Financial Services Regulation 2025 Comparisons

Denmark is a member of the European Union, which means that much of its financial legislation is derived from or directly governed by EU law, including both regulations that apply directly, such as the Capital Requirements Regulation (CRR) and the Markets in Financial Instruments Regulation (MiFIR), as well as directives that require national implementation, such as the Capital Requirements Directive (CRD) and the Markets in Financial Instruments Directive (MiFID II).

Main Financial Services Laws

Building on this framework, Denmark has enacted a range of key statutes and executive orders that give effect to EU requirements and establish national rules in other areas. The most significant pieces of Danish financial services legislation include the following.

The Danish Financial Business Act (lov om finansiel virksomhed)

This is the principal statute governing the regulation and authorisation of credit institutions such as banks and mortgage-credit institutions, as well as UCITS management companies. It sets out, among other things, licensing conditions, governance and risk management requirements, conduct obligations and the supervisory and enforcement powers of the Danish Financial Supervisory Authority (Finanstilsynet) (the “Danish FSA”).

The Danish Financial Business Act implements key provisions from a significant number of EU directives, including the CRD, Undertakings for Collective Investment in Transferable Securities Directive (the “UCITS Directive”) and the Bank Recovery and Resolution Directive (BRRD) and contains national provisions supplementing directly applicable EU legislation such as the CRR and Markets in Crypto-Assets Regulation (MiCA).

The Danish Insurance Business Act (lov om forsikringsvirksomhed)

This is the principal statute governing the regulation and supervision of insurance and reinsurance undertakings in Denmark. It sets out requirements concerning authorisation, solvency, governance, outsourcing and reporting obligations as well as conduct of business and policyholder protection standards applicable to insurers operating in the Danish market. The Danish Insurance Business Act also regulates cross-border activities and the use of the EU passport regime for insurance and reinsurance undertakings.

The Danish Insurance Business Act implements key provisions from a range of EU legislation governing the insurance and reinsurance sector, most notably the Solvency II Directive.

The Danish Investment Firms Act (fondsmæglerloven)

This is the principal statute governing the authorisation, operation and supervision of investment firms in Denmark. It establishes requirements concerning licensing, governance, risk management, organisational arrangements and conduct of business obligations for firms providing investment services such as portfolio management, investment advice and order execution. The Danish Investment Firms Act also regulates cross-border activities, including the provision of investment services under the EU passport regime.

The Danish Investment Firms Act implements key provisions of the Investment Firms Directive (IFD) and contains national provisions supplementing directly applicable EU legislation, including the Investment Firms Regulation (IFR).

The Danish Capital Markets Act (lov om kapitalmarkeder)

This is the principal statute governing securities trading and the operation of regulated markets and multilateral trading facilities in Denmark. It establishes the framework for investor protection, disclosure obligations and the functioning and supervision of trading venues, forming a key component of Denmark’s capital markets regulation.

The Danish Capital Markets Act implements key provisions from a number of significant EU directives, such as MiFID II, the Transparency Directive and the Takeover Directive and sets out national provisions supplementing directly applicable EU legislation, such as the Market Abuse Regulation (MAR) and the Prospectus Regulation.

The Danish Payments Act (lov om betalinger)

This is the principal statute governing payment services and electronic money institutions in Denmark. It establishes the regulatory framework for the authorisation, operation and supervision of payment institutions, electronic money institutions and third-party providers offering payment initiation and account information services. The Danish Payments Act sets out detailed rules concerning licensing, safeguarding of customer funds, operational and security requirements, transparency of terms and the rights and obligations of both payment service providers and users.

The Danish Payments Act implements the Second Payment Services Directive (PSD2) and the Electronic Money Directive (EMD) and contains national provisions supplementing certain directly applicable EU legislation.

The Danish Alternative Investment Fund Managers Act (lov om forvaltere af alternative investeringsfonde m.v.)

This is the principal statute governing the authorisation, operation and supervision of managers of alternative investment funds (AIFMs) in Denmark. It establishes requirements relating to licensing, organisational structure, risk management, valuation, delegation and transparency, as well as rules governing marketing of alternative investment funds (AIFs) to professional and retail investors, both domestically and on a cross-border basis.

The Danish Alternative Investment Fund Managers Act implements the Alternative Investment Fund Managers Directive (AIFMD) and includes national provisions supplementing directly applicable EU regulations, such as the European Venture Capital Funds Regulation (EuVECA).

The Danish Investment Associations Act (investeringsforeningsloven)

This is the principal statute governing the establishment, management and supervision of investment associations (UCITS) in Denmark. It sets out requirements concerning authorisation, organisational structure, governance, risk management, valuation and disclosure as well as rules on marketing and investor protection. The Danish Investment Associations Act provides the legal basis for the operation of Danish investment associations, SICAVs and securities funds and regulates both domestic and cross-border distribution of fund units.

The Danish Investment Associations Act implements the UCITS Directive and certain provisions from related EU directives. It also contains national provisions supplementing directly applicable and related EU legislation.

The Danish Anti-Money Laundering Act (hvidvaskloven)

This is the principal statute establishing Denmark’s framework for preventing money laundering and terrorist financing. It applies to a broad range of financial and non-financial entities, including credit institutions, investment firms, payment institutions and insurance undertakings. The Danish Anti-Money Laundering Act sets out obligations relating to customer due diligence, risk assessment, record-keeping, monitoring and reporting of suspicious transactions.

The Danish Anti-Money Laundering Act implements the Fourth and Fifth Anti-Money Laundering Directives (AMLD4 and AMLD5) and aligns with international standards set by the Financial Action Task Force (FATF).

Other Financial Services Laws

In addition to the key statutes outlined above, a number of other legislative acts form part of Denmark’s broader financial regulatory framework. Such legislative acts include, among others, the Danish Mortgage-Credit Loans and Mortgage-Credit Bonds etc, Act (lov om realkreditlån og realkreditobligationer m.v.), which governs the issuance of mortgage-credit loans and covered bonds; the Danish Recovery and Resolution Act (Lov om restrukturering og afvikling af visse finansielle virksomheder) implementing BRRD; the Danish Consumer Loan Companies Act (lov om forbrugslånsvirksomhed), which regulates non-bank consumer lending and imposes requirements relating to authorisation and conduct of business; the Danish Credit Servicers and Credit Purchasers Act (lov om kreditservicevirksomheder og kreditkøbere), which implements the Credit Servicers Directive and establishes rules for entities that manage or acquire non-performing credit agreements; the Danish Act on Financial Advisers, Investment Advisers and Mortgage Credit Intermediaries (lov om finansielle rådgivere, investeringsrådgivere og boligkreditformidlere), which sets out the requirements for authorisation, registration and conduct applicable to financial advisers, investment advisers and mortgage credit intermediaries operating in Denmark; and the Danish Insurance Mediation Act (lov om forsikringsformidling), which governs the licensing, registration and conduct of insurance intermediaries and implements the Insurance Distribution Directive (IDD).

In addition to sector-specific regulation, a number of legislative acts govern the conduct of business and the protection of consumers in financial matters. The Danish Credit Agreements Act (kreditaftaleloven) establishes the framework for consumer credit agreements, implementing the Consumer Credit Directive. The Danish Consumer Contracts Act (forbrugeraftaleloven) contains general rules on distance selling and online financial services, including requirements for information disclosure and the right of withdrawal. The Danish Insurance Contracts Act (forsikringsaftaleloven) regulates the contractual relationship between insurers and policyholders, setting out the rights and obligations of each party and ensuring fair treatment and transparency in insurance contracts. These are supplemented by the Danish Marketing Practices Act (markedsføringsloven), which applies generally and which prohibits unfair commercial practices and misleading advertising.

Additional Legislative Instruments

The Danish financial services regulation outlined above is supplemented by a wide range of executive orders (bekendtgørelser) issued pursuant to the principal statutes. These instruments provide detailed operational rules on issues such as governance requirements, outsourcing and conduct of business standards. In addition, the Danish regulator publishes guidelines and interpretations (vejledninger) that clarify supervisory expectations and the application of EU technical standards.

The range of financial products and services regulated in Denmark largely mirrors that regulated at EU level. Danish regulation therefore covers the same core categories of financial activity as set out in key EU directives and regulations, including, in particular, those relating to banking, payment services, investment services, insurance and fund management.

As such, the activities that generally fall within the scope of Danish financial regulation and require authorisation from the Danish FSA include, among others, the following:

• taking deposits and other repayable funds from the public;
• providing payment services;
• issuing electronic money;
• providing investment services;
• managing UCITS and AIFs;
• carrying out insurance or reinsurance business;
• insurance distribution;
• granting consumer credit;
• granting loans secured by registered mortgages on real property on the basis of the issuance of mortgage-credit bonds;
• providing foreign exchange services as a business; and
• conducting debt collection as a business.

Where conducted to a limited extent, certain activities are subject only to a registration requirement. This includes, for example, managing AIFs below certain monetary thresholds and insurance distribution on an ancillary basis. In addition, certain types of activities require registration under the Danish Anti-Money Laundering Act when carried out by Danish entities that are not otherwise subject to a licensing requirement. These include activities such as non-consumer lending, financial leasing, the granting of guarantees and commitments and the provision of advice to undertakings on corporate finance matters, such as capital structure or mergers and acquisitions.

While Denmark’s financial regulatory regime is comprehensive and largely aligned with EU law, a number of exemptions exist that allow certain financial activities to be carried out without a full licence from the Danish FSA. These exemptions fall broadly into two categories:

• exemptions to the regulatory perimeter – available to entities conducting limited or ancillary financial activities; and
• cross-border exemptions – available to foreign entities providing financial services into Denmark under specific conditions, typically where the service is not deemed to be carried out “in Denmark” under Danish law.

Exemptions to the Regulatory Perimeter

Under Danish law, certain financial activities conducted by entities may be carried out without a full licence from or notification to the Danish FSA, either because they fall outside the regulatory perimeter or qualify for a limited registration. These exemptions largely reflect those provided under EU legislation such as MiFID II, AIFMD, PSD2, IDD and Solvency II.

Common examples of activities that fall outside the regulatory perimeter include intra-group financial services conducted solely within the same corporate group, ancillary or occasional activities connected to a firm’s primary non-financial business and own-account trading that is not offered as a service to clients. Examples of activities that are exempt from full authorisation requirements and instead require registration include managing AIFs below certain thresholds as well as acting as an ancillary insurance intermediary.

Cross-Border Exemptions

Foreign firms providing financial services into Denmark may, under certain circumstances, do so without obtaining a Danish licence.

In particular, activities that are not considered to be conducted “in Denmark” generally fall outside the Danish regulatory perimeter. This typically includes (i) services provided at the exclusive initiative of the client (so-called reverse solicitation) and (ii) services where the essential or defining element of the service (the so-called characteristic performance) is carried out outside Denmark.

These exemptions are most commonly relied upon by third-country firms providing services to Danish clients on a cross-border basis. However, there is very limited formal guidance from the Danish FSA on the application of these principles and, in particular, the characteristic performance test is based primarily on older supervisory practice. Firms relying on these principles should therefore do so cautiously.

As an EU member state, the regulation of crypto-assets in Denmark is primarily governed by MiCA.

MiCA sets out comprehensive requirements for crypto-asset service providers (CASPs), including authorisation, governance, prudential and conduct-of-business obligations, as well as operational resilience and safeguarding standards. It also sets out specific requirements for issuers of asset-referenced tokens (ARTs) and e-money tokens (EMTs), including white paper disclosure obligations, ongoing reporting duties and restrictions on offering such tokens to the public without prior approval.

The Danish Financial Business Act was amended in 2024 to include Part IX b (Markets in Crypto-Assets), which supplements MiCA at the Danish national level. These provisions establish the legal and supervisory framework governing the local application of the rules on the issuance, offering and provision of services relating to crypto-assets in Denmark and designate the Danish FSA as the competent authority in this respect.

Crypto-assets that qualify as financial instruments within the meaning of the Danish Capital Markets Act are regulated under the same framework as traditional securities. A crypto-asset may qualify as a financial instrument if it confers rights equivalent to shares, bonds, other forms of non-equity securities or other transferable securities. This means, for example, that activities such as trading, placing or providing investment advice in relation to such crypto-assets may require authorisation to provide investment services under Danish law.

In addition to MiCA and the Financial Business Act, CASPs operating in Denmark are subject to the Danish Anti-Money Laundering Act, which means that CASPs must comply with obligations relating to customer due diligence, risk assessment, record-keeping, monitoring and reporting of suspicious transactions.

The Danish FSA

The primary financial services regulator in Denmark is the Danish FSA, which operates as an independent government agency under the Danish Ministry of Industry, Business and Financial Affairs (Erhvervsministeriet).

The role of the Danish FSA can be broadly divided into three main pillars: supervision, regulation and information.

• Supervision – the Danish FSA is responsible for the supervision and licensing of financial institutions in Denmark and for enforcing compliance with financial regulation. Its scope of supervision covers, among others, banks, mortgage-credit institutions, investment firms, fund managers, insurers, payment and e-money institutions and CASPs. The Danish FSA’s supervision is carried out on a risk-based basis, meaning that resources are generally focused on areas where the likelihood and potential impact of breaches are greatest with respect to financial stability, market integrity or consumer protection.
• Regulation – the Danish FSA contributes to the development of financial regulation in Denmark and issues executive orders and guidelines that supplement the primary legislation (see also 1.1 Key Financial Services Law). The Danish FSA also plays an active role in the formation of EU financial legislation and participates in European supervisory fora and working groups.
• Information – the Danish FSA publishes its supervisory priorities, enforcement actions, sector analyses and decisions. It also provides guidance to firms to clarify regulatory expectations and provides information relevant to consumers and market participants regarding financial regulation and supervisory practices.

Other Regulators

In addition to the Danish FSA, other authorities play defined roles within Denmark’s financial regulatory framework.

• Danmarks Nationalbank, the central bank of Denmark, is responsible for monetary policy, financial stability and the issuance of currency. It monitors systemic risks in the financial system and oversees the operation and security of payment and settlement systems.
• Finansiel Stabilitet, Denmark’s national resolution authority, is responsible for the orderly resolution and restructuring of failing credit institutions in accordance with the BRRD as implemented in Denmark.
• The Danish Financial Intelligence Unit (FIU), which is part of the National Unit for Special Crime (National enhed for Særlig Kriminalitet or NSK), serves as the national centre for receiving, analysing and disseminating reports of suspicious transactions and activities related to money laundering and terrorist financing.
• The Danish Consumer Ombudsman (Forbrugerombudsmanden) enforces general consumer protection and marketing law, including rules on unfair commercial practices and misleading advertising.
• The Danish Competition and Consumer Authority (Konkurrence- og Forbrugerstyrelsen) oversees competition matters, including in the financial sector.
• The Danish Business Authority (Erhvervsstyrelsen) manages and supervises company registration, accounting and corporate reporting obligations, among others, and also maintains the Danish Central Business Register (CVR).

Advisory and Co-Ordination Bodies

In addition to the above-mentioned authorities, several advisory and co-ordination bodies contribute to the overall stability and resilience of the Danish financial system. For example, the Systemic Risk Council (Det Systemiske Risikoråd) monitors and issues recommendations on systemic risks that could affect financial stability and advises the government and relevant authorities on macroprudential policy; the Operational Resilience Collaboration Forum (Samarbejde om Operationel Robusthed) facilitates co-operation between financial institutions and authorities on cyber and operational resilience; and the Danish Payments Council (Betalingsrådet) serves as a forum for dialogue between authorities and market participants on the development and security of payment systems in Denmark.

The Danish FSA issues various forms of non-binding guidance and interpretative materials intended to clarify regulatory expectations and supervisory practices. These include, among others, guidelines, supervisory statements, thematic reports, Q&As and public enforcement decisions. These materials can be accessed via the Danish FSA’s official website.

Executive orders and guidelines issued by the Danish FSA are also available through the Danish legal information system, which provides public access to all Danish statutes and statutory instruments. English translations of selected key legislation are also available on the Danish FSA’s website.

Other Danish authorities also issue guidance relevant to financial regulation. These include, for example, the Danish Consumer Ombudsman, which publishes guidelines on consumer protection and marketing practices; Danmarks Nationalbank, which issues analyses and reports on financial stability and payment systems; and the Danish Business Authority, which provides guidance on company law, accounting, auditing and corporate reporting obligations.

In addition, guidance from the European Supervisory Authorities – the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA) – forms an integral part of the Danish regulatory framework, as the Danish FSA generally applies such guidelines in its supervisory approach.

Other relevant sources include communications and other guidance issued by the European Commission as well as opinions and reports published by the European Central Bank (ECB) and the European Systemic Risk Board (ESRB) and materials from international bodies such as the Financial Stability Board (FSB), the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO).

As a member state of the European Union, Denmark implements the Basel III framework through EU legislation, primarily via the CRR and the CRD. These form the core prudential framework for credit institutions across the EU and are directly applicable in Denmark or transposed into Danish law through the Danish Financial Business Act and related executive orders issued by the Danish FSA.

The final Basel III reforms – often referred to as the “Basel III finalisation” or “Basel IV” package – were adopted in the EU through the CRR III and CRD VI legislative package, which entered into force in 2024. The majority of the package began to apply from 1 January 2025, introducing, among others, revised approaches to credit risk, market risk and operational risk, as well as the new output floor limiting the extent to which institutions can reduce capital requirements through internal models.

However, not all elements of the Basel III reforms have yet taken effect. The implementation of the new market risk framework, the Fundamental Review of the Trading Book (FRTB), has been postponed by the European Commission until 1 January 2027. The Commission adopted a delegated act in 2025 delaying the application of the FRTB by one further year, citing the need to maintain a global level playing field for internationally active EU banks and to align with other major jurisdictions that have also deferred implementation.

Securities transactions on the Danish market currently settle on a T+2 basis (trade date plus two business days) through VP Securities A/S (branded as Euronext Securities Copenhagen), which operates the Danish central securities depository and forms part of the Euronext group.

VP Securities A/S is authorised and supervised by the Danish FSA under the Central Securities Depositories Regulation (CSDR) and it participates in the TARGET2-Securities (T2S) platform operated by the Eurosystem.

The European Union, including Denmark, is expected to transition to a T+1 settlement cycle in October 2027, in line with the European Commission’s and ESMA’s proposed timetable for shortening the securities settlement period across EU markets.

ESG Rules for Danish Financial Undertakings

As an EU member state, Denmark’s framework for ESG-related financial regulation relating to financial products is largely derived from EU law. The primary legislative instruments are the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation, which impose disclosure, transparency and classification requirements on financial market participants. These regulations apply directly in Denmark and are supplemented by the Danish Financial Business Act and related executive orders, which implement certain organisational and governance requirements relating to sustainability risk management.

Financial institutions, fund managers, investment firms and insurance undertakings supervised by the Danish FSA are required to integrate sustainability risks into their business and investment decision-making processes and to disclose relevant sustainability-related information both at the entity and product level in accordance with the SFDR. The EU Taxonomy Regulation further sets out the criteria for determining whether an economic activity qualifies as environmentally sustainable, providing a common classification system for use in disclosures and investment documentation.

Supervisory Focus on Sustainability Disclosures

In recent years, the Danish FSA has issued several communications reminding financial market participants of the need for accuracy and consistency in sustainability-related disclosures, in line with both EU and Danish marketing law requirements. The Danish FSA has also conducted multiple thematic reviews focusing on how Danish fund managers disclose sustainability objectives under the SFDR.

• In its 2023 thematic review of Danish sustainability disclosures for funds having sustainable investments as an objective, the Danish FSA identified a number of deficiencies, including vague or overly general statements regarding sustainable investment objectives, insufficient explanation of how investments contribute to those objectives and inadequate information on how the “do no significant harm” principle is applied. The Danish FSA required firms to improve the clarity and substantiation of their disclosures, emphasising that investors must be able to understand and verify the basis for sustainability claims. Following this, the Danish FSA published a “good practice report on the basis of thematic review of sustainability information for funds with sustainable investments as their objective”, outlining concrete supervisory expectations for how managers should document methodologies, ensure consistency in screening and exclusion criteria and substantiate sustainability claims.
• Further guidance was published in July 2025 through the Danish FSA’s “sustainable investments – requirements and practices” report, which summarises findings from its thematic reviews of sustainable-investment funds and sets out supervisory expectations on proper documentation of methodologies, consistent application of screening and exclusion criteria, transparent disclosure of thresholds/criteria and data-quality issues, independent use (and scrutiny) of external ESG ratings and clear linkage between declared sustainability objectives and measurable contributions.

In parallel, the Danish Consumer Ombudsman has taken an increasingly active role in addressing misleading environmental and sustainability claims (so-called greenwashing) in marketing and consumer communications. In its 2024 Annual Report, the Consumer Ombudsman reported 162 cases related to suspected greenwashing. Three of these cases were referred to the police for potential criminal prosecution. Two companies also accepted fines totalling several million Danish kroner for misleading environmental claims in their advertising and product labelling. Enforcement activity has continued in 2025, with further fines issued in the multi-million kroner range for misleading climate-related statements and unsubstantiated claims of CO₂-neutrality and sustainability.

Supervisory Focus on AI

The Danish FSA has identified the use of AI and advanced data analytics as an increasing area of supervisory focus, particularly in relation to governance, accountability and risk management within financial undertakings. While no standalone Danish legislation currently regulates AI in financial services, the Danish FSA expects firms to ensure that the use of AI systems complies with existing requirements under the Danish Financial Business Act and other relevant rules, including those concerning operational resilience, outsourcing, data protection and conduct of business.

Guidance and Good Practice Publications

In recent years, the Danish FSA has published several thematic papers and good practice reports addressing the use of AI in financial services. These include, among others, the following.

• Recommendations when using supervised machine learning (September 2019) – this paper, published following the Danish FSA’s FT Lab pilot project, provides non-binding recommendations for financial institutions applying supervised machine learning models in their operations. It identifies potential risks and outlines good practice principles in nine key areas, including governance, data management, model development, explainability, robustness, fairness and transparency. The paper emphasises that financial institutions remain fully responsible for model outcomes and must be able to document, explain and justify decisions supported by AI in line with existing regulatory requirements.
• Report on data ethics when using AI in the financial sector (November 2023) – this thematic report focuses on the ethical aspects of AI use, going beyond legal compliance to encourage financial institutions to adopt voluntary data ethics principles. It recommends that firms establish and maintain internal data ethics policies, identify and manage ethical dilemmas related to algorithmic fairness and consumer transparency, and anchor accountability at board and management levels. The report includes case studies from Danish financial institutions and provides practical tools for assessing data ethics maturity. It concludes that the integration of data ethics into corporate governance strengthens consumer trust and supports sustainable innovation in the financial sector.
• Recommendations when using artificial intelligence (May 2024) – this paper updates and expands the 2019 guidance to reflect advances in AI technology, including the use of generative AI tools, and to align with the EU Artificial Intelligence Act. It outlines the Danish FSA’s expectations for responsible AI governance across five main areas: strategy and governance, risk management, data and model management, explainability and compliance. The paper underlines that boards and senior management retain ultimate responsibility for the use of AI and should ensure appropriate documentation, control and integration of AI into existing risk frameworks. It also provides examples of good and poor practices observed among Danish financial institutions and highlights the need for proportionality based on the scale and risk of the AI application.

In September 2024, the Danish FSA also published a report on the use of artificial intelligence in the financial sector, providing a comprehensive overview of how Danish financial institutions are adopting AI technologies, including generative AI. The report maps current industry practices and identifies both the potential benefits of AI – such as efficiency gains, improved risk modelling and enhanced customer service – and emerging risks linked to data quality, model explainability and human oversight. It highlights that most firms are still in the early stages of AI deployment, with limited integration into critical decision-making processes and stresses that effective governance, documentation and ethical awareness are essential as usage expands. The report also notes that the Danish FSA will continue to monitor AI developments closely and incorporate its findings into supervisory priorities and future guidance.

The above-mentioned publications can be accessed via the Danish FSA’s website.

EU Artificial Intelligence Act

At the EU level, Denmark is subject to the EU Artificial Intelligence Act, which entered into force on 1 August 2024 and will apply in stages through 2027. The regulation establishes a risk-based framework governing the development, placing on the market and use of AI systems across the EU. It introduces proportionate obligations depending on a system’s potential impact, ranging from minimal to high risk. Within the financial sector, applications such as credit assessment, customer onboarding, transaction monitoring and algorithmic trading are expected to fall within the high-risk category, triggering additional requirements relating to data quality, documentation, transparency, human oversight and post-market monitoring.

Danish policymakers broadly recognise fintech as a driver of innovation and economic growth. The government has expressed its intention to strengthen the domestic fintech ecosystem and supports a range of initiatives, often co-ordinated through organisations such as Innovation Fund Denmark and the Danish Export and Investment Fund (EIFO). These initiatives cover research, technology development and early-stage company financing.

Internationally, Denmark engages in cross-border collaborations and alliances through the Danish FSA, aimed at facilitating the international expansion of Danish fintech firms and attracting foreign companies and talent to establish a presence in Denmark.

To promote regulatory clarity, the Danish FSA has established a dedicated fintech unit that provides informal guidance and dialogue to fintech firms regarding authorisation, licensing and applicable regulation.

In 2018, the Danish FSA launched an experimental regulatory sandbox, FT Lab, designed to enhance the authority’s understanding of innovative business models and technologies in the financial sector. FT Lab provides a controlled environment in which selected firms can test new solutions with real customers under the supervision of the Danish FSA. The sandbox has since evolved into an integral part of the Danish FSA’s innovation strategy, supporting co-operation with both Danish and international fintechs while informing supervisory practice and regulatory development.

Denmark does not currently have a domestic central bank digital currency (e-krone). Danmarks Nationalbank has concluded that, at present, the potential benefits of introducing a retail CBDC do not outweigh the costs and operational risks, given the efficiency and reliability of existing payment systems in Denmark. However, the central bank continues to monitor international developments closely, particularly the ECB’s digital euro project, and participates in related research and policy discussions to assess potential implications for Danish and European payment infrastructures.

Financial Institutions Must Act in Accordance With Good Business Practice

All financial undertakings, including credit institutions, insurance undertakings, investment firms, fund managers and payment institutions are subject to an overall requirement to act honestly, fairly and professionally towards their customers (so called good business practice). These rules are to a significant degree intended to provide protection for retail/consumers and vulnerable customers.

For credit institutions, insurance undertakings and certain other entities, the rules on good business practice are codified in the Executive Order on Good Business Practice for Financial Institutions (bekendtgørelse om god skik for finansielle virksomheder), which applies to entities located in Denmark as well as entities operating on a cross-border basis in reliance on an authorisation or EU passport. The executive order requires institutions to provide clear and adequate information about products and services, to enter into and amend agreements’ transparently and to ensure that advice is relevant, in the customer’s interest and tailored to the customer’s financial situation and knowledge.

The executive order also sets out rules aimed at protecting customers who may be in a particularly vulnerable position. Institutions must take special care in dealings with such customers and avoid practices that could significantly distort their economic behaviour due to age, limited financial literacy or other vulnerabilities. Further, the executive order includes specific provisions for areas such as basic deposit accounts (basal indlånskonto), marketing practices and product sales to children and young people.

Supervision and Enforcement of Good Business Practice Requirements

The Danish FSA oversees compliance with the rules on good business practice for financial undertakings and regularly conducts thematic inspections and publishes enforcement decisions for violations thereof as well as for violations of other consumer protection rules.

For example, in August 2024, the Danish FSA issued orders to five banks for inadequate compliance with rules on the provision of “basic” payment accounts (basal betalingskonto), citing delays in processing applications, insufficient justification for refusals and lack of proper guidance to customers regarding complaint options. Similarly, in October 2024, the Danish FSA published findings from its investigation into banks’ compliance with competence requirements for advice on complex investment products, identifying cases where non-certified employees provided investment advice and requiring improvements in internal controls and training. In addition, the Danish FSA has recently taken supervisory action against several fund managers for misleading marketing of units in AIFs.

The Danish FSA’s supervision is supplemented by the Danish Consumer Ombudsman, which has, for example, been given special powers under Section 348 of the Danish Financial Business Act to bring court proceedings concerning conduct that contravenes rules on good business conduct, including actions for injunctions, corrective measures, damages and recovery of unlawfully charged amounts. The Ombudsman may also, where appropriate, act as a group representative in collective actions.

The Danish FSA is also required to notify the Danish Consumer Ombudsman if it becomes aware that a firm’s customers may have suffered losses as a result of breaches of the rules on good business conduct.

In October 2024, the Danish FSA and the Danish Consumer Ombudsman entered into a formal co-operation agreement (Aftale om Finanstilsynets og Forbrugerombudsmandens samarbejde om tilsynet med virksomheder på det finansielle område), which aims at strengthening the co-ordination between the two authorities in cases where financial undertakings may breach both financial regulation and consumer protection rules. Under this agreement, the authorities exchange information on supervisory findings, co-ordinate enforcement actions where appropriate and ensure that cases involving potential harm to consumers are handled efficiently and consistently.

Although acknowledged by the Danish Systemic Risk Council (Det Systemiske Risikoråd) as a potential source of systemic risk, the concept of “shadow banking” (that is, non-bank financial intermediation which may sit outside the traditional regulatory perimeter) has not gained significant regulatory attention from a local Danish perspective. The Danish FSA has not issued any specific proposals or dedicated frameworks directly targeting shadow banking activities. Instead, Denmark relies largely on the broader EU-level initiatives and standards developed by, among others, the European Systemic Risk Board (ESRB), EBA and the Financial Stability Board (FSB).

Authorisation Framework for Danish Undertakings

The process for obtaining authorisation to operate as a financial undertaking in Denmark depends on the type of activity to be conducted.

The procedural framework for authorisation for Danish banks, mortgage-credit institutions and UCITS management companies, among others, is set out in the Danish Financial Business Act and for other financial undertakings in specific sectoral legislation applicable to the business area concerned.

These include, among others:

• the Danish Investment Firms Act in respect of obtaining authorisation as an investment firm;
• the Danish Insurance Business Act in respect of obtaining authorisation as an insurance undertaking;
• the Danish Act on Alternative Investment Fund Managers in respect of obtaining authorisation as an AIFM; and
• the Danish Payments Act in respect of obtaining authorisation as a payment institution or e-money institution.

In order to obtain an authorisation, an application must be submitted to the Danish FSA. The Danish FSA has prepared standard application forms for most types of financial undertakings and regulated activities, which applicants are expected to use. These forms, together with accompanying guidance and checklists, are available on the Danish FSA’s website.

Applications must typically be accompanied by detailed documentation demonstrating that the undertaking meets applicable legal and prudential requirements, including, where relevant and applicable:

• capital requirements – documentation showing that the undertaking holds the minimum capital required under the relevant legislation;
• governance – information on the organisational structure, including a clear outlining of responsibilities, decision-making procedures and internal control functions;
• fit-and-proper assessments – information on board members, management and, if applicable, other key persons, including documentation of their qualifications, experience, reputation and financial reliability;
• business plan and strategy – a comprehensive description of the proposed business model, target market, key products and services and financial projections/budgets;
• risk management framework – documentation describing how the undertaking identifies, measures, monitors and manages key risks, including, as applicable, credit, market, liquidity, operational and compliance risks. Where outsourcing or the use of third-party technology providers is planned, the Danish FSA typically requires detailed information on outsourcing arrangements and risk controls; and
• policies and procedures – internal rules covering all relevant areas, including governance, customer due diligence, AML/CFT controls, conflict of interest management, complaints handling and remuneration, among others.

Once authorisation is granted, the business is listed in the Danish FSA’s public register and becomes subject to ongoing supervisory requirements, including regular reporting and compliance obligations.

Provision of Financial Services Within the EU/EEA (Passporting)

As Denmark is a member of the EU, financial undertakings authorised in Denmark may, under the relevant EU sectoral directives, such as the CRD, Solvency II, PSD2, IDD, the UCITS Directive and the AIFMD, establish branches in other EU/EEA member states or provide services on a cross-border basis without obtaining separate authorisation in those jurisdictions.

This passporting regime applies, among others, to credit institutions, investment firms, insurance and reinsurance undertaking, UCITS management companies, AIFMs, payment institutions and e-money institutions. The Danish FSA must be notified of the firm’s intention to operate in another EEA country, following which it informs the host state regulator in accordance with the applicable notification procedure.

Conversely, financial undertakings authorised in another EU/EEA member state may provide services in Denmark under the same passporting framework, subject to notification by their home state regulator to the Danish FSA.

Provision of Financial Services by Third-Country Undertakings

Undertakings established outside the EU/EEA are generally not permitted to provide regulated financial services in Denmark without obtaining a cross-border authorisation or establishing a branch in Denmark, unless a specific exemption applies (see also 2.2 Exemptions).

Generally, the authorisation regimes available to third-country undertakings are limited in scope and rarely used in practice, as the requirements are often substantial and comparable to what applies to Danish financial undertakings. However, there are certain exceptions.

For example, third-country investment firms and credit institutions may obtain an authorisation to provide investment services in Denmark pursuant to Section 33 of the Danish Financial Business Act (for credit institutions) or Section 41 of the Danish Investment Firms Act (for investment firms).

Approval is conditional on the existence of a co-operation agreement between the Danish FSA and the applicant’s home-state regulator and the services may only be directed to per se professional clients and eligible counterparties within the meaning of MiFID II. Retail client business is not permitted under this exemption (this instead requires the establishment of a branch and is therefore rarely used).

While the Section 33/41 licence regime had seen limited use historically, its utilisation has increased notably following Brexit, as several UK-based institutions have sought to maintain access to the Danish market. In response, the Danish FSA has streamlined the application process and introduced a dedicated application form for third-country entities.

In addition to the Section 33/41 licence regime, other third-country regimes are occasionally used in practice, most notably under the Danish Act on Alternative Investment Fund Managers by third country AIFMs intending on marketing AIFs in Denmark.

The timeframe for obtaining authorisation from the Danish FSA varies depending on the type and complexity of the licence sought and the completeness of the application submitted.

Danish Undertakings

For most applications – such as authorisation as a credit institution, investment firm, insurance undertaking, AIFM or payment institution – statutory processing deadlines apply once the Danish FSA has received a complete application. These are typically:

• three months (eg, for applications as an AIFM or a payment institution);
• six months (eg, for applications as an investment firms); or
• up to 12 months (eg, for applications as banks, mortgage-credit institutions and insurance undertakings).

In practice, timelines vary depending on the quality of the submission, the complexity of the structure and the need for clarifications or additional information.

EU/EEA Undertakings

The timeframe for notification processing is typically one month for cross-border services and up to five months for branch establishments, although notification timelines vary between regimes.

Third-Country Undertakings

The Danish FSA is generally not bound by statutory timelines when processing third-country applications. Under the Section 33/41 licence regime, the expected processing time typically ranges from one to two months for applicants from well-known and closely supervised jurisdictions, such as the United Kingdom, whereas applications from less familiar jurisdictions may take up to 12 months to complete.

Fees

There are generally no separate application fees payable to the Danish FSA in connection with the authorisation process. However, authorised undertakings are subject to annual supervisory fees, which are levied pursuant to Chapter 22 of the Financial Business Act, which lists all applicable fees. These include both fixed base fees for certain entity types, which are adjusted yearly, and variable levies calculated as a proportion of sector-wide supervisory costs or the undertaking’s own size and activity level.

The Danish FSA publishes the annual rates for fixed fees yearly on its website once the annual budget and supervisory cost allocations have been finalised. The fee rates can be accessed on the Danish FSA’s website.

Senior individuals within authorised financial undertakings in Denmark are subject to direct regulatory oversight by the Danish FSA.

Under the Danish Financial Business Act, the board of directors and executive management of banks, mortgage-credit institutions and UCITS management companies are responsible for ensuring that the firm operates in accordance with applicable laws, regulations and good business practices. The same generally applies for other types of financial undertakings pursuant to the specific sectoral legislation applicable to the business area concerned.

Key individuals, including board members, executives and other persons who effectively direct the business, are generally subject to a “fit-and-proper” assessment by the Danish FSA both in connection with the appointment and on an ongoing basis. This assessment covers:

• honesty and integrity (eg, absence of criminal convictions, financial misconduct or disciplinary sanctions);
• professional qualifications and experience, including technical competence, management experience and familiarity with financial regulation; and
• financial soundness, ensuring the person’s circumstances do not compromise independence or judgment.

In addition, key individuals may be subject to a range of specific statutory requirements arising under sectoral legislation. Such requirements may include:

• duties to avoid conflicts of interest, and refrain from certain financial transactions that could compromise independence or prudence;
• notify the Danish FSA of changes to circumstances relevant to the fit-and-proper assessment;
• adhere to confidentiality obligations concerning knowledge that is obtained in the course of performing their duties; and
• adhere to certain investment restrictions.

Violations of these obligations may result in regulatory measures, administrative sanctions or, in serious cases, criminal penalties including fines or imprisonment.

Much of the reform activity in Denmark over the coming years will be driven by legislative changes introduced at the EU level. This includes measures such as the MiFID II/MiFIR review; the AIFMD II implementation; the new EU anti-money laundering package (comprising the directly applicable AML Regulation and the sixth AML Directive) and the payment-services reforms under PSD3 and the Payment Services Regulation, among others.

Within this wider regulatory programme, a number of more targeted reforms will take shape, bringing previously unregulated services within the Danish regulatory perimeter, including the following.

Implementation of CRD VI and the Provision of Banking Services by Third-Country Undertakings

The Danish implementation of CRD VI will also shape the regulatory landscape in the period ahead. One of the more consequential elements concerns the tightening of rules on the provision of banking services by undertakings established outside the EU/EEA.

Denmark has historically permitted a degree of cross-border activity from third-country undertakings – particularly in relation to non-consumer lending. However, under CRD VI, core banking activities – including lending – may only be carried out through an authorised EU branch subject to the relevant prudential and governance requirements. Consequently, once the new regime applies, third-country undertakings will no longer be able to provide non-consumer loans into Denmark on a cross-border basis unless an exemption applies (see also 2.2 Exemptions).

A limited grandfathering regime applies. Pursuant to the Danish implementation of Article 21c(5) of CRD VI, the new regime does not affect the legal validity of contracts entered into before 11 July 2026 between third-country credit institutions and Danish clients. The purpose of the rule is to ensure that rights acquired by clients before the rules take effect do not become invalid merely because the institution would, after the new regime enters into force, be carrying out an activity that is no longer lawful in Denmark.

On 11 June 2025, the Danish Parliament approved the legislation transposing CRD VI into Danish law, with the act entering into force on 1 July 2025 and the substantive CRD VI provisions concerning the provision of banking services by third-country undertakings taking effect from 1 January 2027.

Implementation of the Revised Consumer Credit Directive and the Introduction of a Supervisory Framework for Credit Intermediaries

On 8 October 2025, the Danish government presented legislative proposal L 19 to implement the revised Consumer Credit Directive (EU) 2023/2225 (CCD II) into Danish law.

As CCD II is a full-harmonisation instrument, the Danish government has proposed an implementation approach that avoids over-implementation (gold-plating), save for a limited number of instances where specific consumer-protection considerations are regarded as warranting measures beyond the minimum requirements.

Implementation will predominantly take place through amendments to the Danish Credit Agreements Act as well as the Danish Marketing Practices Act and the Danish Consumer Loan Companies Act. The proposal contains, among other things, changes to the scope of the Danish Credit Agreements Act, expanded creditor information and creditworthiness-assessment requirements, new conduct of business provisions, new marketing rules and – of particular importance for the distribution chain – a registration and supervisory regime for credit intermediaries, which have not previously been subject to any regulatory registration or oversight framework in Denmark.

The new framework introduces a statutory definition of credit intermediaries, covering entities that present or offer credit agreements, assist consumers by undertaking preparatory work or administrative arrangements prior to the conclusion of a credit agreement or conclude credit agreements on behalf of a creditor. As a result, a wide range of actors – including retailers, brokers and online platforms – may fall within scope where they perform distribution or facilitation functions in relation to consumer credit.

Pursuant to the legislative proposal, credit intermediaries must be registered with the Danish FSA before conducting credit intermediation. Further, the Danish FSA must refuse registration if the intermediary is not established in Denmark or another EU/EEA member state, making the regime unavailable for third-country undertakings.

The proposal is currently undergoing parliamentary proceedings and, if adopted in its current form, is set to enter into force on 20 November 2026, with current credit intermediaries being required to submit their registration applications from 20 May 2026 and no later than 20 November 2026 in order to continue operating while the Danish FSA processes their application.