Finanstilsynet is an independent government agency that builds on laws and decisions emanating from the Storting (Norwegian parliament), the government and the Ministry of Finance. Finanstilsynet also participates in extensive international cooperation. Through the EEA Agreement, EU financial market regulation is implemented in Norwegian law.
Finanstilsynet’s role and responsibilities
Finanstilsynet’s main goal is to promote financial stability and well-functioning markets.
Through its supervision of enterprises and markets, Finanstilsynet promotes financial stability and well-functioning markets and helps to instil confidence that financial contracts will be honoured and services performed as intended.
Financial stability means that the financial system is able to handle disruptions and unexpected events and carry out its functions, thereby precluding major, negative consequences for the rest of the economy and for consumers.
Well-functioning markets contribute to effective distribution and pricing of capital and risk. There is a close link between financial stability and well-functioning markets. In the absence of financial stability, the markets cannot distribute capital and risk effectively. If this distribution does not function as intended and risk is incorrectly priced, the outcome may be financial instability.
Financial stability and well-functioning markets are necessary to ensure confidence in the financial system, stable economic development and protection of users of financial services.
Supervision of the financial sector
Finanstilsynet supervises how the institutions operate in the financial markets, whether they are financially sound and able to cope with changing economic conditions, and whether they have an acceptable risk level.
Finanstilsynet assesses whether the Board of Directors and the executive management are fit to fulfil their responsibilities. However, the Board and management of the individual institution are responsible for its business operations.
The financial system makes sure that capital and risk are distributed and provides payment and settlement services. Financially sound institutions and well-functioning financial and securities markets are essential to ensure the proper execution of these functions.
Regulation and supervision shall help to ensure that users are given correct and comprehensive information, thus enabling them to make informed choices, whether they are depositors, borrowers, investors, issuers, policyholders or users of other services provided by supervised institutions.
Consumer protection is at centre stage in the statutory regulation of the financial market and in the supervision of financial services providers in the banking, insurance and securities markets. Financially sound, well-capitalised financial institutions and well-functioning financial markets are fundamental consumer interests, both for the community and for the individual.
At the same time it is important for consumers to be well protected when purchasing and selling financial products and property, and to be able to base their decisions on good information and neutral advice.
Areas of supervision
Finanstilsynet has extensive supervisory responsibilities covering the financial sector, including banking, insurance and securities operations. In addition, it has supervisory responsibility for real estate broking, debt collectors, auditors and external accounting firms.
Banking and finance
Banks are key operators in the financial system. Regulation and supervision are important to promote confidence in the financial system and financial stability. The supervision of banks and other credit institutions aims to foster financially sound, risk-aware institutions with sound governance and control. The provision of financial services must be compliant with the regulatory framework in the best interest of society and the users of these services.
Insurance and pensions
The supervisory regime aims to foster financially sound, risk-aware insurance and pension undertakings with sound governance and control. Regulation and supervision are important in safeguarding policyholders' rights under insurance and pension contracts, and in instilling public confidence in the market. The supervision also encompasses insurance intermediation.
The overarching aim of regulation and supervision of the securities market is that the market should be a well-functioning source of capital for the business community, forming the basis for investment and savings. The supervision encompasses both the institutions’ operations and financial position and compliance with business rules and general market conduct rules. Control of financial advisory services is an important part of the supervision.
A prospectus shall be prepared in connection with an offer to subscribe for or purchase securities in the Norwegian securities market. The same applies when securities are to be admitted to trading and in connection with capital increases in companies on a Norwegian regulated market. Finanstilsynet checks that the prospectuses contain the information imposed by legislation.
Financial reporting enforcement
The primary aim of financial reporting enforcement is to promote a more efficient securities market. Finanstilsynet oversees that the financial statements of listed companies are prepared in accordance with accounting requirements and international financial reporting standards (IFRS). The review covers all Norwegian-registered entities that are listed on a regulated market/stock exchange in Norway or in other EEA countries, as well as their financial reporting at group and company level.
Auditors and audit firms are required to have a licence from Finanstilsynet. Finanstilsynet checks that auditors maintain their independence and perform their work in a satisfactory manner and in compliance with regulations and good audit practices. The audit industry consists of a few large international firms and a large number of small audit firms.
External accountants and accounting firms need a licence from Finanstilsynet. The supervision includes checking that they perform their work in compliance with regulations and good accounting practices.
Real estate broking
Real estate agents and real estate agencies are required to have a licence from Finanstilsynet, which checks that brokerage activities are in compliance with regulations and good estate agency practice. The supervision encompasses entities, including cooperative housing associations, that are licensed to engage in real estate broking and lawyers holding an estate agency licence. The supervision focuses on entities offering consumers real estate broking activities.
Debt collection agencies need a licence from Finanstilsynet. The supervision of debt collection agencies shall help to ensure that they operate in accordance with generally accepted debt collection practice. The supervision covers entities that collect outstanding pecuniary claims for others and entities that purchase outstanding claims and collect these themselves.
Supervision of ICT and payment systems
Finanstilsynet supervises financial institutions’ use of ICT and payment services systems. The supervision shall help to ensure that the institutions meet the necessary security requirements and that their ICT operations are in compliance with regulations. Finanstilsynet monitors that the financial institutions’ payment services, such as online banks and payment terminals, are secure and stable.
Finanstilsynet provides guidance to supervised institutions on the anti-money laundering legislation and oversees compliance with the legislation. The legislation is harmonised with EU requirements and international standards, which also include measures against terrorist financing.
- Mortgage companies
- Finance companies
- Payment institutions
- Electronic money institutions
- Insurance intermediaries
- Pension undertaking
- Holding companies in financial services groups
- Investment firms
- Mutual fund management companies
- Managers of alternative investment funds (AIFs)
- Regulated markets
- Clearing houses
- Securities registers
- Real estate agents
- Real estate agencies
- Debt collection licensees
- Debt collection agencies
- Audit firms
- External accountants
- External accounting firms
In addition, Finanstilsynet is responsible for:
- Market conduct rules
- Financial reporting enforcement – listed companies
- Prospectus control – transferable securities
- Supervision of payment service systems
Finanstilsynet's working methods
Finanstilsynet’s work is largely based on dialogue with the supervised institutions through both trade organisations, meetings and other contact with the various institutions. This provides an opportunity to exchange information and create an understanding of the requirements set by Finanstilsynet.
Supervision and monitoring
Finanstilsynet monitors that the institutions comply with regulations and guidelines. Supervision takes place through reporting and analysis of data, on-site inspections at the institutions or more specific thematic inspections. In addition, Finanstilsynet regularly assesses macroeconomic aspects and other trends that may pose a risk to the financial stability of the Norwegian market. Regular analyses are carried out of the risks facing banks and other market players, and of possible sources of future stability problems in the Norwegian financial system.
Finanstilsynet administers the rules for licences and licensing requirements in all parts of the financial sector. Anyone wishing to start a business in Norway within Finanstilsynet’s remit, must apply for a licence. If Finanstilsynet discovers errors and rule violations at the entities, they are ordered to rectify this in accordance with the licensing requirements. In the event of serious irregularities, Finanstilsynet may withdraw the licence.
Regulatory development shall promote economic and market conditions that help to ensure profitable and competitive institutions. The regulations provide a framework for sound business operations and ensure a high level of protection for users of financial services. Finanstilsynet’s responsibilities include developing and harmonising regulations and preparing draft laws and regulations. Finanstilsynet cooperates with foreign supervisory authorities and organisations on regulatory development. This work is important, both to exert influence and to ensure the best possible understanding of the basis for international rules. Most of the regulations that apply to Norwegian financial institutions are based on EU regulations. This work has increased in scope and significance.
Communication and cooperation
Finanstilsynet places emphasis on ensuring that its supervisory activities are predictable and that information about external parameters and regulations is easily accessible and clearly communicated. Information should help financial market players to comply with the regulations. Therefore, information and communication about decisions, comments, regulatory changes and other resolutions are also an important element of supervisory activity. Finanstilsynet cooperates with a number of authorities and organisations in Norway and internationally.