Reports from the Danish Securities Council 1996

The Danish Securities Council has been set up pursuant to Act No. 1072 of 20 December 1995 on Securities Trading, etc.

The activities of the Danish Securities Council have been defined in Executive Order No. 254 of 28 March 1996 on the Rules of Procedure of the Danish Securities Council.

Pursuant to section 83 (5) of the Act the rules of procedure have been approved by the Danish Minister for Business and Industry.

By Royal Order of 30 December 1996 legislation and matters concerning regulation and supervision of financial undertakings were transferred from the Danish Ministry of Business and Industry to the Danish Ministry of Economic Affairs. The competence in relation to the Danish Securities Council previously resting with the Minister for Business and Industry was from this date on transferred to the Danish Minister of Economic Affairs.

Pursuant to section 83 of the Danish Securities Trading, etc. Act the objects of the Danish Securities Council are to be instrumental in promoting a smooth Danish securities market which is so efficient, transparent and competitive that it will be attractive to issuers, investors and securities dealers and which will comply with international standards.

One of the purposes of the Danish Securities Council's supervision of the market is to create optimal conditions for the securities transactions so that the trading in securities will take place in a fair and proper manner.

Through its supervision of the market the Danish Securities Council is to ensure that all necessary steps will be taken to ensure an efficient protection of investors and an efficient provision of capital to issuers.

Besides, the Danish Securities Council is to ensure that clearing business is conducted in an adequate and proper manner and that it considers the commercial terms of the securities trading in competition with the securities markets in other countries.

Through its supervision of the market the Danish Securities Council is to ensure that stock exchanges and clearing centres in reality are open for foreigners and that they comply with international standards.

Finally, the Danish Securities Council is, through its supervision of the market, to work for a fair pricing of Danish listed securities. The objective is to ensure efficient financing opportunities for Danish issuers of securities and to create the best possible security and transparency for investors.

In short the tasks of the Danish Securities Council with respect to its supervision of the market are to ensure adequate and proper protection for all market participants and to ensure that the international competitiveness of the Danish securities market is maintained and improved.

The Danish Securities Council supervises the market in close and regular interaction with the companies on the securities market, including the stock exchanges.

The supervision of the market is to be effected in such a manner that the Council may unite - in an appropriate manner and in close contact with the market - the various interests in making generally accepted and binding decisions and rules concerning the overall matters on the securities market, see below.

The Danish Securities Trading, etc. Act provides that the Danish Securities Council shall lay down specific rules governing the following:

• Admission, etc. of securities to listing or trading on a stock exchange
• The contents of prospectuses
• Prospectuses at the first public offer
• Exemption from the obligation to draw up a prospectus
• Publication of prospectuses and material concerning offers
• Delisting and suspension of securities from listing
• Issuers' and shareholders' obligations to disclose information
• Take-over bids
• Contents and publication of the document of the offer
• Reporting of transactions in securities
• Payment of fees for the handling of prospectuses

Moreover, the Danish Securities Council may lay down rules governing:

• Inclusion of other instruments and contracts under the Act.
• Exemption of specified instruments from the Act.
• Good securities trading practices.
• Extension of the obligation to report to include others than securities dealers or unlisted securities
• Exemption from the obligation to draw up an offer prospectus for securities which are not to be admitted to listing on a stock exchange
• The detailed contents of the material concerning offers.
• Authorised money-market brokers' operation of markets for listed money-market related securities.

Various rules issued by certain market participants, i.e. stock exchanges, authorised market places and clearing centres, shall be notified to the Danish Securities Council pursuant to the Danish Securities Trading, etc. Act.

This applies to:

• The rules laid down by a stock exchange governing the terms and conditions of the operation and transparency of the market.
• The rules laid down by a stock exchange governing access to the market.
• The rules laid down by an authorised market place governing the admission of securities to trading.
• The rules laid down by an authorised market place governing the obligation of issuers and shareholders to disclose information.
• The rules laid down by an authorised market place governing the terms for being a member.
• The rules laid down by a clearing centre governing clearing and settlement as well as rules governing the participation of a clearing member, etc.
• Rules of Ethics governing stock exchange operations.

The Danish Securities Council may direct stock exchanges, authorised market places and clearing centres to amend the rules laid down by them or to lay down supplementary rules.

The Danish Securities Council makes decisions in a number of specific cases such as:

• About exemption from the obligation to submit an offer.
• About approval of prospectuses.
• About permission to and perhaps the terms of carrying on securities broking business.
• As to whether an authorised money-market broker may carry on business as a securities broker.

The Danish Securities Council is the Board of Appeal in cases concerning decisions made by stock exchanges, authorised market places, clearing centres and central securities depositories in matters of a far-reaching and fundamental nature.

Finally, the Danish Securities Council may offer its opinion in matters submitted to it by the Danish Financial Supervisory Authority, including questions as to whether an undertaking or a market meets the conditions for carrying on stock exchange business.

Published by the Danish Securities Council, May 1997
Electronic edition by Net Bureauet