pc
nid 91828
Apr 10, 2026
tojuri@vixio.com
Denmark
Financial Supervisory Authority
financial services
80% of draft length
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2061 charsDenmark's Financial Supervisory Authority Introduces Simplified Process for Own Share Repurchases
On April 9, 2026, the Danish Financial Supervisory Authority (Finanstilsynet) introduced a new practice to reduce administrative burdens for credit institutions seeking general prior authorisation to purchase their own core capital instruments. This initiative forms part of Finanstilsynet's national proportionality regime project.
Under the new simplified process, credit institutions can apply for general prior authorisation to repurchase their own common equity tier one (CET1) instruments with reduced information requirements compared to standard authorisation applications. The framework is primarily designed for small and medium-sized credit institutions but is available to all institutions meeting the eligibility criteria. The key simplification is that institutions are not required to submit stress tests with their applications. General prior authorisations can be used for market-making activities or employee remuneration schemes.
To qualify for the simplified process, an institution must currently maintain: a capital, net stable funding ratio (NSFR), and debt buffer coverage of at least 5 percent of risk-weighted exposures; a liquidity coverage ratio (LCR) of minimum 150 percent; and a leverage ratio of at least 7 percent. Additionally, the authorisation sought cannot exceed 0.5 percent of the institution's common equity tier one capital. Banks and savings banks converted to joint-stock companies must also comply with limitations of 3 percent of the specific issuance and 10 percent of capital and NSFR buffer coverage.
The rules governing repurchases of common equity tier one instruments derive from Regulation (EU) No. 575/2013 on prudential requirements for credit institutions and investment firms (Capital Requirements Regulation). The application form and detailed process description are available on Finanstilsynet's website.
REFERENCES:
Finanstilsynet. "Finanstilsynet indfører ny praksis for generel forhåndstilladelse til køb af egne kernekapitalinstrumenter." Accessed April 9, 2026. https://www.finanstilsynet.dk/
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1640 charsDenmark's Financial Supervisory Authority Introduces Simplified Process for Repurchase of Own Capital Instruments
On April 9, 2026, the Danish Financial Supervisory Authority (FSA) introduced a new practice to reduce administrative burdens for credit institutions seeking general prior authorisation to purchase their own core capital instruments.
This initiative forms part of the FSA’s national proportionality regime project. Under the new simplified process, credit institutions can apply for general prior authorisation to repurchase their own common equity tier one (CET1) instruments with reduced information requirements compared to standard authorisation applications. The framework is primarily designed for small- and medium-sized credit institutions but is available to all institutions that meet the eligibility criteria.
The key simplification is that institutions are not required to submit stress tests with their applications. General prior authorisations can be used for market-making activities or employee remuneration schemes.
To qualify for the simplified process, an institution must currently maintain:
An excess coverage for capital, minimum requirement for own funds and eligible liabilities (MREL) and debt buffer requirements of at least 5 percent of the risk-weighted exposures.
A Liquidity Coverage Ratio (LCR) of at least 150 percent.
A leverage ratio of at least 7 percent.
It is also a condition that the framework licence that the institution applies for does not exceed an amount corresponding to 0.5 percent of the CET1 capital. Banks and savings banks converted to joint-stock companies must also comply with limitations of 3 percent of the specific issuance and 10 percent of capital and MREL buffer coverage.