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Denmark’s Fintech Landscape: A Regulatory Overview

Copenhagen, Denmark - As Denmark’s fintech industry continues to grow and evolve, it is essential for companies operating in this space to understand the regulatory requirements that apply to their activities.

Regulations in Denmark are designed to protect consumers, maintain market stability, and prevent financial crime. At the heart of these regulations are licensing requirements, which vary depending on the type of activity being conducted.

Licensing Requirements

To operate in Denmark, fintech companies must obtain a licence from the Financial Supervisory Authority (Finanstilsynet) if they engage in certain activities. These activities include:

  • Investment Advice: Firms that provide investment advice to consumers must hold a licence as an investment adviser.
  • Financial Advice: Companies that offer advice on financial products, such as credit agreements and insurance products, must be licensed as financial advisers.
  • Residential Credit Intermediation: Undertakings that provide advice on or arrange residential credit agreements for consumers must hold a licence as a residential credit intermediary.
  • Insurance Activities: Insurers, reinsurers, and insurance brokers are required to obtain a licence from Finanstilsynet.

Capital Requirements

In addition to licensing requirements, financial services firms in Denmark must also meet capital adequacy requirements. The minimum own funds requirement for investment firms is €125,000, while large investment firms are subject to a higher requirement of €730,000.

Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT)

Fintech companies in Denmark must also comply with AML/CFT regulations. This includes registering with Finanstilsynet if they perform certain activities, such as:

  • Deposit taking
  • Lending
  • Assisting in offering securities

Other Regulations

In addition to licensing requirements and AML/CFT regulations, fintech companies in Denmark may also be subject to other laws and regulations, including:

  • The Payments Act: Regulates payment services and requires a licence for firms that provide certain payment services.
  • The Danish Fundraising Act: Sets out rules for crowdfunding activities.
  • EU General Data Protection Regulation and the Danish Data Protection Act: Regulate the processing of personal data.

Conclusion

Denmark’s fintech landscape is characterized by a range of regulations designed to protect consumers and maintain market stability. While these regulations can be complex and challenging to navigate, they are essential for ensuring the integrity and reliability of the financial system. By understanding these regulations, fintech companies in Denmark can ensure compliance and continue to grow and innovate in this rapidly evolving space.