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Securities trading update: New rules regarding non-EEA based investment services


The Ministry of Finance has amended the Regulations to the Securities Trading Act allowing non-EEA entities to provide investment services and conduct investment activities in Norway. The new provision will replace the temporary solution in the Continuity Regulation for investment firms affected by Brexit.

On 11 September 2023, the Ministry of Finance adopted amendments in the Regulations to the Securities Trading Act (nw. Verdipapirforskriften) regarding investment services provided by entities with their head office outside of the EEA. The adopted provision is overall in line with the proposal sent out for public consultation in April.

The amendment is done through a new section 9-39 a in the Regulations (office translation set out below).

We note especially the following:

  1. Timing: The new regulation takes effect immediately.
  2. Types of clients: Under the new regime, entities with their head office outside the EEA may provide investment services only to "eligible counterparties" in Norway (i.e., not professional clients). In addition, services may be provided to the Norwegian Bank's Guarantee Fund (nw. Bankenes Sikringsfond).
  3. Requirements on the firms: The new regime applies to entities which are authorized in the home state to provide the relevant service, and where the supervisor in the home state has entered into a cooperation agreement with the Norwegian Financial Supervisory Authority (NFSA). Signature on the multilateral IOSCO MOU is sufficient and covers most countries (link). This has been confirmed by the NFSA in a press release (see link to English version of the press release here). The new provision applies generally, as opposed to the temporary regime in the Continuity Regulation, meaning that it is not limited to entities which had authorization before 31 December 2020 based on their home state authorization and the right to provide services under the EEA agreement.
  4. The Continuity Regulation will be repealed: The temporary regulation allowing UK firms to provide services to Norwegian "per se" professionals and eligible counterparties, ends 1 October. This means that investment services to per se professional clients, by non-EEA firms which are already providing services in Norway under the Continuity Regulation, must end by this date.
  5. Reverse solicitation: The ordinary exemption for reverse solicitation continues to apply.

As noted above, the new regime applies to investment services and investment activities towards "eligible counterparties". According to the Securities Trading Act section 10-23 "eligible counterparties" are investment firms, credit institutions, insurance undertakings, collective investment undertakings and management companies for such undertakings, pensions undertakings and their management companies, other authorized and regulated financial institutions and public bodies at the national level, including central banks and supranational organisations.

Securities Trading Regulations, Section § 9-39a

Provision of investment services from entities with headquarters outside the EEA to eligible counterparties.

(1) A company with its head office outside the EEA may provide investment services and conduct investment activities towards eligible counterparties in Norway without permission as mentioned in the Securities Trading Act (nw. verdipapirhandelloven) section 9-36 first paragraph if it fulfils the conditions in the second paragraph.

(2) The company must have authorization in its home state that covers the investment services it provides and the investment activities it conducts in Norway, and must be under supervision in the home state. The Norwegian Financial Supervisory Authority and the supervisory authorities in the company's home state must have entered a bilateral or multilateral agreement on supervisory cooperation in the area of securities. If the company's home state is listed by the Financial Action Task Force, the company cannot provide investment services in Norway as long as the listing lasts.

(3) The Banks' Guarantee Fund (nw. Bankenes Sikringsfond) is considered equal to an eligible counterparty mentioned in the first paragraph, cf. Act of 23 March 2018 no. 3 on the Banks' Guarantee Fund.

Office translation

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