DENMARK - Legal changes in Denmark will boost the business power of pensions institutions ATP and LD, paving the way for them to run banking, credit and insurance activities, as well as their pensions operations.
The Danish government, in its programme of legislation for the coming parliamentary year, has proposed that ATP and LD, like the rest of the sector, will have "permission to conduct financial business in the form of subsidiary companies".
The changes will form part of a broader revision of the Act on ATP and LD scheduled for this parliamentary year.
Mona Frandsen, legal counsel at ATP, said the new rules were an extension of ATP and LD's rights beyond those they already have in terms of owning investment companies and investment management companies.
"This is to further protect ATP's investments," she told IPE.
"Life insurance companies already have those rights, so this is a harmonisation and equalisation with those rules."
But despite the new business freedom ATP and LD are set to acquire, neither has plans to make any great forays into the banking, insurance and credit sectors just yet.
"There are no plans at ATP," Frandsen said.
LD's deputy director Dorrit Vanglo said: "We haven't got any plans at the moment to use this, but if a situation comes up when it's necessary, then it's nice to have the legislation there."
Last month, ATP acquired a 49.95% stake in FIH Erhvervsbank from Iceland's now defunct Kaupthing Bank.
As the law governing ATP now stands, the pension institution may not hold a majority stake in another company, except in a temporary situation lasting less than a year, when the move is necessary to protect its investments.
Under the new legislation, ATP and LD will have the freedom to take over financial institutions on a permanent basis.
Frandsen said the law was not being changed as a result of ATP's new involvement with FIH.
"A change to the ATP Act was underway, and it's not a consequence of that," she said, pointing out that ATP does not have control of the Nordic lender.
The new legislation is being packaged with a broader change in the ATP Act, which was due in any case because of the winding up of the SP special pension scheme - a smaller-scale scheme that has run alongside ATP's giant labour market supplementary pension scheme for 12 years.
"It was natural that there would be a change at this point," Frandsen said.
Earlier this summer, ATP made its first foray into the UK market by opening an office in London.
The office is located in Dover Street and led by Morten Nilsson, head of international operations.
ATP said the office would play a vital role in its strategy to exploit its expertise and business model on the international scene.