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13.04.2012. Last updated: 06.01.2016 Print page

Guidance for applicants for authorisation to act as a nominee

Applies to applications under the Norwegian Securities Register Act, the Public Limited Liability Companies Act and the Securities Funds Act with associated Regulations.

1 General

1.1 Definition of nominee
Nominee means a party that is registered in a register of owners of financial instruments instead of the beneficial owner. Such registration requires authorisation from Finanstilsynet.

An important reason for regulating nominee activity by law is to ensure that nominee registration does not prevent Norwegian public authorities from accessing information on beneficial owners of Norwegian securities. Finanstilsynet, among other institutions, needs access to such information, for example in combating insider trading and market manipulation and in its oversight of investment firms and other entities under supervision. The tax authorities and the debt enforcement authorities also need access to information on the owners of financial instruments.

1.2 Authorisation required – statutory provisions
In order to act as a nominee in a Norwegian securities register, in practice Verdipapirsentralen ASA (“VPS”), the nominee must be authorised under

  • Act on Registration of Financial Instruments of 5 July 2002 No. 64 (“the Securities Register Act”)  section 6-3

In order to act as a nominee in the shareholder register of a Norwegian public limited company, the nominee must be authorised under

  • Act on Public Limited Liability Companies of 13 June 1997 No. 45 (“the Public Limited Liability Companies Act”) section 4-10

The same authorisation is required in order to act as a nominee in the shareholder register of a Norwegian limited company whose shares are registered in a securities register; see the Act on Private Limited Liability Companies of 13 June 1997 No. 44 ("the Private Limited Liability Companies Act") section 4-4.

In order to act as a nominee in Norwegian securities funds’ unit holder registers, the nominee must be authorised under

  • Act on Securities Funds of 25 November 2011 No. 44 (“the Securities Funds Act”)  section 4-10 subsection (4) and associated Regulations to the Securities Funds Act of 21 December 2011 No. 1467 ("the Securities Funds Regulations")  section 13-2

This implies, for example, that an institution which intends to act as a nominee in respect of Norwegian bonds registered in the VPS must hold an authorisation under the Securities Register Act section 6-3, while an institution intending to act as a nominee in respect of shares issued by Norwegian companies must hold both an authorisation under the Public Limited Liability Companies Act section 4-10 and the Securities Register Act section 6-3 (the latter due to the fact that companies are required to establish the shareholder register in a securities register; see the Public Limited Liability Companies Act section 4-4 subsection (1)). Institutions intending to act as a nominee in Norwegian securities funds’ unit holder registers must be authorised under the Securities Funds Regulations section 13-2; cf. the Securities Funds Act section 4-10. In order to act as a nominee in a unit holder register maintained by the VPS, the institution must also hold an authorisation under the Securities Register Act section 6-3.

Finanstilsynet recommends institutions to choose one of the following alternatives when applying for an authorisation:

  • Apply for an authorisation to act as a nominee in Norwegian securities funds’ unit holder registers and as a nominee for all types of financial instruments whose registration is permitted on a nominee account in a Norwegian securities register (including shares issued by Norwegian companies); cf. the provisions of
    - the Securities Funds Regulations section 13-2, cf. the Securities Funds Act section 4-10 subsection (4)
    - the Securities Register Act section 6-3
    - the Public Limited Liability Companies Act section 4-10
  • Apply for an authorisation to act as a nominee for all types of financial instruments whose registration is permitted on a nominee account in a Norwegian securities register (including shares issued by Norwegian companies) except securities fund units; cf. the provisions of
    - the Securities Register Act section 6-3
    - the Public Limited Liability Companies Act section 4-10
  • Apply for an authorisation to act as a nominee in Norwegian securities funds’ unit holder registers and in securities funds’ unit holder registers maintained by a Norwegian securities register; cf. the provisions of
    - the Securities Funds Regulations section 13-2, cf. the Securities Funds Act section 4-10 subsection (4)
    - the Securities Register Act section 6-3

Information on nominee duties is given in item 4 of this guidance.

1.3 General requirements for applications

Applications may be sent to Finanstilsynet by mail or attached to an email. There is no application form. The application should however include the following information in addition to that indicated in item 2.2 and 3.2 below:

  • the full name of the institution (the legal entity) to which the application relates
  • the postal address of the institution to which the application relates
  • the provisions under which the application is submitted; see the application alternatives recommended in 1.2 above

To ensure speedier application processing, the application should also include:

  • the contact person’s name and email address for any queries related to the application

Further information on who may be authorised to act as a nominee under the relevant provisions and information on the documentation that must accompany applications from foreign applicants is given below. In principle no formal documentation requirements apply to institutions subject to supervision by Finanstilsynet.

2 Applications under the Securities Register Act section 6-3 and the Public Limited Liability Companies Act section 4-10

2.1 Who may be authorised

The Securities Register Act section 6-3 and the Public Limited Liability Companies Act section 4-10 set no specific requirements with regard to who may be authorised to act as a nominee under these provisions. However, based on Finanstilsynet's administrative practice, authorisation is only granted to institutions that are subject to public supervision in their home country.

2.2 Documentation requirements

Neither the Securities Register Act section 6-3 nor the Public Limited Liability Companies Act section 4-10 sets explicit documentation requirements. Finanstilsynet does however require applications from foreign applicants to be accompanied by:

  • documentation from the home country’s supervisory authority showing that the applicant is subject to supervision by that authority
  • contact details for use by public authorities, including the name of the business area in the undertaking that is responsible for the performance of the nominee activity, the name of the manager with day-to-day responsibility for such activity and the telephone number, email address and, in the event, telefax number

Sufficient documentation that the applicant is subject to supervision may be a written confirmation from the home country’s supervisory authority or a printout from the supervisory authority’s register containing a reference to the website where the information is available. The documentation must be based on recent information, preferably no older than 2 months. Finanstilsynet may find it necessary to ask for additional documentation concerning the supervision to which the applicant is subject to etc.

Finanstilsynet does require authorised translations into Norwegian or English of any required documentation which is not available in a Scandinavian language or English.

3 Applications under the Securities Funds Regulations section 13-2, cf. the Securities Funds Act section 4-10 subsection (4)

3.1 Who may be authorised

Authorisation to act as a nominee in Norwegian securities funds’ unit holder registers may pursuant to the Securities Funds Regulations section 13-2 subsection (1) first sentence be granted to a Norwegian or foreign

  • bank
  • investment firm
  • securities register
  • management company

Investment firms must be authorised to provide investment services mentioned in the Securities Trading Act section 2-1 subsection (1) no. 1, 2 or 4; see the second sentence of section 13-2 subsection (1). An investment firm must accordingly be authorised to provide at least one of the following services:

  1. reception and transmission, on behalf of clients, of orders in relation to one or more financial instruments defined in section 2-2
  2. execution of orders on behalf of clients
  3. active management of investors’ portfolios of financial instruments on a client-by-client basis and in accordance with the investors’ mandates

Finanstilsynet may in special cases grant authorisation to act as a nominee in a securities fund’s unit holder register to institutions which are not covered by the first sentence of section 13-2 subsection (1) (i.e. institutions other than banks, investment firms, securities registers or management companies); see section 13-2 subsection (2). In such cases the institution must be subject to satisfactory home country supervision and be obliged to comply with implemented legislation equivalent to Directive 2005/60/EC on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing. This provision will be rigorously applied. Finanstilsynet will grant an authorisation only when there are special grounds for doing so, for example in situations where the home country’s legislation prevents an institution as mentioned in the first sentence of section 13-2 subsection (1) from acting as a nominee in foreign securities registers, so that nominee services must be provided by other types of institution.

3.2 Documentation requirements

3.2.1 Applies to all applications
Applications from foreign applicants must pursuant to the Securities Funds Regulations section 13-2 subsection (3) be accompanied by

  1. documentation from the home country’s supervisory authority showing that the applicant is subject to supervision by that authority and what services the applicant provides or is authorised to provide
  2. contact details for use by public authorities, including which business area in the undertaking is responsible for the performance of the nominee activity, name of the manager with day-to-day responsibility for such activity and telephone number, email address and, in the event, telefax number

As regards (1), sufficient documentation may be a written confirmation from the home country’s supervisory authority or a printout from the supervisory authority’s register containing a reference to the website where the information is available. What services the applicant is authorised to provide (or what services the applicant provides in case the services are not subject to authorisation in the applicant’s home country) must be clear from the documentation. The documentation must be based on recent information, preferably no older than 2 months.

If the required documentation is not available in a Scandinavian language or English, the application must be accompanied by authorised translations into Norwegian or English; see section 13-2 subsection (5).

3.2.2 Applicants from countries outside the EEA
Applicants from countries outside the EEA must in addition (see section 13-2 subsection (4))

  • document that the home country has implemented legislation equivalent to Directive 2005/60/EC  on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing

A statement from the home country’s supervisory authority confirming that the home country has implemented legislation equivalent to Directive 2005/60/EC will be sufficient documentation. If this information is explicitly stated on the website of the supervisory authority in question, a printout containing a reference to the website where the information is available will be sufficient.

The above-mentioned documentation is for the time being not required for applicants from Switzerland and USA.

3.2.3 Special cases; see section 13-2 subsection (2)
Institutions applying for authorisation pursuant to section 13-2 subsection (2) must at minimum present

  • an explanation of why special conditions call for this provision to be applied
  • documentation showing that the applicant is subject to satisfactory home country supervision
  • documentation showing that the applicant is obliged to comply with implemented legislation equivalent to Directive 2005/60/EC

Finanstilsynet may ask for additional documentation/information.

4 Nominee duties

A nominee is obliged to act in accordance with all relevant prevailing Norwegian regulations. Violation of relevant provisions may result in withdrawal of authorisation to act as a nominee or in Finanstilsynet requiring the blocking of the nominee account(s); see the Securities Register Act section 6-4 and the Securities Funds Regulations section 13-6.

Information on duties to which Finanstilsynet would like to draw particular attention is given below.

4.1 Duty to register

A nominee is required to maintain at all times a register containing the identity of clients connected with all financial instruments registered in a nominee account and the number of financial instruments comprised by each nominee assignment. At minimum the following information on the client must be registered:

  • full name or name of undertaking
  • personal identity number, organisation number, D-number or, if the customer has no such number, another unique identity code
  • permanent address
  • nationality or, if a legal person, country of incorporation

For units in a securities fund's unit holder register, the Securities Funds Regulations lay down further provisions on the nominee’s obligation to register information.

  • The nominee shall record information as mentioned in the Act of 6 March 2009 No. 11 on measures to combat money laundering and the financing of terrorism etc. ("The Money Laundering Act") section 8 and appurtenant regulations; see the Securities Funds Regulations § 13-3 subsection (1) third sentence.
  • For unit holders who are liable for tax in Norway, the nominee shall register such information as is required by the Combined Regulations of 17 September 2013 no. 1092 on Third Parties' Disclosure Requirement ("the Combined Regulations") section 5-9-22, section 5-9-23, section 5-9-24 and section 5-9-25; see the Securities Funds Regulations section 13-3 subsection (1) second sentence and section 13-4 subsection (3). (This information shall be reported each year to the management company; see section 13-4 subsection (2). See the last paragraph under 4.2 on the disclosure obligation.)
  • The nominee shall establish whether the principal is the beneficial owner of the unit(s). If the principal is also a nominee, the nominee is required at all times to have legal and practical access to information about the identity of the beneficial owner and to ensure that such information on the beneficial owner as is stated in the above-mentioned bullet point is duly recorded. If the nominee does not have access to information on the identity of the beneficial owner, the nominee may not accept the nominee assignment; see section the Securities Funds Regulations 13-3 subsection (2).
  • The nominee shall ensure that all information on nominee assignments and principals, including an overview of changes in the principals' portfolios of nominee-registered units, is retained for a period of ten years; see the Securities Funds Regulations section 13-3 subsection (3).

4.2 Disclosure obligation

A nominee is obliged on demand to provide information on beneficial owners of financial instruments registered in a nominee account to the party that is entitled by law to receive such information from at securities register; see the Securities Register Act section 6-3 fourth paragraph and section 8-2. A corresponding disclosure obligation is provided for in the Securities Funds Regulations section 13-4. This applies in particular to Norwegian public authorities such as the Norwegian Tax Administration and Finanstilsynet. Such information must be presented in the manner and within the timeframe deemed suitable by the authority in question.

The disclosure obligation applies irrespective of any legal provisions to which the nominee may be subject in his home country. A nominee that is subject to provisions of confidentiality which prevent it from fulfilling the disclosure obligation must obtain the necessary legal basis for disclosure through customer agreements (prior consent). The nominee is however always obliged to obtain such prior consent from its principals in respect of assignments related to unit holder registers of securities funds; see the Securities Funds Regulations section 13-4 subsection (5).

In cases where there is more than one level of nominee registration, i.e. where the nominee’s client is not the beneficial owner of the financial instruments, the authorisation holder will need to ensure that a legal basis exists requiring “clients at each level” to submit the identity of their respective clients at the authorisation holder’s request. This will inter alia require prior consent from the customers in cases where one or more “sub-nominees” are subject to provisions of confidentiality.

A nominee has a corresponding disclosure obligation towards Norwegian issuers of equity shares; pursuant to the Public Limited Liability Companies Act section 4-10 subsection (4) the nominee shall, upon request by the issuer, provide the issuer with the name of the beneficial owners of the shares registered by the nominee and the number of shares owned by each beneficial owner.

A nominee who is entered in a securities fund's unit holder register instead of a unit holder who is liable for tax in Norway is required to report each year to the management company information registered pursuant to the Securities Funds Regulations section 13-3 subsection (1) second sentence; see section 13-4 subsection (2). Any questions regarding this reporting obligation should be directed to the management company for the fund concerned and/or to the Tax Directorate by Leif Martin Sande, tel.: (47) 945 39 548, or Elin Imsland, tel.: (47) 480 32 362.

4.3 Other

Financial instruments belonging to a nominee may not be registered in a nominee account administered by the same nominee; see the Securities Register Act section 6-3 third paragraph.

Shares issued by Norwegian companies may only be held in a nominee account on behalf of foreign shareholders; see the Public Limited Liability Companies Act section 4-10 subsection (1). By foreign shareholders is meant companies registered outside Norway, unless their head office is situated in Norway, and non-Norwegian citizens domiciled outside Norway. It is not possible for shares issued by a Norwegian company and owned by a foreign national who is liable for tax in Norway to be registered in a nominee account. Hence ʿcountry of domicile for tax purposes' determines a foreign shareholder’s status in this context.

A nominee shall establish rules for when the nominee shall be deemed to have received notification of the establishment of a legal right pursuant to the Securities Register Act section 7-5; see the Securities Register Act section 6-3 sixth paragraph.

The undertaking is obliged to send Finanstilsynet notification of any change in contact details as well as other changes related to the authorisation, including name changes, mergers or cessation of activity. The undertaking is also obliged to ensure consistency at all times between the name of the undertaking to which the authorisation has been issued, any subsequent name change notified to Finanstilsynet, and the name in which the undertaking’s nominee accounts are registered. (See the Securities Funds Regulations section 13-3 subsection (6).)


For further information:
Senior Adviser Camilla Sten, tel.: (47) 229 39 954

 

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