 2010, may, throughout the entire term of the debt instrument, and notwithstanding subsections (1) to (5), publish information in English. Furthermore, the issuer may
publish information in Danish, Swedish or Norwegian, if this language is also accepted by the
competent authority in the relevant countries.
Registration and storage of information
8

(1) An issuer of securities required to submit information pursuant to section 27a(2) and (3) of
the Securities Trading etc. Act shall ensure that the submission of information takes place in
accordance with subsection (3).
(2) Section 27a(2) and (3) of the Securities Trading etc. Act and this Executive Order shall apply
correspondingly to issuers which are required to publish information according to section
1(4), section 5 and section 6 of this Executive Order. The provision of the first clause shall
not apply, however, to issuers which do not have Denmark as their home country, and which
are covered by section 1(5).
(3) Information shall be submitted digitally to the Danish FSA IT system and by using a digital
signature which meets the technical specifications set by the Danish FSA. However, foreign
issuers which have Denmark as their home country, cf. section 1(3), no. 1, b), or section
1(3), no. 2 are not required to use a digital signature.
Information for holders of securities

(1) An issuer of shares which is not covered by the Companies Act, but which is covered by section 1(3), no. 1, b), or section 1(5) shall comply with the requirements mentioned in subsections (2)

to (4).

(2) The issuer shall ensure equal treatment of all shareholders who are in the same position.

727

(3) The issuer shall ensure that all the facilities and information necessary to enable shareholders to exercise their rights are available in Denmark, or, if the issuer is covered by section
1(5), in a Member State of the European Union or countries with which the Union has entered into an agreement for the financial area where the issuer has its home country. The issuer shall also ensure that the integrity of data is preserved. Without prejudice to the law of
the country in which the issuer is registered, shareholders shall not be prevented from exercising their rights by power of attorney. In this regard, the issuer shall:
1)

Provide information on the time, place, and agenda of general meetings, the total number of shares and voting rights, and the rights of shareholders to participate in general
meetings.

2)

Make available a power-of-attorney form on paper or, where relevant, by electronic

means, to each person entitled to vote at a general meeting, together with the notice of
the meeting or, on request, after announcement of the meeting.

3)

Designate as its agent a bank through which shareholders may exercise their financial
rights.

4)

Publish notices or distribute circulars concerning the distribution and payment of dividends, the issue of new shares, as well as any allotment, subscription, renunciation or
conversion schemes.

(4) The issuer may convey information to shareholders by electronic means, provided such a decision is taken at a general meeting and meets at least the following conditions:
1)

The use of electronic means may not depend upon the registered office or residence of
the shareholder or, in the cases referred to in section 4 of the Executive Order on Major
Shareholders, the registered office or place of residence of the natural or legal persons.

2)

Identification arrangements shall be ensured so that the shareholders, or the natural or

legal persons entitled to exercise, or to direct the exercise, of voting rights, are actually
informed.

3)

Shareholders, or in the cases referred to in section 4, nos. 1-5 of the Executive Order on
Major Shareholders, the natural or legal persons entitled to acquire, dispose of or exercise voting rights, shall be contacted in writing to request their consent to conveying information in electronic form. If they do not object within a reasonable period of time,
their consent shall be deemed to have been given. They shall be able to request, at any
time in the future, that information be conveyed in writing.

4)

Any apportionment of the costs entailed in the conveyance of such information by electronic means shall be determined by the issuer in compliance with the principle of equal
treatment laid down in subsection (2).

728

10

(1) An issuer of debt instruments which is covered by section 1(3) or section 1(5), shall meet
the requirements mentioned in subsections (2) to (5).
(2) The issuer shall ensure that all holders of debt instruments ranking pari passu are given
equal treatment in respect of all the rights attaching to those debt instruments.
(3) The issuer shall ensure that all the facilities and information necessary to enable holders of
debt instruments to exercise their rights are publicly available in Denmark, or, if the issuer
is covered by section 1(5), in the Member State of the European Union or countries with
which the Union has entered into an agreement for the financial area where the issuer has
its home country. The issuer shall also ensure that the integrity of data is preserved. Without prejudice to the law of the country in which the issuer is registered, holders of debt instruments shall not be prevented from exercising their rights by power of attorney. In this
regard, the issuer shall:
1)

Publish notices, or distribute circulars, concerning the place, time and agenda of meetings of holders of debt instruments, the payment of interest, the exercise of any conversion, exchange, subscription or cancellation rights, and redemption, as well as the right
of these holders to participate therein.

2)

Make available a power-of-attorney form on paper or, where relevant, by electronic

means, to each person entitled to vote at a meeting of holders of debt instruments, together with the notice of the meeting or, on request, after announcement of the meeting.

3)

Designate as its agent a bank through which holders of debt instruments may exercise
their financial rights.

(4) If only holders of debt instruments with a nominal value per unit of no less than EUR
100,000 or, with regard to debt instruments denominated in a currency other than euro,
with a nominal value per unit at the date of the issue equivalent to no less than EUR
100,000, are to be invited to a meeting, the issuer may choose as venue any Member State
of the European Union or countries with which the Union has entered into an agreement for
the financial area, provided that all the facilities and information necessary to enable such
holders to exercise their rights are made available in the relevant country, cf. however, subsection (5).
(5) Subsection (4) shall also apply for issuers of debt instruments, the nominal value per unit of
which is at least EUR 50,000, or, with regard to debt instruments in another currency than
euro, the nominal value per unit of which at the date of issue corresponds to at least EUR
50,000, if these debt instruments had already been admitted to trading on a regulated market in the European Union or countries with which the Union has entered into an agreement
for the financial area, before 31 December 2010, and throughout the entire term of the debt

729

instrument, provided that all the facilities and information necessary to enable such holders
to exercise their rights are made available in the Member State chosen by the issuer.
(6) Issuers which are covered by section 1(3) and section 1(5) or which pursuant to subsection
(4) or (5) have chosen a venue in Denmark, may convey information to holders of debt instruments in electronic format, provided such a decision is taken at a meeting and meets at
least the following conditions:
1)

The use of electronic means shall not depend upon the location of the registered office
or residence of the holder of the debt instrument or of a proxy representing that holder.

2)

Identification arrangements shall be established so that the holders of debt instruments

are actually informed.

3)

The holders of debt instruments shall be contacted in writing to request their consent to
convey information in electronic format and if they do not object within a reasonable period of time, their consent shall be deemed to have been given. They shall be able to
request, at any time in the future, that information be conveyed in writing.

4)

Any apportionment of the costs entailed in the conveyance of information in electronic

form shall be determined by the issuer in accordance with the principle of equal treatment in subsection (2).

Special regulations for issuers registered in another Member State of the European Union or
countries with which the Union has entered into an agreement for the financial area
11

(1) A securities issuer registered in another Member State of the European Union or countries
with which the Union has entered into an agreement for the financial area and which, pursuant to section 27(7), 1st clause of the Securities Trading etc. Act shall publish an annual report, shall ensure that the annual report is prepared in accordance with subsections (2) to
(6).
(2) The annual report shall contain the following:
1)

The audited financial statements.

2)

A management's review.

3)

A statement by management where the name and function of each member in relation
to the company is clearly indicated and in which they state whether
a)

the annual report has been presented in accordance with the requirements provided
for by legislation and any requirements provided for by the articles of association or
by agreement,

b)

the annual report gives a fair presentation of the undertaking's assets and liabilities,
financial position and results for the year, and if consolidated financial statements

730

are prepared, the group's assets and liabilities, financial position and results for the
year, and
c)

the management's review contains a true review of the development of the activities
and financial situation of the undertaking and, if consolidated financial statements
have been prepared, the activities and financial situation of the group, as well as a
description of the principal risks and uncertainty factors to which the undertaking or
group, respectively, may be subject.

(3) If the issuer mentioned in subsection (1) shall prepare consolidated financial statements according to Directive 83/349/ EEC, the audited annual report shall include such consolidated
financial statements, prepared in accordance with international accounting standards, as
adopted pursuant to Council Regulation no. 1606/2002/EC, as well as the issuer's financial
statements presented in accordance with national legislation in the Member State of the European Union or countries with which the Union has entered into an agreement for the financial area where the issuer is registered.
(4) If the issuer mentioned in subsection (1) is not required to prepare consolidated financial
statements, the audited annual report shall include the issuer's financial statements presented in accordance with legislation in the Member State of the European Union or countries with which the Union has entered into an agreement for the financial area where the issuer is registered.
(5) The annual report shall be audited according to Articles 51 and 51a of Directive 78/660/EEC,
and, if the issuer shall present its consolidated financial statements, according to Article 37
of Directive 83/349/EEC. The auditors' report, signed by the person or persons responsible
for auditing the financial statements, shall be made available in full to the public together
with the annual report.
(6) The management's review shall be prepared in accordance with Article 46 of Directive
78/660/EEC and, if the issuer shall prepare consolidated financial statements, according to
Article 36 of Directive 83/349/EEC.
12

(1) A securities issuer registered in another Member State of the European Union or countries
with which the Union has entered into an agreement for the financial area and which, pursuant to section 27(7), 2nd clause of the Securities Trading etc. Act, shall publish a half- year
interim report, shall ensure that the half-year interim report is prepared in accordance with
subsections (2) to (7).
(2) The half-year interim report shall as a minimum contain the following:
1)

Financial statements for the six months.

2)

A management's review.

10

731

3)

A statement by management where the name and function of each member in relation
to the company is clearly indicated and in which they state whether
a)

the half-year interim report has been presented in accordance with the requirements
provided for by legislation and any requirements provided for by the articles of association or by agreement,

b)

the half-year interim report gives a fair presentation of the undertaking's assets and
liabilities, financial position and results for the period, and, if consolidated financial
statements are prepared, the group's assets and liabilities, financial position and results for the period, as well as whether the management's review contains a true
review of the information required in subsection (6).

(3) If the issuer is required to prepare consolidated financial statements, the interim financial
statements shall be prepared in accordance with the international accounting standard for
interim financial statements as adopted pursuant to article 6 of Council Regulation no.
1606/2002/EC.
(4) If the issuer is not required to prepare consolidated financial statements, the interim financial statements shall as a minimum include a balance sheet as at the end of the half-year
period with comparative figures from the balance sheet as at the end of the previous financial year, an income statement for the first six months of the financial year with comparative
figures from the comparable period from the previous financial year and explanatory notes,
cf. subsection (5). The balance sheet and income statement shall contain the same items as
contained in the most recent annual report and any additional items that could be deemed
necessary in order to ensure a fair presentation. The issuer shall apply the same principles
for recognition and measurement as in preparation of annual reports.
(5) The explanatory notes in a half-year interim report pursuant to subsection (4) shall as a
minimum include sufficient information to ensure comparability with the annual report and
to ensure that significant changes and developments in amounts, which are reflected in the
balance sheet and income statement in the half-year interim report, are explained.
(6) The management's review shall as a minimum include information about important events in
the first six months of the financial year, and the impact hereof on the financial statements,
as well as a description of the most important risks and uncertainty factors in the remaining
six months of the financial year. For issuers of shares, the management's review shall, furthermore, describe major transactions with related parties made within the first six months
of the financial year.
(7) If an audit has been carried out of the half-year interim report, the auditors' report shall be
reproduced in its entirety. The same shall apply in cases where the auditor has conducted a
review. If the auditor has not carried out an audit or review of the half-year interim report,
the issuer shall make a note of this in its report.

11

732

Special provisions for issuers which are registered in a country outside the European Union
with which the Union has not entered into an agreement for the financial area (third countries)
13

(1) An issuer covered by section 1(3), no. 1, b) may be exempt from the requirements laid
down in sections 28 and 29(1), 3rd clause of the Securities Trading etc. Act, and sections 4
and 6 of this Executive Order, if the legislation of the third country in which the issuer is
registered includes equivalent requirements, or the issuer complies with the requirements of
the legislation of a third country in accordance with subsections (2) to (5). The information
covered by the requirements of the third country shall be published and submitted in accordance with section 27a of the Securities Trading etc. Act and section 7 of this Executive
Order.
(2) A third country shall be deemed to have established requirements corresponding to the requirements laid down in section 4, when it is required by the legislation of the relevant
country that an issuer shall publish quarterly interim reports.
(3) A third country shall be deemed to have established requirements corresponding to section
29(1), 3rd clause of the Securities Trading etc. Act when it is required by the legislation of
the relevant country that the time limit within which an issuer with a registered office in the
third country shall be notified in regard to major holdings, and within which it shall publish
information about major holdings, in total corresponds to or is less than seven trading days.
(4) A third country shall be deemed to have established requirements corresponding to the requirements laid down in section 28 of the Securities Trading etc. Act when the legislation of
that country requires an issuer, whose registered office is in the relevant third country, to
meet the following conditions:
1)

An issuer which is permitted to hold up to a maximum of 5 percent of its own shares to

which voting rights are attached shall notify immediately when this threshold is reached
or exceeded.

2)

An issuer which is permitted to hold up to a maximum of between 5 percent and 10 percent of its own shares to which voting rights are attached, shall notify immediately when
the threshold of 5 percent or the threshold of 10 percent is reached or exceeded.

3)

An issuer which is permitted to hold more than 10 percent of its own shares to which
voting rights are attached shall notify immediately when the threshold of 5 percent or
the threshold of 10 percent is reached or exceeded.

(5) A third country shall be deemed to have established requirements corresponding to the requirements laid down in section 6 when the legislation of the country requires an issuer to
publish the total number of voting rights and capital no later than 30 calendar days after
there has been an increase or decrease in these.

12

733

14

(1) Annual reports and half-year interim reports from issuers from countries outside the European Union with which the Union has not entered into an agreement for the financial area,
which are required to be published pursuant to section 27(7) of the Securities Trading etc.
Act, shall be prepared in accordance with the same accounting rules as those which would
apply if the issuer were domiciled in Denmark. Those parts of the annual report and the
half-year interim report that are not required to follow the international accounting standards as adopted pursuant to Council Regulation no. 1606/2002/EC on the application of international accounting standards (consolidated accounts and interim financial reporting on a
consolidated basis) may, however, after authorisation from the Danish FSA, be prepared in
accordance with another set of accounting rules, if the Danish FSA assesses that the relevant rules are equivalent to the rules applicable to issuers domiciled in Denmark.
(2) When, in accordance with article 3 of Commission Regulation (EC) No 1569/2007 of 21 December 2007 establishing a mechanism for the determination of equivalence of accounting
standards applied by third country issuers of securities pursuant to Directives 2003/71/EC
and 2004/109/EC of the European Parliament and of the Council, the Commission has decided that another set of accounting rules is equivalent to the international accounting standards mentioned in subsection (1), this other set of accounting rules may, notwithstanding
subsection (1), be applied by issuers that are mentioned in subsection (1), 1st clause in
preparation of consolidated financial statements and consolidated interim financial statements.
(3) When, in accordance with article 4 of the Commission Regulation mentioned in subsection
(2), the Commission has decided that another set of accounting rules can be accepted for a
limited period, this other set of accounting rules can, notwithstanding subsection (1), be applied by issuers that are mentioned in subsection (1), 1st clause in preparation of consolidated financial statements and consolidated interim financial statements for financial years
commencing before 1 January 2012.

15.

An issuer, as mentioned in section 1(3), no. 1, b), which publishes information in a country
outside the European Union with which the Union has not entered into an agreement for the
financial area and which may be of importance to the public in the European Union or countries with which the Union has entered into an agreement for the financial area, shall publish
and submit this information in accordance with section 27a of the Securities Trading etc. Act
and this Executive Order, even if this information is not covered by the disclosure obligation
of Part 7 of the Securities Trading etc. Act.
Penalties

16

(1) Violation of section 1(4), section 2(1), sections 3 and 4(1), sections 5 and 6, section 7(1),
sections 8 and 9(1), section 10(1), section 11(1), section 12(1) and sections 14 and 15,
shall be liable to a fine.

13

734

(2) Companies, etc. (legal persons) may incur criminal liability according to the regulations in
chapter 5 of the Criminal Code.
Entry into force
17

(1) This Executive Order shall enter into force on 1 July 2012.
(2) At the same time Executive Order no. 220 of 10 March 2010 on Issuers' Duty to Provide Information shall be repealed.

Danish FSA, 22 June 2012

Ulrik Ndgaard
/ Hanne Re Larsen

14

735

This translation was partly carried out by the professional translation agency GlobalDenmark Translations on behalf of the Danish Financial Supervisory Authority, and updated by Plesner's state-authorised
translators. The text is to be regarded as an unofficial translation based on the latest official Executive
Order. Only the Danish document has legal validity.

Executive Order on notice, notification and public disclosure of managers' transactions, lists of insiders, notification of suspicious transactions, signals of market manipulation and accepted market practices1

Executive Order no. 386 of 18 April 2013

The following shall be laid down pursuant to section 3a(2), section 28a(7), section 37(10), section
38(5) and section 93(4) of the Securities Trading, etc. Act, see Consolidated Act no. 219 of 20 February
2013, as amended by Act no. 155 of 28 February 2012:

Part 1
Common provisions
Definitions
1

For the purpose of this Executive Order:

1)

Person shall mean: A natural or legal person.

2)

List of insiders shall mean: A list of persons with access to inside information which a
person according to section 37(4) of the Securities Trading, etc. Act shall prepare and
update.

3)

Suspicious transaction shall mean: A securities transaction covered by section 34(1) of

the Securities Trading, etc. Act which fairly can be assumed to violate section 35(1) or
39(1) of the Securities Trading, etc. Act.

4)

Accepted market practices shall mean: Practices that are reasonably expected in one
or more securities markets and are accepted by the Danish FSA pursuant section 38(4),
2nd sentence of the Securities Trading, etc. Act.

This Executive Order contains provisions implementing parts of Commission Directive 2003/124/EC of 22 December 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards the definition and public disclosure of inside information and the definition of market manipulation, Official Journal 2003,
no. L 339, p 70, and parts of Commission Directive 2003/124/EC of 29 April 2004 implementing Directive
2003/6/EC of the European Parliament and of the Council as regards accepted market practices, the definition of
inside information in relation to derivatives on commodities, the establishment of insider list, the notification of
managers' transactions and the notification of suspicious transactions, Official Journal 2004, no. L 162, p 70.

736

Part 2
Notice, notification and public disclosure of managers' transactions
Scope
2

(1) The regulations of section 28a of the Securities Trading, etc. Act and of sections 3-5 of this
Executive Order shall apply to:
1)

managers in companies
a)

which issue shares admitted to trading on a regulated market in Denmark, in another Member State of the European Union or in a country with which the Union has entered into an agreement for the financial area or for which a request for admission
to trading on such market has been filed, and

b)
2)

the home country of which is Denmark, see subsection (2), and

related persons to managers covered by no. 1.

(2) Denmark is considered home country if the company:

1)

has its registered office in Denmark; or

2)

is registered in a country outside the European Union with which the Union has not entered into an agreement for the financial area (a third part country) and Denmark is the
place where the company made its initial public offering after 31 December 2003 or filed
the first request for admission to trading on a regulated market.
The concept, related persons to a manager

The concept other relatives in section 28a(4), no. 3 of the Securities Trading, etc. Act shall
only include natural persons related to a manager in the direct line of ascent or descent or
as siblings.
Triviality limit

Calculations of whether the triviality limit of EUR 5,000 in section 28a(5) of the Securities
Trading, etc. Act has been exceeded shall use the most recent currency prices published by
Danmarks Nationalbank (Denmarks central bank) at the time of the transaction.
Notification of information

(1) Notification of information to the Danish FSA according to section 28a(1) and (3) of the Securities Trading, etc. Act shall be made by one of the following means:
1)

electronically by the manager using a digital signature,

2)

electronically by another person authorised by the manager, or

737

3)

by the issuing company by filing a company announcement through the com-pany's

news provider system under a power of attorney granted by the manager.

(2) Any person who electronically notifies information to the Danish FSA's IT system warrants
that the notification is duly authorised.
(3) Notification of information to the Danish FSA according to section 28a(1) and (3) of the Securities Trading, etc. Act shall be in the Danish or English language. Electronic notification
shall be made by such means which comply with the technical specifications set out by the
Danish FSA.
Part 3
Lists of insiders
Creation and contents of lists of insiders
6

(1) Persons covered by section 37(4), 1st or 2nd sentences of the Securities Trading, etc. Act
shall prepare a list of insiders, but see the second sentence. The duty to prepare a list of insiders pursuant to section 37(4), 2nd sentence shall only rest upon persons who - by virtue
of the exercise of their profession or business - regularly come into possession of inside information.
(2) The list of insiders shall contain the information mentioned in subsection (3) for all the persons who work for the relevant party and who regularly or in isolated circumstances have or
have had access to inside information which directly or indi-rectly relates to securities covered by section 34(1), no. 1 of the Securities Trading, etc. Act.
(3) The list of insiders shall, as a minimum, contain the following information on each person
who has or has had access to inside information:
1)

identity in the form of:

a)

the name and civil registration (CPR) number for the natural persons who have a
Danish civil registration number,

b)

the name, address and date of birth of natural persons who do not have a Danish
civil registration number,

c)

the name and company registration (CVR) number of legal persons registered office
in Denmark, or

d)

the name, address and company registration number in the home country of legal
persons with its registered office outside of Denmark,

2)

the reason why such person is on the list of insiders, and

3)

the date on which the list of insiders was created and updated.

738

Updates of lists of insiders

7

A list of insiders shall be updated immediately when:

1)

there is a change in the reason why a person is already on the list,

2)

a new person is to be added to the list of insiders, or

3)

a person already on the list of insiders no longer has access to inside infor-mation.
Keeping lists of insiders

A list of insiders shall be kept for no less than five years after preparation or updating of the
relevant list.
Information for persons included on lists of insiders

Persons included on a list of insiders shall, without undue delay, be informed that they are
on the list and of:
1)

the legal duties involved in possession of inside information, and

2)

the sanctions which, pursuant to legislation, may be imposed for misuse or im-proper
circulation of inside information.
Part 4
Notification of suspicious transactions
Scope

10

The regulations of section 37(6) and (7) of the Securities Trading, etc. Act as well as sections 11-14 of this Executive Order shall apply for:
1)

companies with their registered office in Denmark,

2)

companies with their headquarters in Denmark,

3)

branches located in Denmark, and

4)

natural persons employed in one of the companies or branches mentioned in nos. 1-3.
Suspicious transactions

11

(1) Persons covered by section 37(6), 1st sentence of the Securities Trading etc. Act shall notify
the Danish FSA if they assist in completion of a suspicious transaction which is part of loyal
completion of orders from a customer.
(2) Assessment of whether there is a suspicious transaction shall take account of:

739

1)

the definition of internal information in section 34(2)-(5) of the Securities Trad-ing, etc.
Act.

2)

the ban on insider trading of section 35(1) of the Securities Trading, etc. Act.

3)

the definition of price manipulation in section 38(1)-(3) of the Securities Trading, etc.
Act.

4)

the signals of price manipulation in sections 15 and 16 of this Executive Order, and

5)

the ban on price manipulation of section 39(1) of the Securities Trading, etc. Act.
Time limit for notification

12

Notification shall be sent without undue delay to the Danish FSA that the per-son has become acquainted with facts or information which gives reason to pre-sume that there is a
suspicious transaction.
Content of the notification

13

(1) Notification to the Danish FSA shall contain:

1)

a description of the suspicious transaction, including the type of the order and transaction,

2)

information on the reason that the transaction is considered suspicious,

3)

information enabling identification of the person(s) for whom the transaction has been
completed and of other persons who may be involved in the transaction,

4)

information about the function carried out by the notifying person, and

5)

all other information which could be significant for the assessment of the suspi-cious
transaction.

(2) If all the information covered by subsection (1) is not available at the time of the notification, it shall be sufficient that notification discloses the reason that the transaction is suspicious. All other information covered by subsection (1) shall be submitted to the Danish FSA
as soon as it becomes available.
Methods of notification
14

(1) Notification to the Danish FSA may be by letter, email, fax or telephone.
(2) If notification is by telephone, and if so requested by the Danish FSA, written confirmation of
the notification shall be submitted.

740

Part 5
Price manipulation
Signals of price manipulation
15

(1) For the purposes of assessing whether orders to trade or transactions constitute price manipulation pursuant to section 38(1), nos. 2 and 4 of the Securi-ties Trading, etc. Act, the
Danish FSA and market participants may take into ac-count whether one or more of the signals of price manipulation mentioned in sub-section (2) exist. If one or more of the signals
of price manipulation mentioned in subsection (2) exist, this will not necessarily mean that
the order to trade shall be deemed as price manipulation.
(2) The following signals of price manipulation may be taken into account in par-ticular:
1)

If the relevant orders to trade or transactions represent a significant proportion of the

daily volume of transactions in the relevant financial instrument on the regu-lated market concerned, in particular when these activities lead to a significant change in the
price of the financial instrument.

2)

If the relevant orders to trade or transactions are undertaken by persons with a significant buying or selling position in a financial instrument lead to significant changes in the
price of the financial instrument or related derivative or underlying asset admitted to
trading on a regulated market in Denmark or in a country within the European Union or
in a country with which the Union has entered into an agreement for the financial area,
or corresponding foreign markets.

3)

If the relevant transactions lead to no change in beneficial ownership of a finan-cial instrument admitted to trading on a regulated market in Denmark or in a coun-try within
the European Union or in a country with which the Union has entered into an agreement
for the financial area, or corresponding foreign markets.

4)

If the relevant orders to trade or transactions include position reversals in a short period
and represent a significant proportion of the daily volume of transactions in the relevant
financial instrument on the regulated market concerned, and might be associated with
significant changes in the price of a financial instrument admitted to trading on a regulated market in Denmark or in a country within the European Union or in a country with
which the Union has entered into an agreement for the financial area, or corresponding
foreign markets.

5)

If the relevant orders to trade or transactions are concentrated within a short time span
in the trading session and this leads to a temporary price change which is subsequently
reversed.

741

6)

If the relevant orders to trade change the representation of the best bid or offer prices
in a security, or more generally the representation of the order book availa-ble to market participants, and are removed before they are executed.

7)

If the relevant orders to trade or transactions are undertaken at or around a specific

time when reference prices, settlement prices and valuations are calculated and lead to
price changes which have an effect on such prices and valuations.

16

(1) For the purposes of assessing whether orders to trade or transactions constitute price manipulation pursuant to section 38(1), no. 3 of the Securities Trading, etc. Act, the Danish
FSA and market participants may take into account whether one or more of the signals of
price manipulation mentioned in subsection (2) exist. If one or more of the signals of price
manipulation mentioned in subsec-tion (2) exist, this will not necessarily mean that the order to trade shall be deemed as price manipulation.
(2) The following signals of price manipulation may be taken into account in par-ticular:
1)

If the relevant orders to trade or transactions in the security undertaken by per-sons

are preceded or followed by dissemination of misleading information by the same persons or persons linked to them.

2)

If the relevant orders to trade are given or transactions are undertaken by persons before or after the same persons or persons linked to them disseminate investment analyses regarding securities which are erroneous or biased or demonstrably influ-enced by
material interests.
Part 6
Accepted market practices
Factors to be considered in decisions on accepted market practices

17

(1) The Danish FSA shall decide whether a market practice can be accepted, see section 38(4),
2nd sentence of the Securities Trading, etc. Act.
(2) When the Danish FSA make decisions pursuant to subsection (1), the Authority shall take
particular account of:
1)

The need to safeguard the operation of market forces and the proper interplay of the
forces of supply and demand.

2)

The structural characteristics of the relevant market including whether it is regu-lated or

not, the types of securities traded and the type of market participants (professional
and/or retail investors) active on the relevant market.

3)

The level of transparency of the relevant market practice in relation to the whole market.

742

4)

The degree to which the relevant market practice has an impact on market li-quidity and
efficiency.

5)

5) The degree to which the relevant market practice has an impact on the most important parameters for the market, including the extent of the impact on the av-erage
price for the trading session, the daily closing price, or market conditions otherwise.

6)

6) The degree to which the relevant practice takes into account the trading mecha-nism
of the relevant market and enables market participants to react properly and in a timely
manner to the new market situation created by that practice.

7)

7) The risk inherent in the relevant practice for the integrity of, directly or indirectly, related markets, whether regulated or not, in the relevant security.

8)

8) The outcome of any investigation of the relevant market practice by any compe-tent
authority or other authority in particular whether the relevant market practice breached
regulations in Acts, Executive Orders or codes of conduct designed to prevent market
abuse on the relevant market or on a directly or indirectly related market.

(3) That a market practice is new or under development shall not, in itself, mean that it cannot
be accepted.
Consultation procedures and disclosure decisions on accepted market practices
18

(1) Before the Danish FSA makes a decision pursuant to section 17(1), the Authority shall consult relevant bodies, including representatives of issuers of secu-rities, financial services
providers, market operators, consumers and other authori-ties.
(2) Before the Danish FSA makes a decision pursuant to section 17(1), the Au-thority shall, according to the circumstances, consult other competent authorities, particularly where there
exist comparative markets with regard to structures, vol-ume or type of transactions, in
other countries within the European Union or in a country with which the Union has entered
into an agreement for the financial area.
(3) Decisions made by the Danish FSA pursuant to section 17(1) shall be disclosed on the Danish FSA website. The Danish FSA shall transmit such decisions to the European Securities
and Markets Authority (ESMA) which shall make them available on its website.
(4) In disclosures of decisions pursuant to section 17(1) the Danish FSA shall in-clude a comprehensive description of the relevant market practice. Disclosure shall also include a description of the factors taken into account by the Authority in de-termining whether the relevant practice is regarded as acceptable.
(5) If, prior to a decision pursuant to section 17(1), investigatory actions on spe-cific cases of
market abuse have started, the Danish FSA may delay the consulta-tion procedures set out
in subsections (1) and (2) until the end of such investigation and possible related sanctions.

743

(6) The Danish FSA shall review regularly previous decisions on whether a market practice is acceptable, in particular if significant changes have subsequently taken place in the relevant
market environment such as changes to trading rules or to market infrastructure. If a previous decision on whether a market practice is ac-ceptable is subsequently changed, the regulations of subsections (1)-(5) shall be observed.
Part 7
Concluding provisions
Penalties
19

(1) Violation of the provisions of sections 5-9 and section 12, section 13(1) and (2), second sentence, as well as section 14(2), shall be liable to a fine.
(2) Companies, etc. (legal persons) may incur criminal liability according to the regulations in
part 5 of the Criminal Code.
Entry into force

20

(1) This Executive order shall enter into force on 1 May 2013.
(2) At the same time Executive Order no. 1179 of 11 October 2007 on notice, notification and
public disclosure of managers' transactions, lists of insiders, notifi-cation of suspicious
transactions, indications on market manipulation and accepted market practices (Executive
Order on market abuse) shall be repealed.
(3) The requirements in section 6(3), no. 1, regarding the specification of the identity of persons who have access to inside information apply to addition of per-sons to the list of insiders after the Executive Order enters into force and in relation to any change of a person's information on the list of insiders.

Danish Financial Supervisory Authority, 18 April 2013

Ulrik Ndgaard
/ Hanne Re Larsen

744

This translation was carried out by the professional translation agency GlobalDenmark Translations on
behalf of the Danish Financial Supervisory Authority. The text is to be regarded as an unofficial translation based on the latest official Executive Order. Only the Danish document has legal validity.

Executive Order on Reporting of Transactions in Securities

Executive Order no. 932 of 26 August 2011

The following shall be laid down pursuant to section 33((3) and (5) and section 93(4) and (5) of the Securities Trading, etc. Act, cf. Consolidated Act no. 883 of 9 August 2011:

Reporting of transactions involving securities which are admitted for trading on a regulated
market
1

(1)

Securities dealers covered by part 9 of the Securities Trading, etc. Act shall have a duty to
report information on transactions in securities which have been admitted for trading on a
regulated market in Denmark, a regulated market in a country within the European Union or
a country with which the Union has entered into an agreement for the financial area. Reporting shall be as quickly as possible and no later than the close of the working day of the
regulated market following completion of the transaction.

(2)

The information may be reported by the securities dealer himself, a third party acting on the
behalf of the securities dealer, or by a trade-matching or reporting system approved by the
Danish FSA, or by the operator of the regulated market or the company operating the multilateral trading facilities through whose systems the transaction was completed.

(3)

The Danish FSA may approve trade-matching or reporting systems meeting the requirements
of article 12 of the Commission Regulation on implementing Directive 2004/39/EC of the European Parliament and of the Council as regards record-keeping obligations for investment
firms, transaction reporting, market transparency, admission of financial instruments to
trading, and defined terms for the purposes of that Directive.

(4)

Transaction reporting shall be made to the Danish FSA or to the person authorised to receive
such reports on behalf of the Danish FSA.

(5)

Transaction reporting shall be in one or more formats stipulated by the Danish FSA.

(6)

When reporting transactions covered by subsection (1), with the exception of transactions in
bonds and investment association certificates, reporting shall contain information on custody
account number as well as the name of the client on whose behalf the securities dealer has
executed the transaction.

(7)

For the purposes of transaction reporting, the Commission Regulation on implementing Directive 2004/39/EC of the European Parliament and of the Council as regards record-keeping
obligations for investment firms, transaction reporting, market transparency, admission of
financial instruments to trading, and defined terms for the purposes of that Directive shall
also apply.

745

Reporting of transactions involving securities which are admitted for trading on an alternative
marketplace and derivatives that are not admitted for trading on a regulated market, but
where the underlying security has been admitted for trading on a regulated market
2

(1)

Securities dealers covered by part 9 of the Securities Trading, etc. Act shall report information on transactions in securities which are admitted for trading on an alternative marketplace. Reporting shall be as quickly as possible and no later than the close of the working
day of the alternative market following completion of the transaction.

(2)

Securities dealers covered by part 9 of the Securities Trading, etc. Act shall report information on transactions in derivatives which have not been admitted for trading on a regulated market but where the underlying security is admitted for trading on a regulated market.
The reporting is to be made as soon as possible and no later than the close of the working
day following completion of the transaction.

(3)

Transaction" shall mean the purchase and sale of a financial instrument excluding securities
financing transactions, the exercise of options or covered warrants or primary market transactions (such as issuance, allotment or subscription) in financial instruments.

(4)

Securities financing transaction" shall mean an instance of stock lending or stock borrowing
or the lending or borrowing of other financial instruments, a repurchase or reverse repurchase transaction, or a buy-sell back transaction.

(5)

The information may be reported by the securities dealer himself, a third party acting on the
behalf of the securities dealer, or by a trade-matching or reporting system approved by the
Danish FSA, or by the company operating the alternative marketplace or the multilateral
trading facilities through whose systems the transaction was completed.

(6)

The Danish FSA may approve a trade-matching or reporting system if it

1)

ensures the security and confidentiality of the data reported,

2)

incorporates mechanisms for identifying and correcting errors in a transaction report,

3)

incorporates mechanisms for authenticating the source of the transaction report,

4)

includes appropriate precautionary measures to enable the timely resumption of reporting in the case of system failure, and

5)

enables reporting the information required under section 3 in the format required by the
Danish FSA and within the limits set out in subsection (1).

(7)

Transaction reporting shall be made to the Danish FSA or to the person authorised to receive
such reports on behalf of the Danish FSA.

(8)

Transaction reporting shall be in one or more formats stipulated by the Danish FSA.

746

(9)

Transaction reporting shall be made in electronic form. The Danish FSA may in special circumstances grant exemptions, if the transactions report can be made in a medium which allows for the storing of the information in a manner which allows future reference by the
Danish FSA.

(1)

Reporting of transactions in securities which are admitted for trading on an alternative marketplace and in derivatives that are not admitted for trading on a regulated market, but
where the underlying securities are admitted for trading on a regulated market shall contain
the following information:
1)

Reporting company identification

2)

Trading day

3)

Trading time

4)

Buy/sell indicators

5)

Trading capacity

6)

Security identification (the instrument)

7)

Security code type

8)

Underlying security identification

9)

Underlying instrument identification code type

10) Instrument type

11) Maturity date
12) Derivative type
13) Put/call
14) Strike price
15) Price multiplier
16) Unit price
17) Price notation
18) Quantity
19) Quantity notation
20) Counterparty

747

21) Venue identification

22) Transaction reference number
23) Cancellation flag
24) Depository number/custody account number of the client on whose behalf the securities
dealer has completed the transaction
25) Name of the client on whose behalf the securities dealer has completed the transaction.
(2)

Subsection (1), nos. 24 and 25 shall not apply to reports of transactions in bonds and investment association certificates that are admitted for trading on an alternative marketplace.

(3)

Subsection (1), nos. 24 and 25 shall not apply to reports of transactions in derivatives that
are not admitted for trading on a regulated market, if the underlying security is a bond or an
investment association certificate that is admitted for trading on a regulated market.

(4)

Notwithstanding subsection (1), reporting shall only contain the information which is relevant to the type of securities in question and which the Danish FSA declares is not already in
its possession or is not available to it by other means.

(5)

For the purposes of the identification of a counterparty to the transaction, if the counterparty is an alternative marketplace or any other entity which acts as central counterparty, the
Danish FSA shall make public a list of identification codes of the alternative marketplaces
and of any other entities which act as central counterparties for such an alternative marketplace.
Penalties

(1)

Anyone violating section 1(1) and (4)-(6), section 2(1), (2) and (7)-(9), and section 3(1)
shall be liable to a fine.

(2)

Anyone violating articles 7 and 8, article 12(1) and article 13(1) of the Commission Regulation on implementing Directive 2004/39/EC of the European Parliament and of the Council as
regards record-keeping obligations for investment firms, transaction reporting, market
transparency, admission of financial instruments to trading, and defined terms for the purposes of that Directive shall be liable to a fine.

(3)

Companies etc. (legal persons) shall incur criminal liability according to the regulations in
part 5 of the Criminal Code.

Entry into force

748

(1)

This Executive Order shall enter into force on 1 September 2011.

(2)

At the same time Executive Order no. 1189 of 10 October 2007 on reporting of transactions
in securities shall be repaled.
The Danish Financial Supervisory Authority, 26 August 2011
Ulrik Ndgaard
/ Hanne Re Larsen

749

This translation was carried out by the professional translation agency GlobalDenmark Translations on
behalf of the Danish Financial Supervisory Authority. The text is to be regarded as an unofficial translation based on the latest official Executive Order. Only the Danish document has legal validity.

Executive Order on the Production and Dissemination to the Public of Certain Investment
Analyses1
Executive Order no. 1234 of 22 October 2007

The following shall be laid down pursuant to section 28b(2), and section 93(3) of the Securities Trading
etc. Act, cf. Consolidated Act no. 1077 of 4 September 2007, as amended by Act no. 108 of 7 February
2007:

Part 1
Introductory provisions Scope
1

(1)

This Executive Order shall apply to any person producing or disseminating analyses intended
for the public or distribution channels in the exercise of his profession or the conduct of
business, relating to
1)

securities, cf. section 2 of the Securities Trading, etc. Act, which are admitted to trading
on a regulated market in Denmark or in other countries within the European Union or in
a country with which the Community has entered into an agreement for the financial area,

2)

securities, cf. section 2 of the Securities Trading, etc. Act, for which a request for admission to trading on a regulated market in Denmark or in other countries within the
European Union or in a country with which the Community has entered into an agreement for the financial area has been made, or

3)
(2)

issuers of securities as mentioned in nos. 1-2.

This Executive Order shall not apply to investment advice through the provision of a personal recommendation to a client in respect of one or more transactions relating to securities,
which are not likely to become publicly available.

(3)

The regulations in sections 6-8 shall only apply to analyses produced by persons whose main
business is to produce investment analyses.

(4)

The regulations in sections 9-10 and sections 16-17 shall only apply to analyses produced
and disseminated by an investment firm or a credit institution.

1) This Executive Order contains provisions implementing Commission Directive 2003/125/EC of 22 De-

cember 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council as
regards the fair presentation of investment recommendations and the disclosure of conflicts of interest (Official Journal L 339, p 73).

750

Definitions
2

For the purposes of this Executive Order:

1)

"Person":
Shall mean a natural or legal person.

2)

"Distribution channel":
Shall mean a channel through which information is, or is likely to become, publicly
available, as a large number of persons have access to the information.

3)

"Analysis":
Shall mean a report, an article or similar information (written or oral) intended for dissemination for the public or through distribution channels, and which is subject to a) or
b) of this provision:
a)

Analyses produced by a person whose main business is to produce investment analyses if, directly or indirectly, the analysis expresses a particular investment recommendation in respect of a security, including any opinion as to the present or future
value or price of such securities.

b)

Analyses produced by persons other than the persons referred to in a), if the analysis, directly or indirectly, expresses a particular investment recommendation in respect of a security.

4)

"Person whose main business is to produce investment analyses":

Shall mean
a)

an investment firm or a credit institution,

b)

a legal person with a relation to an investment firm or a credit institution,

c)

an independent financial analyst,

d)

any other person whose main business is to produce investment analyses, and

e)

natural persons working for one of the persons in (a)-(d) in this provision under a
contract of employment or otherwise.

5)

"Investment firm":
Shall mean a person whose business it is to provide investment services, cf. section
5(1), no. 3 of the Financial Business Act.

751

6)

"Credit institution":
Shall mean an undertaking, the activity of which consists of receiving from the general
public deposits or other funds to be repaid, and granting loans at its own expense, cf.
section 5(1), no. 2 of the Financial Business Act.

7)

"Related legal person":

Shall mean a legal person in the same group as a legal person, cf. section 5(1), no. 9 of
the Financial Business Act.

8)

"Issuer":
Shall mean the issuer of a security to which an analysis relates, directly or indirectly.

9)

"Recommendations":
Shall mean analyses or other information recommending or suggesting an investment
strategy, explicitly or implicitly, concerning one or several financial instruments or the
issuers of financial instruments, including any opinion as to the present or future value
or price of such instruments, intended for distribution channels or for the public.
Part 2

Rules on production and presentation of analyses General requirements

3

Any person presenting an analysis shall ensure that the analysis clearly and prominently discloses the name and job title of the legal person or persons who prepared the analysis and
the name of the legal person responsible for its presentation.

(1)

Any person presenting an analysis shall ensure that:

1)

facts are clearly distinguished from interpretations, estimates, opinions and other types
of non-factual information in the analysis;

2)

all sources in the analysis are reliable or, where there is any doubt as to whether a
source is reliable, this is clearly indicated;

3)

all projections, forecasts and price targets are clearly labelled as such and that the material assumptions made in producing or using them are clearly stated.

(2)

Any person who has presented an analysis shall ensure that the analysis can be substantiated as reasonable upon request by the Danish FSA.

(1)

Any person presenting an analysis shall ensure that the analysis discloses all relationships
and circumstances that may reasonably be expected to influence the objectivity of the analysis, including where

752

1)

the relevant person has a significant financial interest in one or more of the securities
which are the subject of the analysis, or

2)

the relevant person has a significant conflict of interest with respect to the issuer to
which the recommendation relates.

(2)

Where the analysis is presented by a legal person, the requirements of subsection (1) shall
also include any interests or conflicts of interest of a natural or legal person who is working
for this person under a contract of employment or otherwise, or who has been involved in
the preparation of the analysis.

(3)

Where the analysis is presented by a legal person, the information to be disclosed in accordance with subsection (1) shall at least include any interests or conflicts of interest of the responsible legal person or of related legal persons, provided that this information
1)

was accessible or could reasonably be expected to be accessible to legal persons involved in the preparation of the analysis, or

2)

was accessible to other legal persons, who, although not involved in the preparation of
the analysis, had or could reasonably be expected to have access to the analysis prior to
its dissemination to customers or the public.

(4)

Subsections (1)-(3) shall not entail a duty to breach effective information barriers (Chinese
Walls) put in place by a legal person in order to prevent and avoid conflicts of interest between the departments of the enterprise.

Special requirements for persons whose main business is to produce investment analyses
6

In addition to the requirements of section 3, a person whose main business is to produce investment analyses shall, when presenting an analysis, ensure that the analysis contains a
reference to any external self-regulatory standards or codes of conduct, by which the person
who has produced the analysis is covered.

In addition to the requirements of section 4, a person whose main business is to produce investment analyses shall, when presenting an analysis, ensure that the following information
is included in the analysis:
1)

All substantially material sources for the analysis, as appropriate, including if the issuer
was used as a source.

2)

Whether the analysis or parts hereof has been disclosed to the issuer and whether the
investment recommendation has been amended following this disclosure before its dissemination.

3)

An appropriate basis of valuation or methodology used to evaluate the security or the

issuer, or to set a price target for the security.

753

4)

The meaning of any investment recommendation made in the analysis, such as "buy",
"sell" or "hold", including the time horizon of the investment recommendation made in
the analysis.

5)

An appropriate risk warning on the recommended investment, including a sensitivity

analysis of the relevant assumptions.

6)

The frequency of any planned updates of the analysis.

7)

Any major changes in the responsible legal person's guidelines for coverage of the security previously announced.

8)

The date at which the analysis was first released for distribution.

9)

Date and time for any security price mentioned in the analysis.

10) Any change of investment recommendations in the analysis in relation to an earlier

analysis concerning the same security or issuer, issued during the 12-month period immediately preceding the presentation of the new analysis, and the date of the earlier
analysis.
8

(1)

In addition to the requirements of section 5, a person whose main business is to produce investment analyses shall, when presenting an analysis, ensure that the analysis clearly and
prominently includes information on the following:
1)

Where persons whose main business is to produce investment analyses, or any related
legal person holds shares in the issuer, and the denomination of the shares exceeds 5%
of the total issued share capital.

2)

Where the issuer holds shares in the person whose main business is to produce investment analyses, or any related legal person, and the denomination of the shares exceeds
5% of the total issued share capital.

3)

Other significant financial interests held by the person whose main business is to produce investment analyses or any related legal person in relation to the issuer.

4)

Where the person whose main business is to produce investment analyses or any related
legal person is a market maker or liquidity provider in the securities of the issuer.

5)

Where the person whose main business is to produce investment analyses, or any related legal person has been lead manager or co-lead manager over the previous 12 months
of any publicly disclosed offer of securities of the issuer.

6)

Where the person whose main business is to produce investment analyses, or any related legal person is party to any other agreement with the issuer relating to the provision
of investment banking services, provided that

754

a)

information on the agreement would not entail the disclosure of any confidential
commercial information, and

b)

that the agreement has been in effect over the previous 12 months or has given rise
during the same period to the payment of compensation or to the promise to get
compensation paid.

7)

Where the person whose main business is to produce investment analyses, or any related legal person is party to an agreement with the issuer relating to the production of the
investment analysis.

(2)

Subsection (1) shall not entail a duty to breach effective information barriers (Chinese
Walls) put in place by a legal person in order to prevent and avoid conflicts of interest between the departments of the enterprise.
Special requirements for investment firms and credit institutions

In addition to the requirements of section 3 and section 6, investment firms and credit institutions shall, when presenting an analysis, ensure that the analysis states which authority
supervises the firm or the institution.

10

In addition to the requirements of section 5 and section 8, investment firms and credit institutions shall, when presenting an analysis, ensure that the analysis includes information on
the following conditions:
1)

The organisational and administrative arrangements set up within the investment firm or
the credit institution for the prevention and avoidance of conflicts of interests with respect to investment analyses, including for the establishment of information barriers.

2)

Where a person working for the firm or the institution, under a contract of employment
or otherwise, and who was involved in preparing the analysis, receives remuneration
tied to investment banking transactions performed by the investment firm or credit institution or any related legal person.

3)

Information on price and date of the acquisition, if a natural person working for the firm
or institution under a contract of employment

or otherwise, and who was involved in

the preparation of the analysis, receives or purchases the shares of the issuers prior to
a public offering of such shares.
4)

The proportion of the firm's or institution's direct investment recommendations presented within the latest quarter that are "buy", "hold" or "sell" or equivalent categories.

5)

The proportion of issuers corresponding to each of the categories in no. 4 to which the
investment firm or the credit institution has supplied material investment banking services over the previous 12 months.

755

Analyses presented in a shortened form or orally

11

Where the requirements of section 5, sections 7-8 and section 10 would be disproportionate
in relation to the length of the analysis distributed, it shall suffice to make clear and prominent reference in the analysis itself to the place where such disclosure can be directly and
easily accessed by the public, such as the website of the legal person.

12

Where an analysis is presented orally, it shall suffice to meet the requirements of sections 310 that, in connection with the presentation of the analysis, reference is made, to the greatest extent possible, to the place where such disclosure can be directly and easily accessed
by the public, such as the website of the legal person.
Part 3
Regulations on dissemination of analyses produced by third parties
General requirements

13

A person who, at his own responsibility, disseminates an analysis produced by a third party
shall, in connection with the dissemination, clearly and prominently state his name and any
job title. The 1st clause shall not apply where it is possible to identify the person responsible
for the production of the analysis in connection with the dissemination.

14

(1)

If a person, prior to the dissemination of an analysis produced by a third party, substantially

alters the analysis, that person shall ensure that the information disseminated clearly indicates the changes in detail.

(2)

If a substantial alteration as mentioned in subsection (1) consists of a change in the direction of the investment recommendation, such as changing a "buy" investment recommendation into a "sell" or "hold" recommendation or vice versa, the disseminator shall meet the
requirements of sections 3-7 and section 9, to the extent of the substantial alteration.

(3)

Legal persons who themselves, or through natural persons, disseminate substantially altered
analyses shall

have a formal written policy so that the persons receiving substantially al-

tered analyses may be directed to where, provided that this information is publicly available,
they can have access to

(4)

1)

the identity of the producer of the original analysis,

2)

the analysis itself, and

3)

the disclosure of the producer's interests or conflicts of interest.

Subsections (1)-(3) shall not apply to news reporting on analyses produced by a third party,
provided that the substance of the analysis is not altered.

15

(1)

If a person disseminates a summary of an analysis produced by a third party, this person

shall ensure that the summary is clear and not misleading

756

(2)

If a person disseminates a summary of an analysis produced by a third party, this person

shall ensure that, provided that this information is publicly available, the summary mentions
1)

where the original analysis is available, and

2)

where information on any interests and conflicts of interests for the third party can be
accessed by the public, if this information is not stated in the analysis itself.
Special requirements for investment firms and credit institutions

16

If an investment firm, a credit institution or a natural person working for such firms or institutions under a contract of employment or otherwise disseminates analyses produced by a
third party, the firm or the institution shall, in addition to the requirements of sections 1315, ensure in connection with the dissemination
1)

disclosure of the authority supervising the firm or institution, and

2)

in accordance with section 8 and section 10, disclosure of interests or conflicts of interest with the firm or institution, unless the third party producing the analysis already has
disseminated the analysis to the public or distribution channels.

17

If an investment firm or a credit institution, prior to dissemination, has substantially altered

the analysis, the firm or institution shall meet the requirements of sections 3-10 with regard
to the substantial alteration.
Part 4
Final provisions Penalties

18

(1)

Fines may be stipulated for any violation of the provisions of sections 3-4, section 5(1)-(3),
sections 6-7, section 8(1), sections 9-10, section 13, section 14(1)-(3), and sections 15-17.

(2)

Companies, etc. (legal persons) may incur criminal liability according to the regulations in
chapter 5 of the Criminal Code.
Entry into force

19

This Executive Order shall enter into force on 1 November 2007. At the same time Executive
Order no. 125 of 28 February 2005 on the Production and Dissemination to the Public of Certain Investment Analyses shall be repealed.

The Danish Financial Supervisory Agency, 22 October 2007

Henrik-Bjerre Nielsen
/ Mads Mathiassen

757

Rules for issuers of shares

NASDAQ OMX Copenhagen A/S
1-6-2013

758

Shares
Table of contents
INTRODUCTION...................................................................................................... 3
1 GENERAL PROVISIONS ....................................................................................... 4
1.1
1.2

THE APPLICABILITY OF THE RULES ............................................................................ 4

ENTRY INTO FORCE ............................................................................................. 4

2. LISTING REQUIREMENTS FOR ADMITTING SHARES TO TRADING ...................... 5

2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10

PROVISIONS ..................................................................................................... 5
THE PROCESS FOR ADMITTANCE TO TRADING .............................................................. 5
GENERAL REQUIREMENTS FOR ADMITTANCE TO TRADING ................................................. 7
ADMINISTRATION OF THE COMPANY ......................................................................... 11
CORPORATE GOVERNANCE.................................................................................... 13
WAIVERS ....................................................................................................... 14
SECONDARY ADMITTANCE TO TRADING ..................................................................... 14
OBSERVATION SEGMENT ...................................................................................... 16
DELETION FROM TRADE ....................................................................................... 16
SPECIFIC LISTING REQUIREMENTS FOR ACQUISITION COMPANIES .................................... 18

3 DISCLOSURE REQUIREMENTS FOR ISSUERS OF SHARES .................................... 20

3.1 GENERAL DISCLOSURE REQUIREMENTS .................................................................... 20
3.1.1 General provision ..................................................................................... 20
3.1.2 Correct and relevant information ................................................................ 23
3.1.3 Timing of information ............................................................................... 23
3.1.4 Information leaks ..................................................................................... 24
3.1.5 Methodology ............................................................................................ 25
3.1.6 Website .................................................................................................. 25
3.2 REGULAR DISCLOSURE REQUIREMENTS ..................................................................... 26
3.2.1 Financial reports ...................................................................................... 26
3.2.2 Timing of financial statement release and interim reports .............................. 26
3.2.3 Content of financial reports ....................................................................... 27
3.2.4 Audit report ............................................................................................. 27
3.3 OTHER DISCLOSURE REQUIREMENTS ........................................................................ 28
3.3.1 Forecasts and forward-looking statements ................................................... 28
3.3.2 Unexpected and significant deviation in financial result or financial position ..... 29
3.3.3 General meetings of shareholders .............................................................. 29
3.3.4 Issues of securities ................................................................................... 30
3.3.5 Changes in board of directors, management and auditors.............................. 31
3.3.6 Share-based incentive programmes ............................................................ 31
3.3.7 Closely-related party transactions .............................................................. 33
3.3.8 Business acquisitions and divestitures ......................................................... 33
3.3.9 Change in identity .................................................................................... 35
3.3.10 Decisions regarding listing ........................................................................ 36
3.3.11 Information required by another trading venue ........................................... 36
3.3.12 Company calendar ................................................................................... 36
3.4 INFORMATION TO THE EXCHANGE ONLY ..................................................................... 37
3.4.1 Public tender offers .................................................................................. 37

759

Rules for issuers of shares

3.4.2 Advance information ................................................................................. 37

4 SPECIAL RULES ................................................................................................. 38
4.1
4.2
4.3

INTERNAL RULES GOVERNING TRADING IN THE COMPANY'S OWN SHARES .............................. 38

INTERNAL RULES GOVERNING TRADING IN THE COMPANY'S SHARES .................................... 39
RECOMMENDATIONS FOR CORPORATE GOVERNANCE ...................................................... 40

5 VIOLATION ........................................................................................................ 42

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Introduction
This set of rules contains the requirements for listing of shares on NASDAQ OMX Copenhagen
A/S (the exchange).
The rules are issued by the exchange according to The Securities Act section 21 which states
that an operator of a regulated market, an exchange, shall set clear and transparent rules for
admittance to trading on the regulated market. The rules shall ensure that securities admitted to
trading can be traded in a fair, orderly and effective manner, when the securities are freely
tradable.
In addition to the listing requirements the rules contains the provisions that regulate the issuers
information activities towards the market and the exchange and certain separate exchange rules
including those of internal rules and Corporate Governance. The rules are adapted to the current
EU-directives such as the Market Abuse-directive, the Transparency-directive and the directive
of markets for financial instruments (MiFiD).
The rules are in substance harmonised for the NASDAQ OMX-exchanges in Stockholm,
Helsinki, Copenhagen and Iceland, ie. for the issuers on the Nordic markets. This applies above
all for the conditions concerning admittance to trading for shares and the disclosure
requirements. The harmonization makes it easier for the investors and it contributes to create a
common Nordic Securities Market with a larger opportunity for the issuers to achieve access to
risk capital. The price information appears in a complete Nordic pricelist.
The rules for issuers of shares initially contain provisions governing the validity of the rules and
entry into force of the rules. Section 2 specifies the conditions concerning the admittance to
trading for shares while the disclosure requirements for the listed companies are regulated in
section 3. In section 4 some exchange rules are found which are distinct for Danish issuers.
Rules concerning violation are found in section 5.
The rule text itself is written in bold letters. To promote the use of the rules the rule text is
usually followed by a guiding text. The guiding text is not binding for the company but is just
the exchanges interpretation of the current practice.
The latest updated version of the set of rules is available on the exchanges website
www.nasdaqomx.com/listing/europe/rulesregulations/.

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1 General provisions
1.1

The applicability of the rules

1.1.1 The rules in this set of rules shall apply as of the day on which the issuers financial
instrument is admitted to trading on the exchange, or the day on which the issuer applies
for admittance to trading and thereafter in the period of time in which the financial
instrument is admitted to trading.
1.1.2 If a company according to the companies act is established with a supervisory board
instead of a board of directors the provisions in this set of rules concerning the board of
directors shall apply correspondingly to the supervisory board.
1.2

Entry into force

This set of rules applies from 1 June, 2013. As of 1 June, 2013,Rules for Issuers of Shares
on NASDAQ OMX Copenhagen of 1 October, 2011 are lifted. Rule 4.3 concerning
Corporate Governance contain a special commencement rule.

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2. Listing Requirements for admitting shares to trading

2.1

Provisions

2.1.1 The process, the requirements and some other issues pertaining to admittance to
trading are set out below. For the purposes of this Chapter, the term Requirements for
Admittance to Trading shall mean the requirements set out under Section 2.3 (General
Requirements for Admittance to Trading), Section 2.4 (Administration of the company),
Section 2.5 (Corporate Governance) and Section 2.10 (Specific Listing Requirements for
Acquisition Companies).
2.1.2 The Requirements for Admittance to Trading are harmonized between NASDAQ
OMX Helsinki, Stockholm and Copenhagen.
Companies whose shares are admitted to trading at the exchange will be presented on the Nordic
List together with companies whose shares are admitted to trading at NASDAQ OMX Helsinki
and Stockholm. The Nordic List is divided into three segments based on the market cap of the
company concerned (Large Cap, Mid Cap and Small Cap). In addition, all companies are
presented according to a company classification standard. Information about, inter alia, the
exchange at which the relevant shares are admitted to trading and the legal status of the
admittance (official listing cf. the Executive Order on the Conditions for Official Listing of
Securities - or admission to trading without being officially listed) is also presented in the Nordic
List.
The vast majority of the Requirements for Admittance to trading are harmonized. However,
because of special requirements regarding, inter alia, national legislation or other differences in
the regulatory framework in a specific jurisdiction, some minor differences may still exist in the
Requirements for Admittance to Trading between NASDAQ OMX Helsinki, Stockholm and
Copenhagen.
2.1.3 The Requirements for Admittance to Trading shall apply at the time when the shares
of the company are admitted to trading, as well as continuously when shares are traded at
the market. Notwithstanding this general presumption, the following parts of the
Requirements shall only apply at the time of the admittance to trading:

2.2

Rule 2.3.5 Accounts and Operating History,

Rule 2.3.6 Profitability and Working Capital, and
Rule 2.3.8 Market Value of Shares.

The Process for Admittance to Trading

2.2.1 The rules in this section shall only apply where a company seeks listing on the
exchange without its shares prior to this are listed (IPOs).

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2.2.2 Initiation of the Process for Admittance to Trading

2.2.2.1 Shares may be admitted to trading on the exchange if the shares and the company
fulfill the provisions in these rules. Shares admitted to trading can, furthermore, be
admitted to official listing, if they fulfil the conditions described in the Executive Order on
the Conditions for Official Listing of Securities and meet the provisions in these
requirements.
Admittance for official listing presupposes admittance to trading. The announcement of the
requirements for official listing of securities comes into force on 1 November 2007. As goes for
shares, which on 1 November 2007 are already was listed on the exchange, it applied that these
shares was also considered to be admitted to official listing after 1 November 2007.
2.2.2.2 When applying for admittance to trading of shares on the exchange a prospectus
must be prepared, approved and published. The approval of the prospectus is done by the
relevant financial supervisory authority, while it is the exchange that assesses whether a
company fulfils the conditions for admittance to trading and Official Listing.
2.2.2.3 The company shall lie down and adopt a set of internal rules, cf. rule 4.1 and 4.2 in
this set of rules.
2.2.3 Internal Rules
The exchange shall receive a copy of the companys internal rules prior to the first day of
trading.

2.2.4 General Terms and Conditions for Admittance to Trading

The company shall accept and sign the General Terms and Conditions for Admittance for
Trade on NASDAQ OMX Copenhagen A/S. The exchange shall receive a copy of the
General Terms and Conditions prior to the first day of trading.
2.2.5 Initiation of the listing process
A company considering to apply for its shares to be admitted to trading and official listing
on NASDAQ OMX Copenhagen A/S (the exchange) can request the exchange to initiate a
listing process. The request shall:
1) state the reason for the admittance- and official listing application;
2) state how the proceeds will be spent;
3) state the companys share capital /number of shares (if relevant with information
about share classes and an indication of differences between share classes);
4) state the size of the share offering, broken down by new and existing shares, and
specify the type of offering;
5) list the financial intermediary/intermediaries handling the share offering on
behalf of the company..

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The following documents shall accompany the request:

1)
a concrete, precise and detailed description of how the company fulfils each
listing requirement in rules 2.3, 2.4 and 2.5 and if relevant the requirements for
official listing;
2)
a draft prospectus;
3)
the companys accounts for the past three fiscal years;
4)
a timetable for the admission to trading and the share offering;
5)
the companys latest registered set of articles of association;
6)
a subscription/sales form;
7)
a copy or draft of the companys internal rules, cf. rule 4.1 and 4.2; and
8)
documentation for the companys registration with the Danish Commerce and
Companies Agency or other authority of registration .
2.2.6 Application for admittance to trading
After the listing process is initiated the company must apply formally for admittance to
trading of its shares. By applying formally the company commits to adhere to disclosure
requirements and other requirements set out for issuers of securities admitted to trading
on the exchange in the Securities Trading etc. Act and rules determined by the competent
authority and the exchange.
2.3

General Requirements for Admittance to Trading

2.3.1 Incorporation
The company must be duly incorporated or otherwise validly established according to the
relevant laws of its place of incorporation or establishment.
2.3.2 Validity
The shares of the issuer must:
(i)
(ii)

conform with the laws of the companys place of incorporation, and

have the necessary statutory or other consents.

2.3.3 Negotiability
The shares must be freely negotiable.
Free negotiability of the shares is a general prerequisite for becoming publicly traded and
admitted to trading on the exchange. When the companys Articles of Association include
limitations on transferability of the shares, such limitations may be typically considered to
restrict free transferability in the meaning of this clause, while other arrangements with similar
effect may lead to similar interpretation.
2.3.4 Entire class must be admitted to trading

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Rules for issuers of shares

The application for admittance to trading must cover all issued shares of the same class.
The application for admittance to trading must cover all shares of the same class that have been
issued and that are issued in an IPO preceding the first day of admittance to trading.
Subsequent issues of new shares and admittance to trading of such new shares shall be admitted
to trading in accordance with the practices applied by the exchange and legal requirements.
2.3.5 Accounts and Operating History
2.3.5.1 The company shall have published annual accounts for at least three years in
accordance with the accounting laws applicable to the company in its home country.
Where applicable, the accounts shall also include consolidated accounts for the company
and all its subsidiaries.
2.3.5.2 In addition, the line(s) of business and the field of operation of the company and its
group shall have a sufficient operating history.
The general rule is that the company shall have complete annual accounts for at least three years.
When the operating history of the company is evaluated, a company that has conducted its
current business, in essential respects, for three years and is able to present financial accounts for
these years is normally deemed to fulfil the requirement. Evaluation of accounts and operating
history shall cover the company including its subsidiaries. The basis for the assessment shall be
the situation for the company as it develops over time. Since a company may acquire or divest
one or more subsidiaries, this, of course, must be reflected in the annual accounts. The company
must be able to demonstrate its operations in order for the exchange and the investors to assess
the development of the business. Pro forma accounts (or other financial information that is
presented for comparative purposes to explain changes to official accounts or a lack thereof) are
presented as required in the prospectus, and typically such accounts are presented for one fiscal
year. However, the exchange may require additional comparable information for evaluating
fulfilment of rule 2.3.5.2. Material changes in the companys line(s) of business or field of
operation prior to admittance to trading, or for example a reverse takeover, may lead to the
requirement stipulated in rule 2.3.5.2 not being fulfilled, or require extensive additional
information about the business of the company before making an informed judgment of the
company.
In order for an exemption to be granted from the requirement to have annual accounts for three
years, there should be sufficient information for the exchange and the investors to evaluate the
development of the business and to form an informed judgment of the company and its shares as
an investment. This information may be evidence of an otherwise stable and high-quality
environment, as may be the case, for example, in the event of spin-offs from companies admitted
to trading or where a company has been formed through an acquisition or merger between two
or more companies that would be suitable for admittance to trading, or other corresponding
cases. For evaluating companies with less than three years of operational history, even more
attention will be paid to the information presented about the business and operation of the
company.

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2.3.6 Profitability and Working Capital

2.3.6.1 The company shall demonstrate that it possesses documented earnings capacity on a
business group level.
2.3.6.2 Alternatively, a company that does not possess documented earnings capacity shall
demonstrate that it has sufficient working capital available for its planned business for at
least twelve months after the first day of trading.
As a principle, this clause means that the company shall be able to document that its business is
profitable. Accordingly, the companys financial statements shall show that the company has
generated profits or has the capacity to generate profits of a reasonable size in comparison with
the industry in general. The general rule is that a profit must have been reported during the most
recent fiscal year. For companies that lack financial history, stringent requirements are imposed
regarding the quality and scope of the non-financial information set forth in the prospectus and
the admittance to trading application in order for investors and the exchange to be able to make a
well-founded assessment of the company and its business. At the very least, it should be made
clear when the company expects to be profitable and how the company intends to finance its
operations until such time.
When demonstrating to the exchange and investors the existence of sufficient working capital,
various means may be used. Means to present sufficient working capital for the next twelve
months may include estimates on cash-flow statements, planned and available measures for
financing, descriptions of the planned business and investments, and well-founded assessments
of the future prospects of the company. It is important that the basis for the companys wellfounded assessment be made clear. Despite such financing, the requirement is not considered to
be fulfilled in a case where, for some other reason, the companys financial status is
extraordinary or threatened, as may be the case, for example, if a company restructuring or a
similar voluntary process has taken place.
2.3.7 Liquidity
2.3.7.1 Conditions for sufficient demand and supply shall exist in order to facilitate a
reliable price formation process.
2.3.7.2 A sufficient number of shares shall be distributed to the public. In addition, the
company shall have a sufficient number of shareholders.
2.3.7.3 For the purposes of rule 2.3.7.2, a sufficient number of shares shall be considered as
being distributed to the public when 25 percent of the shares within the same class are in
public hands.
2.3.7.4 The exchange may accept a percentage lower than 25 percent of the shares if it is
satisfied that the market will operate properly with a lower percentage in view of the large
number of shares that are distributed to the public.

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Rules for issuers of shares

A prerequisite for exchange trading is that there is sufficient demand and supply for the
securities admitted to trading. Such sufficient demand and supply must support reliable price
formation in trading. There are various components in the evaluation of these requirements
before admittance to trading on the Nordic List. Factors that may be considered in the evaluation
may include previous trading history.
As a general requirement, there shall be a sufficient number of shares in public hands, and there
shall be a sufficient number of shareholders. The number of shareholders may be considered as
one way to estimate sufficient demand and supply. In this context, a small number of shares or
shareholders may lead to deterioration in reliable price formation. Under normal circumstances,
companies having at least 500 shareholders holding shares with a value of around EUR 1000
will be considered to fulfil the requirement regarding the number of shareholders.
In this context, the term Public hands means a person who directly or indirectly owns less than
10 percent of the companys shares or voting rights. In addition, all holdings by natural or legal
persons that are closely affiliated or are otherwise expected to employ concerted practices in
respect of the company shall be aggregated for the purposes of the calculation.
Also the holdings of members of the board and the executive management of the company, as
well as any closely affiliated legal entities such as pension funds operated by the company itself,
are not considered to be publicly owned.
When calculating shares that are not publicly owned, shareholders who have pledged not to
divest their shares during a protracted period of time (so-called lock-up) are included.
There may be situations in which more than 25 percent of the shares are in public hands at the
time of the admission to trading, but where the distribution falls under such percentage
thereafter. It should be noted that the 25 percent rule is to be seen as a proxy, supporting the
main principle that there should be a sufficient share distribution. Consequently, once a company
is admitted to trading, the exchange will continuously assess whether share distribution and
liquidity are sufficient from an overall viewpoint, and the 25 percent rule will thus become only
one of many components in such an assessment. This also means that a company that is not
complying with the 25 percent rule will not automatically be considered to violate the rule.
In the event that the conditions regarding liquidity materially deviate from the requirements for
admittance to trading while the company is admitted to trading, such companies will be
encouraged to remedy the situation. It may be suggested that a company commission the
services of a liquidity provider. If trading in the companys shares remains sporadic, a listing in
the observation segment may be considered. Such a decision by the exchange is preceded by a
discussion with the company.
If the company considers admitting a second class of shares to trading, the exchanges
assessment will be based on whether there will be sufficient liquidity in the shares in such a
class. In practice, this means that the exchange will make an overall assessment of expected
trading interest.

768

Rules for issuers of shares

10

There may be situations in which the shares are not fully distributed at the time of the
introduction, but where it is ascertained that such distribution will be achieved shortly thereafter.
In such circumstances, the exchange may find it appropriate to approve the application with
reference to rule 2.6.
2.3.8 Market Value of Shares
The expected aggregate market value of the shares shall be at least EUR 1 million.
The expected aggregate market value of the shares is typically evaluated based on the offering
price in the Initial Public Offering, but other means of evaluation can be used as well. This
requirement applies only prior to an initial admittance to trading on the Exchange.
2.3.9 Suitability
The exchange may also, in cases where all requirements are fulfilled, refuse an application
for trading if it considers that the admittance to trading would be detrimental for the
securities market or investor interests.
In exceptional cases, a company applying for trading may be deemed to be unsuitable for
admittance to trading, despite the fact that the company fulfils all of the requirements for this.
This may be the case where, for example, it is believed that the admittance to trading of the
companys shares might damage confidence in the securities market in general. If a company,
already admitted to trading, despite fulfilling all continuous requirements, is considered to
damage confidence in the securities market in general because of its operations or organization,
the exchange may consider evaluating grounds for moving the shares to the observation list or
deleting the shares from the trade.
In order to maintain and preserve the publics confidence in the market, it is imperative that
persons discharging managerial responsibilities in the company, including members of the
board, do not have a history that may jeopardize the reputation of the company and thus
confidence in the securities market. It is also important that the history of such persons be
sufficiently disclosed by the company prior to the admittance to trading, as part of the
information presented in the prospectus. For example, the company should carefully consider
whether information relating to the criminal record of such persons should be disclosed or not,
and the same goes for information pertaining to involvement in bankruptcies and suchlike. In
extreme circumstances, if a relevant person has a history of felonies, in particular white-collar
crimes, or has been involved in a number of bankruptcies in the past, such circumstances may
disqualify the company from being admitted to trading, unless such a person is relieved from
his/her position in the company.
2.4

Administration of the Company

2.4.1 The management and the board of directors

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11

2.4.1.1 The board of directors of the company shall be composed so that it sufficiently
reflects the competence and experience required to govern a company, whose shares are
admitted to trading, and to comply with the obligations of such a company.
2.4.1.2 The management of the company shall have sufficient competence and experience
to manage a company admitted to trading and to comply with the obligations of such a
company.
A prerequisite for being a company, whose shares are admitted to trading, is that the members of
the board and persons with managerial responsibilities in the company have a sufficient degree
of experience and knowledge in respect of the special requirements for such companies. It is
equally important that such persons also understand the demands and expectations placed on
such companies. It is neither mandated nor warranted that all members of the board possess such
experience and competence, but the board needs to be sufficiently qualified based on an overall
assessment. As regards the management, at least the CEO and CFO must be sufficiently
qualified in this respect.
When assessing the merits of relevant persons in the company or its board, the exchange will
take into consideration any previous experience gained from a position in a company, whose
shares are or have been admitted to trading on the exchange, another regulated market or a
marketplace with equivalent legal status. Other relevant experience shall qualify as well.
It is also important that the members of the board and the management know the company and
its business, and are familiar with the way the company has structured, for example, its internal
reporting lines, the management pertaining to financial reporting, its investor relation
management and its procedures for disclosing ad hoc and regular information to the stock
market. The exchange will normally consider the members of the board and the management as
being sufficiently familiar with such circumstances if they have been active in their respective
current positions in the company for a period of at least three months and if they have
participated in the production of at least one annual or interim report issued by the company
prior to the admittance to trading.
It is also important that all members of the board and persons in management have a general
understanding of market rules, in particular such rules that are directly attributable to the
company and its admittance to trading. Such understanding may be acquired by participating in
one of the regular seminars that are offered by the exchange. Persons that are sufficiently
qualified shall demonstrate this to the exchange, for example by providing a CV, a certification
by an acceptable third party or other means that may satisfy the exchange.
The exchange requires the CEO to be employed by the company. This requirement may be
waived for a shorter period, if duly justified.
2.4.2 Capacity for providing information to the market
Well in advance of the admittance to trading, the company must establish and maintain
adequate procedures, controls and systems, including systems and procedures for financial

770

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12

reporting, to enable compliance with its obligation to provide the market with timely,
reliable, accurate and up-to-date information as required by the exchange.
The company shall have an organization that ensures timely dissemination of information to the
exchange. The organization and the routines should be in place prior to the admittance to
trading, meaning that the company should have prepared at least one interim report for
publication in accordance with the Exchange rules, although this information need not have been
disseminated to the market. The exchange encourages applicants to go even further, in the sense
that it is recommended that the organization for dissemination of information to the market will
have been in operation for at least two quarters and involved in the production of at least two
interim reports or a report of annual earnings figures and one interim report prior to the
admittance to trading.
The financial system shall be structured in such a manner that management and the board of
directors receive the necessary information for decision-making. This should facilitate speedy
and frequent reporting to management and the board of directors, commonly in the form of
monthly reports. The financial system must allow for the speedy production of reliable interim
reports and reports of annual earnings figures. The company shall also have the human resources
required to analyze the material so that, for example, profit trends in the external reporting can
be commented upon in a manner relevant to the market. It may be acceptable that retained
external personnel handle parts of the financial function, provided that there is a long-term
contractual relationship and reasonable continuity of personnel. However, the responsibility for
the fulfilment of the financial functions always rests with the company and having essential
aspects of financial expertise based on external personnel is not acceptable.
In order to avoid a situation in which the president becomes overly burdened, there shall be at
least one additional person who can communicate externally on behalf of the company.
Consultants may function as a support in the distribution of information, especially with respect
to the drafting of market information. However, basing material parts of the information
expertise on consultants or hired external personnel is not acceptable.
To ensure that the company provides the market with timely, reliable, accurate and up-to-date
information, the exchange encourages the company to adopt an information policy. A
companys information policy is a document that helps the company to continuously provide
high-quality internal and external information. It should be formulated in such a manner that
compliance with it is not dependent on a single person, and it should also be designed to fit the
circumstances pertaining to the specific company. The information provided to the market shall
be correct, relevant, and reliable and shall be provided in accordance with the rules of the
exchange. A companys information policy normally deals with a number of areas, such as who
is to act as the companys spokesperson, which type of information is to be made public, how
and when publication shall take place and the handling of information in crises. With respect to a
company, with shares admitted to trading, it is also of particular importance that the policy
contains a section dealing with the markets demands for information. The internal rules to be
laid down by the companies admitted to trading, will contribute to this.
2.5

Corporate Governance

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13

The company shall disclose its compliance with the corporate governance code in the
jurisdiction where its registered office is, according to local practice. If the company is not
subject to a corporate governance code in its home country, the company shall apply the
corporate governance code that is applied on the exchange.
For the corporate governance-rules (Corporate Governance Recommendations) that apply to the
companies admitted to trading on the exchange, see also rule 4.3.
2.6

Waivers

The exchange may approve an application for admittance to trading, even if the company
does not fulfil all the requirements, if it is satisfied
(i) that the objectives behind the relevant Requirements for Admittance to Trading
or any statutory requirements are not compromised, or
(ii) that the objectives behind certain Requirements for Admittance to Trading can
be achieved by other means.
The objectives behind the Requirements for Admittance to Trading are to facilitate sufficient
liquidity and to promote confidence in the company, the exchange and the market at large.
These objectives are normally deemed to have been met if all the Requirements for Admittance
to Trading are satisfied. However, each particular case has to be assessed on its own merits.
Where the circumstances considered together give a sufficient assurance that the situation of the
company and its shares is in compliance with the said objectives, the exchange may approve an
application for admittance to trading even if all the Requirements for Admittance to Trading
have not been fulfilled. For example, it may be that the share distribution is less than 25 percent,
but the number of shares distributed to the public and the number of shareholders is sufficient to
provide orderly trading and sufficient liquidity. In such circumstances, the requirements need to
provide a sufficient degree of flexibility, in order not to hinder admission to trading if such
trading would be in the best interest of the company and the investors. Such deviation must not
be contrary to The Danish Securities Trading etc. Act.
Waivers may only be relevant at the time of admission to trading. Consequently, a company that
has been approved for admittance to trading does not need to seek a waiver if the situation
changes so that one or more of the requirements for admittance to trading are no longer fulfilled.
In such circumstances, the exchange normally initiates a discussion with the company in order to
find a solution, if needed. In situations whereby there are substantial deviations from the
Requirements for Admittance to Trading, the issue of deletion may be brought up as one
ultimate alternative.
2.7

Secondary Admittance to Trading

2.7.1 Companies incorporated in Denmark shall be considered as having their primary

admittance to trading on the exchange. However, if the company can demonstrate that the
majority of the trading interest in its securities relates to a foreign exchange, the exchange
may accept such foreign exchange to be the place of the primary admittance to trading.

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2.7.2 Companies incorporated in a country other than Denmark may be considered as

having their primary admittance to trading in the country where they are incorporated, if
such companies are admitted to trading on an exchange in the particular country and the
majority of the trading interest in the shares can be referred to such an exchange. In the
absence of admittance to trading on an exchange in the country of incorporation, a foreign
company may be deemed to have a primary admittance to trading on such an established
and recognized foreign exchange to which it is considered to have the closest connection,
taking into account the trading interest in the shares at such an exchange, compared with
any other relevant exchange.
2.7.3 Subject to approval by the exchange according to rule 2.7.1 or 2.7.2, a company with
a primary admittance to trading on a foreign exchange may apply for secondary
admittance to trading, and the exchange may under such circumstances waive one or more
of the Requirements for admittance to trading set out under rule 2.3 and 2.4.
Companies with a primary listing on a regulated market, or equivalent, which market is run by
NASDAQ OMX, Deutsche Brse, London Stock Exchange, NYSE Euronext, Oslo Brs, Hong
Kong Exchanges and Clearing, Autstralian Securities Exchange, Singapore Exchange or Toronto
Stock Exchange may be granted exceptions from the Process for Admittance to Trading in Section
2.2.

In connection with a secondary listing, NASDAQ OMX will normally require

a certificate from the regulated market where the company has its primary
listing. This is done to verify that the company, in essential respects, has
complied with the listing requirements at the primary market.
2.7.4 When seeking a secondary admittance to trading on the exchange, the company
must satisfy the exchange that there will be sufficient liquidity in order to facilitate orderly
trading and an efficient price formation process.
The exchange will normally recognize the requirements for admittance to trading of another well
recognized exchange or equivalent regulated market, if the company is subject to primary
admittance to trading on such an exchange. The Exchange may accept a secondary listing of a
company having its primary listing on such a market in accordance with the requirements set out
in the above Clauses.
However, also in case of secondary admittance to trading, it is imperative that the liquidity is
sufficient to provide for orderly trading and an efficient price formation process. The exchange
will consider the forecast of sufficient liquidity based on an overall assessment of the share
distribution of the company, not only on the domestic market but also in a Nordic, European or
even global perspective. In its assessment, the exchange will consider factors such as (i) the
share distribution in the national market, and (ii) the efficiency of relevant cross-border clearing
and settlement facilities. If deemed appropriate under the circumstances, the exchange may
require that the company use a designated liquidity provider in order to safeguard a sufficient
liquidity.

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15

The exchange may at any time decide that the admittance to trading on the exchange shall be
considered as a primary admittance to trading in case of changed circumstances. For example,
the exchange may initiate such a change if it becomes evident that the prerequisites for
secondary admittance to trading set out in the Clauses above are no longer fulfilled.
2.8

Observation Segment

The exchange may decide to place the companys shares or other securities in the
observation segment if
(i)
(ii)
(iii)
(iv)
(v)

(vi)
(vii)

the company fails to satisfy the Requirements for admittance to trading and
the failure is deemed to be significant,
a serious breach of other exchange rules pertaining to companies admitted to
trading is at hand,
the company has applied for deletion from admittance to trading,
the company is subject to a public offer or a bidder has disclosed its intention
to raise such a bid in respect of the company,
the company has been subject to a reverse take-over or otherwise plans to
make or has been subject to an extensive change in its business or
organization so that the company upon an overall assessment appears to be
an entirely new company,
there is a material adverse uncertainty in respect of the companys financial
position, or
any other circumstance exists that results in substantial uncertainty
regarding the company or the pricing of the securities admitted to trading.

As a signal to the market, a companys shares or other securities may temporarily be placed in
the observation segment. The objective behind the observation segment is to give a signal to the
market that there are special circumstances connected to the company or its shares to which the
investors should pay attention. Reasons for placing the security in the observation segment may
vary significantly in various situations, as can be seen from the various different reasons for
observation. An observation listing should take place during a limited period of time, normally
not more than six months.
2.9

Deletion from trade

Deletion from trade can be decided by the exchange according to section 25 of the Danish
Securities Trading Act.
According to the abovementioned provision an exchange may decide that a security shall be
deleted from trading from the exchange in question if it finds that the security no longer fulfils
the rules of the market. The deletion may not be concluded though, if there is a possibility, that
this will cause sufficient damage to the interests of the investors or the market functions.
Pursuant to this provision it is the decision of the exchange if a admittance to trading no longer
fulfils the rules of the market and that a deletion this will not cause sufficient damage to the
interests of the investors or the market functions. In such a case several factors will be taken into

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consideration, and the exchange will form its decision based on an evaluation of all those
factors. Thus the fact that there for example is limited liquidity in a security admitted to trading
will usually not and have up until now never in itself resulted in a deletion. However, limited
liquidity may eventually - combined with other factors such as a high percentage of ownership
concentration, poor management, an unwillingness by the issuer to comply with the rules of the
Exchange or with relevant legislation or other factors - lead to a deletion. However, only if the
situation is such that the exchange finds that the interest of the market in a deletion has to carry
greater weight than the interests of those investors, who have invested in the security admitted to
trading. Even in such a situation deletion will only be decided if all other alternative ways of
remedying the situation have been tried with no result. Forced deletion is a tool that shall only be
used in extreme cases, thus situations where a forced deletion has been decided are very rare.
In situations where significant changes are made in a public limited company, including
significant changes in ownership, the capital base, the companys activities or the companys
management, name, etc. so that, based on an overall evaluation, the exchange considers that the
company is in fact a new company, the exchange shall decide, whether the shares of the
company may continue to be admitted to trading.
If a company submits a request for deletion, such request shall be complied with, according to
the Danish securities Trading Act, unless the exchange, on the basis of an assessment of the
companys state of affairs and the specific situation, finds that deletion will cause sufficient
damage to the interests of the investors or the market functions.
When considering whether deletion would be detrimental to the interests of the investors, the
exchange will, among other things, determine whether the protection of minorities has been
disregarded, or whether a deletion would give certain shareholders or others an undue advantage
over other shareholders or the company.
When considering whether deletion would be detrimental to the interests of the market
functions, the exchange will, among other things, check how many outstanding shares and
shareholders there are in the company in question.
Where the exchange receives a request for deletion in a case where the minority shareholders
have been or will be fully redeemed prior to the deletion, in compliance with the provisions of
the Danish Securities Trading Act possibly combined with a compulsory redemption under the
rules of the Danish Companies Act, the interests of the investors cannot be said to be
disregarded. The same applies where the company is discontinued. In situations where a 100 %
ownership concentration is ensured in a company as a result of compulsory redemption, merger
or liquidation, the exchange will delete the company without any further ceremony.
If ownership concentration is not ensured 100 %, or if the company is not discontinued, the
exchange will normally require that the company seeking deletion should have a significant
ownership concentration. The exchange will, among other things, consider whether the
companys shareholders are in a situation where they may demand to be redeemed under the
rules of the Danish Companies Act, and other factors, such as the volume of outstanding shares,
the number of shareholders and the market value of the outstanding shares, will also be taken
into account. In order to be able to make an assessment in these situations of whether a deletion

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will be detrimental to the interests of the investors, the exchange will ask the company to raise
the question of deletion as a separate item at a general meeting. Based on a copy of the minutes
of the general meeting, the exchange will assess any comments and objections. A resolution to
remove the company from trading on the exchange cannot in itself justify a deletion. In these
circumstances, other factors may be included in the exchanges consideration.
In the situations whereby the exchange finds that the interests of the investors or the market can
justify a deletion, the exchange will require the company to ensure that the companys
shareholders may dispose of their shares until the company is deleted from the exchange via an
offer to buy the remaining shares. Thus the minority shareholders will have an opportunity to
dispose of their shares knowing that the company is subsequently going to be deleted from the
exchange.
Pursuant to the Danish Securities Trading Act, a company, whose shares are admitted to trading,
shall be entitled to have a security deleted from an exchange if the security in this connection is
being listed or is admitted to trading on another regulated market.
2.10

Specific Listing Requirements for Acquisition Companies

2.10.1 An Acquisition Company is a company whose business plan is to complete one or

more acquisitions within a certain time period. The rules regarding Annual Financial
Reports, Operating History and Profitability in Clauses 2.3.5.1, 2.3.5.2 and 2.3.6 shall not
be applicable to Acquisition Companies.
2.10.2 At least 90 per cent of the gross proceeds from the initial public offering and any
other sale by the company of equity securities must be deposited in a blocked bank account
(a deposit account).
2.10.3 Within 36 months of the effectiveness of its prospectus, or such shorter period that
the company specifies in its prospectus, the company must complete one or more business
combinations having an aggregate fair market value of at least 80 per cent of the value of
the deposit account (excluding any deferred underwriters fees and taxes payable on the
income earned on the deposit account) at the time of the agreement to enter into the initial
combination.
2.10.4 Until the company has satisfied the condition in Clause 2.10.3 above, each business
combination must be approved by a majority of the directors who are independent of the
company and the management of the company (cf. Recommendations for good corporate
governance 5.4.1.).
2.10.5 Until the company has satisfied the condition in Clause 2.10.3 above, each business
combination must be approved by a majority of the shares voting at the shareholders
meeting at which the combination is being considered.
2.10.6 Until the company completes a business combination where all conditions in Clause
2.10.3 above are met, the company must notify NASDAQ OMX Copenhagen as soon as
possible about each proposed business combination prior to disclosing it to the public.

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2.10.7 Until the company has satisfied the condition in paragraph 2.10.3 above,
shareholders voting against a business combination at a shareholders meeting and making
a claim for redemption at that meeting, must have the right, determined in the companys
articles of association, to convert their shares into a pro rata share of the aggregate amount
then in the deposit account (net of taxes payable and amounts distributed to management
for working capital purposes) provided that the business combination is approved and
consummated and that it is in accordance with national law. A company may establish a
limit (set no lower than 10 % as to the maximum of the companys total share capital) with
respect to which any shareholder, may exercise such conversion rights. This right of
conversion excludes
a)
b)
c)
d)
e)
f)

Members of the board of directors of the company,

Officers of the company,
Founding shareholders of the company,
A spouse or co-habitee of any person referred to in subsections a-c,
A person who is under custody of any person referred to in subsections a-c, or
A legal person over which any person referred to in subsections a-e, alone or
together with any other person referred to therein, exercises a controlling influence.

The notice of the general meeting shall mention the shareholders right to demand
redemption.
2.10.8 When the company has satisfied the condition in Clause 2.10.3 and no longer is to be
regarded as an Acquisition Company, the company must provide documentation to the
exchange that it fulfills the general listing requirements for listed companies in all relevant
parts. If the company does not fulfill the listing requirements, the Exchange may decide
that trading in the listed security in question will be terminated in accordance with Clause
2.9

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3 Disclosure requirements for issuers of shares

3.1

General Disclosure Requirements

3.1.1 General provision

The company shall, as soon as possible, disclose information about decisions or other facts
and circumstances that are price sensitive. For the purpose of these rules, price
sensitive information means information which is reasonably expected to affect the price
of the companys listed securities, in accordance with the applicable national legislation.
This General provision addresses situations which require disclosure of information and which
are not covered by other sections of this rulebook. The applicable national legislation is, in
Sweden: Lag om Vrdepappersmarknaden; in Finland: Arvopaperimarkkinalaki; in Denmark:
Lov om Vrdipapirhandel; in Iceland: Lg um verbrfaviskipti. The wording of General
provision shall not be considered as a requirement that extends or is intended to extend the
purpose of local legislation.
A listed company shall ensure that all market participants have simultaneous access to any price
sensitive information about the company. The company is also required to ensure that the
information is treated confidentially and that no unauthorised party is given such information
prior disclosure. As a consequence of the foregoing, price sensitive information may not be
disclosed to analysts, journalists, or any other parties, either individually or in groups, unless
such information is simultaneously made public to the market. The abovementioned does not
prevent the disclosure of information to other persons in the course of the ordinary execution of
their work, profession or tasks. The General provision also stipulates that all price-sensitive
information concerning the company must be disclosed as soon as possible (see also rule 3.1.3).
Disclosure must be made according to national legislation and the requirements set forth in rule
3.1.5.
The determination of what constitutes price sensitive information must be based on the facts and
circumstances in each case and, where doubts persist, the company may contact the Exchange
for advice. The Exchanges employees are subject to a duty of confidentiality. However, the
company is always ultimately responsible for fulfilling its duty of disclosure.
In evaluating whether a price sensitive effect is reasonably expected to occur, the factors to be
considered may include:
the expected extent or importance of the decision, fact or circumstance compared to the
companys activities as whole;
the relevance of the information as regards the main determinants of the price of the
companys securities; and
all other market variables that may affect the price of the securities.
When the company has received the information from an external party, also the reliability of
the source can be taken into consideration.

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An additional basis for evaluation is whether similar information in the past had a price sensitive
effect or if the company itself has previously treated similar circumstances as price sensitive. Of
course this does not prevent companies from making changes to their disclosure policies, but
inconsistent treatment of similar information should be avoided.
As previously mentioned, a company must disclose information when it is reasonably
expected that the price of the securities will be affected. It is not required that actual changes in
the price of the securities occur. The effect on the price of the securities may vary and should be
determined on a company by company basis, taking into account, among other things, the share
price trend, the relevant industry in question, and the actual market circumstances. Accordingly,
an obligation to provide information pursuant to this provision may, for example, exist in the
following situations:

orders or investment decisions;

co-operation agreements or other agreements;
price or exchange rate changes;
credit or customer losses;
new joint ventures;
research results;
commencement or settlement of, or decisions rendered in, legal disputes;
financial difficulties;
decisions taken by authorities;
shareholder agreements known to the company which pertain to the use of voting rights
or transferability of the shares;
market rumours;
market making agreements; and
information regarding subsidiaries and affiliated companies, and
significant deviation in financial result or financial position

Some of the examples are described in greater detail below.

Orders or investment decisions; co-operation agreements
If a company discloses a major order, it could be essential to provide information about the value
of the order, including the product or other content of the order and time period to which the
order relates. Orders relating to new products, new areas of use, new customers or customer
types, and new markets may be considered as price sensitive under certain circumstances. In the
context of co-operation agreements, it may be difficult to determine the financial effects and,
therefore, it is very important to provide the securities market with a clear description of the
reasons, purpose, and plans.
Financial difficulties
If a company encounters financial difficulties, such as a liquidity crisis or suspension of
payments, and simultaneously loses control of its situation as significant decisions are taken by
other parties, e.g. lenders or major shareholders, such a factor is reasonably expected to be price
sensitive.

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The foregoing does not absolve the company of its responsibilities relating to information
disclosure and, therefore, the company remains liable for the disclosure of the information. This
is achieved by the company staying continuously informed of developments through contacts
with representatives from lenders, major shareholders, etc. On the basis of information then
received, appropriate information measures may be taken.
Not infrequently, loan agreements contain different types of limits in relation to equity ratio,
turnover, credit ratings or suchlike (covenants) and if these limits are exceeded, the lender
may demand renegotiation of the loan. Exceeding such limits may be a factor of a price sensitive
nature and thus must be disclosed.
Decisions taken by authorities
Even though it may be difficult for the company to control processes where decisions are made
by authorities or courts of law, it is still the companys responsibility to provide information
regarding such decision(s) to the securities market as soon as possible. The information must be
sufficiently comprehensive and relevant from the markets viewpoint to enable an assessment of
the effect on the company and its operations, result or financial position and thus the extent of
the information needed may vary.
If it is impossible for the company to provide an opinion on the consequences of the decisions
made by authorities or courts of law, the company may initially make an announcement
regarding the decision. As soon as the company has made an assessment of the consequence of
the decision, if any, the company should make a new announcement regarding these
consequences.
Information regarding subsidiaries and affiliated companies
Decisions, facts and circumstances pertaining to the group or to individual subsidiaries, and in
some cases affiliated companies as well, may likewise be price sensitive. Evaluation is naturally
affected by the legal and operational structure of the group and by other circumstances.
A situation may occur in which an affiliated company discloses information independently with
regard to its own operations regardless of whether the affiliated company itself has a similar duty
of disclosure. In such cases the listed (parent) company is required to evaluate whether that
information is also price sensitive with regard to the listed companys securities and,
accordingly, disclose such information in accordance with the General provision.
When the subsidiary is a listed company, circumstances in the subsidiary may be price sensitive
for the parent companys listed securities and must be disclosed by the parent company. When
the information is not significant from the parent companys perspective and when the investors
have sufficient information to assess the announcement from the subsidiary, it is generally
unnecessary for the parent company to make a separate disclosure of information already
disclosed to the markets by the subsidiary. However, the parent company must disclose the
information when special assessment is required from the parent companys perspective, for
example when the consequences to the parent company cannot be easily understood from the
announcement made by the subsidiary. In such cases, the information should also follow the
requirements of the Correct and Relevant Information rule. It is preferable that listed group
companies cooperate in making their announcements.

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Significant deviation in financial result or financial position

In the event that the financial result or position of the company deviates in a significant way
from what could reasonably be expected based on financial information previously disclosed by
the company, the company shall disclose information about the change if it is considered price
sensitive.
3.1.2 Correct and relevant information
Information disclosed by the company shall be correct, relevant and clear,
and must not be misleading.
Information regarding decisions, facts and circumstances must be sufficiently
comprehensive to enable assessment of the effect of the information disclosed on the
company, its financial result and financial position, or the price of its listed securities.
The information the company discloses must reflect the companys actual situation and may not
be misleading or inaccurate in any manner. The requirement regarding relevance dictates that the
information must contain facts which provide sufficient guidance to enable evaluation of such
information and its effect on the price of the companys securities.
The second part of the provision states that information must be sufficiently comprehensive to
enable assessment of the effect of the information disclosed on the company itself, its financial
result and financial position, or the price of its securities and therefore also information omitted
from an announcement may cause the announcement to be inaccurate or misleading. The
information in an announcement must however be ready to be disclosed.
In some cases, like mergers and acquisitions, disclosure at various stages of the transactions may
be necessary. When the transaction or specific elements of it are not yet finalized, and more
information is expected to be disclosed later, the company should refer to such pending matters
and in due course give further information about them. However, companies should, in general,
avoid disclosing information in stages.
3.1.3 Timing of information
Disclosure of information covered by these Rules shall be made as soon as possible, unless
otherwise specifically stated. If price sensitive information is given intentionally to a third
party, who does not owe a duty of confidentiality, disclosure shall be made simultaneously.
The disclosure of information may be delayed in accordance with applicable national
legislation.
Significant changes to previously disclosed information shall be disclosed as soon as
possible. Corrections to errors in information disclosed by the company itself need to be

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disclosed as soon as possible after the error has been noticed, unless the error is
insignificant.
The purpose of the requirement is to ensure that all market participants shall have access to the
same information at the same time. The requirement to inform the market as soon as possible
means that very little time may elapse between the time when a decision is taken or an event
occurs, and the disclosure thereof. Normally, the disclosure should not take more time than
necessary to compile and disseminate the information, but at the same time it is necessary that
the information must be ready to be disclosed, to allow a sufficiently comprehensive disclosure.
Even if draft announcements normally are prepared prior to planned decision-making, the rule
does not require an announcement e.g. during an ongoing meeting of the board of directors or
other decision-making. The disclosure can then be made after the meeting is finished.
According to these rules it is not possible to provide price sensitive information e.g. at general
meetings or analyst presentations without disclosure of the information. If the company intends
to provide such information during such a meeting or presentation, the company must
simultaneously at the latest - disclose the new price sensitive information as an announcement
in accordance with Rule 3.1.5.
According to national legislation it is under certain circumstances sometimes possible to delay
price sensitive information. In these cases the company must make sure that they comply with all
applicable rules in local legislation regarding delayed information.
Whenever the company discloses significant changes to previously disclosed information, the
changes should also be disclosed using the same distribution channels as previously. When there
are changes to information in a financial report, it is not usually necessary to repeat the complete
financial report, but the changes can be disclosed in an announcement with a similar distribution
as for the report.
3.1.4 Information leaks
If a company learns that price sensitive information has leaked prior to such disclosure,
the company shall make an announcement regarding the matter. If price sensitive
information is given non-intentionally to a third party, who does not owe a duty of
confidentiality, disclosure shall be made promptly.
It may occur that information about the company becomes available publicly without the
company itself having disclosed it by an announcement. In such cases the company assesses
whether such information may be price sensitive and whether a disclosure obligation in
accordance with the General provision (rule 3.1.1) has arisen. The assessment takes into
consideration, among other things, accuracy of the information and possible underlying
insider information within the company. When such information is largely accurate and in fact
price sensitive information within the company, the company will need to assess whether it has
been able to ensure the confidentiality of such information or if price sensitive information has
leaked to the market (see also rule 3.1.3).

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Market rumours or media speculation regarding the company may occur even if information has
not leaked from the company. The company is not obliged to monitor market rumours or
respond to rumours which are without substance or other inaccurate or misleading information
from a third party. In such cases the company may alternatively respond with no
comment. However, when an untrue rumour has a significant effect on the price of the
companys securities, the company may consider making an announcement in order to provide
the market with correct information and to promote orderly price formation. If orderly trading is
substantially affected by such rumours, the Exchange will need to consider whether it needs to
take action such as suspending trading.
3.1.5 Methodology
Information to be disclosed under these Rules shall be disclosed in a manner that ensures
fast access to such information on a non-discriminatory basis.
Information to be disclosed shall also be submitted to the Exchange for surveillance
purposes not later than simultaneously with the disclosure of information, in the manner
prescribed by the Exchange.
Announcements shall contain information stating the time and date of disclosure, the
companys name, website address, contact person and phone number.
The most important information in an announcement shall be clearly presented at the
beginning of the announcement. Each announcement by the company shall have a heading
indicating the substance of the announcement.
The purpose of the requirement is to ensure that all market participants shall have access to the
same information at the same time. Information for surveillance purposes must be sent
electronically in the manner prescribed by the Exchange. For practical assistance regarding the
prevailing practice, the company can contact the Exchange.
3.1.6 Website
The company shall have its own website on which information disclosed by the company
on the basis of the disclosure requirements imposed on listed companies shall, at a
minimum, be available for at least three years.
However, financial reports shall be available for a minimum of five years from the date of
disclosure.
The information shall be made available on the website as soon as possible after the
information has been disclosed.
The company is required to have its own website in order to ensure the availability of corporate
information to the market.

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The requirement applies as of the date of application for listing. The requirement also pertains to
annual reports and prospectuses, when possible.
3.2

Regular disclosure requirements

3.2.1 Financial reports

The company shall prepare and disclose all financial reporting pursuant to accounting
legislation and regulations applicable to the company.
Where applicable, a company may disclose interim management statements instead of
disclosing quarterly reports. Where a financial statement release is not required, the
company may instead disclose the annual financial report as soon as possible following the
completion of the report.
Since the annual financial report must be prepared according to IFRS adopted by EU for groups
of undertakings, the financial statement release must also be prepared on the basis of the
accounting principles for the annual financial report. Normally the financial statement release
should be so comprehensive that the annual report does not provide the market with any new
significant information that may be price sensitive.
3.2.2 Timing of financial statement release and interim reports
If the financial statement release is not based on an audited report, it shall be disclosed not
later than two months from the expiry of the reporting period. Alternatively, if the
financial statement release is based on an audited report, it shall be disclosed not later than
three months from the expiry of the reporting period.
Interim reports shall be disclosed within two months from the expiry of the reporting
period and shall state whether they have been audited or reviewed, or if they are
unaudited.
Depending on the companys reporting systems and procedures in connection with the audit of
the annual financial report, the deadline for disclosing a financial statement release may be either
two or three months. Where national legislation requires disclosure of an unaudited financial
statement release, the disclosure requirements thus impose a two-month deadline.
A full report may be disclosed prior to the pre-announced day where, for example, it appears that
the preparation of the financial statement release or interim report is proceeding faster than
estimated. Where the company becomes aware that the report will not be disclosed by the preannounced time, the company should announce a new day for disclosure. See also rule 3.3.11
regarding Company calendar. The annual report shall be disclosed no later than three months
after the expiration of the financial year, if the company does not disclose a financial statement
release.

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Where information arises during preparation of a financial report, indicating that the information
in the report will deviate significantly from an explicit forecast or reasonable assessment which
can be made based on information previously provided by the company, the company shall
disclose such information without undue delay. Rule 3.1.2 applies also when disclosing such
partial information. Therefore it is required that the disclosed information gives unambiguous
and clear information without confusing or misleading the market. Also when the timeframe
until the scheduled disclosure of the upcoming financial report is very short, it may be justified
for the company to wait until the disclosure of the full report if it can be considered that the new
information is given to the markets without undue delay. The company may also decide to
disclose a complete financial report ahead of the scheduled time, when it is possible.
The two-month limit is mandatory for all interim reports, including interim reports for the first
and third quarter, if the company discloses such reports. Any disclosure of interim management
statements shall be in compliance with national legislation. The requirement regarding a
statement about audit and review for interim reports does not apply to the interim management
statement. The content and timing of the interim management statement must be in compliance
with national legislation. According to the requirements based on the Transparency Directive,
companies which disclose quarterly reports are not required to issue an interim management
statement.
3.2.3 Content of financial reports
The financial statement release shall include the proposed dividend per share, if available,
and information regarding the planned date of the annual general meeting. It shall also
state where and which week the annual financial report will be made available to the
public.
An announcement containing a financial statement release or an interim report shall
commence with a summary stating the companys key figures, including, but not limited
to, net turnover and earnings per share as well as information regarding forecasts, if a
forecast is provided in the report.
The requirement to include information about the proposed per share dividend naturally only
applies provided that such a proposal exists at the time of the disclosure. Where no dividend is
proposed to be paid out, this must be clearly stated in the report. Where the proposed dividend is
not determined by the time of the disclosure of the financial statement release, it should be
disclosed when the decision is taken. With regard to information regarding forecasts, if a
forecast is provided in the report in the summary, the company may either include the full
forecast, an abbreviated forecast, or only state that a forecast is included in the report.
3.2.4 Audit report
The audit report is a part of the annual financial report. However, the company shall
disclose any audit report as soon as possible, if the audit report includes a statement which
is not in standard format or if the audit report has been modified.

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For the purpose of this rule, an audit report is considered to be modified or not in standard
format when the auditor adds an emphasis of matter paragraph or is not able to express an
unqualified opinion with no modification.
3.3

Other disclosure requirements

3.3.1 Forecasts and forward-looking statements

When the company discloses a forecast, it shall provide information regarding the
assumptions or conditions underlying the forecast provided. To the extent possible,
forecasts shall be presented in an unambiguous and consistent manner. If the company
issues other forward-looking statements, they shall also be provided in an unambiguous
and consistent manner.
Where the company reasonably expects that its financial result or financial position will
deviate significantly from a forecast disclosed by the company and such deviation is price
sensitive, the company shall disclose information about the deviation. Such disclosure shall
also reiterate the forecast previously provided.
The rule itself does not require the presentation of a forecast. Within the framework of the
legislation, it is up to the company to decide the extent to which it will make a forecast or other
forward-looking statements.
Forecast is interpreted as an explicit figure for the current financial period and/or following
financial periods. It could also for instance include a comparison to previous period (for instance
slightly better than last year) or indicate a figure or a minimum or maximum figure for the
likely level of profits or losses for the current financial period and/or following financial periods.
A forward-looking statement is a more general description of the companys expected future
developments.
Forecasts and other forward-looking statements shall to the extent possible be presented in an
unambiguous and consistent manner. Information regarding, for example, underlying conditions
should be described clearly so that investors can evaluate such information properly. For
example, the information should be unambiguous about the income measure to which reference
is made, e.g. whether the financial results are expressed before or after tax, whether capital
gains/losses are included, whether the effects of planned corporate acquisitions are included, etc.
The timeframe for the forecast should also be provided. Forecasts and other information relating
to the future in interim reports and annual financial statement releases should be provided under
a separate heading and in a prominent position. In conjunction with forecast adjustments, the
information in the announcement shall reiterate the preceding forecast in order to evaluate the
significance of the change.
The General provision (Rule 3.1.1) regarding disclosure of price sensitive information shall also
serve as a guide with respect to interpretation of changes in forecasts. This rule requires the
company to disclose information about deviations from a previous forecast, when it is
reasonably expected that such changes will be price sensitive. When deciding whether a change

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in forecast is significant enough to require a public announcement, the company must evaluate
the deviation based on the last known actual financial performance. In deciding whether to make
an announcement, the company should consider performance prospects and publicly known
changes in financial conditions during the remainder of the review period. Matters affecting such
prospects may include changes in the companys operating environment and seasonal patterns in
the company's line(s) of business. Attention may also be given to any information the company
has disclosed about the effect of external factors on the company, e.g. sensitivity analysis
regarding commodity prices or in relation to specific market developments. Market expectations,
such as analyst estimates, are not decisive for such evaluation; instead, the information disclosed
by the company itself and what can justifiably be concluded from such information is decisive.
When the company has come to the conclusion that a change in forecast in the period between
two reports is likely to be price sensitive, the company must disclose the change in an
announcement. Also when such change is disclosed, it shall be based on sufficient knowledge in
order to give unambiguous and consistent information about the change without confusing or
misleading the market (see also rule 3.1.2).
3.3.2
3.3.2 General meetings of shareholders
Notices to attend general meetings of shareholders shall be disclosed.
The company shall disclose information about resolutions adopted by the general meeting
of shareholders unless a resolution is insignificant. This requirement applies
notwithstanding that such resolutions are in accordance with previously disclosed
proposals. Where the general meeting has authorised the board of directors to decide later
on a specific issue, such resolution by the board of directors shall be disclosed, unless such
resolution is insignificant.
Notices to attend general meetings of shareholders shall always be disclosed. This applies
irrespective of if a notice contains price sensitive information or not, if a notice will be sent to
the shareholders by post or in any other way will be made public (e.g. in a newspaper) and
notwithstanding of if certain information included in the notice previously has been disclosed
according to these rules.
A proposal from the board of directors to a general meeting of shareholders which is price
sensitive must be disclosed as soon as possible. This means that a price sensitive proposal must
be disclosed as soon as possible even though the content of the proposal will later be part of a
notice. A notice must not be disclosed later than when the notice is sent to e.g. a newspaper for
publication.
Even though a notice does not contain any price sensitive information the notice must in general
be disclosed at the same time as the advertisement is sent to a newspaper. There may, however,
be situations where certain information is still outstanding when a draft notice is sent to a
newspaper for publication. This could be one reason to await the disclosure until the notice is
finalized. The notice must, however, always at the latest be disclosed the evening before the

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notice is expected to be published in a newspaper and before it is made available on the

companys web site. It is thus not sufficient to disclose the information the same morning as the
notice will be published in a newspaper.
With insignificant resolutions, the rule refers for example to matters which are of technical
nature.
If a company plans to disclose price sensitive information at a general meeting, the company
shall disclose the information in an announcement available to all investors, at the latest at the
same time it is presented to the general meeting.
After close of the general meeting the company shall as soon as possible disclose information
about resolutions adopted by the general meeting of shareholders unless a resolution is
insignificant.This requirement applies notwithstanding that such resolutions are in accordance
with previously disclosed proposals.
Resolutions whereby the general meeting authorises the board of directors to decide on a matter,
such as the issuance of securities or buy-back of own shares, must also be disclosed. In such
cases, the company must also disclose the board of directors resolution to exercise the authority.
3.3.3 Issues of securities
The company shall disclose all proposals and decisions to make changes in the share capital
or the number of shares or other securities related to shares of the company, unless the
issue is insignificant.
Information shall be disclosed regarding terms and conditions for an issue of securities.
The company shall also disclose the outcome of the issue.
The announcement regarding an issue of securities shall include all significant information
concerning the issue of new securities. Information in the announcement should, at a minimum,
include the reasons for the issue, expected total amount to be raised, subscription price and,
where relevant, to whom the issue is directed. If allowed by local company law, an issue of
shares (or other securities) to the company itself, as well as a decision to transfer treasury shares
of the company to a third party, shall also be disclosed in accordance with this provision.
Disclosure concerning issues of securities shall include terms and conditions of the issue, any
agreements or commitments to subscribe for shares, and time schedule information. When the
company discloses the outcome of the issue, the announcement should include information such
as whether or not the issue has been fully subscribed or if, for example, secondary subscription
rights have been exercised. Normally, it is also relevant to repeat the subscription price,
especially in cases where a fixed price has not been used (e.g. book-building process).
In accordance with national requirements the companies may be required to publish the total
number of shares and voting rights at the end of each such calendar month during which the said
number has changed, unless the number has already been published during the calendar month.

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3.3.4 Changes in board of directors, management and auditors

Proposals and actual changes with respect to the board of directors of the company shall be
disclosed. In addition, any other significant changes to the companys top management,
including but not limited to managing director, shall be disclosed.
The disclosure regarding a new board member or a new managing director shall include
relevant information about the experience and former positions held by the board member
or managing director.
A change of the auditor shall also be disclosed.
Any announcement regarding a new board member or managing director shall include relevant
information about the experience and former positions held by that person. Such relevant
information comprises, for example, information about former and present board positions as
well as relevant education.
Depending on the organisation of the company, different people and positions may be considered
important. In a company, all changes pertaining to the managing director and the members of the
board of directors are important. Other changes can also be important and, in such case, must be
disclosed. This may, for example, include changes to the supervisory board, management board,
or other persons in executive positions, or deputies of the aforementioned persons. On many
occasions, the key managements importance from the securities markets perspective depends
on the nature of the business and organisation of the company at issue. Changes in management
of significant subsidiaries of the company may also be price sensitive for the listed company,
especially when significant segments of the business operations are conducted by subsidiaries
rather than by the listed company.
3.3.5 Share-based incentive programmes
The company shall disclose any decision to introduce a share-based incentive programme.
The disclosure shall contain information about the most important terms and conditions of
the programme.
The information is required to provide investors with information about the factors motivating
management and other employees and also the dilution effects of the incentive programmes, in
order to help investors understand the potential total liabilities under such programmes.
An announcement concerning share-based incentive programmes shall normally contain:

the types of share-based incentive covered by the programmes;

the group of persons covered by the programmes;
timetable for the incentive programme;
the total number of shares involved in the programmes;
the objectives of the share-based incentive and the principles for granting;
the exercise period;

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the exercise price;

the main terms and conditions that must be met; and
the theoretical market value of the share-based incentive programmes, including a
description of how the market value has been calculated and the most important
assumptions for the calculation.

The rule is only related to share-based incentive programmes. Share-based incentives here
means any incentive programme where the participants receive shares, securities carrying an
entitlement to shares, other securities where the value is based on the share price, synthetic
programmes where a cash settlement is based on the share price, or other programmes with
similar features.
Information about Group of persons covered by the programmes may consist of a general
reference to groups such as board of directors, management, general staff, etc.

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3.3.6 Closely-related party transactions

A transaction between the company and closely-related parties which is not entered into in
the normal course of business shall be disclosed when the decision regarding such a
transaction is taken, unless the transaction is insignificant to the parties involved.
Closely-related parties include managing directors, members of the board of directors,
and other managers in the parent company or significant subsidiaries who control or
exercise significant influence in making financial and operational decisions in the parent
company or in the relevant significant subsidiary. Legal entities controlled by these persons
and shareholders controlling more than ten percent of the shares or voting rights of the
company are also considered as closely-related parties.
In order to ensure credibility and confidence, any transaction with a closely-related party should
be disclosed unless it is insignificant to the parties involved.
An example of a matter to be disclosed is when a closely related party, according to the
definition in the rule, buys out a subsidiary from the listed company. Even if the subsidiary is
small compared to the group and the price of securities may be unaffected, disclosure must be
made according to the rule. There is however no need to disclose information if the transaction is
insignificant to the involved parties. In the case of a buy out of a subsidiary, the evaluation
from the listed companys point of view should be done in relation to the whole group and not
merely to the size of the subsidiary itself. A buy out is often significant in relation to the closely
related party - and therefore a disclosure must be made if the transaction is not made in the
normal course of business.
A disclosure according to this provision should only be done for transactions which are not
entered into in the normal course of business. This means that a disclosure is not required for
example on matters which are not exceptional but are generally available to many employees on
similar terms.
3.3.7 Business acquisitions and divestitures
An acquisition or a sale of a company or business which is price sensitive shall be disclosed.
The disclosure shall include:

purchase price, unless special circumstances exist;

method of payment;
relevant information about the acquired or sold entity;
the reasons for the transaction;
estimated effects on the operation of the company;
the time schedule for the transaction; and
any key terms or conditions that apply to the transaction, especially when such may
affect the validity of the transaction.

The company or business acquired shall be described in a manner that addresses its key
line(s) of business, historical financial performance and financial position.

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In conjunction with corporate transactions, specific requirements are imposed regarding the
completeness of information. Based on the information disclosed about a transaction, the market
participants should be able to assess the financial effects of the acquisition or sale as well as the
effects on the operation of the company and the effect on the price or value of the companys
securities. Typically, such assessment requires knowledge of the financial effects of the
acquisition or sale as well as the effects on the operation of the company.
Companies must disclose the price in a purchase or a sale of a company because it normally is a
key element in an assessment of the effects of the transaction. In rare cases there is, however, a
possibility to withhold information regarding the price for an acquired or sold entity. This might
be the case where the purchase price is not of importance for the valuation of the company
admitted to trading. Another example could be when disclosure must be made in an early stage according to other disclosure rules - before the final price negotiations have been finalized. It is
then impossible to inform about the price, but once the price has been agreed upon, relevant
information thereon must be disclosed. It is not unusual that the purchase price is related to the
future outcome of the acquired business. In such a case the listed company should disclose the
total estimated purchase price at once, and then if necessary, adjust the figure in future reporting.
A company cannot evade the disclosure obligation by making an agreement with the opposite
party stating that the purchase price or other required information will not be disclosed.
Different kinds of transactions can be considered price sensitive and there can be different ways
to evaluate the transactions. Under normal circumstances, the Exchange considers a transaction
to be price sensitive where any of the following pertain:

the target entity represents more than ten percent of the listed companys consolidated
revenue or assets;
the target entity represents more than ten percent of the listed companys consolidated equity
capital; or
the consideration paid for the target entity represents more than ten percent of the listed
companys consolidated equity or more than ten percent of the total market value of the
listed companys shares if its total equity capital is lower than the market value of its
securities.

Transactions which do not fulfil the abovementioned limits can also be considered price
sensitive, e.g. due to their strategic importance.
Relevant information could include:

the effects on the income statement or balance sheet resulting from the integration of
operations or, alternatively, the effects of the sale;
in conjunction with very large acquisitions, supplementary information should be provided
in the form of pro forma accounts.

In conjunction with the acquisition of business activities, it may be particularly important to

report information regarding the purchase price, the type of business that has been acquired, the
assets and liabilities included in the acquisition, the number of employees transferred, etc.

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In some cases, a transaction might be treated as significant but might still not significantly affect
the listed companys future result or financial position. In such case, it is advisable to mention
this fact in the announcement.
3.3.8 Change in identity
If substantial changes are made to a company during a short period of time, or in its
business activities in other respects, to such a degree that the company may be regarded as
a new undertaking, the company shall disclose information about the changes and
consequences of the changes.
When a listed company undergoes significant changes and, following those changes, may be
regarded to be an entirely new company, additional information regarding the company is
needed. A change in identity of the company may need to be evaluated where, for example, an
acquired operation is extremely large and, in particular, where the character of the business is
different from the companys business to date. During a short period of time means that a
gradual development process within a company does not normally fall under this provision.
Evaluation of the change in identity is made on an overall basis. Criteria for evaluating whether
there has been a change in identity typically include, but are not limited to, the following:

the ownership structure or assets;

the existing business of a company is sold and, in connection therewith, a new business is
acquired;
the turnover or assets of the acquired company exceed the turnover or assets of the listed
company;
the market value of an acquired company exceeds the market value of the listed company, or
the consideration paid e.g. value of the new securities issued, exceeds the market value of the
listed company;
the control of the listed company is transferred due to a transaction; and
the majority of the board of directors or the management changes as a result of a transaction.

Upon an overall evaluation, the occurrence of most or all of the abovementioned factors means
that a change of identity is deemed to have taken place. On the other hand, the occurrence of
only one or two of these factors might not be sufficient to treat the company as a completely new
undertaking.
When a change in identity occurs, it is of the utmost importance that the securities market
receives enhanced information. The information must be equivalent to what is required pursuant
to the rules applicable to prospectuses. This rule applies notwithstanding that the company is not
obligated to prepare such a prospectus pursuant to legislation or any other regulation.
Information must be provided within a reasonable time.
If, in the Exchanges opinion, the information presented by the company in conjunction with the
disclosure of a change in identity is insufficient, the companys securities may be placed on the
observation segment pending additional information.

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Transfer to the observation segment may also occur where the Exchange is of the opinion that
the change in operation is such that it can be equated with the listing of a new company. The
fulfilment of the listing requirements can, in such cases, be questioned and the Exchange may
initiate an examination comparable to that conducted for an entirely new company applying for
listing on the Exchange. In conjunction with a planned changed in identity, the Exchange should
be contacted in advance so that issues regarding the companys continued listing may be
administered as smoothly as possible. The process for a new listing is described in chapter 2.2
(the Process for Admittance to Trading).
3.3.9 Decisions regarding listing
The company shall disclose information when it applies to have its securities admitted to
trading at the Exchange for the first time, as well as upon a secondary admittance to
trading at another trading venue. The company shall also disclose any decision to apply to
remove its securities from trading at the Exchange or another trading venue. The company
shall also disclose the outcome of any such application.
The duty to comply with the disclosure rules enters into force when a company applies to have
its securities admitted to trading on an exchange. The company has no obligation to disclose
unsolicited listings because such listings do not entail any disclosure or other obligations on the
company.
3.3.10 Information required by another trading venue
When the company discloses any significant information due to rules or other disclosure
requirements of another regulated market or trading venue, such information shall be
simultaneously disclosed.
The purpose of the rule is to ensure that all market participants have the same information on
which to base their investment decisions. The simultaneous disclosure obligation exists even if
the information to be disclosed is not subject to disclosure under these rules.
3.3.11 Company calendar
The company shall publish a company calendar listing the dates on which the company
expects to disclose financial statement releases, interim reports, interim management
statements and the date of the annual general meeting. In respect of the annual financial
report, the company shall publish the week of disclosure.
The company calendar shall be published prior to the start of each financial year.
If a disclosure cannot be made on a pre-announced date, the company must publish a new
date on which disclosure will be made; If possible, the new date should be published at least
one week prior to the original date.
If applicable, the date for payment of dividends should also be included in the publication.

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The company should also try, if possible, to specify the time of the day at which disclosure will
be made.
If the annual report replaces the financial statement, the date for the publication of the annual
report should be stated in the company calendar.
3.4

Information to the exchange only

3.4.1 Public tender offers

Where the company has made internal preparations to make a public tender offer for
securities in another listed company, the company shall notify the Exchange when there
are reasonable grounds to assume that the preparations will result in a public tender offer.
If the company has been informed that a third party intends to make a public tender offer
to the shareholders of the company, and such public tender offer has not been disclosed,
the company shall notify the Exchange when there are reasonable grounds to assume that
the intention to make a public tender offer will be realised.
When discussions have proceeded to an advanced stage in respect of the acquisition of another
listed company at the NASDAQ OMX, the local Exchange must be informed well in advance.
However, there must be reasonable grounds to assume that the measure will lead to an offer. The
information will be used by the Exchange to monitor trading in order to detect unusual price
movements and to prevent insider trading.
The Exchange must also be notified when the company has been contacted by a third party
which intends to make a public offer to the shareholders in the listed company, where there are
reasonable grounds to assume that the contact will lead to a formal public offer.
There is no formal requirement regarding how to notify the Exchange and notice is normally
made by telephoning the surveillance department.
3.4.2 Advance information
If the company intends to disclose information that will have a highly significant effect on
the price of the securities, the company shall notify the Exchange prior to disclosure.
If the company intends to disclose information that is assumed to have a highly significant effect
of the price of the securities, it is important that the Exchange receive the information in advance
in order to consider if any measures need be taken by the Exchange. One result might be that the
Exchange briefly suspends trading and cancels pending orders in order to provide the market
with the possibility to evaluate the new information.

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Information in advance is not required where the information is included in a scheduled report,
since the market already knows that the company will disclose significant information on such
occasion.

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4 Special rules
4.1

Internal rules governing trading in the company's own shares

The company shall prepare internal rules governing trading in its own shares and the
related financial contracts.
The internal rules shall contain a period within which the company is not permitted to
trade in shares issued by the company.
The internal rules may provide that the period shall not apply in special cases and that it
may be departed from in specific cases.
The rules shall be submitted to the exchange upon request.
The exchange recommends that the period within which trading in the company's shares is not
permitted shall be fixed at three weeks prior to the publication of the company's interim report
and preliminary announcement of annual results.
In pursuance of rule 3.2.2 in these rules, a company may choose not to publish a preliminary
announcement of annual results, if the company publishes the annual report and accounts
immediately upon board approval. In this case, the period within which trading in the company's
shares is not permitted shall be related to each published interim report or annual report.
It should be noted that the general ban on insider trading also applies to the company during
such periods when trading is permitted.
Purchases in connection with share buy-back programmes, exercise of option programmes, etc.,
are examples of cases where the internal rules may provide that the period within which trading
in the company's shares is not permitted shall not apply. However, trading in the companys
shares should never take place immediately prior to the publication of the companys interim
reports or preliminary announcement of annual results/annual report.
The internal rules may be formulated so that e.g. banks' execution of customer trades can always
take place.
Market making agreements according to which a company and a bank agree that the bank shall
quote bid and ask prices for its own account in the companys shares shall generally not be
considered trading in the companys own shares.
The management of the company should regularly, and at least once a year, reassess the contents
of the internal rules.

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4.2

Internal rules governing trading in the company's shares

A company and the companys parent company shall lay down internal rules
applicable to the access of board members, general managers and other employees to
trading, for their own or any third partys account, in the securities admitted for trading
issued by the company and any financial instruments attached hereto.
The internal rules shall contain a period within which the persons included on the insider
list prepared pursuant to section 37 (4) of the Danish Securities Trading Act are permitted
to trade. The maximum length of this period is six weeks after each published interim
report or preliminary announcement of annual results.
The internal rules may provide that the period within which the persons included on the
insider list are permitted to trade shall not apply in special cases and that it may be
departed from in specific cases.
The rules shall be submitted to the exchange upon request.
As far as the first part of the rule is concerned, the provision follows section 37(1) of the Danish
Securities Trading Act. It shall be emphasised that the general prohibition against trading based
on inside information also applies to the persons concerned in periods within which it is
otherwise permitted to trade.
Pursuant to section 37 (4) of the Danish Securities Trading Act, the companies shall make and
keep a register of persons working for the company and who have access to inside information
(a so-called insider list).
A person shall be included on the insider list irrespective of whether the person concerned has
access to inside information at regular intervals or merely has had access to inside information
on one single occasion. Managers, as defined in section 28a (2) shall always be included on the
insider list.
The obligation to update the insider list means that a person shall be included on the list only as
long as the person concerned has access to inside information. Persons who have access to inside
information in specific cases only shall, consequently, be removed from the list when the
information that the persons concerned had access to have been published. Persons who
regularly have access to inside information shall be included on the list as long as the persons
concerned have regular access to inside information. The persons covered by the insider lists
shall be informed hereof.
The companies shall be aware that the persons covered by the internal rules governing trading in
the companys shares may also be covered by the obligation to report transactions in the
companys shares pursuant to section 28a (2).
In pursuance of rule 3.2.2 in these rules, a company may choose not to publish a preliminary
announcement of annual results, if the company publishes the annual report and accounts

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39

immediately upon board approval. In this case, the trading window in the internal rules shall be
related to each published interim report or annual report.
Each company should carefully consider the trading windows required. The exchange
recommends that the trading window is set to a maximum of four weeks after each published
interim report or preliminary announcement of annual results.
As regards the possibility of trading after the closure of the trading window, the internal rules
may allow trading in securities if the chairman of the board of directors is notified immediately.
Especially in connection with acquisition of securities, departure should be allowed only if
warranted by special requirements.
Cases, where it is possible to trade outside the trading window may involve subscription for
employee shares, exercise or sale of subscription rights, exercise of subscription options,
acceptance of acquisition offers, exercise of pre-emption rights or obligations or other similar
special cases. However, departure shall, as a rule, be considered inadvisable unless a right is
exercisable only within a time-limit on which the holder of the right has no influence.
The management of the company should regularly, and at least once a year, reassess the contents
of the internal rules. The company must continue to ensure that the persons involved are familiar
with the contents of the internal rules.
4.3

Recommendations for Corporate Governance

Danish companies shall give a statement on how they address the Recommendations on
Corporate Governance issued by the Committee on Corporate Governance May 6, 2013.
The companies shall adopt the comply-or-explain principle when preparing this
statement.
The recommendations issued May 6, 2013 must be applied for financial years starting 1
January, 2013 or later. Prior to this companies can apply the former applicable
recommendations, changed on 16 August, 2011.
The rule implies that companies must apply the recommendations issued by the Committee.
According to the regulation on annual accounts companies must subsequently either in their
annual report or on their homepage publish a Corporate Governance statement with basis in the
recommendations issued by the Committee and with respect of the comply-or-explain
principle. Additional rules on the publication of the statement is included in the Financial
Statement Act and in an executive order issued by the Danish Commerce and Companies
Agency and in the regulation on financial reports for credit institutions and investment
companies etc.
The comply-or-explain principle implies that the companies are required either to comply with
the Recommendations for corporate governance or explain why they do not comply with the
Recommendations. The implementation of the Recommendations into these rules is not based on
the premise that compliance with the Recommendations should be the first choice for the

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individual company. Transparency in the companies governance structure is the key element.
The comply-or-explain principle encourages the individual company to assess, given its own
circumstances, to what extent it complies with the Recommendations or whether compliance is
not appropriate or desirable.
The companies must address each of the recommendations concretely. This means that the
companies must specify which of the recommendations is not followed, that they must inform
about the reason for this and where relevant - on how the company has adapted instead.
The rule is targeted at companies with domicile in Denmark only. Foreign companies admitted
for trading on the exchange may be subject to a different set of recommendations. Foreign
companies that are not subject to other rules are recommended to include a Corporate
Governance statement applying the Danish Corporate Code, if necessary in an adjusted form, or
in compliance with internationally accepted standards.
The aspects covered by the Recommendations are to a certain extent governed by the disclosure
requirements that apply to companies admitted for trading. The Recommendations shall
generally be considered as supplementary. The Recommendations shall also be considered
parallel with the provisions of the Danish Companies Act and the Danish Accounting
Legislation.

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5 Violation
In the event that an issuer fails to meet disclosure requirements, according to this set of
rules, the exchange may give the issuer a reprimand. Moreover, the exchange may give
an issuer a fine of up to three times the annual trading fee, however, not less than DKK
25,000 and not more than DKK 1 million. Where special cause exists the Exchange may
decide to delete the issuers securities from admittance to trading. Decisions made by
the exchange concerning a reprimand or a fine are published with the identity of the
issuer. In cases with less serious reprimands or where special circumstances apply, the
exchange can choose not to publish the identity of the issuer.
If an issuer fails to meet requirements, according to this set of rules, the exchange will generally
give the issuer a direct reprimand, and this reprimand will be published with the identity of the
issuer.
The identity of the issuer will in principle only be published if the issuer has received a
reprimand. Thereby the exchange can provide an opinion and find a situation regrettable without
this leading to a publication of the issuer's identity, but where the case will be described in
anonymous form.
Sanctions may be tightened where there is no continuity between announcements published or
where the market has been misled to a certain extent. If it can be established that the issuer has
intended to conceal essential information from the market or place facts in a more favourable
light, etc., this may be an aggravating factor, not only when the form of sanction is to be chosen,
but also when the amount of a fine is to be fixed. Where special cause exists the Exchange may
decide to delete the issuers securities from admittance to trading, also see Clause 2.9. Persistent
violation may result in publication of a reprimand or imposition of a fine, even though the
gravity of the individual violation, in isolated terms, is of no such nature that publication of a
reprimand or imposition of a fine would be required.

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RECOMMENDATIONS ON
CORPORATE GOVERNANCE
COMMITTEE ON
CORPORATE GOVERNANCE
MAY 2013

C O R P O R AT E
GOVERNANCE

RECOMMENDATIONS ON CORPORATE GOVERNANCE

802
MAY 2013

CONTENTS
Preface....................................................................................................................................................................... 3
Introduction..............................................................................................................................................................4
1. The Committees work........................................................................................................................................4
2. Target group........................................................................................................................................................ 5
3. Soft law and its implications............................................................................................................................ 5
4. Active ownership................................................................................................................................................ 6
5. The comply or explain approach.................................................................................................................... 6
6. Reporting.............................................................................................................................................................. 7
7. Definitions............................................................................................................................................................. 7
Recommendations on Corporate Governance................................................................................................. 9
1. Communication and interaction by the company with its investors and other stakeholders........ 9

1.1. Dialogue between company, shareholders and other stakeholders............................................... 9

1.2. General meeting....................................................................................................................................... 10

1.3. Takeover bids............................................................................................................................................ 10

2. Tasks and responsibilities of the board of directors............................................................................... 11

2.1. Overall tasks and responsibilities..........................................................................................................12

2.2. Corporate social responsibility.............................................................................................................13

2.3. Chairman and vice-chairman of the board of directors................................................................. 14

3. Composition and organisation of the board of directors......................................................................15

3.1. Composition...............................................................................................................................................16

3.2 Independence of the board of directors.............................................................................................17

3.3. Members of the board of directors and the number of other executive functions..................18

3.4. Board committees....................................................................................................................................19

3.5. Evaluation of the performance of the board of directors and the executive board................21

4. Remuneration of management....................................................................................................................22

4.1. Form and content of the remuneration policy..................................................................................23

4.2. Disclosure of the remuneration policy...............................................................................................24

5. Financial reporting, risk management and audits..................................................................................25

5.1. Identification of risks and transparency about other relevant information...............................25

5.2. Whistleblower scheme...........................................................................................................................26

5.3. Contact to auditor...................................................................................................................................26

Annex .......................................................................................................................................................................27

803
RECOMMENDATIONS ON CORPORATE GOVERNANCE

MAY 2013

PREFACE
The purpose of corporate governance is to support value creation and accountable
management, and thus to contribute to the long-term success of companies. These
recommendations aim to ensure confidence in companies through the provision of timely
information as well as transparency. The basic philosophy is that it should be attractive
to invest in companies. Corporate governance inspiring economic value creation makes it
easier for companies to acquire capital, which in turn reduces the costs of companies.
Recommendations by the Committee are best practice guidelines for the management of
companies admitted to trading on a regulated market, including NASDAQ OMX Copenhagen
A/S. The recommendations should be viewed together with the statutory requirements,
including not least the Danish Companies Act and the Danish Financial Statements Act, but
also European Union company law, etc. and the OECD Principles of Corporate Governance.
Companies differ, and accordingly, work on planning and reporting corporate
governance may vary from one company to the other. The most important aspect of the
recommendations is to ensure that shareholders have an insight into the companies, as well
as an understanding of the potential of the companies.
Companies should generally follow these recommendations. An individual company
failing to comply with a recommendation must explain why it has deviated from the
recommendations and what it has done differently (the comply or explain approach). In
order to create the transparency necessary for investors, companies must consider each of
the recommendations and provide information on whether or not they will be complying
with the recommendation concerned. Explanations to alternative choices have significance
for assessments by investors. The descriptions provided for each of the recommendations
must therefore be specific and adequate.
In 2013, the Committee revised the recommendations on the basis of the recommendations
from 2010 drawn up immediately following the Companies Act from 2009, as well as the
amended rules laid down in the Financial Statements Act and the new Approved Auditors
and Audit Firms Act from 2008. Experience gathered from companies and stakeholders
in the period following the 2010 recommendations shows a need and wish to simplify the
recommendations. The Committee has consequently chosen to omit recommendations
which have either been laid down by legislation, or which generally have been incorporated
into company practice. Developments show that there is no longer a need for explicit
recommendations in these areas, but the omission does not imply that the principles are no
longer attributed any value.
The Committee assumes that companies comply with statutory requirements in companies
accounting, auditing and stock exchange legislation without repeating these requirements
in these recommendations.
The Committee will monitor developments in corporate governance to continuously
develop the recommendations to comply with the soft law principle, as need be.
These recommendations will replace the Committees recommendations of 16 August 2011.
Copenhagen, 6 May 2013
Committee on Corporate Governance
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INTRODUCTION
1. The Committees work
The Committee was commissioned to monitor corporate governance developments at national
and international level, as well as to strive for continuity in corporate governance work in Denmark.
Furthermore, the Committee is to collect views and experience with the corporate governance
recommendations, adjust the recommendations, and ensure that the recommendations, following
an overall assessment, be appropriate for Danish companies and comply with Danish and European
Union company law and recognised best practice.
The recommendations on corporate governance supplement current company law and stock
exchange regulation as well as the requirements for financial reporting, and such rules and
regulations are presumed known. Supervision of companies compliance with rules and regulations
is partly exercised by NASDAQ OMX Copenhagen A/S and partly by the Financial Council.
The division of responsibilities between NASDAQ OMX Copenhagen A/S, the Financial Council and
the Committee is illustrated in the figure below:

Who is responsible for what?

NASDAQ OMX

Committee

Public authority

Stock market authority

Stock market rules

Recommendations

Financial Statements Act

Requirements for the
management commentary

Inspection
Trends
(national/International level),

Supervision
(The Financial Council)

Experience and dialogue,

Compliance analysis
Adjustment of recommendations

Any reprimand/fee
Decisions on reprimands or
fees made by the stock market
are published with the issuers
identity unless in the case of a
minor infringement

Any reprimand with

publication

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It is important for the Committee that the recommendations be an appropriate tool for companies
to implement good and ascertainable corporate governance.
The Committees comments on the recommendations may be included as guidelines and
inspiration for companies in their work on the recommendations. In this connection, the comments
are meant as a tool. The Committee has also drawn up several guidelines which can be used
as inspiration. The guidelines are available at www.corporategovernance.dk. The reporting
on corporate governance itself should only be carried out in compliance with the specific
recommendations of the Committee, and not according to the comments or guidelines.
The activities of financial undertakings are regulated by statute. Consequently, the Committee has
chosen not to introduce specific recommendations for the financial sector.
The Committee finds that self-regulation is the best form of regulation in relation to corporate
governance. This view is shared globally. However, this requires that society, companies and
investors have a positive attitude towards corporate governance, follow the development in this
area, and that stakeholders participate in the dialogue.

2. Target group
The recommendations are aimed at Danish companies with shares admitted to trading on a regulated
market. Such companies have chosen to be publicly traded companies. Transparency is essential to
ensure that investors and other stakeholders are able to evaluate the performance of such companies.
The recommendations or parts thereof may also motivate companies not admitted to trading on
a regulated market, e.g. state-owned companies, other companies of special public interest or
certain companies owned by funds.

3. Soft law and its implications

The recommendations are soft law and thus more flexible than legislation (hard law). Whereas
regulation by law typically provides a minimum standard that forms the framework for company
conduct, soft law reflects best practice. Furthermore, soft law is characterised by a high degree of
voluntarism, which provides the recommendations with the flexibility necessary for companies to
adjust the principles on corporate governance to the circumstances.
Soft law is more dynamic than traditional legislation as it is more easily adapted to the
developments within the areas affected. This enables the recommendations remain continuously
up-to-date.
The flexibility of the recommendations is essential as there is no one-size-fits-all solution for
all companies when it comes to corporate governance. Thus, the recommendations enable the
individual company to organise its governance optimally and not within a fixed framework.

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The comply or explain approach is a key element of the recommendations; in Denmark, this
principle is laid down in section 107b of the Financial Statements Act and in the NASDAQ
OMX Copenhagen A/S rules for issuers of shares. Any explanation given must relate to each
recommendation and enable the reader to understand the companys style of management.

4. Active ownership
In recent years, focus on the role of shareholders in listed companies has increased. This aspect
was also addressed in the European Commission Green Paper from April 2011 and in the European
Commission Action Plan on European company law and corporate governance from December
2012. In July 2010, the UK introduced a Stewardship Code for institutional investors.
The increasing dispersion in the ownership of Danish public limited companies admitted to trading
on a regulated market may facilitate capital injections, but it complicates the dialogue between
the management and owners of the company. Regardless of dispersed ownership, and accordingly
relatively small equity interests, the group of owners of the company should also act as active
owners and voice their opinions. This could be by participating in general meetings, appointing
members to the companys board of directors, and by questioning the company and voicing
opinions. Particularly major shareholders must participate in the companys value creation through
active ownership and dialogue with the companys management.
Similarly, the company must listen to the shareholders opinions and take these into account. It
is important to ensure an understanding of integrity and mutual respect between the individual
shareholders and the company as a whole.

5. The comply or explain approach

Reports by companies on corporate governance must be according to the comply or explain
approach. This means that the board of directors of the individual companies themselves decides
the extent to which it wishes to comply with the recommendations. If the company fails to meet a
recommendation, the board of directors must explain:
1. why it has chosen differently, and
2. what it has chosen to do instead.
Failure to comply with a recommendation is not considered a breach of rules, but merely implies
that the board of directors of the company has chosen a different approach. The markets must
decide whether deviations are justified, and whether the explanation is satisfactory. A good
explanation provides specific insight for stakeholders to be able to decide on any investments.
In order to create the transparency necessary for investors, companies must respond to each
recommendation and provide information on whether or not they will be complying with the
recommendation in question.
Note that reporting must reflect the current style of management at the time of reporting. In
the event of significant changes during the year, or after the balance sheet date, this should be
described in the corporate governance report.
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Companies must consider each of the recommendations. FAQ, other guidelines and standard
reporting formats are available at www.corporategovernance.dk. Furthermore, examples have
been published of well drawn up and poorly drawn up explanations provided by companies in their
corporate governance reports.
The Committee has ascertained that many companies choose to provide supplementary
information even in cases where the company specifically meets a recommendation. The
Committee encourages companies to provide supplementary information where this increases
transparency and if relevant.

6. Reporting
Pursuant to the Financial Statements Act, information regarding companies compliance with the
principles of corporate governance must be provided in a corporate governance report published
in either the management commentary on the annual report or on the companys website with
exact reference to the management commentary.

Publication on the website

The Committee believes that publication of the corporate governance report on the companys
website - with exact reference to the report in the management commentary - creates the highest
degree of transparency. Publication of the report on the companys website provides easier access
for investors and other stakeholders.

For use in companies reporting, the Committee on Corporate Governance has drawn up
a form which companies may choose for their reporting. The form is available on www.
corporategovernance.dk. By using the same reporting structure from year to year, shareholders and
other stakeholders can more easily find, process and compare information.

7. Definitions
The management structures used by companies differ within the EU, and the same applies for
legislation adopted by the different member states. Unitary and dual management structures are
used, but they do not necessarily represent the same concept in all member states. The choice
of management structure determines which body is responsible for a function or task. The figure
below illustrates the two management structures in Denmark:

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The supreme governing body

The central governing body

BOARD OF
DIRECTORS

SUPERVISORY
BOARD

BOARD OF
DIRECTORS

SUPERVISORY
BOARD

EXECUTIVE
BOARD

EXECUTIVE
BOARD

EXECUTIVE
BOARD

EXECUTIVE
BOARD

Act no. 470 of 12 June 2009 on public limited companies and private limited companies (the
Companies Act) introduced the following generic concepts for the government bodies:
The supreme governing body:

- The board of directors of companies with an executive board and a board of directors, and

- The supervisory board in companies with an executive board and a supervisory board.

The central governing body:

- The board of directors of companies with an executive board and a board of directors, and

- the executive board in companies with a executive board and a supervisory board.

Danish public limited companies are free to choose between the two management structures. All
the management models in the Companies Act share one common feature: the executive board of
the company is in charge of the day-to-day management.
In addition, public limited companies must have either a board of directors or a supervisory
board. If the company has a board of directors, the executive board will only be in charge of the
day-to-day management, and the board of directors will be in charge of the overall and strategic
management and will supervise the executive board. If the company has a supervisory board, such
board will only supervise the executive board, as the executive board will be in charge of the entire
management function, i.e. also the overall and strategic management.
In the view of the Committee, companies with securities admitted to trading on a regulated market
should have a board of directors and an executive board, as this structure provides constructive
and value-creating interaction between the two governing bodies. Consequently, and in order to
clarify and simplify the recommendations on corporate governance, the Committee has chosen
to use the designations known so far for the governing bodies: board of directors and executive
board.
The tasks of the board of directors are also described in legislation on financial statements and
in company law. These recommendations should be seen in relation to these provisions and the
articles of association of the company, rules of procedure, etc.
Note that, pursuant to the Companies Act, members of the supreme governing body elected by
employees are subject to the same responsibilities as members of the supreme governing body
elected by the general meeting. For more information about members of the supreme governing body
elected by employees, please refer to the website of the Danish Business Authority www.erst.dk.

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1. Communication and interaction by the company with its investors
and other stakeholders
The companys investors, employees and other stakeholders have a joint interest in stimulating
the Companys growth, and in the company always being in a position to adapt to changing
demands, thus allowing the company to continue to be competitive and create value.
Therefore, it is essential to establish a positive interaction not merely between management
and investors, but also in relation to other stakeholders.
Good corporate governance is also about establishing appropriate frameworks which enable
investors to enter into a dialogue with management of the company.
Openness and transparency are essential conditions for the companys investors and other
stakeholders to have regular access to evaluate and relate to the company and its future, and
thus engage in a constructive dialogue with the company.
As owners of the company, the shareholders should actively exercise their rights and
influence at general meetings in order to help the companys management protect the
interests of its shareholders as best as possible and thereby ensure an appropriate and
balanced development of the company in the short and long term.

1.1. Dialogue between company, shareholders and other stakeholders

1.1.1. THE COMMITTEE RECOMMENDS that the board of directors ensure ongoing dialogue
between the company and its shareholders in order for the shareholders to gain
relevant insight into the companys potential and policies, and in order for the board of
directors to be aware of the shareholders views, interests and opinions on the company.

COMMENT: The companys dialogue with its shareholders may be summarised in an

Investor Relations strategy on the type of information to be published, the language

to be used, as well as how, when and to whom this should be published. The strategy
should also relate to selection and attraction of investor target groups.
Communication aims at ensuring that all shareholders regularly receive the same
information.
The insight of the board of directors into the dialogue may possibly be established
through participation in investor meetings or reporting from such meetings, or through
regular reporting from the executive board.
On behalf of the board of directors, the chairman should ensure good and constructive
relations with the shareholders.
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1.1.2. THE COMMITTEE RECOMMENDS that the board of directors adopt policies on
the companys relationship with its stakeholders, including shareholders and other
investors, and that the board ensures that the interests of the shareholders are
respected in accordance with company policies.

1.1.3. THE COMMITTEE RECOMMENDS that the company publish quarterly reports.

1.2. General meeting

1.2.1. THE COMMITTEE RECOMMENDS that, when organising the companys general
meeting, the board of directors plans the meeting to support active ownership.

COMMENT: When organising the general meeting, it is important to ensure that the

shareholders have an opportunity to participate, and that they are able to voice their
opinions at the general meeting. Considerations should address holding the general
meeting wholly or partly electronically to ensure that the shareholders are able to
participate without having to be physically present. The shareholders will then be in a
position to influence and guide the management of the company on the development of
the company in the short and long term.
1.2.2. THE COMMITTEE RECOMMENDS that proxies granted for the general meeting allow
shareholders to consider each individual item on the agenda.

1.3. Takeover bids

1.3.1. THE COMMITTEE RECOMMENDS that the company set up contingency procedures
in the event of takeover bids from the time that the board of directors has reason to
believe that a takeover bid will be made. According to such contingency procedures,
the board of directors should not without the acceptance of the general meeting,
attempt to counter the takeover bid by making decisions which in reality prevent the
shareholders from deciding on the takeover bid themselves.

COMMENT: The board of directors should ensure that contingency procedures have
been prepared in the event of takeover bids. Such contingency procedures aim at
ensuring that the shareholders have a real opportunity to decide whether or not they
wish to dispose of their shares in the company under the terms offered, and that the
board of directors
is informed about the formal conditions in the event of external enquiries,
has discussed who will assume which tasks, and the advisors to be consulted,
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 is ready for the challenges which the companys value-creation plan might present,
cf. the comment on recommendation 2.1.2.
The board of directors will not be in conflict with the recommendations if it seeks
alternative (competing) takeover bids in order to create value for its shareholders.

2. Tasks and responsibilities of the board of directors

It is incumbent upon the board of directors to carefully protect the interests of the
shareholders with due consideration for the other stakeholders.
The board of directors is responsible for the overall and strategic management of the
company to ensure value creation in the company. The board of directors must to lay down
the strategic goals of the company and ensure that the prerequisites necessary in order to
reach such goals are present, in the form of financial resources and competences, and to
ensure appropriate organisation of the activities of the company.
The prerequisite for meeting the companys strategic goals is that the board of directors
employ a competent executive board, lays down the division of responsibilities between the
board of directors and the executive board, the tasks and employment relationships of the
executive board, and also establishes clear guidelines for accountability, planning, follow-up
and risk management. The board of directors must supervise the executive board and lay
down guidelines for the supervision.
The board of directors is responsible for ensuring the development, retention or dismissal of
the executive board, as well as for ensuring that remuneration of the executive board reflects
the long-term value creation in the company and the results otherwise achieved by the
executive board.
The chairman of the board of directors organises, convenes and leads meetings of the board
of directors to ensure efficiency in the boards work and to create the best possible working
conditions for the members individually and collectively. This ensures that the individual
members special knowledge and skills are used in the best possible manner and to the
benefit of the company.
In order for the board of directors to be able to meet its obligations, the chairman should
cooperate with the board of directors on ensuring that members regularly receive updates,
and expand their knowledge about matters relevant to the company, as well as ensure that
the special knowledge and skills of each individual member are used in the best possible
manner to the benefit of the company.

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2.1. Overall tasks and responsibilities

2.1.1. THE COMMITTEE RECOMMENDS that at least once a year the board of directors take
a position on the matters related to the boards performance of its responsibilities.

COMMENT: Through appropriate planning of the tasks of the board of directors,

sufficient time should be available for the board to discuss the companys overall
strategic goals and value creation. Setting up an annual plan - the annual wheel
- may contribute to ensuring appropriate processing of the tasks of the board of
directors adapted to the activities and needs of the company. A review of the rules of
procedure for the board of directors is also part of this plan.

2.1.2. THE COMMITTEE RECOMMENDS that at least once a year the board of directors
take a position on the overall strategy of the company with a view to ensuring value
creation in the company.

COMMENT: Strategy discussions should focus on implementation through a plan for

value creation comparable to alternative scenarios, including a best owner principle

scenario with synergy effect from either selling or purchasing. The results of these
discussions may form the basis for further discussion on whether the companys
strategy sufficiently responds to the companys short and long-term opportunities
and challenges.
The ongoing strategy work should be planned such that the board of directors has a real
possibility of influencing the companys strategic direction. This could be by involving
the board of directors in the strategy work along the way.

2.1.3. THE COMMITTEE RECOMMENDS that the board of directors ensure that the
company has a capital and share structure ensuring that the strategy and longterm value creation of the company are in the best interest of the shareholders
and the company, and that the board of directors presents this in the management
commentary on the companys annual report and/or on the companys website.

COMMENT: For the purpose of these recommendations, capital and share structures
refer to the size of the share capital, the denomination, the number of share classes and
the voting rights attached to the share classes, including restrictions on voting rights,
the right to dividends, the distribution between equity financing and loan capital
financing, treasury shares, share buy-backs, etc. The key element of this assessment is
to ensure that the company is adequately capitalised and ensure adequate liquidity of
the share and a reasonable distribution of risk and influence.

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2.1.4. THE COMMITTEE RECOMMENDS that the board of directors annually review and
approve guidelines for the executive board; this includes establishing requirements for
the executive board on timely, accurate and adequate reporting to the board of directors.

COMMENT: Guidelines on the division of responsibilities between the board of

directors and the executive board should lay down more detailed frameworks for
the interaction, including e.g. investment rules and the division of responsibilities
between members of the executive board. If the board of directors or the executive
board has special requests for work procedures, approval of policies and powers, this
should be included in the guidelines.

2.1.5. THE COMMITTEE RECOMMENDS that at least once a year the board of directors
discuss the composition of the executive board, as well as developments, risks and
succession plans.

COMMENT: Particularly in relation to risks, the executive board and the other
management layers must be composed so that short absence of a member of the
executive board does not significantly affect the day-to-day operations of the company.

2.1.6. THE COMMITTEE RECOMMENDS that once a year the board of directors discuss the
companys activities to ensure relevant diversity at management levels, including
setting specific goals and accounting for its objectives and progress made in
achieving the objectives in the management commentary on the companys annual
report and/or on the website of the company.

COMMENT: Diversity includes e.g. age, international experience and gender. It would
be appropriate to prepare action plans describing the companys efforts in respect of
diversity at management levels addressing the needs and future development of the
company. Such action plans may supplement statutory requirements on target figures
and policies for the gender-related composition of management and reporting in this
respect.

2.2. Corporate social responsibility

2.2.1. The Committee recommends that the board of directors adopt policies on corporate
social responsibility.

COMMENT: In this connection, the board of directors may take a position on the
companys possible adoption of recognised national and international voluntary
initiatives.

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2.3. Chairman and vice-chairman of the board of directors

2.3.1. THE COMMITTEE RECOMMENDS appointing a vice-chairman of the board of directors

who will assume the responsibilities of the chairman in the event of the chairmans
absence, and who will also act as effective sparring partner for the chairman.

COMMENT: The rules of procedure of the board of directors may include a general

description of the tasks, duties and responsibilities of the chairman and the vicechairman.

2.3.2. THE COMMITTEE RECOMMENDS ensuring that, if the board of directors, in

exceptional cases, asks the chairman of the board of directors to perform special
operating activities for the company, including briefly participating in the day-to-day
management, a board resolution to that effect be passed to ensure that the board
of directors maintains its independent, overall management and control function.
Resolutions on the chairmans participation in day-to-day management and the
expected duration hereof should be published in a company announcement.

COMMENT: A reasonable division of responsibilities should be ensured between the

chairman, the vice-chairman, the other members of the board of directors and the
executive board. An agreement regulating the chairmans discharge of special tasks
should contain provisions on the special precautions taken to protect the distribution
of roles and responsibilities between the members of the board of directors and
between the board of directors and the executive board.

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3. Composition and organisation of the board of directors

The board of directors should be composed so that it is able to execute its strategic,
managerial and supervisory tasks.
It is essential that the board of directors be composed so as to ensure effective performance
of its tasks in a constructive and qualified dialogue with the executive board. It is also
essential that the members of the board of directors always act independently of special
interests.
The board of directors defines the skills required by the company and regularly assesses
whether its composition and the skills of its members individually and collectively reflect the
requirements of the companys situation and conditions.
Diversity improves the quality of the work and the interaction of the board of directors, e.g.
through different approaches to the performance of management tasks.
To increase value creation, the board of directors should evaluate its members every year and
ensure integration of new talent while maintaining continuity.
In addition to the members of the board of directors elected by the general meeting, the
board of directors may comprise members elected by the employees pursuant to the
regulations of the Companies Act.

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3.1. Composition

3.1.1. THE COMMITTEE RECOMMENDS that the board of directors annually accounts for

the skills it must have to best perform its tasks,

the composition of the board of directors, and

the special skills of each member.

3.1.2. THE COMMITTEE RECOMMENDS that the selection and nomination of candidates
for the board of directors be carried out through a thoroughly transparent process
approved by the overall board of directors. When assessing its composition and
nominating new candidates, the board of directors must take into consideration
the need for integration of new talent and diversity in relation to age, international
experience and gender.

3.1.3. THE COMMITTEE RECOMMENDS that a description of the nominated candidates

qualifications, including information about the candidates

other executive functions, e.g. memberships in executive boards, boards of

directors, and supervisory boards, including board committees in foreign
enterprises, be accompanied by the notice convening the general meeting when
election of members to the board of directors is on the agenda.

demanding organisational tasks, and information

about whether candidates to the board of directors are considered independent.

COMMENT: The description may contain information about recruitment criteria

established by the board of directors, including requirements for professional

and personal qualifications, knowledge about the industry, diversity (e.g. age,
international experience and gender), educational background, etc., which represent
qualities paramount to the board of directors. The nomination to the general meeting
on the composition of the board of directors should be drawn up against this
background.

3.1.4. THE COMMITTEE RECOMMENDS that the companys articles of association stipulate
a retirement age for members of the board of directors.

3.1.5. THE COMMITTEE RECOMMENDS that members of the board of directors elected by
the general meeting be up for election every year at the annual general meeting.

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3.2 Independence of the board of directors

3.2.1. THE COMMITTEE RECOMMENDS that at least half of the members of the board of
directors elected by the general meeting be independent persons, in order for the
board of directors to be able to act independently of special interests.

To be considered independent, this person may not:

be or within the past five years have been member of the executive board, or senior

within the past five years, have received larger emoluments from the company/group,

staff member in the company, a subsidiary undertaking or an associate,

a subsidiary undertaking or an associate in another capacity than as member of the
board of directors,

represent the interests of a controlling shareholder,

within the past year, have had significant business relations (e.g. personal or
indirectly as partner or employee, shareholder, customer, supplier or member of
the executive management in companies with corresponding connection) with the
company, a subsidiary undertaking or an associate.

be or within the past three years have been employed or partner at the external auditor,

have been chief executive in a company holding cross-memberships with the company,

have been member of the board of directors for more than 12 years, or

have been close relatives with persons who are not considered independent.

COMMENT: The board of directors decides which members are considered

independent persons. When applying the independence criteria, the board of

directors should focus on substance rather than form.
Independence means that the person in question does not have close ties to or
represents the executive board, the chairman of the board of directors, controlling
shareholders or the company.
It is important that the board of directors introduces new talent among its members,
and that the individual members of the board of directors, under the circumstances,
recognise the value of being critical of previously adopted resolutions.
The fact that a member of the board of directors was elected by votes of the
controlling shareholder does not in itself influence the assessment of that members
independence. Other factors determine the question of independence, including
whether the person in question is member of the executive management of or has
close ties to the companys controlling shareholder.
Cross-memberships of executive management are seen e.g. where a member of the
board of directors in company A is a member of the executive board in company B, at
the same time as a member of the board of directors in company B is a member of the
executive board in company A. A similar situation may arise where a member of the
board of directors has significant links with members of the executive board in the
company through involvement in other companies or entities.
In the view of the Committee, employee representatives are not independent.
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3.3. Members of the board of directors and the number of other

executive functions

3.3.1. THE COMMITTEE RECOMMENDS that each member of the board of directors assesses

the expected time commitment for each function in order that the member does not
take on more functions than he/she can manage satisfactorily for the company.

COMMENT: A member of the board of directors who is also a member of the

executive management of a company, should generally not take on more than a few
non-executive directorships or one chairmanship and one non-executive directorship
in companies not forming part of the group. This assessment should also consider the
number and scope of committee posts.

3.3.2. THE COMMITTEE RECOMMENDS that the management commentary, in addition to

the provisions laid down by legislation, includes the following information about the
members of the board of directors:

the position of the relevant person,

the age and gender of the relevant person,

whether the member is considered independent,

the date of appointment to the board of directors of the member,

expiry of the current election period,

other executive functions, e.g. memberships in executive boards, boards of

directors, and supervisory boards, including board committees in foreign
enterprises and

the number of shares, options, warrants and similar in the company, and other

demanding organisational tasks, and

group companies of the company, owned by the member, as well as changes in
the portfolio of the member of the securities mentioned which have occurred
during the financial year.

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3.4. Board committees

Board committees may increase efficiency and improve the quality of the work
performed by the board of directors.
A board committee should be set up with the sole purpose of facilitating the
transaction of business by the board of directors and must not cause significant
information required by all members of the board of directors only to be
communicated to the board committee, or that the processing required in the
board of directors be limited or omitted.
The board of directors remains fully responsible for all decisions prepared by a
board committee.
The board of directors should consider whether the company is particularly
exposed, or whether other matters might motivate setting up further permanent
committees other than the ones recommended below. This may help obtain better
exploitation of the special competences of the board of directors. For example,
this could be research and development or risk committees.
The board of directors may also set up ad hoc committees in connection with special
tasks or issues of significant, though temporary nature. This may help ensure the
required focus on the task in question as well as temporal prioritisation. Such issues
could be CSR, ethical or image-related issues, large acquisitions or takeover bids.

3.4.1. THE COMMITTEE RECOMMENDS that the company publish the following on the
companys website:

The terms of reference of the board committees,

the most important activities of the committees during the year, and the number

the names of the members of each committee, including the chairmen of the

of meetings held by each committee, and

committees, as well as information on which members are independent members
and which members have special qualifications.

3.4.2. THE COMMITTEE RECOMMENDS that a majority of the members of a board

committee be independent.

3.4.3. THE COMMITTEE RECOMMENDS that the board of directors set up a formal audit
committee composed such that

the chairman of the board of directors is not chairman of the audit committee, and

between them, the members should possess such expertise and experience as to
provide an updated insight into and experience in the financial, accounting and audit
aspects of companies whose shares are admitted to trading on a regulated market.
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3.4.4. THE COMMITTEE RECOMMENDS that, prior to the approval of the annual report and
other financial reports, the audit committee monitors and reports to the board of
directors about:

significant accounting policies,

significant accounting estimates,

related party transactions, and

uncertainties and risks, including in relation to the outlook for the current year.

3.4.5. THE COMMITTEE RECOMMENDS that the audit committee:

annually assesses the need for an internal audit, and in such case, makes
recommendations on selecting, appointing and removing the head of the internal
audit function and on the budget of the internal audit function, and

monitor the executive boards follow-up on the conclusions and recommendations

of the internal audit function.

COMMENT: The alternative to setting up an internal audit function may be to

outsource the task, possibly to another party than the auditor elected by the general
meeting. The party in question will carry out the internal audit and refer to the board
of directors.

3.4.6. THE COMMITTEE RECOMMENDS that the board of directors establish a nomination
committee chaired by the chairman of the board of directors with at least the
following preparatory tasks:

describe the qualifications required by the board of directors and the executive
board, and for a specific membership, state the time expected to be spent
on having to carry out the membership, as well as assess the competences,
knowledge and experience of the two governing bodies combined,

annually assess the structure, size, composition and results of the board of
directors and the executive board, as well as recommend any changes to the
board of directors,

annually assess the competences, knowledge and experience of the individual

members of management, and report to the board of directors in this respect,

consider proposals from relevant persons, including shareholders and members

of the board of directors and the executive board for candidates for the board of
directors and the executive board, and

propose an action plan to the board of directors on the future composition of the
board of directors, including proposals for specific changes.

COMMENT: When electing candidates for the board of directors, external assistance

should be considered.

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20

3.4.7. THE COMMITTEE RECOMMENDS that the board of directors establish a remuneration
committee with at least the following preparatory tasks:

to recommend the remuneration policy (including the general guidelines for
incentive-based remuneration) to the board of directors and the executive board
for approval by the board of directors prior to approval by the general meeting,

make proposals to the board of directors on remuneration for members of the

board of directors and the executive board, as well as ensure that the remuneration
is in compliance with the companys remuneration policy and the assessment
of the performance of the persons concerned. The committee should have
information about the total amount of remuneration that members of the board of
directors and the executive board receive from other companies in the group, and

recommend a remuneration policy applicable for the company in general.

3.4.8. THE COMMITTEE RECOMMENDS that the remuneration committee do not consult
with the same external advisers as the executive board of the company.

3.5. Evaluation of the performance of the board of directors and the

executive board
The evaluation process is to form the basis for continuous improvements in board
work and is to ensure that the board of directors continues to have the right
composition and regularly introduces new talent. Involving external assistance in
the evaluation process may be considered periodically.

3.5.1. THE COMMITTEE RECOMMENDS that the board of directors establish an evaluation
procedure where contributions and results of the board of directors and the
individual members, as well as collaboration with the executive board are annually
evaluated. Significant changes deriving from the evaluation should be included in the
management commentary or on the companys website.

COMMENT: The evaluation should consider the composition, work and results of the

board of directors (including the number of members). The need for and usefulness of
the committee structure, as well as organisation of work and the quality of material for
the board of directors, should also be included in the evaluation.
The evaluation of the individual member could benefit from being carried out as
an anonymous assessment among the other members to be followed by an annual
interview between the chairman and the individual member. The evaluation of the
chairman should be undertaken by a member other than the chairman.
To increase value creation, the board of directors should carry out an evaluation of
its composition every year and ensure integration of new talent while maintaining
continuity. This evaluation should form the basis for new initiatives to be launched,
such as relevant supplementary training and new talent or replacement.
822
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This evaluation will also include participation by the individual members in board and
committee meetings.
3.5.2. THE COMMITTEE RECOMMENDS that in connection with preparation of the general
meeting, the board of directors consider whether the number of members is
appropriate in relation to the requirements of the company. This should help ensure a
constructive debate and an effective decision-making process in which all members
are given the opportunity to participate actively.

3.5.3. THE COMMITTEE RECOMMENDS that at least once every year the board of directors
evaluate the work and performance of the executive board in accordance with predefined clear criteria.

COMMENT: Executive board members, who are members of the board of directors,
should not participate in the board of directors evaluation of the executive board as
they are regarded as disqualified in this respect.

3.5.4. THE COMMITTEE RECOMMENDS that the executive board and the board of directors
establish a procedure according to which their cooperation is evaluated annually
through a formalised dialogue between the chairman of the board of directors and
the chief executive officer and that the outcome of the evaluation be presented to
the board of directors.

COMMENT: This evaluation should be integrated into the overall evaluation by the
board of directors.

4. Remuneration of management
Openness and transparency about all important issues regarding company policy on and
amounts of the total remuneration offered to members of the governing bodies are essential.
Company policy on remuneration should support a long-term value creation for the company.
Competitive remuneration is a prerequisite for attracting and retaining competent members
of the management of the company (the board of directors and the executive board). The
company should have a remuneration policy, according to which the total remuneration
package, i.e. the fixed and variable components and other remuneration components, as well
as other significant employment terms, should be reasonable and reflect the governing body
members independent performance, responsibilities and value creation for the company.
The variable component of the remuneration (the incentive pay scheme) should be based on
actual achievements over a period of time with a view to long-term value creation so as not
to promote short-term and risky behaviour.
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4.1. Form and content of the remuneration policy

4.1.1. THE COMMITTEE RECOMMENDS that the board of directors prepare a clear and
transparent remuneration policy for the board of directors and the executive board,
including

a detailed description of the components of the remuneration for members of the

the reasons for choosing the individual components of the remuneration, and

a description of the criteria on which the balance between the individual

board of directors and the executive board,

components of the remuneration is based.

The remuneration policy should be approved by the general meeting and published
on the companys website.

COMMENT: The remuneration policy comprises fixed emoluments as well as incentive

pay schemes. The remuneration policy, including the general guidelines for incentivebased remuneration laid down in section 139 of the Companies Act, is after approval
by the general meeting only to be heard by the general meeting again, if the policy or
the guidelines adopted for incentive-based remuneration are subject to changes.

4.1.2. THE COMMITTEE RECOMMENDS that, if the remuneration policy includes variable
components,

limits be set on the variable components of the total remuneration package,

a reasonable and balanced linkage be ensured between remuneration for

governing body members, expected risks and the value creation for shareholders
in the short and long terms,

there be clarity about performance criteria and measurability for award of variable

there be criteria ensuring that qualifying periods for variable components in

an agreement is made which, in exceptional cases, entitles the company to

components,
remuneration agreements are longer than one calendar year, and
reclaim in full or in part variable components of remuneration that were paid on
the basis of data, which proved to be misstated.

4.1.3. THE COMMITTEE RECOMMENDS that remuneration of members of the board of

directors does not include share options.

COMMENT: If members of the board of directors are partly remunerated in the form of

shares at market value, this does not contravene with these recommendations.

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23

4.1.4. THE COMMITTEE RECOMMENDS that if share-based remuneration is provided, such

programmes be established as roll-over programmes, i.e. the options are granted
periodically and should have a maturity of at least three years from the date of allocation.

4.1.5. THE COMMITTEE RECOMMENDS that agreements on termination payments should

not amount to more than two years annual remuneration.

4.2. Disclosure of the remuneration policy

4.2.1. THE COMMITTEE RECOMMENDS that the companys remuneration policy and
compliance with this policy be explained and justified annually in the chairmans
statement at the companys general meeting.

4.2.2. THE COMMITTEE RECOMMENDS that the proposed remuneration for the board
of directors for the current financial year be approved by the shareholders at the
general meeting.

4.2.3. THE COMMITTEE RECOMMENDS that the total remuneration granted to each
member of the board of directors and the executive board by the company and other
companies in the group, including information on the most important contents of
retention and retirement/resignation schemes, be disclosed in the annual report and
that the linkage with the remuneration policy be explained.

COMMENT: If the total remuneration includes contributions to pension schemes,

such payments and the actuarial value and changes of such schemes over the year, are
considered to be covered by the disclosure on remuneration. Severance programmes
cover a wide area, including period of notice and qualification, termination payment,
change of control agreements, insurance and pension schemes, payment of pension
contributions after retirement, etc.

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5. Financial reporting, risk management and audits

Each member of the board of directors and the executive board is responsible for preparing
the annual report and other financial reports in accordance with current legislation,
applicable standards and any further requirements concerning financial statements stipulated
in the articles of association, etc.
The annual report and other financial reports should be supplemented by additional financial
and non-financial information, if deemed necessary or relevant in relation to the information
needs of the recipients.
The members of the board of directors and executive board must ensure that the financial
reporting is easy to understand and balanced and provides a true and fair view of the
companys financial position, performance and cash flow. The management commentary must
give a true and fair presentation of the state of affairs, including value creation and the outlook.
When considering and approving the annual report, the board of directors must decide
whether the business is a going concern, including supporting assumptions or qualifications
where necessary.
Effective risk management and an effective internal control system contribute to reducing
strategic and business risks, to ensuring observance of current rules and regulations and
to ensuring the quality of the basis for management decisions and financial reporting. It is
essential that the risks are identified and communicated, and that the risks are managed
appropriately.
Effective risk management and internal control are a precondition for the board of directors
and the executive board to efficiently perform the tasks bestowed upon them. Consequently,
it is essential that the board of directors ensure effective risk management and effective
internal controls.
An independent and competent audit is essential for the boards work.

5.1. Identification of risks and transparency about other relevant

information

5.1.1. THE COMMITTEE RECOMMENDS that the board of directors in the management
commentary review and account for the most important strategic and businessrelated risks, risks in connection with the financial reporting as well as for the
companys risk management.

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25

COMMENT: Information about the companys risk management in relation to strategic

and business-related risks supplements the statutory account in the management

commentary on the companys internal control and risk management systems in
connection with the financial reporting process.
The executive board should regularly identify the most important risks and report
to the board of directors about the developments in the most important risk areas,
including initiatives and action plans.

5.2. Whistleblower scheme

5.2.1. THE COMMITTEE RECOMMENDS that the board of directors decide whether to
establish a whistleblower scheme for expedient and confidential notification of
possible or suspected wrongdoing.

COMMENT: A whistleblower scheme should have its roots in the audit committee.

5.3. Contact to auditor

5.3.1. THE COMMITTEE RECOMMENDS that the board of directors ensure regular dialogue
and exchange of information between the auditor and the board of directors,
including that the board of directors and the audit committee at least once a year
meet with the auditor without the executive board present. This also applies to the
internal auditor, if any.

5.3.2. THE COMMITTEE RECOMMENDS that the audit agreement and auditors fee
be agreed between the board of directors and the auditor on the basis of a
recommendation from the audit committee.

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26

ANNEX

Committee on Corporate Governance in perspective

The Committee on Corporate Governance should primarily but not exclusively
participate in corporate governance networks in the EU and in international contexts,
relate to implementation of EU recommendations, etc. where it is assumed that member
states have national corporate governance bodies,
monitor developments in corporate governance at national and international levels,
hear/issue consultation statements in connection with relevant bills,
strive for continuity in the work on corporate governance in Denmark,
motivate companies with shares listed on the Danish regulated markets to have reasonable
and appropriate conditions and terms to adapt to the recommendations applicable on
corporate governance at all times,
collect views and experience from companies arising from their work on the
recommendations,
launch and support empirical studies in the field of corporate governance,
at appropriate intervals and after prior relevant consultation, adapt the Danish
recommendations on corporate governance with a view to ensuring that the
recommendations, from an overall assessment, for Danish listed companies and in
conformity with Danish and EU company legislation, continue to be appropriate and
recognised best practice.
The Committees members are appointed for a period of two years. Members may be reappointed for another three periods.
In the terms of reference of 2 March 2001, Lars Nrby Johansen, Jrgen Lindegaard, Waldemar
Schmidt and Mads vlisen were asked to assess the need for recommendations on corporate
governance in Denmark, and also to make proposals for this. In the same year, the first
recommendations on corporate governance were published.
At publication of these recommendations, the Committee comprises Birgit Aagaard-Svendsen
(chairman), Marianne Philip (vice-chairman), Henrik Brandt, Jrn P. Jensen, Thomas HofmanBang, Stig Enevoldsen, Dorrit Vanglo, Bjrn Sibbern and Vagn Srensen.
Since 2001, 21 persons have participated in the work on the recommendations. Other than the
persons mentioned above, these are Bodil Nyboe Andersen, Ingelise Bogason, Hans-Ole
Jochumsen, Finn Meyer, Peter Ravn, Lars Rohde, Sten Scheibye and Henrik Stenbjerre.
These recommendations have been updated six times: in 2005, twice in 2008, in 2010, in 2011,
and most recently, in 2013.

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27

829
RECOMMENDATIONS ON CORPORATE GOVERNANCE

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28

In case of discrepancy between the Danish and the English text of this Act, the Danish text
will prevail.

The Danish Competition Act

(Consolidation Act No. 23 of 17 January 2013)

The Competition Act, cf. Consolidated Act no. 972 of 13 August 2010, as amended by Section 30 in Act
no. 1231 of 18 December 2012 and Section 1 in Act no. 1385 of 23 December 2012, is hereby promulgated.
The wording of the Act is fully applicable from 1 March 2013; cf. Section 3 in Act no. 1385 of 23 December 2012.

Part 1
The purpose of this Act and its area of use
1

The purpose of this Act is to promote efficient resource allocation in society through workable competition for the benefit of undertakings and consumers.

(1) This Act shall apply to any form of commercial activity as well as aid from public funds
granted to commercial activity.
(2) The provisions of Parts 2 and 3 of this Act shall not apply where an anti-competitive practice
is a direct or necessary consequence of public regulation. An anti-competitive practice established by a local council shall only be considered a direct or necessary consequence of public
regulation in so far as the practice is necessary to allow the local council to carry out the
tasks assigned to it in accordance with current legislation.
(3) Decisions made by the executive committee of a local authority partnership, cf. Section 60
of the Local Government Act, shall be considered equivalent to decisions made by a local
council as referred to in subsection (2) above.
(4) A decision about the extent to which an anti-competitive practice will be covered by subsection (2) above shall be made by the minister responsible for the regulation concerned. If the
Competition Council requests the relevant minister to determine whether an anti-competitive
practice is covered by subsection (2), the minister must reach a decision no later than four
weeks after having received the request from the Council. The Competition Council can extend the deadline.

830

(5) If the Competition Council finds a public regulation or an aid scheme likely to restrain competition or otherwise likely to impede efficient allocation of society's resources, the Council
may deliver a reasoned opinion to the relevant minister and to the Minister for Business and
Growth, pointing out its potentially adverse effects on competition, and present recommendations for promoting competition in the area concerned. After negotiating with the Minister
for Business and Growth, the relevant minister reply to the Competition Council no later
than four months from the receipt of the Council's statement. The Competition Council can
extend the deadline.
(6) (Repealed).
3

This Act shall not apply to pay and working conditions. For the purposes of its on-going work
the Competition Council may, however, demand information from organisations and undertakings concerning pay and working conditions.

4
5

(Repealed).
(1) The provisions of Part 2 of this Act shall not apply to agreements, decisions and concerted
practices within the same undertaking or group of undertakings.
(2) The Minister for Business and Growth shall lay down specific rules on the application of subsection (1), after consultation with the Competition Council, including rules on how to define
agreements etc. within the same undertaking or group of undertakings.

5 a

(1) The definition of the relevant market under this Act shall be based on examinations of demand and supply substitutability, and potential competition. The potential competition must
be examined when the position of the undertakings operating on the relevant market has
been documented and this position gives rise to doubt as to whether this Act has been infringed.
(2) The Competition Council may draw on external expertise in making its assessment under
subsection (1) above.
Part 2
Prohibition against certain anti-competitive agreements

(1) It shall be prohibited for undertakings etc. to enter into agreements that have restriction of
competition as their direct or indirect object or effect.
(2) Agreements covered by subsection (1) may, in particular, be agreements made to
i)

fix purchase or selling prices or other trading conditions;

ii)

limit or control production, sales, technical development or investments;

iii) share markets or sources of supply

831

iv) apply dissimilar conditions to equivalent transactions with trading partners, thereby
placing them at a competitive disadvantage;
v)

make the conclusion of contracts subject to acceptance by the other contracting party of
supplementary obligations which, by their nature or according to commercial usage,
have no connection with the subject of such contracts;

vi) coordinate the competitive practices of two or more undertakings through the establishment of a joint venture; or
vii) determine binding resale prices or in other ways seek to induce one or more trading
partners not to deviate from recommended resale prices.
(3) Subsection (1) shall furthermore apply to decisions made by an association of undertakings
and to concerted practices between undertakings.
(4) The Competition Council may issue orders to put an end to infringements of subsection (1),
cf. Section 16. Acting upon any concerns it may have in relation to subsection (1), the Competition Council may, furthermore, decide that commitments made by an undertaking shall
be binding, cf. Section 16a(1).
(5) Agreements and decisions that are prohibited under subsections (1) (3) shall be void, unless otherwise excepted under Section 7, exempted under Section 8 or Section 10, or comprised by a declaration under Section 9.
7

(1) The prohibition set out in Section 6(1) above shall not apply to agreements between undertakings, decisions made by an association of undertakings or concerted practices between
undertakings, in case the undertakings involved have
i)

an aggregate annual turnover of less than DKK 1 billion and an aggregate share of less
than 10 per cent of the product or service market concerned, cf., however, subsections
(2)-(4); or

ii)

an aggregate annual turnover of less than DKK 150 million, cf., however, subsections
(2)-(4).

(2) The exceptions in subsection (1) shall not apply to cases in which undertakings or an association of undertakings agree, coordinate or decide on
i)

prices, profits etc. for the sale or resale of goods or services,

ii)

restrictions on production or sales,

iii) sharing of markets or customers, or

832

iv) fixing bids prior to their tendering, fixing conditions for the opening of bids, deferring
bids, prior notification of bids, or any other form of bid rigging.
(3) The prohibition set out in Section 6(1) shall, irrespective of subsection (1) above, apply to
an agreement between undertakings, a decision made by an association of undertakings and
concerted practices between undertakings if, this agreement etc., together with other similar
agreements etc., will restrict competition.
(4) The Minister for Business and Growth shall, after consultation with the Competition Council,
lay down specific rules on the calculation of turnover under subsection (1), including rules to
the effect that, in the case of financial undertakings, the mentioned turnover thresholds
shall be calculated on the basis of other assets.
(5) The exception set out in subsection (1) shall apply even if the undertakings exceed the
above thresholds for two consecutive years. The Minister for Business and Growth shall, after consultation with the Competition Council, lay down specific rules in that respect, including rules on minor transgressions of the mentioned thresholds.
8

(1) The prohibition set out in Section 6(1) above shall not apply if an agreement between undertakings, a decisions made by an association of undertakings or concerted practices between undertakings
i)

contribute to improving the efficiency of the production or distribution of goods or services, or to promoting technical or economic progress;

ii)
iii)

provide consumers with a fair share of the resulting benefits;

do not impose on the undertakings restrictions that are not necessary to attain these
objectives; and

iv) do not afford such undertakings the possibility of eliminating competition in respect of a
substantial part of the products or services in question.
(2) The Competition Council may, upon notification, exempt an agreement between undertakings, a decision within an association of undertakings or a concerted practice between undertakings from the prohibition in Section 6(1) if the Council finds the conditions set out in
subsection (1) have been complied with. The notification of such an agreement etc., including an application for exemption under subsection (1), may be submitted to the Competition
and Consumer Authority. The Competition Council shall lay down specific rules on notification, including rules on the use of special notification forms, and on the submission of a nonconfidential version of a notification.
(3) Decisions made under subsection (2) shall specify the period for which the exemption is effective. Exemptions may be granted on specific terms.

833

(4) The Competition Council may, upon notification, extend an exemption when the Council finds
that the conditions in subsection (1) are still satisfied. Subsection (3) shall apply correspondingly.
(5) The Competition Council may refrain from considering a notification under subsection (2) or
(4), if the agreement etc. may appreciably affect trade between the Member States of the
European Union.
(6) The Competition Council may alter or revoke a decision made under subsection (2) or (4) if
i)

the facts of the situation have changed in any respect that was important for the decision;

ii)

the parties to the agreement etc. fail to comply with the terms imposed; or

iii) the decision has been based on incorrect or misleading information from the parties to
the agreement etc.
9

(1) The Competition Council may declare, upon notification from an undertaking or association
of undertakings, that according to the facts in its possession, an agreement, decision or
concerted practice shall be outside the scope of the prohibition set out in Section 6(1), and
that, accordingly, it has no grounds for issuing an order under Section 6(4). The Competition
Council shall lay down specific rules on notification, including rules on the use of special notification forms, and on the submission of a non-confidential version of a notification.
(2) The Competition Council may refrain from considering a notification under subsection (1), if
an agreement etc. may appreciably affect trade between the Member States of the European
Union.

10

(1) The Minister for Business and Growth shall, after consultation with the Competition Council,
lay down rules on the granting of block exemptions from the prohibition in Section 6(1) for
groups of agreements, decisions and concerted practices that satisfy the conditions in Section 8(1).
(2) Where agreements, decisions by an association of undertakings or concerted practices that
are comprised by a block exemption issued under subsection (1) above have impact on a
concrete case which is incompatible with the conditions in Section 8(1), the Competition
Council may revoke such a block exemption for the undertakings etc. that have entered into
the agreement etc.
Part 2 a
Trading terms of dominant undertakings

10 a

(1) The Competition Council may order a dominant undertaking to submit its general trading
terms to the Competition and Consumer Authority if

834

i)

a competitor has filed a not unfounded complaint;

ii)

special conditions prevail on the market and

iii) the Competition and Consumer Authority, due to these conditions, sees a special need
to acquire insight into the ways in which the dominant undertaking fixes its prices, discounts, etc.
The order may exclusively comprise the trading terms for the markets with which the complaint is concerned.
(2) Orders issued under subsection (1) shall apply for two years from the date when the decision is final.
(3) Trading terms" shall mean the basis applied at any time by an undertaking to generally fix
its prices, discounts, marketing contributions and free services, and the terms and conditions on which the undertaking will grant these financial benefits to its trading partners.
(4) Undertakings that have submitted their trading terms under subsection (1) above may ask
the Competition Council for an assessment of these terms. The Competition Council shall
make its decision within six months. This time limit will run from the date when the Competition and Consumer Authority receives from the undertaking the information that is necessary to make an assessment of its trading terms. If no decision has been made by the Competition Council within this time limit, the trading terms shall be considered as approved.
(5) The Competition Council may refrain from making a decision in case such a decision may
have implications for whether one or more undertakings abuse a dominant position in the
common market or an essential part thereof, and trade between the Member States of the
European Union may be appreciably affected thereby.
(6) If the trading terms are contrary to Section 11(1) or administered in contravention of Section 11(1), the Competition Council may order revocation or alteration of one or more provisions in the trading terms. If the trading terms are prepared in such a manner that the
Competition Council will have an inadequate basis for assessing whether they are contrary to
Section 11(1), the Competition Council may order that one or more of the terms must be
further specified.
(7) If a dominant undertaking against which an order under subsection (1) has been issued
deals with trading partners on the Danish market using prices, discounts, financial benefits
or other terms that are not shown in or deviate to a not insignificant extent from the trading
terms submitted to the Competition and Consumer Authority, this will be taken into account
in connection with the general presentation of evidence in proceedings under Section 11.

835

(8) The provision in subsection (7) shall also apply if a dominant undertaking breaches an order
issued under subsection (6). This shall not apply, however, when under Section 19(4) a delaying effect has been granted pending the outcome of an appeal against the order.
Part 3
Abuse of a dominant position
11

(1) Any abuse by one or more undertakings etc. of a dominant position is prohibited.
(2) The Competition Council must declare, upon request, whether one or more undertakings
hold a dominant position, cf., however, subsection (7). If the Competition Council declares
that an undertaking does not hold a dominant position, this declaration shall be binding until
revoked by the Competition Council.
(3) Abuse as set out in subsection (1) may, for example, consist of
i)

directly or indirectly imposing unfair purchase or selling prices or other unfair trading
conditions;

ii)
iii)

limiting production, sales or technical development to the prejudice of consumers;

applying dissimilar conditions to equivalent transactions with trading partners, thereby
placing them at a competitive disadvantage, or

iv) making the conclusion of contracts subject to acceptance by the other contracting party
of supplementary obligations which, by their nature or according to commercial usage,
have no connection with the subject of such contracts.
(4) The Competition Council may issue orders to put an end to infringements of subsection (1),
cf. Section 16. Acting upon any concerns it may have in relation to subsection (1), the Competition Council may, furthermore, decide that commitments made by an undertaking shall
be binding, cf. Section 16a(1).
Stk. 5. The Competition Council may declare, upon notification from one or more undertakings,
that based on the facts in its possession, a certain form of conduct shall not fall under the
prohibition in subsection (1) and that, accordingly, it has no grounds for issuing an order
under subsection (4).
(6) The Competition Council may lay down specific rules on the material that has to be submitted for a decision under subsection (2) or (5), including the submission of a non-confidential
version of a request or a notification.
(7) The Competition Council may refrain from making a decision under subsection (2) or (5), in
case such a decision may have implications for whether one or more undertakings abuse a
dominant position in the common market or an essential part thereof, and trade between the
Member States of the European Union may be appreciably affected thereby.

836

Part 3 a
Aid that distorts competition
11 a

(1) The Competition Council may issue orders for the termination or repayment of aid granted
from public funds to support certain forms of commercial activity.
(2) An order under subsection (1) may be issued in case
i)

the direct or indirect object or effect of the aid is distortion of competition; and

ii)

the aid is not lawful according to public regulation.

(3) The decision of whether granted aid is lawful according to public regulation shall be made by
the relevant minister or the relevant municipal supervisory authority unless otherwise provided by other legislation. Decisions as to the lawfulness of granted aid according to public
regulation shall be made no later than four weeks after receipt of a request from the Competition Council. The Competition Council can extend the deadline.
(4) An order for repayment of aid under subsection (1) may be issued to private undertakings,
self-governing institutions and corporate undertakings owned fully or partly by public authorities. The Minister for Business and Growth may lay down specific rules to the effect that
orders for repayment of aid under subsection (1) may also be issued to certain quasicorporate undertakings owned fully or partly by public authorities.
(5) The Competition Council's powers to order repayment of public aid under subsection (1)
above shall be barred by limitation five years after the aid was paid out. The Competition
Council shall determine the interest to be paid in connection with orders for repayment of
unlawful aid according to subsection (1) above. Interest shall be paid at the interest rate
fixed at any time under the European Union's state aid rules to be applied in the repayment
of state aid. The Competition Council may stipulate that compound interest shall accrue from
the date when unlawful aid was first made available to the recipient and until the date when
the aid has been repaid. The sum of interest which has accrued the preceding year shall accrue interest each subsequent year.
(6) The Competition Council may, upon notification, declare that, based on the conditions known
to it, certain grants of public aid are not covered by subsection (2)(i) and that, accordingly,
the Council has no grounds for issuing an order under subsection (1). The Council may lay
down specific rules on notification, including rules on the use of special notification forms.
(7) The Competition Council may refrain from dealing with a case under subsections (1)-(6) if
the aid scheme may affect trade between the Member States of the European Union.
(8) An order that aid shall be terminated, cf. subsection (1), may be issued regardless of when
the decision granting the aid was made.

837

(9) Aid which, pursuant to subsection (1), is ordered to be repaid shall be paid to the state
treasury.
11b

(1) The Competition Council may investigate the extent to which a public authority offers private
providers of services covered by the Free Choice programme a settlement price fixed in accordance with the rules established in other legislation on the Free Choice programme, cf.
subsection (5).
(2) If the settlement price referred to in subsection (1) is lower or estimated to be lower than
the price which the public authority should have used according to the relevant provisions on
Free Choice, the Competition Council may issue an order addressed to the public authority to
the effect that the public authority shall
i)

stop calculating and stipulating settlement prices that are contrary to the Free Choice
rules,

ii)

use specified bases of calculation, calculation methods or settlement prices in respect of

private providers of Free Choice services and

iii) ensure post-payment of an amount to private suppliers of Free Choice services corresponding to the difference between the settlement price that the authority has used and
the settlement price that the authority should have used in accordance with paragraph
(i).
(3) Unless otherwise specified in the provisions on the Free Choice programme in question, the
order to ensure post-payment may not relate to payments that were made more than one
year prior to the date on which the Competition and Consumer Authority launched an investigation into the conditions of the public authority in question.
(4) The Competition Council may refrain from dealing with a case under subsections (1)-(3) if
the scheme may affect trade between the Member States of the European Union.
(5) The Minister for Business and Growth shall, after negotiation with the relevant minister, lay
down rules to specify the Free Choice programmes that fall within the Competition Council's
field of competence.
11c

The Minister of Business and Growth may lay down rules on the implementation of the
Commission Directive on the transparency of financial relations between Member States and
public undertakings and on financial transparency within certain undertakings.
Part 4
Merger control

12

(1) The provisions of Part 4 of the Act shall apply to mergers where

838

i)

the aggregate annual turnover in Denmark of all undertakings involved is more than
DKK 900 million and the aggregate annual turnover in Denmark of each of at least two
of the undertakings concerned is more than DKK 100 million; or

ii)

the aggregate annual turnover in Denmark of at least one of the undertakings involved
is more than DKK 3.8 billion and the aggregate annual worldwide turnover of at least
one of the other undertakings concerned is more than DKK 3.8 billion.

(2) Where a merger is a result of the acquisition of parts of one or more undertakings, the calculation of the turnover referred to in subsection (1) shall only comprise the share of the
turnover of the seller or sellers that relates to the assets acquired.
(3) However, two or more acquisitions as referred to in subsection (2), which take place within a
two-year period between the same persons or undertakings, shall be treated as one and the
same merger arising on the date of the last transaction.
(4) The Minister for Business and Growth shall, after consultation with the Competition Council,
lay down specific rules on the calculation of the turnover under subsection (1), including
rules prescribing that the mentioned turnover thresholds shall be calculated on the basis of
other assets in the case of financial institutions.
(5) Even if the aggregate turnover of the undertakings involved is lower than the thresholds referred to in subsection (1) above, the provisions of this Part of the Act shall apply to a merger which the European Commission refers to Denmark according to the EU Merger Regulation.
12 a

(1) For the purpose of this Act, a merger shall mean:

i)

two or more previously independent undertakings amalgamating into one undertaking;

or

ii)

one or more persons who already control at least one undertaking, or one or more undertakings - by an agreement to purchase shares or assets or by any other means - acquiring direct or indirect control of the entirety of or parts of one or more other undertakings.

(2) The establishment of a joint venture that will perform on a permanent basis all the functions
of an independent business entity shall constitute a merger within the meaning of subsection
(1)(ii).
(3) For the purpose of this Act, control of an undertaking is obtained through rights or agreements or in other ways which will, either separately or in combination, make it possible to
exert decisive influence on the operations of the undertaking.
(4) A merger shall not be deemed to arise under subsection (1) in the following cases:

10

839

i)

Where credit institutions, other financial undertakings or insurance companies whose

normal activity includes transactions and dealing in securities for their own account or
for the account of others are temporarily in possession of interests which they have acquired in an undertaking with a view to reselling these, provided always that they do not
exercise the voting rights attached to these interests for the purpose of determining the
competitive conduct of that undertaking or exercise these voting rights exclusively with
the aim of preparing the disposal of all or part of that undertaking or its assets or
shares held and that the disposal takes place within one year of the date of acquisition;

ii)

Where control is acquired by a professional who has powers under current insolvency
legislation to deal with and dispose of the undertaking; or

iii) Where the transactions referred to in subsection (1)(ii), above are carried out by holding companies as defined in the Annual Accounts Directive, subject to the restriction,
however, that the voting rights attached to the shares in their possession, especially in
relation to the appointment of members of the management and supervisory bodies of
the undertakings in which the shares are held, are only exercised to retain the full value
of these investments and not to determine directly or indirectly the competitive conduct
of these undertakings.
(5) The Competition Council may, upon request, extend the time limit set out in subsection
(4)(i), where the credit institute or financial undertaking, or insurance company is able to
substantiate that the disposal was not reasonably possible within the period required.
12 b

(1) A merger covered by this Act shall be notified to the Competition and Consumer Authority
after a merger agreement has been concluded, a takeover bid has been published or a controlling interest has been acquired and before the merger is carried out.
(2) The Competition and Consumer Authority may publish a notice to announce that it has received notification of a merger. The notice published shall include the names of the parties
to the merger, the nature of the merger and the economic sectors involved.
(3) The Minister for Business and Growth shall, after consultation with the Competition Council,
lay down rules on the notification of mergers, including rules on the use of special notification forms, and on the submission of a non-confidential version of a merger notification.

12 c

(1) The Competition Council shall decide whether to approve or prohibit a merger, cf., however,
subsection (7) below.
(2) A merger that will not significantly impede effective competition, in particular due to the
creation or strengthening of a dominant position, shall be approved. A merger that will significantly impede effective competition, in particular due to the creation or strengthening of
a dominant position, shall be prohibited.

11

840

(3) To the extent that the formation of a joint venture that will constitute a merger under Section 12a(2) above also has as its object or effect the coordination of the competitive conduct
of undertakings that remain independent, such coordination shall be assessed in accordance
with the criteria laid down in Sections 6(1) and 8(1) of this Act or Article 101(1) and (3)
TFEU in order to establish whether the transaction shall be approved.
(4) When making the assessment under subsection (3), the Competition Council shall, in particular, take into account:
1)

whether two or more founding undertakings have retained significant activities in the
same market as the established joint venture or in a market which is downstream or upstream from that of the joint venture or in a related market closely associated with this
market; and

2)

whether the coordination that is the direct consequence of the establishment of the joint
venture in question provides a possibility for the undertakings involved to eliminate
competition in respect of a substantial part of the products or services in question.

(5) A merger that is subject to the provisions of this Act shall not be carried through until it has
been notified to and approved by the Competition Council under subsection (1) above. This
shall not prevent the implementation of a public takeover bid or a series of transactions in
securities, including securities that can be converted to other securities that can be traded in
a market such as a stock exchange, whereby control is acquired from different sellers, cf.
Section 12a, provided that the merger is notified immediately to the Competition and Consumer Authority and the acquirer does not exercise the voting rights attached to the securities in question or only does so to maintain the full value of his investment and on the basis
of an exemption granted by the Competition Council according to subsection (6) below
(6) The Competition Council may grant an exemption from the provision set out in subsection
(5) and in that connection make it subject to certain conditions or it may issue an order for
the purpose of ensuring effective competition.
(7) Irrespective of subsection (1) above, the Competition and Consumer Authority may grant
approval of a merger, based on a simplified procedure if the Authority, based on the information submitted, finds that the merger will not give rise to any objections on the part of
the Authority.
12 d

(1) It shall be decided, no later than 25 weekdays after a complete notification has been received, whether a merger shall be approved, and whether the merger may be approved on
the basis of a simplified procedure. Within the same time limit it shall be decided whether a
further investigation of the merger shall be initiated.

12

841

(2) If the Competition Council initiates a further investigation of a merger, cf. subsection (1),
second sentence, then it shall be decided within 90 weekdays after the expiry of the time
limit set out in subsection (1) above whether to approve or prohibit the merger.
(3) The time limit referred to in subsection (2) above shall be extended by up to 20 weekdays in
case one or more of the undertakings involved propose new or revised commitments. The
time limit may only be extended if, at the time when the commitments are proposed, there
are fewer than 20 weekdays left until a decision should have been made under subsection
(2) above, thus, providing that a total period of 20 weekdays is available for the assessment
of the merger in light of the new or revised commitments.
(4) The time limit set out in subsection (2) above may furthermore be extended upon a decision
of the Competition Council provided that the undertaking or undertakings that has or have
filed the notification has or have requested or consented to the extension. An extension may
not exceed 20 weekdays.
(5) If no decision has been made within the time limits provided by subsections (1)-(4) above,
this shall be considered to be a decision to approve the merger, cf., however, subsection 6.
(6). If an undertaking involved lodges an appeal with the Danish Competition Appeals Tribunal
against the procedure in a merger in which a decision under Section 12c (1) or (3) has not
yet been made, the time limits in subsections (1)-(4) shall not take effect until the Competition Appeals Tribunal has made a decision regarding the appeal.
12 e

(1) The Competition Council may attach conditions to its approval of a merger under Section
12c(2) or issue orders to ensure, for example, that the undertakings involved comply with
the commitments they have accepted vis--vis the Competition Council to eliminate any anti- competitive effects of the merger.
(2) Such conditions or orders may require that the undertakings involved must
i)

dispose of an undertaking, parts of an undertaking, assets or other proprietary interests;

ii)

grant third party access; or

iii) take other measures capable of promoting effective competition.

(3) The Competition Council may, after its approval of a merger, issue the orders that are necessary to ensure due and correct fulfilment of the commitments made to the Council by the
undertakings involved according to subsection (1) above.
12 f

(1) The Competition Council may revoke its approval of a merger, when
1)

its approval is based to a substantial extent on incorrect or misleading information, for

which one or more of the undertakings concerned are responsible; or

13

842

2)

the undertakings concerned fail to comply with conditions or orders imposed under Section 12e(1).

(2) In case the Competition Council is made aware of the fact that an undertaking concerned, as
part of the assessment of a merger notified according to the simplified procedure, has submitted incorrect or misleading information, the Council may revoke its approval under Section 12c(7) and demand that within two weeks the undertakings concerned submit a full notification, cf. subsection (3), however. The Competition Council's assessment is subject to
the time limits set out in Section 12d.
(3) However, a full notification shall not be submitted, if, at the time when the Competition
Council revokes its approval, the undertakings involved have not taken any initiatives to implement the merger or if they have taken initiatives to implement the merger, but inform
the Competition Council within two weeks that the merger will not be implemented.
12 g

The Competition Council may, when making a decision under Section 12c(1) to prohibit a
merger that has already been carried through, issue an order that requires separation of the
undertakings or assets that have been taken over or merged or cessation of joint control or
any other measure capable of restoring effective competition.
Part 5
Access to documents

13

(1) The Act on Public Access to Documents in Public Files shall not apply to cases and investigations under this Act other than cases concerning the definition of rules under Section 5(2),
Section 7(4) and (5), second sentence, Section 8(2), third sentence, Section 9(1), second
sentence, Section 10(1), Section 11(6), Section 11a(4), second sentence, and (6), second
sentence, Section 11c, Section 12(4), Section 12b(3), Section 14(3), Section 18(8), second
sentence, Section 18a(3) and Section 21(3). However, Section 4(2) and Section 6 of the Act
on Public Access to Documents in Public Files shall also apply to cases covered by this Act.
In addition, sentences one and two are applicable if information obtained under this Act has
been disclosed to another administrative authority.
(2) The Competition and Consumer Authority shall publish:
i)

Decisions made by the said authority according to Section 2(4), first sentence, and Section 11a(3), first sentence, as well as the Competition Council's reasoned opinions and
the relevant minister's responses according to Section 2(5),

ii)

The Competition Council's decisions made under this Act,

iii) The Competition and Consumer Authority's decisions made on behalf of the Competition
Council or a summary of such decisions, unless the decision is neither found to be of
importance for the understanding of the Competition Act nor otherwise found to be of
public interest,

14

843

iv) Judgments, settlements of fines or a summary thereof, where, subject to Section 23, a
fine is imposed on or accepted by an undertaking,
v)

Orders made by the Competition Appeals Tribunal,

vi) Judgments passed in lawsuits, to which the Competition and Consumer Authority, the
Competition Council or the Competition Appeals Tribunal is a party,
vii) Judgments which the Authority has obtained from the courts or of which it has requested copies according to Section 20(4) where such judgments concern the application of
this Act or Articles 101 and 102 TFEU.
(3) The Competition and Consumer Authority may also publish information concerning the Competition Council's and the Authority's activities in the area of competition.
(4) Publication of information according to subsections (2) and (3) shall not include information
on technical matters, including information on research, production methods, products and
operating and business secrets, where such information is of substantial financial importance
to the person or undertaking concerned. Nor shall customer-related information from undertakings, which fall under the jurisdiction of the Financial Supervisory Authority, be disclosed.
(5) Any party who is required to submit information to the Competition Council may file an application to the Chairman of the Council requesting that information that may not be disclosed or made available to the public pursuant to subsection (4) may not be disclosed to
the members of the Council either. The Chairman shall make the final decision as to the extent to and form in which the information should be disclosed.
Part 6
The Competition and Consumer Authority. Organisation and powers
14

(1) The enforcement of this Act and the subordinate rules issued under this Act shall be the responsibility of the Competition Council, cf., however, Sections 2(4), first sentence, and
11a(3), first sentence. However, this shall not apply to rules laid down according to Section
11c of this Act. The Competition Council may consider cases on its own initiative, upon notification or appeal, or as a result of a referral from the European Commission or other competition authorities of the European Union. The Competition Council shall decide whether
there are sufficient grounds to initiate an investigation or make a decision in a case, including whether the consideration of a case should be suspended or discontinued. The Competition Council may also decide not to consider cases in which undertakings have previously
given commitments under Section 16a(1).
(2) The Competition and Consumer Authority serves as secretariat to the Competition Council in
respect of cases under this Act and handles the day-to-day administration of the Act on behalf of the Competition Council.

15

844

(3) The Minister for Business and Growth shall lay down rules of procedure for the Competition
Council as well as specific rules on the activities of the Competition Council and the Competition and Consumer Authority in the area of competition, including rules on the dismissal of
Council members or their deputies upon recommendation from the Chairman of the Council
prior to the expiry of their term.
15

(1) The Competition Council is composed of a Chairman and 17 members. The Minister for Business and Growth shall appoint the Chairman and the members for a term of up to four
years. The Council shall have comprehensive insight into public as well as private enterprise
activity, including expertise in legal, economic, financial and consumer-related matters. The
Chairman and eight members of the Council shall be independent of commercial and consumer interests. One of these members shall have special insight into government enterprise activity. According to specific directions given by the Minister for Business and Growth,
seven members shall be appointed on the recommendation of trade organisations, one
member shall be appointed on the recommendation of consumer organisations, and one
member with special insight into public enterprise activity upon recommendation from Local
Government Denmark (KL). The members of the Council shall be appointed on the basis of
their personal and professional qualifications and they shall act independently when carrying
out their duties.
(2) The Minister for Business and Growth shall appoint permanent deputies for the members of
the Competition Council.
(3) The Minister for and Growth and Business may lay down specific rules on the recommendation and appointment of members for the Competition Council and on the recommendation
and nomination of their permanent deputies.

15 a

(1) Under the Public Administration Act, the right to access to information for the parties to a
case shall only comprise the part of the correspondence and exchange of documents between the European Commission and the competition authorities of the Member States, or
between the competition authorities of the Member States, which contains information about
factual circumstances of a case that are of substantial importance for its decision.
(2) In cases in which an order is issued, or in which a commitment is made binding, the Competition Council shall issue a preliminary statement of objections and a statement of objections. The time limit for the issuing of a statement by the parties regarding a preliminary
statement of objections is two weeks. If an order is issued in accordance with Section 6(4),
Section 10a(1) and (6), Section 11(4), Section 11a(1) or Section 11b(2), the time limit for
the parties to issue a statement of objections is six weeks. In the cases mentioned in the
third sentence above, in which a party shall be heard further as required under the Public
Administration Act, the time limit for issuing a statement shall be three weeks, unless the
case has already been before the Competition Council. The first through fourth sentences

16

845

shall not apply to cases in which a decision is made under the provisions of Part 4 of this
Act.
15 b

(1) The Minister for Business and Growth may lay down specific rules to the effect that written
communication to and from the authorities regarding matters that are covered by this Act or
by rules issued pursuant to this Act shall take place digitally.
(2) The Minister for Business and Growth may lay down specific rules on digital communication,
including the use of specific IT systems, special digital formats and digital signatures etc.
(3) A digital message must be regarded as having arrived when it is available to the receiver of
the message.
(4) The Minister for Business and Growth may lay down rules to the effect that the authorities
may issue decisions and other documents in accordance with this Act or rules issued pursuant to this Act without signatures, with mechanically or similarly reproduced signatures, or
using a technique that ensures the unambiguous identification of the person who has issued
the decision or document. Such decisions and documents shall be equivalent to decisions
and documents with personal signatures.

15 c

The Competition Council may process cases and make decisions in English if so requested by
the parties to whom a decision is addressed and the regard for the parties to the case does
not decisively make the use of English inadvisable. If the Competition Council has made a
decision in English, a Danish summary of the decision shall be available.

15 d

(1) The Competition and Consumer Authority may carry out investigations of a specific business
sector or certain types of agreements in different sectors (sector inquiries) in order to gain
an insight into the competition situation in the sector or sectors concerned.
(2) The provisions of Sections 17 and 18 of this Act shall similarly be applicable to the Competition and Consumer Authority's investigations under subsection (1) above.
(3) The Competition and Consumer Authority may subject to the limitations in Section 13(4)
publish the results of investigations carried out according to subsection (1) above.

15 e

The Competition and Consumer Authority may publish documents that are part of the case
processing and for which a third party's comments are required. Section 13(4) shall also apply on publication.

16

(1) The orders which the Competition Council may issue under Section 6(4), first sentence, or
Section 11(4), first sentence, or with reference to Article 101 or 102 TFEU, cf. Section
24(1), in order to eliminate the adverse effects of anti-competitive activity may include:
i)

An order for the termination of agreements, decisions, trading conditions etc. in full or
in part;

17

846

ii)

A demand that stated prices or profits must not be exceeded, or that the calculation of
prices or profits shall be subject to specified calculation rules;

iii) An obligation for one or more of the undertakings concerned to sell to specified buyers
on the conditions usually applied by the undertaking in corresponding sales. The undertaking is, however, always entitled to demand cash payment or adequate security;
iv) An order to grant access to an infrastructure facility which is necessary for the marketing of a product or service.
(2) The Competition Council may issue orders that are required to ensure the timely and correct
execution of the orders that the Council has issued under subsection (1).
16 a

(1) The Council may order commitments (remedies) made by undertakings which accommodate
the concerns of the Competition Council in relation to Section 6(1), Section 11(1) or Article
101 or 102 TFEU, cf. Section 24(1), to be binding on the undertakings. A commitment may
be limited in time.
(2) The Competition Council may, after having caused a commitment to be binding in accordance with subsection (1) above, issue the orders necessary to ensure timely and correct fulfilment of the commitments made.
(3) The Competition Council may revoke a decision under subsection (1) if
i)

the facts of the situation have changed in any respect that was important for the decision;

ii)

The conduct of the parties to an agreement etc. is contrary to the commitments made;
or

iii) the decision has been based on incorrect or misleading information from the parties to
the agreement etc.
17

(1) The Competition Council may demand all the information, including accounts, accounting
records, transcripts of books, other business documents and electronic data, that it believes
necessary for its activity or for deciding whether the provisions of this Act shall apply to a
certain situation.
(2) With a view to applying Articles 101 and 102 TFEU or Articles 53 or 54 of the EEA Agreement, the information referred to in subsection (1) may also be demanded for use in the
Competition and Consumer Authority's assistance to the European Commission and other
competition authorities of the European Union or the EEA area.

18

(1) For the use of the Competition Council's activities, the Competition and Consumer Authority
may conduct inspections, which will give the Authority access to the premises and means of
transport of an undertaking or association for the purpose of gaining insight into and making

18

847

copies of information kept on the site, including accounts, accounting records, books and
other business documents, regardless of the information medium used. In connection with
inspections, the Competition and Consumer Authority may request oral statements and demand that persons who are comprised by the investigations show the contents of their pockets, bags, etc. to enable the Competition and Consumer Authority to obtain knowledge of
such contents and, if necessary, take copies thereof.
(2) If the information of an undertaking or an association is stored or processed by an external
data processor, the Competition and Consumer Authority is entitled to be given access to
the premises of the external data processor to gain insight into and make copies of the information stored on the site according to subsection (1). It shall be a precondition for such
access that it is not possible for the Competition and Consumer Authority to obtain the information concerned directly from the undertaking or association that is the target of the inspection.
(3) The Competition and Consumer Authority's inspections may only be carried out on the basis
of a previously obtained court order and against due proof of the investigators' identity.
(4) The Competition and Consumer Authority may obtain a copy of the data content from electronic media covered by the inspection for subsequent review of the copy. The data obtained
must be sealed or otherwise protected against reading before the inspection is finished. The
undertaking which is the target of an inspection may demand that itself or a representative
appointed by the undertaking shall be present when the data obtained are made available
for reading and during the Authority's review of the material obtained. The Competition and
Consumer Authority is obligated, no later than 40 weekdays after the completion of the inspection, to deliver a copy of the information that the Authority may have extracted from
the data obtained from the undertaking which is the target of the investigation. When the
review of the data obtained has been completed, the data shall be secured against reading.
The data obtained shall be deleted if, in the Authority's assessment, the material does not
contain evidence of any infringement of the competition rules. If the Competition and Consumer Authority decides to proceed with the case, the data obtained shall be deleted when
the case has been finally decided.
(5) If the conditions of the undertaking or association make it impossible for the Competition
and Consumer Authority to get access to or make copies of the relevant information cf. subsections (1), (2) and (4) on the day when the inspection is carried out, the Competition and
Consumer Authority is entitled to seal off the relevant business premises and information for
up to three weekdays thereafter.
(6) The Competition and Consumer Authority is entitled on the same conditions as in subsection
(5) above to take the information or the medium on which it is stored away for copying. The
material which the Competition and Consumer Authority has removed must be returned to
the undertaking or association together with a set of copies of the information the Authority

19

848

has extracted for its further examinations, no later than three weekdays after the day of the
inspection.
(7) In special cases, the time limits in subsections (4), (5) and (6) may be extended.
(8) The police shall provide assistance when the Competition and Consumer Authority exercises
the powers assigned to it under subsections (1), (2) and (4)-(6). The Minister for Business
and Growth may, by agreement with the Minister of Justice, lay down specific rules on such
assistance.
(9) The Competition and Consumer Authority may conduct inspections to grant assistance to the
European Commission and other competition authorities of the European Union in connection
with these authorities' application of Articles 101 and 102 TFEU. The provisions of subsections (1)-(8) above shall apply correspondingly.
18 a

(1) The Competition and Consumer Authority may, subject to reciprocity, disclose information
covered by the Competition and Consumer Authority's duty of confidentiality to the competition authorities of other countries, if such information is necessary to assist the enforcement
of the competition rules of those countries, and if the Authority thereby fulfils bilateral or
multilateral obligations of Denmark.
(2) If such information is disclosed to authorities under subsection (1), the Competition and
Consumer Authority shall make the disclosure subject to the following conditions:
i)

The recipient must be under a similar duty of confidentiality;

ii)

The information disclosed may exclusively be used for the purposes set forth in a bilateral or multilateral agreement where the disclosure takes place according to such an
agreement; and

iii) The information disclosed may only be divulged with the express consent of the Competition and Consumer Authority and only for the purposes covered by the consent.
(3) The Minister for Business and Growth may lay down specific rules on the Competition Authority's disclosure to foreign authorities of information covered by the Competition Authority's duty of secrecy.
18 b

(1) If, according to a preliminary assessment, an agreement or conduct is deemed to be in

breach of Section 6(1), Section 11(1), or Article 101(1) or Article 102(1) TFEU, and if it is
deemed that there is the risk of serious restriction of competition, unless quick action is taken, the Competition and Consumer Authority may issue an order, cf. Section 16, which is intended to terminate the restricting effects of the agreement or conduct.
(2) No later than 10 weekdays after the Competition Council has issued an order in accordance
with subsection (1), the Council shall bring the decision before the Competition Appeals Tri-

20

849

bunal in order to affirm the order, cf. subsection (3), however. If it is not submitted before
the time limit, the decision shall be repealed.
(3) An order under subsection (1) shall be applicable from the time of the Competition Appeals
Tribunal's affirmation until the Competition Council has made a decision as to whether there
is an infringement of the law, or until the Competition Council has made the commitments
made by the undertakings binding, cf. Section 16a(1). If, before the expiry of the time limit
in subsection (2), a party waives the demand to have the Competition Council's decision
brought before the Competition Appeals Tribunal, the order shall be applicable from the time
the Council receives that party's waiver.
Part 7
Appeals
19

(1) Decisions according to Section 2(1), Section 3, first sentence, Section 5(1), Section 6(1),
Section 6(4), first sentence, Section 7(1)-(3), Section 8(2), first sentence, and subsection
(3), second sentence, and subsections (4) and (6), Section 9(1), first sentence, Section
10(2), Section 10a(1) and (6), Section 11(1) and (2), Section 11(4), first sentence, Section
11(5), Section 11a(1) and (6), first sentence, Section 11b(2), Section 12a(5), Section
12b(1), Section 12c(1), first sentence, Section 12c(2), (3), (6) and (7), Section 12d(5),
Section 12e(1) and (3), Section 12f, Section 12g, Section 13(4), Section 16, Section 16a(2)
and (3) and Section 24(2), cf. subsection (1), may be appealed to the Competition Appeals
Tribunal.
(2) An appeal according to subsection (1) may be lodged by:
i)

the party to whom the decision is directed.

ii)

Another party who has an individual and substantial interest in the case. This does,
however, not apply to decisions made by the Competition Council according to Section
12a(5), Section 12b(1), Section 12c(1) (2), (3), (6) and (7), Section 12d(5), Section
12e(1) and (3), Section 12f, Section 12g, and Section 16a(2) and (3) of this Act.

(3) Decisions according to Section 14(1) cannot be brought before the Competition Appeals Tribunal for appeal.
(4) An appeal against a decision under Section 13(4) will act as a stay of proceedings. An appeal
against other decisions may be granted a stay of proceedings by the Competition Council or
the Competition Appeals Tribunal.
(5) The Competition Appeals Tribunal may consider cases and make decisions in English if so requested by the addressees of the decision and the regard for the parties to the case does
not decisively make the use of English inadvisable. If the Competition Appeals Tribunal has
made a decision in English, a Danish summary of the decision shall be available. If the Competition Council has dealt with a case in English or made a decision in English under Section

21

850

15c, these documents shall be relied upon in the Tribunal's hearing of the appeal regardless
of whether the Tribunal's hearing and decision are conducted or made in English.
(6). The Competition Appeals Tribunal may deal with decisions that the Competition Council
makes in accordance with Section 18b(1).
20

(1) Decisions made by the Competition Council under this Act may not be brought before any
other administrative authority than the Competition Appeals Tribunal and may not be
brought before the courts of law until the Appeals Tribunal has made its decision.
(2) Appeals shall be lodged with the Competition Appeals Tribunal within four weeks after a decision has been communicated to the party concerned. When special reasons so warrant, the
Competition Appeals Tribunal can disregard exceeding of the appeal time limit.
(3) The decision of the Competition Appeals Tribunal may be brought before the courts no later
than eight weeks after the party in question has been notified about the decision. If submission is not made within the time limit, the decision by the Competition Appeals Tribunal is
final.
(4) Copies of judgments passed by a court concerning the application of this Act or Articles 101
and 102 TFEU shall be submitted to the Competition and Consumer Authority by the court,
however, in criminal cases by the State Prosecutor for Serious Economic Crime. The Competition and Consumer Authority shall inform the European Commission of judgments concerning Articles 101 and 102 TFEU.

21

(1) The Competition Appeals Tribunal shall consist of a President, who shall be a Supreme Court
Judge, and four other members, of whom two shall be legal experts while two shall be economic experts. The President may, in case of his own absence, authorise one of the members with legal expertise to replace the President.
(2) The President and the members shall be appointed by the Minister for Business and Growth.
They shall be independent of commercial interests. Their appointment shall cease by the end
of the month in which they will be 70 years old. The President or a member can, however,
finish the processing of cases being processed by the Competition Appeals Tribunal on expiry
of the term of the person concerned.
(3) The Minister for Business and Growth shall lay down rules on the activity of the Appeals Tribunal, including rules on the fees chargeable for bringing decisions before the Appeals Tribunal.
Part 8
Penalty and leniency provisions

22

(1) The Minister for Business and Growth or an authority empowered by the Minister may impose daily or weekly penalty payments on any party who fails to

22

851

i)

submit information demanded by the Competition Council or the Competition and Consumer Authority under this Act;

ii)

comply with conditions imposed or an order issued under this Act; or

iii) fulfil a commitment that has been made binding according to Section 16a(1).
23

(1) Unless a more severe penalty under subsection (3) or under other legislation is applicable, a
party shall be punished with a fine if, intentionally or with gross negligence, that party
i)

infringes Section 6(1);

ii)

fails to comply with a condition attached to a decision under Section 8(3), second sentence, or subsection (4), second sentence;

iii) fails to comply with an order issued according to Section 10a(1) or (6);
iv) infringes Section 11(1);
v)

fails to comply with an order issued according to Section 11a(1) or Section 11b(2);

vi) fails to notify a merger under Section 12b(1) or fails to submit a full notification before
the expiry of the time limit referred to in Section 12f(2);
vii) implements a merger despite the prohibition against implementation, cf. Section 12c(2),
or infringes the prohibition against implementation of a merger prior to a clearance, cf.
Section 12c(5), first sentence, fails to comply with a condition imposed or an order issued according to Section 12c(6) or Section 12e(1) or (3) or fails to comply with an order issued according to Section 12g;
viii) fails to comply with an order issued according to Section 6(4), first sentence, or Section
11(4), first sentence, cf. Section 16;
ix) fails to comply with a commitment that has been made binding according to Section
16a(1);
x)

fails to comply with an order issued according to Section 16a(2);

xi) fails to comply with a requirement according to Section 17;

xii) provides incorrect or misleading information to the Competition and Consumer Authority, the Competition Council or the Competition Appeals Tribunal or conceals matters of
importance for the case or sector inquiry according to Section 15d for which the information is obtained;
xiii) fails to comply with an order under Section 18b(1), or

23

852

xiv) infringes Article 101(1) or Article 102 TFEU, cf. Section 24(1) of this Act.
(2) Subsection (1)(i), above shall not apply from the date when an agreement etc. has been notified to the Competition Council according to Section 8(2) or (4) above and until the Council
has communicated its decision according to Section 8(2), (4) or (5).
(3) The punishment for anyone who acts in breach of Section 6(1) of this Act or Article 101(1)
TFEU, cf. Section 24(1), by entering into a cartel agreement, cf. second sentence, may increase to imprisonment for up to one year and six months if the breach is intentional and of
a grave nature, especially due to the extent of the infringement or its potentially damaging
effects. In this Act, a cartel agreement under first sentence shall mean an agreement, concerted practice or decision between undertakings, operating at the same level of trade, on
i)

prices, profits etc. for the sale or resale of goods or services,

ii)

restrictions on production or sales,

iii) iii) sharing of markets or customers, or

iv) ix) coordination of bids.
(4) Criminal liability may be imposed on companies etc. (legal persons) under the provisions of
Part 5 of the Criminal Code.
(5). When meting out a penalty to be imposed in accordance with this Act, consideration shall
be given to the gravity of the infringement and its duration. When meting out a penalty to
be imposed on legal persons, consideration shall also be given to the legal person's turnover.
(6). The period of limitation for penalties consisting of a fine is five years.
23 a

(1) Anyone who acts in breach of Section 6 of this Act or Article 101(1) TFEU by entering into a
cartel agreement shall upon application be granted withdrawal of the charge that would otherwise have led to a fine or imprisonment being imposed for participating in the cartel, in
case the applicant, as the first one, approaches the authorities about the cartel, submitting
information that was not in the possession of the authorities at the time of the application,
and who
i)

before the authorities have conducted an inspection or a search regarding the matter in
question, gives the authorities specific grounds to initiate an inspection or conduct a
search or inform the police of the matter in question; or

ii)

after the authorities have conducted an inspection or a search regarding the matter in
question, enables the authorities to establish an infringement in the form of a cartel.

(2) Withdrawal of the charge shall be granted only if the applicant

24

853

i)

cooperates with the authorities throughout the entire course of the case;

ii)

brings his participation in the cartel to an end no later than by the time of application,
and

iii) has not coerced any other party into participating in the cartel.
(3) If an application for withdrawal of the charge does not meet the requirements set out in
subsection (1)(i) or (ii), the application shall be treated as an application for reduction of
the penalty as set out in subsection (4).
(4) Anyone who acts in breach of Section 6 of this Act or Article 101(1) TFEU by entering into a
cartel agreement shall be granted a reduction of the fine that would otherwise have been
imposed for participation in the cartel, if the applicant
i)

submits information about the cartel that constitutes significant added value compared
to the information already in the possession of the authorities, and

ii)

satisfies the requirements specified in subsection (2).

(5) The penalty reduction for the first applicant who satisfies the requirements set out in subsection (4) shall be 50 per cent of the fine that would otherwise have been imposed on the
party concerned for participating in the cartel. The penalty reduction for the second applicant who satisfies the requirements of subsection (4) shall be 30 per cent. The penalty reduction for subsequent applicants who satisfy the requirements of subsection (4) shall be up
to 20 per cent.
(6) Applications for leniency shall be submitted to the Competition and Consumer Authority. In
cases where the State Prosecutor for Serious Economic Crime has charged persons or undertakings or initiated criminal investigations into an alleged infringement in the form of a cartel, an application for leniency may also be submitted to the State Prosecutor for Serious
Economic Crime. (7) An application filed under subsection (6) shall be considered according
to the following procedure:
i)

the authority that receives the application as set out in subsection (6) shall issue an
acknowledgement of receipt.

ii)

the competent authority, as referred to in subsection (8) below, shall issue a conditional
assurance containing a statement of whether the requirements in subsections (1) or (4)
are satisfied, and stating whether at this point there is reason to reject the application
because the requirements in subsection (2) are not found satisfied.

iii) when the case has been finally examined and assessed, the competent authority shall
indicate, as set out in subsection (9), whether the applicant satisfies the requirements

25

854

in subsection (2) and, if so, grant leniency in accordance with the conditional assurance
issued to the applicant under paragraph ii).
(8) The conditional assurance shall be issued by the authority that received the application under subsection (6). Before the conditional assurance is issued under subsection (7)(ii), it
shall have been discussed between the Competition and Consumer Authority and the State
Prosecutor for Serious Economic Crime. A conditional assurance for withdrawal of the charge
may only be issued if the authorities agree to do so.
(9) An assurance of withdrawal of the charge under subsection (7)(iii), shall be issued by the
State Prosecutor for Serious Economic Crime after consultation with the Competition and
Consumer Authority. An assurance of a penalty reduction under subsection (7)(iii), shall be
issued by the authority that, in the case in question, issues an administrative notice of a fine
or brings the case before the courts. Before an assurance of a penalty reduction may be issued, the other authority shall be consulted.
(10) Different undertakings cannot submit a joint application for leniency, unless the applicants
are associated members of a group of companies and the application specifies the companies
that it is intended to comprise.
(11) An application from an undertaking or an association shall automatically cover current and
former board members, senior managers and other employees, provided that each person
satisfies the requirements in subsection (2). When the case has been finally examined and
assessed, the competent authority as set out in subsection (9) shall indicate whether each
party satisfies the requirements in subsection (2) and, if so, grant leniency in accordance
with the conditional assurance issued to the undertaking or association under subsection
(7)(ii).
23 b

(1) In cases concerned with infringement of this Act in which the maximum penalty is a fine, the
Competition and Consumer Authority may with the consent of the State Prosecutor for Serious Economic Crime, issue an administrative notice of a fine, indicating that the case may
be settled without a trial if the offender admits being guilty and is willing to pay the fine
within a specified time limit.
(2) The rules of the Administration of Justice Act setting requirements for the contents of an indictment and stipulating that anyone who has been charged has the right to remain silent
shall apply correspondingly to the notice of a fine.
(3) If the fine is accepted, further proceedings shall be repealed.
Part 9
EU competition rules

24

(1) Cases concerning infringement of Articles 101 and 102 TFEU, including cases involving parallel application of Sections 6 and 11 of this Act, may be dealt with by the national competi-

26

855

tion authorities if the case has a connection to Denmark. Connection to Denmark exists if
agreements between undertakings, decisions within an association, concerted practices between undertakings or the conduct shown by an undertaking have anti-competitive effects
on the Danish market, or if an undertaking located in Denmark is involved in an agreement
etc. which has anti-competitive effects in the European Union.
(2) The provisions set out in Parts 5 - 8 of this Act are, in addition, applicable to the exercise of
the powers assigned to the Competition Council under subsection (1) above, to the extent
that it is compatible with regulations and directives issued under Article 103 TFEU.
(3) The assistance granted to the European Commission and other Member States pursuant to
regulations and directives under Article 103 TFEU shall be provided by the Competition and
Consumer Authority.
Part 9 a
Limitation in civil law
25

(1) A creditor's claim for compensation as a result of failure to comply with the provisions of
this Act or Articles 101 and 102 TFEU shall be subject to limitation according to the rules set
out in the Time Limitation Act.
(2) Section 21(2) of the Time Limitation Act shall apply accordingly to claims as referred to in
subsection (1) where the creditor has lodged a complaint with the Competition Council in a
case concerned with violation of provisions as referred to in subsection (1) and the complaint is included in the Council's consideration of the case.
(3) Where the case is brought before the Competition Appeals Board, Section 21(2) of the Time
Limitation Act shall apply correspondingly to claims as referred to in subsection (1) where
the creditor
i)

has brought the case before the Competition Appeals Board or

ii)

has joined the appeal proceedings as an intervener.

Part 9b
Class action

26

In case several persons have raised claims for damages due to infringements of this Act or
Articles 101 and 102 TFEU, the Consumer Ombudsman may be appointed as a representative for the class for the purpose of the class action to recover these damages, cf. Part 23a
of the Administration of Justice Act.

27

856

Part 10
Commencement and interim provisions etc.
27

(1) This Act shall enter into force on 1 January 1998, apart from the provisions of Sections
14(3) and 15 which shall enter into force on 1 July 1997.
(2) The entry into force of this Act shall mean the repeal of the Competition Act, i.e. Consolidation Act No. 114 of 10 March 1993, and the Act on Control of Compliance with the Regulations of the European Economic Community on Monopolies and Restrictive Practices, i.e.
Consolidation Act No. 449 of 10 June 1991. An approval granted under Section 14(1) of the
Competition Act, i.e. Consolidation Act No. 114 of 10 March 1993, shall remain in force until
the Competition Council may decide to withdraw the approval, but cf. subsection (6) below.
Such a decision shall be made according to the rules then in force.
(3) Proceedings conducted under the Competition Act, i.e. Consolidation Act No. 114 of 10
March 1993, which have not been completed at the date when this Act enters into force shall
lapse. However, this does not apply to complaints and cases pending before the Competition
Appeals Tribunal.
(4) Anti-competitive agreements, decisions and concerted practices which are in existence on
the date when this Act enters into force and come under the prohibition set out in Section
6(1), may, if an application for exemption under Section 8 is submitted before 1 July 1998,
be maintained for up to three months after the Competition Council has made its decision in
the case, even if the Council rejects the application. The Competition Council may extend
the three-month time limit.
(5) The administrative rules that are applicable in accordance with Section 7(2) in the Competition Act cf. Consolidated Act no. 114 of 10 March 1993 remain in effect until any new rules
become applicable in accordance with Section 5(3) in the Danish Price Marking and Display
Act, as stated in Section 28 paragraph (i) of this Act. The Administration of the existing applicable rules shall, as mentioned in paragraph (i), be transferred to the Danish Competition
and Consumer Authority. Intentional or grossly negligent violations of the existing rules shall
be punishable by a fine as mentioned in paragraph (i). Criminal liability may be imposed on
companies etc. (legal persons) under the provisions of Part 5 of the Criminal Code.
(6) Irrespective of the provisions of subsection (2), second and third sentence, above, Part 2 of
this Act shall apply to agreements and concerted practices between undertakings as well as
decisions made in an association of undertakings concerning fixed resale prices for the retail
sale of books.

28.

(Repealed.)

29

This Act shall not extend to the Faeroe Islands and Greenland.

28

857

Act No. 1385 of 23 December 2012 includes the following commencement provision:
3
This Act shall enter into force on 1 March 2013.

The Ministry of Business and Growth, 17 January 2013

Annette Vilhelmsen
/ Kirsten Levinsen

29

858

MEMO ON DANISH (AND EU) MERGER CONTROL

Introduction

Merger control implies that the competition authorities evaluate the competitive
effects of some mergers, acquisitions and joint ventures (hereinafter referred to
as "concentrations") and eventually approve or prohibit the concentrations prior
to the implementation hereof. The Danish merger control provisions are based
on and almost identical to the EU merger control provisions. To initiate the review of the Danish competition authorities, the concentration must be notified.
Such review of the notified concentrations is made by the Danish Competition
Council and/or its secretariat, the Danish Competition and Consumer Authority.
For the sake of simplicity, we jointly refer to these authorities by using "the Authority" in the following, without describing whether the Danish Competition Act
empowers the Council or the Authority to handle the mentioned issues.

The Danish Compe-

The overall content of the Danish Competition Act (the Consolidation Act No. 23

tition Act

of 17 January 2013) is to a large extent identical to the content of the equivalent

rules under EU competition law. Legislation with more or less the same features
exists in several other countries, including all EU Member States.
The most important elements of the Danish Competition Act are the provisions
regarding:

a general prohibition against anti-competitive agreements;

a general prohibition against abuse of a dominant position;

merger control; and

state-aid.

In the EU, merger control is regulated by Council Regulation (EC) No 139/2004

(hereinafter referred to as the "EU Merger Regulation"). In Denmark, the provisions on merger control are found in Section 12-12 g of the Danish Competition
Act.
Multiple filings or

The so-called "one stop shop principle" is fundamental in both EU and Danish

one stop shop?

merger control law. "One stop shop" means that concentrations of Union dimension, i.e. concentrations where the turnover of the parties to the concentration
(hereinafter referred to as "the undertakings concerned") exceeds the turnover
thresholds applicable in the EU Merger Regulation, must be notified to the European Commission (hereinafter referred to as "the Commission") and not to any
national competition authority in the EEA Member States.
A concentration subject to the Danish merger control provisions might also be
subject to the provisions on merger control in one or more other jurisdictions. If

859

a concentration subject to Danish merger control provisions is also subject to

provisions on merger control in other jurisdictions, it will lead to multiple filings,
i.e. the concentration will have to be filed with more than one national competition authority (at least as long as the transaction does not have Union dimension).
However, a concentration subject to the provisions on merger control of at least
three EU Member States, but not subject to the EU merger control provisions,
may - upon request by the undertakings concerned and provided that certain
conditions are fulfilled - be notified by the parties involved to the Commission in
lieu of national filings in these EU Member States. Furthermore, the EU merger
control provisions allow - subject to certain conditions - for referral to the Commission of the review of concentrations notified to one or more national competition authorities in the EEA. According to these provisions the national competition authorities in the EEA may potentially refer a concentration to the Commission for review even if the national threshold values are not met.
Similarly, the EU merger control provisions allow - upon request by (i) the undertakings concerned or (ii) one or more national competition authorities in the
EEA and provided certain conditions are fulfilled - for the Commission's referral
of the whole or part of the review of concentrations with Union dimension to one
or more of these national competition authorities. According to these provisions,
a national competition authority in the EEA may potentially review a concentration based on a referral from the Commission even if the national threshold values are not met.
General considera-

To evaluate a concentration in terms of merger control, the following must ini-

tions

tially be established:

Whether it is a concentration as defined in the EU Merger Regulation, the

Danish Competition Act and/or in the other merger control regimes in the
EEA?

Whether the turnover thresholds requiring notification to the Commission

are met?

If not, whether the threshold values requiring notification to the Authority

and/or to other national competition authorities in the EEA are met?

Whether the concentration is suitable for referral between the Commission

and the relevant national competition authorities in the EEA?

Whether the concentration needs to be notified in any non-EEA Member

860

States according to their national merger control regimes?

Whether or not a concentration is subject to notification in any jurisdiction, it is
important to evaluate simultaneously whether the concentration may be expected to give rise to any other anti-competitive concerns.
The review below only concerns notification to the Authority, unless otherwise
expressly indicated. This review also contains some introductory remarks in relation to the special set of provisions applicable to concentrations subject to notification to the Commission.
When is there a

Merger control implies that all structural changes concerning undertakings must

concentration?

be evaluated in advance by the Authority. This applies to:

Two or more previously independent undertakings merging;

One or more persons already controlling at least one undertaking or one or

more undertakings acquiring direct or indirect control of parts or the whole
of one or more other undertakings (irrespective of whether the change in
control will occur by a purchase of securities or assets);

The creation of certain joint ventures.

In practice, the decisive criterion for the existence of a concentration is whether

there is a change in control of an undertaking. "Control" is constituted by rights,
contracts or any other means which, either separately or in combination and
having regard to the consideration of facts or law involved, confer the possibility
of exercising decisive influence on an undertaking.
The turnover

If the specific transaction is a concentration under the Danish Competition Act, it

thresholds - Den-

is, as a general rule, determined on the basis of the turnovers of the previous fi-

mark

nancial year of the undertakings concerned whether the concentration is subject

to notification to the Authority.
There are two sets of turnover thresholds determining whether the concentration
is subject to a notification requirement in Denmark. The provisions are alternatives, i.e. a notification is required if either the first or the second turnover
threshold is exceeded.
1)

The first threshold:

The combined aggregate annual turnover in Denmark of the undertakings
concerned is at least DKK 900 million (approx. EUR 121 million), and each
of at least two of the undertakings must have an aggregate annual turno-

861

ver of at least DKK 100 million (approx. EUR 13.5 million) in Denmark.
This threshold (Section 12(1)(1) of the Danish Competition Act) relates, inter alia, to concentrations between large undertakings in the Danish market.
2)

The second threshold:

At least one of the undertakings has an aggregate annual turnover of at
least DKK 3.8 billion (approx. EUR 510.5 million) in Denmark, and the aggregate annual worldwide turnover of at least one of the other undertakings is at least DKK 3.8 billion (approx. EUR 510.5 million).
This threshold (Section 12(1)(2) of the Danish Competition Act) concerns,
inter alia, situations where a large Danish undertaking is merging with a
large foreign undertaking.

If a merging undertaking is part of a group, the turnover of the whole group is to

be included. In this connection, a wider definition of the notion "company group"
is applied than in other areas of the law. When part of an undertaking is acquired, only the turnover for the part acquired is to be included. These general
turnover calculation rules also apply under the EU merger control provisions.
Foreign to foreign

Geographically, the Danish competition legislation covers all concentrations ex-

concentration

ceeding one of the mentioned turnover thresholds. In this connection, it is irrelevant whether the undertaking is domiciled in Denmark or abroad.

The turnover

Concentrations with "Union dimension" must be notified to and evaluated by the

thresholds - the EEA

Commission. Such concentrations should not be notified to and evaluated by a

national competition authority in any EEA Member State, unless it is partly or
fully referred to one or more national competition authorities as mentioned
above.
The two below-mentioned sets of turnover thresholds in the EU Merger Regulation are alternatives, i.e. a notification is required if either the first or the second
turnover threshold is exceeded.
The turnovers of the undertakings concerned are as a general rule based on the
financial year preceding the concentration. The thresholds are the following:
1)

The first threshold:

a)

the combined aggregate annual worldwide turnover of all the undertakings concerned is more than EUR 5,000 million; and

862

b)

the aggregate annual EU-wide turnover of each of at least two of the

undertakings concerned is more than EUR 250 million, unless each of
the undertakings concerned achieves more than two-thirds of its aggregate EU-wide turnover within one EU Member State.

2)

The second threshold:

a)

the combined aggregate worldwide turnover of all the undertakings

concerned is more than EUR 2,500 million;

b)

in each of at least three EU Member States the combined aggregate

turnover of all the undertakings concerned is more than EUR 100 million;

c)

in each of at least three EU Member States included for the purpose

of point (b), the aggregate turnover of each of at least two of the
undertakings concerned is more than EUR 25 million; and

d)

the aggregate EU-wide turnover of each of at least two of the undertakings concerned is more than EUR 100 million, unless each of the
undertakings concerned achieves more than two-thirds of its aggregate EU-wide turnover within one EU Member State.

The two-thirds provisions ensure that purely national concentrations are not
comprised by the EU merger control provisions.
In most cases, it is relatively easy to establish whether a concentration is above
or below the turnover thresholds in the Danish Competition Act and the EU Merger Regulation. However, in some cases the calculation is rather complex.
If the concentration

If none of the turnover thresholds in the EU Merger Regulation or the Danish

does not meet the

Competition Act has been exceeded in a specific situation, and the review of the

turnover thresholds

concentration has not been referred between the Commission and national competition authorities in the EEA as mentioned above, the concentration may be
implemented without approval from the Commission and the Authority.
In case a joint venture implies co-ordination of the competition behaviour of still
independent undertakings, such elements have to be assessed under the provisions on anti-competitive agreements in Article 101 TFEU and/or Section 6 of the
Danish Competition Act.
Moreover, even if the turnover thresholds are not exceeded, it is still relevant to
evaluate all potentially anti-competitive clauses in the agreement which are not
directly related and necessary to the concentration (the so-called "ancillary restraints") and to carry out a competition law evaluation of the undertaking's

863

agreements and business practices. As an example, competition law may limit

the contractual freedom of the parties with respect to, inter alia, competition
clauses imposed on the seller and/or the purchaser and agreements concerning
future co-operation.
No implementation

The undertakings concerned are not allowed to implement a concentration when

of a concentration

a notification is required before the Authority has approved it, unless the Author-

prior to approval

ity grants an exemption in this regard. However, this shall not prevent the implementation of a public takeover bid or a series of transactions in securities,
provided that the concentration is notified immediately to the Authority and that
(i) the acquirer does not (directly or indirectly) exercise the voting rights attached to the securities in question or (ii) only does so to maintain the full value
of his investment and on the basis of an exemption granted by the Authority.

Criteria for the Au-

When evaluating a notified concentration, the Authority assesses whether the

thority's evaluation

concentration will significantly impede effective competition. Such impediment

of a notified concen-

may particularly be caused by creating or strengthening a dominant position on

tration

one or more relevant markets affected by the concentration. This implies that if
the concentration does not create or strengthen a dominant position, the Authority will approve the concentration unless it otherwise impedes effective competition.
Determining the relevant market, i.e. the relevant product and geographical
market, is very important when evaluating a notified concentration. A concentration is often approved if there are no overlapping markets between the undertakings concerned. EU case law and the Commission's detailed guidelines concerning, inter alia, the definition of the relevant market, are highly relevant also to
Danish merger control. The extent of a number of specific markets is successively mapped out in a series of concentration cases. The Authority may define the
market very narrowly compared to the undertaking's own perception of the market based on a commercial evaluation.

Prohibition and

If the Authority finds that the concentration is impeding the effective competition

commitments

in the market, the Authority may either decide to prohibit the concentration or to
attach conditions to its approval or issue orders to ensure, for example, that the
undertakings concerned comply with the commitments offered by them in order
to eliminate the anti-competitive effects of the concentration. Such conditions
and commitments may be of a behavioural nature and concern future operations
and/or of a structural nature and concern divestments of parts of the relevant
undertaking to prevent or limit horizontal overlaps. The Authority may also order
the undertakings concerned to act in a specific manner before the implementation of the concentration, for example by ordering them to cancel certain provisions in the merger agreement. If such remedies are not possible, the Authority

864

may prohibit the concentration.

Based on case law on the application of the Danish merger control provisions,
there is a clear preference for extracting commitments from the undertakings
concerned

regarding

the

implementation

of

certain

competition

improving

measures rather than prohibiting concentrations.

Practical matters -

A concentration has to be notified to the Authority by using one of the two mer-

notification

ger notification forms (for full and simplified notifications), which are available at
the Authority's webpage www.kfst.dk. Deadline for the submission of a notification to the Authority is (i) after a merger agreement has been concluded, a takeover bid has been published or a controlling interest has been acquired and (ii)
before it is implemented. Taking into account that the drafting of a correct notification requires considerable resources, the preparation of the notification should
be undertaken concurrently with the negotiations concerning the concentration.
The Authority has to evaluate the concentration within relatively short time limits, which commence at the time when the Authority has received a complete notification of a concentration. A notification is complete when it contains all the
information requested in the relevant notification form and required by the Authority in the specific case.

Time limits

No later than 10 working days from the Authority's receipt of the notification, it
must inform the parties whether the notification is complete. If not, a time limit
is fixed for filing of the missing information.
Within 25 working days from having received the complete notification of the
concentration (phase 1), the Authority has to decide whether to approve the
concentration immediately (unconditionally or with conditions) or initiate an indepth investigation (phase 2). If the Authority decides to initiate a phase 2 investigation, the final decision on approving (unconditionally or with conditions)
or prohibiting the concentration must, as a general rule, be reached within 90
working days after phase 1 has expired. However, phase 2 may be extended with
up to another 20 working days, inter alia, if the parties propose commitments. If
no decision has been made within these time limits, the concentration is considered approved.

Fines

Fines can be imposed on the undertakings concerned for failure to submit a notification to the Authority or for implementation of the transaction before the required approval by the Authority. However, so far no fines have been imposed
for such infringements.

865

Furthermore, fines can be imposed on undertakings for the submission of incorrect or misleading information to the Authority. This possibility has been used
once in one case where the relevant undertaking accepted a fine of DKK 50,000
(approx. EUR 6,500).
Simplified procedure

The Danish Competition Act provides for a simplified procedure for unproblematic
concentrations. This procedure requires the submission of a simplified notification form requiring, inter alia, less elaborate market descriptions than the full
notification form. The criteria established to determine whether a concentration
requires the submission of a simplified or a full notification form to the Authority
is almost identical to the similar criteria under the EU merger control provisions.

Potential introduc-

Currently, the undertakings concerned are not required to pay a fee for the sub-

tion of a filing fee

mission of a notification to the Authority. However, the Danish government has

from 1 August 2013

proposed the introduction of such a requirement. According to this proposal, the

undertakings concerned will from 1 August 2013 be required to pay a fee to the
Authority of (i) DKK 50,000 for notifications under the simplified procedure and
(ii) 0.015 % of the parties' combined annual turnover in Denmark up to a maximum fee of DKK 1,500,000 for notifications under the full procedure.

Necessary infor-

The procedure in connection with the collection of information and completion of

mation and docu-

the notification to the Authority does not differ significantly from notification to

ments to be pro-

the Commission, since the Danish merger control provisions are drafted on the

cured by the under-

basis of the EU merger control provisions. Under this procedure the Authority

takings for comple-

may require relatively extensive information and documentation regarding the

tion of the notifica-

parties and the transaction, including (requirements only applicable to the full

tion form

notification form are marked with an asterisk (*)):

Description of the undertakings concerned and of the concentration, including the value of the transaction, a timeline, information as to whether the
concentration is or will be notified to the competition authorities in other
countries and/or the Commission.

Turnover of each of the undertakings concerned for the last financial year
for Denmark, the EU and worldwide.

Lists of (i) all undertakings and/or persons which directly or indirectly control the undertakings concerned; (ii) all undertakings which are active on
the relevant markets, affected markets (*) and other markets on which the
concentration may have a significant impact (*), and which are directly or
indirectly controlled by the undertakings concerned or by any undertaking
and/or person covered by (i);

For each of the undertakings concerned and each of the undertak-

866

ings/persons defined in (i) and (ii) immediately above provide (a) a list of
all other companies which are active on one or more of the relevant markets, affected markets or other markets on which the concentration may
have a significant impact and in which these undertakings/persons, individually or together, own or control at least 10 percent of the voting rights,
the share capital or other bonds; (b) a list of all members of the management and/or the board of directors in these undertakings which also occupy
a management or board of directors' position in other companies which are
active on the mentioned markets; (c) information on whether these undertakings/persons within the last three years have acquired control of undertakings which are active on one or more of the mentioned markets. (*)

Market descriptions and the total turnover (in value and volume) and the
turnover and market shares of the undertakings concerned in the following
market(s): The relevant markets, affected markets (*) and other markets
on which the concentration may have a significant impact (*).

The identity and an assessment of the market shares in value and volume
of all competing undertakings with a market share of at least five percent;
and an assessment of the HHI-index before and after the concentration as
well as the difference between these two numbers. (* - the simplified notification procedure only requires the identity of the three largest competitors of each of the undertakings concerned and an estimate of their market
shares on the relevant markets)

If applicable, an assessment of the value and volume of imports of the undertakings concerned. (*)

Information on how the undertakings concerned produce, set prices for and
sell their products and/or services. (*)

Information on whether the undertakings concerned are vertically integrated with any of their competitors. (*)

The identity of the five most important suppliers for each of the undertakings concerned and each supplier's share of the undertaking's purchase of
the relevant product or service. (* - the simplified notification procedure
only requires the identity of the three most important suppliers)

The structure of distribution on each of the sales markets of the undertakings concerned, including a description of the most used systems of distribution and service; information on the overall capacity of the market and
the concerned undertakings' share hereof; and information on any plans to
either launch new products, to increase or decrease production and/or

867

sales capacity or to use subcontractors within the subsequent three years.

(*)

The identity of the five largest customers of each of the undertakings concerned and each customer's share of the undertakings' sale of the relevant
product or service. (* - the simplified notification procedure only requires
the identity of the three most important customers)

The structure of demand on each of the sales markets of the undertakings

concerned, including a description of the importance of customer preferences; of product differentiation; of time and costs entailed in exchanging
a supplier; and of exclusive and/or long-term contracts; and a description
of the customers. (*)

Barriers to market entry - including intellectual property rights, access to

supplies and to infrastructure, loyalty of customers or suppliers and legal
or regulatory requirements - and the identity of undertakings which have
either made an entry on or an exit from the relevant market(s) in the last
five years, and the identity of potential entrants. (*)

Description of the importance of R&D for the long term competitiveness of

an undertaking operating in the affected market(s). (*)

The most important co-operation agreements concluded by the undertakings concerned (horizontal and vertical). (*)

The trade associations which the undertakings concerned are members of,
and the trade associations which the undertakings' customers and suppliers
are members of. (*)

If applicable, a description of the expected efficiency gains. (*)

If the concentration is a joint venture, it should be stated whether the

founding undertakings to a significant extent retain activities on the same
market as the joint venture or on a neighbouring market and whether
there might be a risk of coordination of the competitive behaviour of the
founding undertakings' competitive behaviour and why any individual exemption from the prohibition against anti-competitive agreements should
be obtained, cf. Section 8(1) of the Danish Competition Act.

Copies of the final or latest versions of all documents leading to the concentration, irrespective of the manner in which the concentration has come
about.

10

868

Copies of the latest annual report of each of the undertakings concerned.

Group outline for each of the undertakings concerned.

Analyses, reports, minutes of board meetings and similar documents related to the concentration.

The Faroe Islands

Finally, for the sake of completeness it should be mentioned that the Faroe Is-

and Greenland

lands and Greenland, which are self-governing parts of the Kingdom of Denmark,
has introduced their own merger regimes. However, whereas the merger control
regime in the Faroe Islands as a general rule requires that the implementation of
a concentration which exceeds the relevant threshold has to be suspended prior
to approval, the Greenlandic merger regime does not require that transactions
have to be approved, but simply requires that a notification is made to the
Greenlandic Competition Authority if the relevant threshold is exceeded.

11

869

INTRODUCTION TO DANISH TAX LAWS RELATED TO

TRANSFERS OF ASSETS OR SHARES AND REORGANISATIONS

Taxable transfer of

A transfer of the activities in a company may be carried out in two different ways

shares and assets

- either by means of a transfer of shares or by means of a transfer of assets.

As a general rule, both a transfer of shares and a transfer of assets involve capital gains taxation of the transferor.

Taxable transfer of

A transfer of shares only directly affects the shareholders selling their shares. As

shares

a general rule, a transfer of shares by a Danish corporate shareholder is tax exempt unless the shares qualify as "taxable portfolio shares" (holding of less than
10% of the share capital of a listed company). Foreign shareholders are generally not liable to pay tax in Denmark on gains realised from selling shares.

Taxable transfer of

A transfer of assets involves taxation of the transferring company on the profits

assets

(2013: 25%) generated in connection with the transfer. A taxable profit may,
among other things, arise in connection with the transfer of inventory and other
current assets, real property, shares, goodwill, and recaptured depreciation. The
consideration, on which the calculation of the tax liability of the transferring
company is based, is equal to the acquisition price and thereby the basis for depreciation of the acquiring company.

Tax exempt reor-

The Danish Merger Tax Act and the Danish Act on Capital Gains on Shares have

ganisations

made it possible to implement a number of tax-exempt reorganisations according

to which the principle of succession is followed. This applies to mergers, demergers, contributions of assets, and shares for shares exchanges.

Cross-border reor-

According to Danish company law, cross-border mergers and demergers are pos-

ganisations

sible alongside cross-border contribution of assets and shares for shares exchanges. However, if such reorganisation is to be conducted as a tax-exempt
transaction, it is a prerequisite that both of the involved companies are comprised by the term "Company from a Member State" as defined in EU Directive
90/434/EEC, or have the same characteristics as a Danish A/S or ApS.

General conditions

Furthermore, in case of mergers, demergers and contributions of assets the below-mentioned provisions on succession on the company's level only apply to assets and liabilities that are subject to Danish tax laws both before and after the
transaction in question.
Mergers, demergers and contributions of assets may only be tax-exempt if the
date of the opening balance sheet for the receiving company prepared in connection with the restructuring coincides with the cut-off date for the receiving com-

870

pany's financial year. Mergers, demergers and contributions of assets may be

carried out with retrospective effect.
Merger

A merger is (i) an operation whereby a company is dissolved without going into

liquidation and all of its assets and liabilities are transferred to another company
or (ii) an operation whereby two or more companies are fused together in a new
receiving company. It is a prerequisite for a tax-exempt merger that the shareholders in the transferring company receive remuneration in shares in the receiving company or in a combination of shares in the receiving company and a cash
payment.
No permission from the Danish tax authorities is required in order to carry out a
tax-exempt merger.
In case of a tax-exempt merger, no tax is imposed on the transferring company
in connection with the transfer of the company's assets. The transferring company's acquisition time, acquisition price, depreciation, etc. in respect of the assets
are carried over to the receiving company (transferred basis). As a consequence,
the capital gains taxation in connection with the merger is deferred until the receiving company sells the assets transferred.
To the extent that the shareholders in the transferring company are paid in cash,
the shareholders' shares in the transferring company are considered sold on the
date of the merger. This means that the shareholders are taxed according to the
general provisions on the sale of shares. On the other hand, the shareholders are
not taxed if they are paid in shares in the receiving company. In that case, the
taxation is deferred until the shareholders sell the shares in the receiving company, and in case of such a sale these shares are treated as if they had been acquired at the same time and for the same acquisition price etc. as the shares in
the transferring company (transferred basis).

Demerger

A demerger is an operation whereby a company transfers part of or all its assets

and liabilities to one or more existing or new companies in exchange for shares
in the receiving company/companies or a combination of shares in the receiving
company/companies and a cash payment.
If the transferring company is not dissolved in connection with the demerger, the
assets and liabilities transferred to the receiving company/companies must constitute a branch of activity. A branch of activity means all the assets and liabilities of a division of a company, which - from an organisational point of view constitute an independent business unit, i.e. an entity capable of functioning on
its own.

871

A demerger may be carried out tax-exempt with or without permission from the
Danish tax authorities.
However, in the following three scenarios it is not possible to carry out a demerger without permission:
1)

if the company has more than one minority corporate shareholder who has
been a shareholder for less than 3 years, and after the demerger becomes
majority shareholder in one of the receiving companies; or

2)

if a corporate shareholder in the transferring company is paid in cash, the

shareholder can receive tax-exempt dividend, and the corporate shareholder would be liable to capital gain taxation if the shares were sold (trade
sales); or

3)

if the company has a non-EU/non-treaty domiciled majority shareholder.

If the demerger is carried out without permission, it is a prerequisite that the received remuneration in shares in the receiving company and amounts paid in
cash equal the fair market value of the transferred assets and liabilities. It is furthermore a condition that the ratio between assets and debt in the transferring
company corresponds to the ratio between assets and debt in the receiving company. Finally, it is, in general, a condition that a corporate shareholder does not
sell these shares within a period of 3 years from the demerger decision. The
shares may, however, be part of subsequent tax-exempt restructuring if there is
no cash consideration.
A tax-exempt demerger with or without permission from the authorities is carried
out according to the same principles as a tax-exempt merger, i.e. the transferring company is not taxed in connection with the transfer of the company's assets, while the transferring company's acquisition time, acquisition price, depreciation, etc. in respect of the assets are carried over to the receiving company/companies (transferred basis), and the acquisition time and acquisition price
etc. of the shareholders' shares in the transferring company are carried over to
the shareholders' shares in the receiving company (exchanged basis).
Transfer of assets

A tax exempt transfer of assets is an operation whereby a company transfers,

without being dissolved, all or one or more branches of its activity to another
company solely in exchange for shares in the receiving company.
A branch of an activity means all the assets and liabilities of a division of a company, which from an organisational point of view constitute an independent business unit, i.e. an entity capable of fun.

872

A transfer of assets may be carried out as tax-exempt with or without permission

from the Danish tax authorities.
However, it is not possible to carry out a transfer of assets without permission, if
the transferring company is domiciled in a non-EU/non-treaty nation.
If the transfer of assets is carried out without permission, it is a prerequisite that
the transferring company does not sell shares in the receiving company in a period of 3 years from the transfer decision. The shares may, however, be part of
subsequent tax-exempt restructuring if there is no cash consideration.
A tax-exempt transfer of assets is carried out according to the same principles as
a tax-exempt merger, i.e. the transferring company is not taxed in connection
with the transfer of the company's assets, while the transferring company's date
of acquisition, acquisition price, depreciation, etc. in respect of the assets are
carried over to the receiving company (transferred basis). The shares in the receiving company which the transferring company receives in connection with the
transfer are considered acquired at market value.
Share for share

A (tax-exempt) share for share exchange is an operation whereby a company

exchanges

(the acquiring company) acquires shares in another company (the target company) such that it obtains a majority of the voting rights in the target company,
and the remuneration for the shareholders in the target company consists of
shares in the acquiring company or a combination of shares in the acquiring
company and a cash payment.
It is also a share for share exchange when the acquiring company already owns
the majority of the voting rights in the target company but acquires an additional
volume of shares by means of an exchange.
As a general rule, the companies involved must correspond to Danish limited
companies ("aktieselskaber") or private limited companies ("anpartsselskaber"),
or be covered by the term "Company from a Member State" as defined in EU Directive 90/434/EEC.
A share for share exchange can be carried out with or without permission from
the Danish tax authorities.
However, it is not possible to carry out a share for share exchange without permission if a majority corporate shareholder exchanges the shares with shares in
a company domiciled in a non-EU/non-treaty nation.
If the share for share exchange is carried out without permission it is a condition
that the remuneration for the shares in the target company corresponds to their

873

fair market value. Finally, it is a condition for a share exchange without permission that the acquiring company does not sell shares in the target company for a
period of 3 years after the exchange of shares. The shares may, however, generally be part of subsequent tax-exempt restructuring if there is no cash consideration.
In case of a tax-exempt exchange of shares, no tax is imposed on the shareholders in the target company to the extent that they receive remuneration by means
of shares in the acquiring company. As is also the case in connection with a taxexempt merger, the taxation is deferred until the shareholders sell the shares in
the acquiring company, and in case of such a sale these shares are treated as if
they had been acquired on the same date and for the same acquisition price etc.
as the shares in the target company (exchanged basis). To the extent that the
shareholders are paid in cash, the shareholders' shares in the target company
are considered sold at the price on the date of the ex-change, and the shareholders are therefore taxed according to the general provisions on the sale of
shares.
If the share for share exchange is carried out without permission, shares in the
target company are treated as if they were acquired at the time of the exchange
at the original acquisition price. If the original acquisition price is higher than the
price at the time of the exchange, the latter will however apply.
A tax-exempt exchange of shares takes effect on the day when the agreement is
made. Thus, the exchange cannot be carried out retrospectively. A creeping
share for share exchange (inter alia, if shares are acquired from several different
shareholders in the target company) must be completed within no more than 6
months from the first day of exchange.
Foreign shareholders are, in general, not liable to pay tax in Denmark on gains
realised from selling shares, if the shares are not attributable to a Danish permanent establishment. Thus, the provisions related to tax exempt share for
share exchanges of shares are only relevant to Danish shareholders.
Sale of Shares to

A company may receive a tax-exempt dividend if it owns at least 10% of the cap-

the Issuing Com-

ital in the dividend distributing company (or if the shares qualify as "group

pany a compa-

shares"). In case of foreign companies receiving dividend from Denmark, it is a

ny's acquisition of

prerequisite for the tax-exemption that the taxation on the dividend is waived or

its own shares

reduced according to the pro-visions in the EU Directive 90/435/EEC, or accord-

(treasury stock)

ing to a double taxation treaty with the country in which the company is registered and that the foreign recipient is the beneficial owner of the dividend.
When shares are sold to the issuing company, the entire consideration will gen-

874

erally be taxed as dividend to the shareholder.

If the consideration is to be taxed as dividend to the shareholder pursuant to the
general rule, it is possible to apply for an exemption so that the consideration is
not taxed as dividend, but in accordance with the general provisions on the sale
of shares. Exemption is normally only granted if the shareholder divests all of his
shares in the issuing company.

875

MEMO ON HUMAN RESOURCE ISSUES RELATED TO TRANSFER OF

SHARES AND ASSSETS
Information and

Before a final decision on the transfer of assets or shares is made, there may -

Consulting Proce-

depending on the circumstances - be an obligation to involve the employees in

dures for employ-

the decision-making process. Such obligation is set forth in the Danish Act on In-

ees in connection

forming and Consulting Employees (implementing Directive 2002/14/EC).

with acquisitions
and mergers

The Danish Act on Informing and Consulting Employees does not apply if the employer is under an obligation to inform and consult the employees pursuant to a
collective agreement. Thus, with respect to employers who are subject to collective agreements, the information and consultation duty under the Danish Act on
Informing and Consulting Employees will often be replaced by a similar duty set
forth in the relevant collective agreement - e.g. in the Cooperation Agreement of
9 June 1986 between the Danish Employers' Confederation and the Danish Confederation of Trade Unions.
The Danish Act on Informing and Consulting Employees applies to undertakings
employing a staff of at least 35 employees. If the number of staff is below 35,
the undertaking has no duty to inform and consult pursuant to the Danish Act on
Informing and Consulting Employees.
When assessing the possible obligation to involve the employees in the decisionmaking process with respect to the transfer of an undertaking, a distinction must
be made between a transfer of activities and a transfer of shares. The obligation
to inform and consult the employees will often be different in these two situations.
When transferring activities, the transferor must, in reasonable time before making the final decision to carry through the transfer, inform and consult the employees' representatives with regard to the contemplated transfer.
In case of a transfer of shares, it is basically not required to inform and consult
the employees' representatives. However, there will be a duty to inform and consult if it is already obvious prior to the transfer that the purchaser intends to introduce measures requiring that the employees are informed and consulted pursuant to the Danish Act on Informing and Consulting Employees - such measures
could, for instance, be collective redundancies or a subsequent merger. In that
case, the duty to inform and consult the employees lies with the company whose
shares are being sold, and the informing and consulting process must take place
prior to the final decision on carrying through the sale of shares.
In special cases, the employees' representatives can be imposed secrecy on all
information that is disclosed to them. Information specifically given in confidenti-

876

ality to the employees' representatives may not be disclosed to third parties.

The undertaking may omit to inform the employees' representatives in situations
where such information could be detrimental to the undertaking. The applicability
of this exception will depend on a specific assessment in each case.
Further obligations to inform employees may follow from the Danish implementation of Council Directive 94/45/EC as amended by Council Directive 97/74/EC
concerning European Works Councils, applicable to undertakings and group of
companies operating in several EU or EEA countries with a staff exceeding 1,000
employees.
Act on Employees'

The Danish Act on the Legal Status of Employees in connection with the Transfer

Legal Status on

of Undertakings (implementing Council Directive 77/187/EEC as amended by

Transfer of Under-

Council Directive 2001/23/EC) is applicable where a change of employer takes

takings

place in connection with a transfer of assets.

In case of a purchase of shares, the legal entity remains the same in relation to
the employees. Consequently, the provisions of the Act on the Legal Status of
Employees in connection with the Transfer of Undertakings do not apply and the
existing terms and conditions of employment remain unchanged.
In a transfer of assets, a change of debtor takes place in consequence of which
the purchaser of an undertaking - or part of an undertaking - is obligated to accept and continue all existing terms and conditions of employment of the affected
staff (white-collar and blue-collar workers) pursuant to the Act on the Legal Status of Employees in connection with the Transfer of Undertakings. This also comprises obligations dating from the time before the transfer. After the transfer, the
employee shall, basically, only refer to the purchaser and may not raise any
claims against the transferor, unless the employment relationship is definitely
terminated or the employee has been released from work prior to the actual date
of transfer.
Pursuant to the Act on the Legal Status of Employees in connection with the
Transfer of Undertakings, dismissals on grounds of the transfer of an undertaking
or part thereof are not deemed reasonably justified by the circumstances of the
undertaking, unless the dismissals are due to economic, technical or organisational reasons entailing changes in the workforce.
The purchaser is allowed to change and adapt the employment conditions of the
transferred employees to the same extent as the transferor could have done.
Consequently, the purchaser may notify the implementation of material changes
in the employment conditions with the term of notice of termination (normally
three to six months) applicable to the individual employee and subject to the

877

employee's acquired rights pursuant to collective agreements in force on the date

of transfer.
In the event that material changes are notified and the transferred employees do
not want to accept such changes, the employees are entitled to consider the notification as a dismissal by the employer and cease their work upon expiry of the
relevant periods of notice.
In that case, the employees in question will enjoy all rights afforded to dismissed
employees. This means, inter alia, that the employees may have a right to (i)
seniority-based severance according to their employment contract, law or collective bargaining agreement; (ii) depending on the circumstances, compensation
for unfair dismissal; and (iii) the employees will not be bound by a noncompetition clause, if any.
Changes in the place of work in consequence of the undertaking's change of address, changes in the working hours for the purpose of harmonising the working
hours in the relevant undertakings, implementation of the purchaser's code of
business conduct, etc., will basically be considered as reasonably justified changes. However, this must always be assessed in each individual case.
Where the transferred employees are covered by collective agreements, the purchaser must basically - no later than three weeks after the takeover - notify the
relevant trade unions if the purchaser does not want to adopt the collective
agreements.
If the purchaser does not renounce the collective agreements within the stipulated time limit, the purchaser will be considered as having originally entered into
the collective agreements and be entirely bound by the provisions contained in
the collective agreements.
If the purchaser chooses to renounce the collective agreements, the consequences will be that the purchaser continues to be obligated to observe - until expiry
of the term of the collective agreement - each employee's individual rights provided by the collective agreement, e.g. provisions on overtime pay, protection
against unfair dismissal, etc. However, in connection with a renunciation, the
purchaser disclaims the collective rights and obligations under the collective
framework. This entails, inter alia, that the purchaser cannot be imposed a penalty for violation of a collective agreement. In return, the employees will not be
bound by any strike clause, and the employer will consequently not be protected
against strikes through the term of the collective agreement.
The transferor must, in reasonable time before the transfer is carried out, notify
the employees' representatives or - if no such representatives have been ap-

878

pointed or elected - the affected employees of the date or the proposed date of
the transfer; the reasons for the transfer; the legal, economic, and social implications of the transfer for the employee; and any measures envisaged in relation
to the employees.
If the transferor, in connection with the transfer, intends to introduce any
measures in relation to the employees, the transferor must, in reasonable time
before the transfer, initiate negotiations with the employees' representatives or if no such representatives have been elected or appointed - the affected employees. However, the transferor is not obligated to reach an agreement with the
employees about such measures.
The obligation of negotiation is relevant in situations implying changes, including
for instance dismissals and changes in the place of work.
If the purchaser already is the owner of an undertaking, the obligation to inform
and negotiate shall correspondingly be applicable in relation to the affected employees in the purchaser's undertaking.
Act on Employment

Pursuant to the Danish Act on Employment Contracts, the employer is obligated

Contracts

to inform the employee of all essential conditions of the employment relationship

in a written document.
In a transfer of assets, the transferred employees shall, as soon as possible and
not later than one month after the actual date of the transfer, receive at least an
addendum to their existing employment contracts with information on the name
and address of the new employer. In practise, it may be appropriate to prepare
completely new employment contracts containing the specific policies etc. applicable in the undertaking already owned by the purchaser.
If the employer does not fulfil the duties of information according to the Act, the
employee may be awarded compensation.

Pursuant to recent case law, the compensation payable to an employee whose

rights are violated is fixed in the range of DKK 1,000 for excusable errors, up to
DKK 25,000 and in case of aggravating circumstances up to 20 weeks' salary.

In a transfer of shares it is not required that addenda to the existing employment

contracts are drafted.
Collective Redun-

The Danish Act on Notice etc. in connection with Collective Redundancies (implementing Council Directive 75/129/EEC as amended by Council Directive

879

dancies

92/56/EEC) applies when the number of contemplated dismissals during a period

of 30 days will exceed:
(i)

At least 10 in an undertaking that normally employs more than 20 and less

than 100 employees.

(ii)

At least 10 per cent of the number of employees in an undertaking that

normally employs at least 100 and less than 300 employees.

(iii)

At least 30 in an undertaking that normally employs at least 300 employees.

According to the Act, the employer must as early as possible initiate negotiations
with the employees - or their representatives - with the aim of achieving an
agreement on avoiding or limiting impending dismissals and alleviating the consequences by means of activities especially aimed at shifting or retraining the
employees to be dismissed.
This means that the employer has to initiate negotiations before a decision is
made. This also applies in the event that the decision is made by the parent
company.
The employer is, however, not obligated to let the negotiations have any influence on the decision regarding the contemplated dismissals.
If the dismissals are to be effected after such negotiations, the dismissals must
be notified to the local Employment Region and will at the earliest be effective 30
days (in some cases eight weeks) after such notification. The planning and timing
considerations are therefore important when these provisions apply.
It is important to observe these provisions, as any infringements hereof may be
sanctioned with compensation payable to the employees concerned as well as a
fine imposed on the employer.
Collective agreements may contain special rules concerning collective redundancies.

880

MEMO ON ACQUISITION FINANCE

Market

The Danish acquisition finance market was in recent years buoyant and generally
experienced a huge growth in the volume and value of leveraged acquisitions involving Danish targets or bidders. Danish targets include listed as well as unlisted companies, including subsidiaries or divisions of listed companies. Buyers are
primarily corporate and private equity funds, including the very large international funds, regional Nordic funds, Danish funds, as well as many other Nordic
and European funds active in the Danish market.
Since the liquidity crises started affecting the market in August/September 2007,
activity has been somewhat reduced primarily due to the fall in very large (multibillion EUR) private equity driven transactions, where financing has not been easily available. Transactions up to approximately EUR 1 billion still occurred, often
financed through primarily Nordic banks or through club deals involving usually
up to 3 such regional banks. Strategic transactions by industrial buyers are less
affected.
For quality transactions by strategic buyers or private equity funds, financing still
seems to be available except, as mentioned, for the very large multi-billion EUR
private equity driven transactions. Terms, however, seem to have changed in favour of the lenders.

Acquisi-

Acquisition finance structures in Denmark are to a large extent similar to struc-

tion/Financing

tures used in connection with acquisitions in other European jurisdictions.

Structures
Typically, the equity investor will establish a Danish purchase vehicle (a "NewCo") in the form of a private limited company (an "ApS"). Like public limited
companies ("A/S") the ApS limits shareholders' liability to the capital investment,
but requires fewer formalities than an A/S (for example there is no requirement
for having a board of directors) and also a smaller minimum capital is required.
If the intention is to list NewCo, an A/S should be chosen as an ApS cannot be
listed.
There may be numerous reasons to choose a Danish incorporated purchase vehicle. One driver is the possibility of tax consolidation between the Danish purchase vehicle and the Danish target and its Danish subsidiaries thereby allowing
tax deductible expenses (such as interest) in the Danish purchase vehicle to be
set off against taxable income in the Danish target group.
Danish provisions on thin capitalisation and other tax limitations on interest deductibility may, however, limit the amount of interest that can be deducted in

881

capital income, cf. below.

While acquisition debt is still sitting at NewCo level, only the shares in target and
in NewCo itself (and other assets of NewCo or its parent, if any) can serve as security for the acquisition debt as provisions on financial assistance prevent target
and its subsidiaries from issuing guarantees or providing security for the acquisition debt. Consequently, the acquisition debt owed by NewCo will be structurally
subordinated to the creditors (secured as well as unsecured) of target and its
subsidiaries.
In order to avoid structural subordination issues and to optimize the lenders' security position, a debt push down of debt from NewCo to target (group) is often
effected. To the extent adequate free reserves are available at target level, dividends can be up-streamed to the purchase vehicle allowing NewCo to repay acquisition debt and at the same time the debt push down will facilitate that target
and its Danish subsidiaries can provide security with their own assets for debt
pushed down at target level and below.
The dividend payment from target to NewCo is tax exempt as long as NewCo
holds a minimum 10% ownership interest in target. An EU domiciled owner of the
Danish NewCo will likewise, subject to the same ownership threshold, be able to
receive dividends without such dividends being subject to Danish taxation. If the
ultimate owners are based in a tax heaven careful tax analysis need to be carried
out as the Danish tax authorities have questioned certain structures. Litigation
has been initiated in that regard and a final ruling is still pending.
In connection with debt push down, provisions on extraordinary dividends facilitate that the debt push down can be effected (in principle) immediately after the
acquisition of target and the drawdown under the acquisition facility for such
purpose, however, limited to the amount of distributable reserves then available
at target (group) level.
In order for such extraordinary dividend to be paid, target's articles of association must authorise or be amended (with simple majority) to authorise the board
of directors to adopt a resolution to pay extraordinary dividends, and such authorisation in the articles of association must be registered with the Danish Business Authority no later than 1 day prior to the dividend distribution. In addition,
the first annual report of the relevant company must have been rendered, and
the resolution passed by the board of directors must be supported by an interim
balance sheet, reviewed and countersigned by the company's auditor, disclosing
that adequate means are available for the distribution. The board of directors
must prepare a statement to the effect that the extraordinary dividend does not
exceed what may be justified taking into account the financial position of the

882

company and (in parent companies) of the group.

It should be noted that additional provisions apply where the extraordinary dividend is to be made by a listed company, including inclusion of certain information in the offer document describing the intention to make extraordinary dividend payments within the first 12 months following completion of the public offer.
Listed Targets

An offeror offering to buy a listed company may offer cash, other shares or securities or a combination of these as consideration for the target's shares. Where
cash is offered, there is no obligation on the offeror to include in the offer document any guarantee or assurance from a financial institution that the offeror will
have sufficient cash available to satisfy the offer in full. However, an offer cannot
be made subject to a financing condition, and the offeror is required to state in
the offer document, how the offeror intends to finance the acquisition. This
means in essence that the offeror is required to have certain funds available prior to announcement of the offer. Certain funds require that the offeror with its
lenders and equity providers have signed legally binding commitment documents,
under which the lenders and equity providers will provide the required finance
subject only to the conditions in the offer document being fulfilled or waived by
the offeror.
Conditions to the offer are only permissible in voluntary public offers, whereas no
conditions can be made in mandatory public offers.
Usual offer conditions (in voluntary offers) include that the offer is subject to a
specified level of acceptances, often set at a level which will give the offeror a
controlling interest in the target and/or the right to squeeze-out any shareholders that have not accepted the offer. Controlling interest is usually obtained,
once the offeror has acquired more than 50% of the shares and voting rights of
the target company. More than 90% of the share capital and voting rights in the
target is required in order to enable the offeror to exercise its legal squeeze-out
rights under the Companies Act.
Voluntary public offers may be made subject to additional conditions, for example, no material adverse change, obtaining necessary competition clearances and
other regulatory approvals.
By obtaining control over more than 50% of the shares and voting rights in target, the offeror will in most instances gain control over the future cash flow of
the target, including the control over the payment of dividends.
Structural changes including mergers and demergers require control of 2/3 of the
voting rights and shares in the target company, and if structural changes are re-

883

quired as an integral part of the financing, the offer document should require acceptances of at least 2/3 of the shares and votes as a condition for closing of the
voluntary tender offer.
Once an offeror has acquired 90% of the shares and voting rights in the target,
the offeror will need to be able to finance the acquisition of the remaining shares
as the minority shareholders are entitled to be bought out mirroring the squeezeout rights of the offeror under the Companies Act.
Corporate Thin-cap

A Danish company may deduct net financing expenses for tax purposes, howev-

Rules

er, subject to three main limitation tests; (i) thin capitalisation test (4:1), (ii) the

and

Other

Interest Deductibil-

asset test (cap rule) and (iii) the EBIT test.

ity Limitations
When determining whether a company's net financing expenses shall be reduced
for tax deduction purposes, the thin capitalisation test is applied first.
According to the thin capitalisation test interest deductions on inter-company
debt and debt guaranteed by group companies (controlled debt) may be reduced
if the company's debt-to-equity ratio exceeds 4:1 and the controlled debt exceeds MDKK 10. Interest expenses that are reduced applying the thin capitalisation test are not included when applying the asset test (cap rule) and the EBIT
test.
Secondly, the asset test (cap rule) is applied to net financing expenses exceeding
MDKK 21.3. According to the asset test (cap rule) only net financing expenses of
an amount currently corresponding to 5% of the tax value of the company's assets minus certain financial assets are deductible for tax purposes.
Finally, the EBIT test is applied also on net financing expenses exceeding MDKK
21.3. According to this rule the company's net financing expenses may only reduce the taxable income by 80%.
As appears, the asset test (cap rule) and the EBIT test only apply to net financing expenses above MDKK 21.3. Net financing expenses below MDKK 21.3 are
consequently always deductible unless limitations apply pursuant to the thin capitalisation test.
Financial
tance

Assis-

A Danish private or public limited liability company may not lend money, provide
security or otherwise make its assets available (including through a guarantee)
in connection with an acquisition of shares in the company itself or its Danish, EU
or EEA incorporated (direct or indirect) parent company. It is the position of the
Danish Business Authority that this also applies to foreign subsidiaries of a Dan-

884

ish target. There are currently no whitewash procedures available in Denmark.

The Companies Act does, however, allow financial assistance under certain conditions. It is possible for a company to provide a loan to a purchaser of shares in
the company or to secure acquisition debt on the condition that the loan and/or
security is on arm's length terms, that the financial assistance has been approved by the general meeting of the company by qualified majority and that the
loan amount and/or security does not exceed the company's free reserves which
could have been distributed to the shareholders as dividends. The loan or security should be included in the balance sheet of the company as a special reserve
which cannot be distributed as dividends.
In order to obtain access to the target's cash flow and assets, a debt push down
is often implemented whereby debt is pushed down at target (group) level, allowing for target and its subsidiaries to give security by its own assets cf. above.
A merger between (an acquisition debt borrowing) NewCo and target as an alternative to debt push down is typically not seen in Danish acquisition financings.
While good arguments can be put forward that such post-acquisition merger
should offer adequate protection of creditor interests given the mandatory procedure followed in connection with corporate mergers, the Danish Business Authority has in a number of rulings refused to give effect to such mergers. It is the position of the Agency that it would violate the provisions on financial assistance
where the main purpose of the merger is to avoid the limitations following from
such provisions. This position by the Danish Business Authority has so far not
been tested before the courts.

885

INSTITUTIONS CONTACT DETAILS

STOCK EXCHANGE
NASDAQ OMX Copenhagen A/S
Nikolaj Plads 6
PO Box 1040
DK-1007 Copenhagen K
Tel:

+45 3393 3366

Fax: +45 3312 8613

Web site:

www.nasdaqomxnordic.com

EU REGULATED MARKET AND MULTILATERAL TRADING FACILITY (MTF)

GXG Markets A/S
Levysgade 14
DK-8700 Horsens
Tel: +45 70 227 228
Email: info@gxgmarkets.com
Web site: www.gxgmarkets.com
GXG Markets UK
Simon Kiero-Watson, Head of Markets
49 Queen Victoria Street
London EC4N 4SA
Tel: +44 207 653 1935
Email: skw@gxgmarkets.co.uk
Web site: www.gxgmarkets.com
ALTERNATIVE MARKET
FIRST NORTH Copenhagen
Nikolaj Plads 6
PO Box 1040
DK-1007 Copenhagen K
Tel: +45 3393 3366
Fax: +45 3312 8613
Email: listings@nasdaqomx.com
Web site:

www.nasdaqomxnordic.com/firstnorth

CLEARING AND DEPOSITY ORGANISATIONS

VP SECURITIES A/S
(VP SECURITIES Services)
Weidekampsgade 14
PO Box 4040
DK-2300 Copenhagen S
Tel: +45 4358 8888
Email:

vp@vp.dk

886

Web site:

www.vp.dk

TAX AUTHORITIES
Skatteministeriet
(The Danish Ministry of Taxation)
Nicolai Eigtveds Gade 28
1402 Kbenhavn K
Tel:

+45 3392 3392

Fax: +45 3314 9105

Email:

skm@skm.dk

Web site:

www.skm.dk

SKAT
Tel: + 45 7222 1818
Fax + 45 7222 1919
Web site:

www.skat.dk

National numbering agency for Denmark:

SECURITIES IDENTIFICATION AGENCY
VP SECURITIES A/S
(VP SECURITIES Services)
Weidekampsgade 14
PO Box 4040
DK-2300 Copenhagen S
Tel:

+45 4358 8888

Email:

vp@vp.dk

Web site:

www.vp.dk

COMPETITION AUTHORITIES
Konkurrence- og Forbrugerstyrelsen
(The Danish Competition and Consumer Authority)
Carl Jacobsens Vej 35
2500 Valby
Tel:

+ 45 4171 5000

Fax: +45 4171 5100

Email:

kfst@kfst.dk

Web site:

www.kfst.dk

Konkurrencerdet
(The Danish Competition Council)
Carl Jacobsens Vej 35
2500 Valby
Tel:

+ 45 4171 5000

Email:

kfst@kfst.dk

Web site:

www.kfst.dk

887

REGULATORY ORGANISATIONS
Erhvervs- og Vkstministeriet
(Danish Ministry of Business and Growth)
Slotsholmsgade 10-12
DK-1216 Copenhagen K
Tel:

+45 3392 3350

Fax: +45 3312 3778

Email:

evm@evm.dk

Web site:

www.evm.dk

Finanstilsynet
(The Financial Supervisory Authority)
rhusgade 110
DK-2100 Copenhagen OE
Tel:

+45 3355 8282

Fax: +45 3355 8200

Email:

finanstilsynet@ftnet.dk

Web site:

www.ftnet.dk

Det Finansielle Rd
(The Financial Council)
c/o Finanstilsynet
rhusgade 110
DK-2100 Copenhagen OE
Email:

none

Web site:

www.fondsraadet.dk

Erhvervsstyrelsen
(Danish Business Authority)
Langelinie All 17
DK-2100 Copenhagen OE
Tel:

+45 3529 1000

Fax: +45 3546 6001

Email:

erst@erst.dk

Web site:

www.erst.dk

888