We will promote financial stability and well-functioning markets
The institutions and markets that are supervised by Finanstilsynet play a key role in the financial infrastructure. In the reports from the supervised sectors for 2020, the work carried out by the various areas during the past year is highlighted. The reports address important supervisory matters, relevant regulatory developments and a number of licensing matters from 2020.
As a result of the Covid-19 pandemic and containment measures, uncertainty attended Norwegian and international economic developments. Finanstilsynet monitored the banks closely in 2020 and introduced extraordinary reporting with respect to liquidity, credit and operational continuity.
Insurers’ and pension undertakings’ earnings and solvency reflected the volatility in securities markets throughout 2020. During the year, Finanstilsynet closely monitored the financial position and emergency preparedness of insurers and pension funds.
In a stressful situation characterised by market turmoil, infection risk and containment measures, the financial position and emergency preparedness of infrastructure entities, fund managers and investment firms were followed up closely in 2020. Finanstilsynet monitored investment firms' compliance with stricter requirements for accepting inducements and made it clear to management companies that the resulting reduction in distribution costs must be passed on to their clients. The survey of listed companies' sustainability reporting showed that current practices have major deficiencies.
The auditor must be independent of the client and perform the audit in conformity with the requirements of the Auditors Act. Finanstilsynet’s key tasks in 2020 included work on the new Auditors Act and supervision of auditors’ compliance with the anti-money laundering legislation.
The Covid-19 pandemic and containment measures could have caused disruptions to the the financial infrastructure in 2020. In order to prevent and resolve any such disruptions, Finanstilsynet kept a close watch on developments. The Financial Infrastructure Crisis Preparedness Committee (BFI) monitored the risk situation and coordinated preparedness measures between affected parties and the authorities. Finanstilsynet conducted 17 on-site inspections focusing on ICT and payment services.
Supervisory experience shows that compliance with the anti-money laundering (AML) legislation in many cases remains inadequate. Improvement areas include poor understanding of risk, lack of capacity to monitor risks and inadequate AML procedures. In 2020, Finanstilsynet conducted a number of inspections, issued orders for corrective measures and imposed several administrative fines due to regulatory non-compliance.
Customers who wish to invest must receive relevant information about risk and costs, as well as suitable investment advice. During 2020, Finanstilsynet reminded investment firms of their investor protection obligations and published a series of warnings against firms offering investment services without the necessary authorisation.
In 2020, many firms and government authorities were affected by uncertainty concerning the consequences of the UK's exit from the EU and the EEA (Brexit). Finanstilsynet was involved in preparations for regulatory adjustments in order to limit the negative consequences for markets, firms and customers.
Climate risk – The sharp rise in investments in green financial products has heightened the risk of overpricing and financial bubbles in this segment. The authorities are preparing regulations and supervisory practices. __________________________________________________________________________________ Fintech – The purpose of Finanstilsynet’s regulatory sandbox is to enable technological innovation and open up for new players. In 2020, two firms were admitted to the sandbox and cooperated with Finanstilsynet. __________________________________________________________________________________ Covid-19 pandemic – The spread of the virus and containment measures caused financial market turmoil. Economic uncertainty remains high. Finanstilsynet initiated a number of initiatives in 2020 to help to make financial institutions better prepared to face the situation.
