Investment firms

Supervision

Legal requirements concerning investor protection and conflicts of interest are of key importance in the supervision of investment firms. The firms shall act honestly, fairly and professionally in accordance with the best interests of their clients and ensure that the integrity of the market is preserved in the best possible manner. The firms shall also have adequate internal controls and risk awareness.

On the basis of Finanstilsynet's risk-based approach, an inspection was initiated at one investment firm in 2024, in addition to three thematic inspections encompassing a total of 23 investment firms, covering the following topics:

• Advice and information to retail clients.
• Handling of inside information. This topic is discussed in further detail below.
• Valuation of unlisted securities. Finanstilsynet carried out a thematic inspection encompassing all relevant investment firms. Based on this inspection, Finanstilsynet initiated a thematic inspection at 11 investment firms, focusing on how they value and disclose the value of securities that are less tradable than mutual funds and listed shares – more specifically alternative investment funds (AIFs) and unlisted shares. The thematic inspection is expected to be completed in the first quarter of 2025.
• Finanstilsynet also participates in a Common Supervisory Action organised by the European Securities and Markets Authority (ESMA), initiated in November 2024. Finanstilsynet assesses how nine investment firms comply with sustainability-related requirements concerning suitability assessments and product governance. The thematic inspection will be completed in the first half of 2025.

In addition, Finanstilsynet completed 20 inspections in 2024 that were initiated in 2023.

In 2024, Finanstilsynet examined all relevant investment firms’ compliance with the EU Sustainable Finance Disclosure Regulation (SFDR). The regulation has been implemented in the Act on the Disclosure of Sustainability Information in the Financial Sector, etc., and regulates how providers of collective savings products and investment and insurance advisers shall disclose their strategies for the integration of sustainability risks into their operations and consideration of adverse sustainability impacts, as well as how they shall provide sustainability information about their products. Finanstilsynet presented the results of the survey at a sustainability seminar in October. The survey encompassed 87 investment firms, banks and branches. Finanstilsynet assessed 10 per cent of the responses as very good, while 54 per cent of the responses were assessed as ‘failed’. Finanstilsynet will follow up this area in 2025. Recordings of the seminar and presentations from the seminar are published on Finanstilsynet's website.

In October and December 2024, Finanstilsynet published decisions on administrative fines of NOK 17 million and NOK 25 million, respectively, imposed on two investment firms for unlawful disclosure of inside information. Both firms disclosed inside information to investors without having made a satisfactory assessment of whether it represented inside information. Nor did the firms make sure that the persons who received inside information gave a clear and unambiguous consent to receiving this information and did not inform the recipients of the obligations arising from receiving such information. In the reports, Finanstilsynet emphasises that there is a high risk that disclosure of inside information will undermine confidence in the market, and that the firms, through their highly inadequate placing operations, have enabled and facilitated the misuse of inside information. The two decisions are published on Finanstilsynet's website (in Norwegian only).

Finanstilsynet registered that six firms failed to meet the capital requirements in 2024, which is one less than in the previous year. In two of the cases, this was rectified through share issues, in one case by repayment of loans to the majority shareholder and in one case by including interim profits. In one case, Finanstilsynet ended up revoking the authorisation, and the final case is under consideration. At year-end 2024, one investment firm was required by Finanstilsynet to report its capital adequacy position each month due to low capital adequacy ratios, a negative profit trend and inadequate procedures.

Finanstilsynet ordered one investment firm to provide monthly reports on the firm's trading portfolio, including an auditor’s opinion in accordance with the ISA 805 auditing standard. The background for this action was the firm's persistent practice of allocating unlisted and highly illiquid financial instruments to the trading portfolio in violation of Finanstilsynet's previous specifications.

Finanstilsynet did not revoke any authorisations in 2024 apart from the one caused by the breach of capital requirements, but some firms voluntarily renounced their authorisations. 

Providers of exchange and storage services for virtual assets

13 providers of exchange and storage services are registered in Norway in Finanstilsynet's registry. The firms are defined as obliged entities under the anti-money laundering legislation, and Finanstilsynet supervises that they act accordingly. In 2024, Finanstilsynet imposed administrative fines on one of the largest providers of virtual asset services in Norway (Norwegian Block Exchange – NBX) for serious non-compliance with the anti-money laundering legislation.

Licensing and other administrative matters

Five new firms were granted an authorisation to provide investment services in 2024. Three investment firms’ authorisations to provide investment services were extended. One firm’s application for an authorisation was rejected. Five firms renounced their authorisations to provide investment services. One firm renounced parts of its authorisation.

Finanstilsynet shall assess whether new members of boards of directors and senior executives and qualified owners of investment firms meet fitness and propriety requirements and considered a number of applications regarding this. Finanstilsynet did not order any investment firms to make changes to their board of directors or management in 2024.

During the year, Finanstilsynet received 240 notifications of cross-border activity from investment firms headquartered in other EEA states.

Finanstilsynet processed 18 notifications of ICT outsourcing in 2024. 

Investigations into possible illegal activity and market warnings

In 2024, Finanstilsynet investigated eight firms for possible illegal provision of investment services without the necessary authorisation. These firms contact Norwegian investors directly and/or market their business on their websites. In such cases, Finanstilsynet considers whether to make a decision to stop the illegal activities and/or whether to publish a market warning. In 2024, Finanstilsynet made one decision on the termination of operations and one decision to order corrective measures and published four warnings specifying that the firm in question was not authorised to provide investment services in Norway. Finanstilsynet also published approximately 900 warnings issued by foreign supervisory authorities against entities providing services in the EEA without authorisation. Finanstilsynet's website provides information on investment fraud and advice to investors on how to protect themselves against fraud. Finanstilsynet's market warnings are also available at Finansportalen.no.

Regulatory development

MiCA

The Markets in Crypto Assets Regulation (MiCA) contains EU-wide rules on the issuance, public offering and admission to trading of crypto assets, the provision of services related to crypto assets and market abuse in the crypto-asset market. The regulation is intended to promote innovation, investor protection and market integrity, as well as ensure financial stability.

In 2023, Finanstilsynet was commissioned by the Ministry of Finance to assess how MiCA should be implemented in Norwegian law. Finanstilsynet submitted a draft consultation document and proposals for legislative and regulatory amendments to the Ministry of Finance in February 2024, and the Ministry has circulated the proposal for consultation.