Disclosure Requirements - Norway

07.01.2013

Disclosure Category: 1

In the case of holdings in securities listed on a Norwegian marketplace, and/or registered in a Norwegian Securities Register, the custodian is under an obligation to disclose the identity and holdings of customers and the identity of final beneficial owners holding applicable positions.

Consent

Customers entering into transactions in the Norwegian domestic market consent and are hereby deemed to consent to disclosure and to the appointment of the requestor (for example, Kredittilsynet (the Financial Supervisory Authority of Norway - FSAN)) as their attorney-in-fact, under power of attorney to collect from CBL such information as is required to be disclosed.

Disclosure requirements

Customers are advised that local laws and regulations may require CBL to disclose securities trading and holding information and the identity of the ultimate beneficial owners of certain securities.

  • The Norwegian authorities are entitled to obtain information on the beneficial owners of any financial instrument held by the custodian in Norway that is listed on a Norwegian marketplace, and/or registered in a Norwegian Securities Register.
  • Norwegian share issuing companies are entitled to obtain information on the beneficial owners of shares and primary capital certificates that they have issued and that are held in CBL.

Therefore, customers of CBL are only admitted to participate in the services offered by CBL on the Norwegian market if the CBL customer delivers, upon request by CBL, the identity of their underlying beneficial owners within four (4) business days.

Kredittilsynet has indicated that, if there is a failure to disclose requested information about beneficial ownership, it will send a request to CBL requiring the name of the CBL customer that has failed to disclose. Kredittilsynet can also require that any undisclosed holding be transferred to a separate non-trading account until the requested information is obtained. This action would disrupt CBL’s services for such securities.

Therefore, if a customer does not provide such details, CBL will exclude such customer from any services offered on the Norwegian market and will take all necessary steps in relation thereto on the 5th business day following the disclosure request.

Background and legal basis

In the case of holdings in Norwegian equities, the custodian is under an obligation, under the Norwegian Public Limited Companies Act of 13 June 1997, No 45, the Norwegian Act on Securities Trading of 29 June 2007, No 75, ("the Securities Trading Act") section 15-2 subsection (4) and the Securities Register Act (the Act related to the registration of financial instruments) No 64 of 5 July 2002, section 6-3, to disclose the identity and holdings of customers and the identity of the ultimate beneficial owner holding applicable positions.

Norwegian share-issuing companies, as well as Kredittilsynet (FSAN), are entitled to obtain information about beneficial owners of shares and primary capital certificates held by custodians such as CBL.

According to the legislation mentioned above, the disclosure obligation falls on the final beneficial owner that has an ownership in companies registered in Norway.

Requests can be addressed to the custodian and the shareholder or beneficial owner.

Obligation to report threshold crossings

Under the Securities Trading Act, Section 4-2 and the Securities Trading Regulations, Part 4, disclosure is required if an investor breaches the 5%, 10%, 15% (new), 20%, 25% (new), 331/3%, 50%, 662/3% and 90% thresholds on shares or voting capital.

Acquisition of shares resulting in ownership of more than 331/3% of the voting rights in the company will oblige the purchaser to make an offer for all remaining shares. The obligation must be restated when 40% and 50% of the shares are purchased.

The obligation is applicable for shares issued by a Norwegian company listed either on a regulated market in Norway or in another EU state, or by a company domiciled outside Norway but listed only on a Norwegian regulated market.

Whereas the earlier rules required disclosure only when thresholds were crossed as a result of acquisition or disposal of shares or rights, the new rules also require disclosure when the thresholds are crossed as a result of other circumstances. The meaning of the term “other circumstances” is made clear in the Securities Trading Regulations, Section 4-3 and may include factors relating to the notifying party’s own shares, such as share consolidation or deconsolidation.

However, the disclosure obligation may be triggered by pure inaction, typically in connection with an increase or decrease of capital. In such cases, the disclosure obligation arises immediately the party that is subject to this obligation becomes or should have become aware of the circumstance as a result of which the disclosure threshold is crossed.

Listed companies are subject to a new information requirement in any month in which there are changes in share capital or voting rights; see the Securities Trading Act, Section 5-8.

Disclosure reporting must be made to Kredittilsynet (FSAN) or any representative appointed by the FSAN.

Listed companies must report to a storage mechanism (OAM) appointed for the FSAN.

The beneficial owner or carrier of rights is responsible for reporting to the authorities. Shares held by “close associates” are regarded as equivalent to the acquirer’s or disposer’s own shares, rights to shares or voting rights. Close associates include any undertaking within the same group as the shareholder.

Sanctions

If the custodian, shareholder or beneficial owner does not comply with the reporting requirements, the account may be blocked and the shares transferred to a non-trading account. A fine can be the consequence if the custodian, shareholder or beneficial owner fails to properly discharge a disclosure obligation. This is described as follows in the Securities Trading Act Section 17-3: the FSAN can also withdraw the nominee license to the account holder (in this case, CBL).

According to the Securities Trading Act 17-3, additional fines may be imposed:

"(3) A fine shall be handed down to anyone who grossly or repeatedly violates, wilfully or through negligence, sections 4–2 or 4–3 subsection (1) or (2), see regulations pursuant to these provisions, or to anyone who wilfully or through negligence violates section 4–3 subsections (3) or (4); see regulations pursuant to these provisions."

Complicity is subject to the same penalties.