The securities area

Supervision  

Supervision of the securities area includes marketplaces and settlement systems, investment firms, mutual funds and management companies, alternative investment fund managers (AIFMs), listed entities’ financial reporting and prospectus control. Supervision covers securities institutions’ financial position and operations, and their compliance with business rules and general rules of conduct. Finanstilsynet’s work in the various areas is described in special reports for 2020.   

Stock market 

At the end of 2020, the Oslo Børs Benchmark Index stood at 974 points, up 4.6 per cent compared with the beginning of the year. The sharpest reduction during the year was 32 per cent. Oslo Børs showed a weaker trend than a number of other stock exchanges in 2020. For the year as a whole, the S&P 500 (USA) was up 16.6 per cent, OMX30 (Sweden) was up 5.8 per cent, and OMXC20 (Denmark) was up 29 per cent. 

Price developments in various stock markets 2016-2020 

Source: Refinitiv Eikon 

In 2020, equities worth NOK 1 349 billion changed hands on Oslo Børs, up approximately 20 per cent from 2019.   
 
Oslo Børs’ market share of order book turnover in equities that are also traded on other marketplaces (equities included in the OBX index) was 68 per cent. This is an increase of 1 percentage point from 2019 (Source: Cboe Global Markets).  
 
According to Oslo Børs, equity capital worth NOK 46.2 billion was raised on Oslo Børs and Euronext Expand in 2020. About 25 per cent of the equity capital was raised in connection with new listings. A total of ten new entities were admitted to Oslo Børs/Euronext Expand in 2020. At the multilateral trading facility Euronext Growth, NOK 28.3 billion was raised in 2020. 74 per cent of the capital was raised when new companies were admitted to trading. 49 companies were admitted to trading in 2020. 

Bond market  

In 2020, bonds worth a total of NOK 483 billion were issued. This does not include government bonds. Banking and finance accounted for NOK 316 billion, corporates for NOK 129 billion and municipal and county authorities for NOK 37 billion. The total outstanding volume in the Norwegian bond market, including government bonds and unlisted bonds, was NOK 2 283 billion at year-end 2020. Of this, NOK 1 100 billion was issued by the banking and financial sector, NOK 673 billion by the central government sector (including government bonds and Treasury certificates worth NOK 494 billion) and NOK 510 billion by non-financial firms.  
 
The bulk of bonds in the Norwegian market are listed on Oslo Børs or Nordic ABM. The outstanding volume of listed bonds and commercial paper at the end of 2020 was NOK 1 685 billion at Oslo Børs and NOK 530 billion kroner at Nordic ABM.    

 
Bonds listed on Oslo Børs and Nordic ABM are owned mainly by life insurers and private pension funds, banks, foreign companies, mutual funds and the social security administration.

Regulatory development

Amendments to the regulations on contract continuity 

In connection with the UK's exit from the EU and the EEA, the Ministry of Finance adopted amendments to the temporary regulations on contract continuity, which have a legal basis in the Securities Trading Act, Section 9-36 (6). The new rules apply to firms established outside the EEA that on 31 December 2020 were authorised to provide investment services in Norway based on home state authorisation and the right to provide services under the EEA Agreement. For a transitional period of two years after 31 December 2020, these firms can continue to provide such investment services from their home state to professional clients and eligible counterparties in Norway.

Norwegian Central Securities Depository Act

The Storting (Norwegian parliament) adopted a new Central Securities Depository Act in spring 2019. The Act implements EEA rules corresponding to the regulation on improving securities settlement and on central securities depositories (Central Securities Depositories Regulation – CSD Regulation, 909/2014). The new Act came into force on 1 January 2020, replacing the former Securities Register Act. The CSD Regulation and appurtenant supplementary rules in Commission Regulations establish a comprehensive regulatory framework for central securities depositories. In addition to providing a common regulatory framework for central securities depositories in the EU, the regulation aims to facilitate competition between them. 
 
The Ministry of Finance has established transitional provisions which entail that securities registers that were authorised under the former Securities Register Act shall continue their operations in accordance with the former Act until a decision on authorisation under the new Act has been made. The same applies to registrars, settlement participants and holders of nominee accounts in the securities register. The Norwegian Central Securities Depository applied for authorisation under the new Central Securities Depository Act on 30 June 2020. If the application is not approved, the Ministry may withdraw the authorisation pursuant to the Securities Register Act.

Market Abuse Regulation 

The Market Abuse Regulation (MAR) and supplementary rules provided in Commission Regulations were incorporated in the EEA Agreement in 2019. The Storting has passed amendments to the Securities Trading Act implementing MAR in Norwegian law. In November 2020, Finanstilsynet laid down regulations on amendments to the Securities Trading Regulations, including provisions implementing the supplementary regulations (Commission Delegated Regulations) in Norwegian law. MAR and the supplementary regulations enter into force in Norwegian law on 1 March 2021. 
 
The codes of conduct set out in the Securities Trading Act concerning insider dealing, use of inside information, market manipulation and the notification obligation of primary insiders have been retained in MAR, which also includes a number of changes. The scope of application of the regulations had been expanded as MAR will apply in full to financial instruments traded at multilateral trading facilities. For issuers of financial instruments traded on a regulated market, the rules on the notification obligation for primary insiders and close associates will be expanded to apply to issuers of all financial instruments, e.g. bond issuers. The implementation of MAR also entails that Finanstilsynet is authorised to impose administrative fines in more cases than today, for example in connection with market manipulation, unlawful dissemination of inside information and non-compliance with the obligation to keep insider lists.

Cross-border marketing of funds 

Finanstilsynet has prepared a consultation document on the introduction of new rules on cross-border marketing. 

The consultation document proposes the implementation of Regulation (EU) 2019/1156 and Directive (EU) 2019/1160 of the European Parliament and of the Council in Norwegian law through amendments to the Securities Funds Act and the Act on the Management of Alternative Investment Funds and regulations thereto. The Regulation introduces common requirements for marketing communications that will apply to both fund management companies and managers of alternative investment funds. The directive amends the UCITS Directive and the AIFM Directive in some key areas. New rules on market soundings will be introduced to gauge interest in a specific alternative investment fund. There will also be harmonised requirements for the services a fund or manager can offer in the jurisdictions where the fund is marketed to retail investors, and harmonised requirements for the information that must be included in marketing communications. Rules will be introduced for termination of cross-border marketing of funds, which means that the firms will be subject to new duties. Finanstilsynet will send the consultation document to the Ministry of Finance during 2021.

Proposal for a regulatory framework for sustainable finance 

Marketing of sustainable investment products has increased. The EU has followed this up by establishing new regulations on sustainable finance. The regulations are EEA relevant, and Finanstilsynet has looked into the need for changes in Norwegian law to reflect the new regulations:  

• Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector   
• Regulation (EU) 2020/852 on the establishment of a framework for a classification system for various sustainable activities   

Finanstilsynet circulated for comment a consultation document proposing how the EU regulations can be implemented in Norwegian law. According to the proposal, the disclosure requirements and reporting obligations set out in the regulations may be implemented in a new Act on sustainability information.  

Read more:  

• Report on Finanstilsynet’s work on climate risk in 2020  

 Communication and guidance 

Finanstilsynet provides guidance to institutions in the form of, among other things, circulars, topic pages on finanstilsynet.no and speeches. The annual securities seminar was held on 29 October 2020. The seminar was relevant for investment firms, fund management companies, managers of alternative investment funds and depositories.  

Circular on outsourcing

In 2020, Finanstilsynet published a circular on outsourcing (circular 3/2020 - in Norwegian only). The circular is relevant to, among others, investment firms, fund management companies and managers of alternative investment funds.