ATP strikes out at watered-down draft law on investment scope
DENMARK - Danish pensions giant ATP has rejected the latest version of a draft law that falls short of setting it on an equal footing with commercial pensions players.
ATP should have the same investment rights as insurance firms and pension funds in Denmark, it insists.
In a letter to the Ministry for Employment, Michael Callisen, head lawyer at ATP, said:
"ATP sees no reason why ATP's investment regulations should not be fully harmonised with the regulations governing, for example, insurance firms and pension funds."
The proposed legislation in question is a change in the Act on ATP and LD, as well as various tax laws, which together would partially harmonise investment regulations and finally wind up the old SP pension scheme.
The changes would allow ATP to run banking, credit and insurance operations alongside its existing mandatory pension schemes.
But proposals have raised competition concerns in the industry that were formally voiced earlier this year by the Danish Competition and Consumer Authority.
Callisen said ATP believes the proposed law largely reflects the Danish Competition and Consumer Authority's evaluation that a full harmonisation of the regulations would involve competition concerns.
In a response to the hearing, Callisen wrote: "ATP does not agree with the Competition and Consumer Authority's evaluation, which in ATP's opinion does not rest on an adequately documented foundation.
"ATP should have the same opportunities as insurance companies and pension funds to be able to protect its long-term investor interest as well as possible, particularly in the situations where, in relation to an existing investment, ATP wishes to take over co-investors' stakes or to expand its stake."
Last month, the Economics and Business Affairs Ministry backed a new model for the proposed legislation, which included various restrictions compared with the original proposal.
For example, ATP would only be allowed a controlling interest in a credit institution if, through subsidiaries, ATP's market share of the lending market was 5% or less.
Also, it would be banned from using the ATP name, logo and colours for subsidiaries in the bank and lending sectors.
Responding to this particular curb, Callisen wrote: "ATP is currently known as a mandatory pension scheme for all wage earners. There are no analyses about the value of the ATP name that conclude ATP's name should enjoy a particular advantage in competition with larger Danish financial companies' brands."