Browse by year:


Other

PR(00)23: The EFTA Surveillance Authority sends a letter of formal notice to Norway concerning restrictions in Norwegian law on ownership of financial institutions

17.9.2002

The EFTA Surveillance Authority sent today a letter of formal notice to Norway for failure to comply with Article 11 of the Second Banking Directive 89/646/EEC and EEA rules concerning the free movement of capital, i.e. Article 40 of the EEA Agreement and the Capital Movements Directive 88/361/EEC.

Article 11 of the Second Banking Directive provides, inter alia, that EEA States shall require any natural or legal person who proposes to acquire a qualifying holding in a credit institution first to inform the competent authorities of the size of the intended holding. Where the influence exercised by such persons is likely to operate to the detriment of the prudent and sound management of the institution, the competent authorities shall take appropriate measures to put an end to that situation.

Section 2-2, paragraph 1, first sentence, of the Norwegian Law on Financial Activity and Financial Institutions of 10 June 1988 No 40 (lov om finansieringsvirksomhet og finansinstitusjoner), provides, as a main rule, that no one can own more than 10% of the share capital of a Norwegian financial institution. Norway maintains that, because of this rule, there is not a need for an explicit implementation of Article 11 of the Second Banking Directive into the Norwegian legal order.

It is the Authority’s view that a general prohibition against more than 10% ownership of a financial institution is contrary to the free movement of capital and that Norway cannot justify the lack of an explicit implementation of Article 11 of the Second Banking Directive by referring to such a rule. Consequently, it is the Authority’s view that the Norwegian rule is incompatible with EEA rules concerning the free movement of capital and that Norway has failed to transpose Article 11 of the Second Banking Directive.

The Norwegian Government has been invited to submit its observations to the content of the letter of formal notice within three months of its receipt. In light of the observations the Authority will consider whether to proceed with the case.

The Authority is currently examining other cases relating to investment restrictions and recalls that a letter of formal notice was sent to Norway in March 2000 concerning rules on acquisition of business undertakings (see press release PR(00)06) and that in December 2000 two reasoned opinions were sent to Norway concerning rules on the choice of assets that need not be used as cover for technical provisions established by insurance undertakings (see press release PR(00)19).

For further information please contact Mr. Peter Dyrberg (Director of Legal & Executive Affairs), telephone (32)-2-286-1865.

 

*    *    *    *    *




Other EEA Institutions


imgbanner5
This website is built with Eplica CMS