Reports from the supervised sectors for 2021
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 2021, 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 2021.
Banks and other financing activity
Banks, credit institutions, finance companies, payment institutions and electronic money institutions are key players in the financial system as providers of financing, payment services and savings products. Regulation and supervision are important contributors to well-functioning markets, financial stability and confidence in the financial system.
Insurance and pensions
Regulation and supervision of the insurance and pension sectors are important in safeguarding customers’ rights under insurance and pension contracts, and in instilling public confidence in the insurance market. The supervisory activities should help ensure that the undertakings are financially sound and safeguard customers’ rights and interests.
Infrastructure in the securities area
The infrastructure in the securities area encompasses trading venues, central counterparties, central securities depositories and benchmark administrators. These are shared functions for securities market participants and play a key role in ensuring that the market functions as a source of capital for the business sector and as a basis for investment activities and savings. The supervision of the market players aims to ensure that the institutions act in an appropriate and proper manner in accordance with legislation.
Securities market conduct
The general market conduct rules and compliance monitoring should promote investor protection and effective allocation and pricing of capital. The rules on unlawful insider dealing, market manipulation and due care in handling inside information are central. Finanstilsynet also oversees compliance with the rules on the preparation of insider lists, the duty to investigate, the prohibition of unreasonable business methods, the notification requirement for primary insiders and rules requiring the disclosure of large shareholdings.
Regulation and supervision of the securities market aims to ensure reliable information provision and secure, orderly and efficient trading in financial instruments, thereby enabling the securities market to function as a source of capital for business and industry and as a basis for saving and investment.
Mutual funds and collective investment schemes
Finanstilsynet supervises fund management companies and managers of alternative investment funds’ compliance with the Securities Funds Act and regulations thereto. Supervision is risk-based and largely geared to ensuring that consumer interests are protected. In the supervision of managers of alternative investment funds (AIF managers), priority is given to managers of funds targeting retail investors.
Approval of prospectuses – transferable securities
A prospectus shall provide access to relevant information about the company in connection with public offerings or listing on regulated markets. Through its control, Finanstilsynet shall ensure that the prospectuses contain the required information.
Financial reporting enforcement – listed companies
Finanstilsynet oversees financial reporting by Norwegian-registered entities that are listed on a regulated market in Norway or elsewhere in the EEA, as well as certain foreign entities that are listed on a regulated market in Norway. This supervision aims to contribute to confidence in the financial reporting among investors who invest in these companies.
Market participants’ confidence in financial reporting is key to a well-functioning market. This is particularly true for reporting by public interest entities. High audit quality contributes to increased confidence. In order to properly perform the function as a representative of the general public, the auditor must be independent of the client and perform the audit in conformity with the requirements of the Auditors Act.
An important aim of cross-border supervisory cooperation is to identify risk factors present in firms and fluctuations in the international financial market at an early stage. The supervisory cooperation also enables coordinated measures to mitigate risk and handle crises to be put in place. This has been very important in monitoring the financial markets during the Covid-19 crisis.
Money laundering and financing of terrorism
Fight against crime is one of the operational goals in Finanstilsynet’s strategy for 2019–2022. Finanstilsynet’s primary tool is to oversee that supervised institutions comply with the anti-money laundering (AML) legislation.
Digital finance and IT risk
An effective and robust financial infrastructure is crucial to well-functioning markets and financial stability. The financial sector is characterised by rapid digitalisation, driven by new and advanced digital solutions, new regulations and new market entrants and service providers. Technological developments entail significant gains for users, financial institutions and society as a whole but may also introduce new or changed vulnerabilities. Finanstilsynet is keeping a close watch on the digitalisation and on how digital vulnerabilities are developing in the financial market.