DENMARK - Proposed legislative changes allowing Danish pensions giant ATP to run banking, credit and insurance operations alongside its existing mandatory pension schemes will now include restrictions to satisfy competition concerns.
The Economics and Business Affairs Ministry has backed a more restricted version of the draft change in the law that governs ATP in the wake of misgivings expressed by the Danish Competition and Consumer Authority.
The Danish government, in its programme of legislation released at the beginning of this parliamentary year, proposed that ATP and LD, like the rest of the sector, would have "permission to conduct financial business in the form of subsidiary companies".
The changes were to form part of a larger revision of the Act on ATP and LD already scheduled for this parliamentary year.
Brian Mikkelsen, minister for economics and business affairs, said: "We have now had light shed on the competition aspects of giving ATP the opportunity to run financial businesses via subsidiaries.
"This should be weighed up against, among other things, financial stability considerations, as well as securing a reasonable return for pension savers.
"Against that background, the employment minister and myself agree on a model that takes account of the competition misgivings, while at the same time giving ATP the necessary flexibility."
ATP will be given the freedom to acquire a controlling interest in a credit institution, but only if it, though its subsidiary, has a market share of 5% or less on the lending market.
For bank and credit companies where ATP has a controlling interest, ATP will be prohibited from selling administrative services to its subsidiary.
Also, it will not be able to use the ATP name, logo and colours for subsidiaries in the bank and lending sectors.
On top of this, ATP will be barred from owning a controlling interest in businesses in the life and pensions industry.