Institutional investors, including in particular pension funds, play a significant role in financing both listed and unlisted companies and, once invested, frequently act as active investors. The purpose of this article is to describe and analyse the regulation based on the so-called “prudent person principle” which determines how pension funds invest and subsequently manage their investments. The prudent person principle is EU-based. The Danish implementation has primarily taken place in the preparatory work for the relevant Danish acts. This creates ambiguity about the content and scope of the rules. In their oversight the Danish FSA have taken the view that investments in alternative assets possess the highest risk and have issued guidelines relating to such investments. However, in relation to most of the pension funds’ investments, which are made to obtain exposure to the listed markets, the Danish regulation remain silent. The analysis set out in the article includes the requirements which follow from the prudent person principle in relation to both listed and unlisted instruments as well as the considerations that should be made when investing in derivatives.
In 2021, there were not the usual judgments concerning the free movement of companies and the service directive. On the other hand, there were several judgments interpreting secondary law, in particular the rules applicable to listed companies. Several of these cases address procedural aspects of national law, where the Court is focussed on ensuring that the Member States observe the principles of equivalence and effectiveness as well as the Charter of Fundamental Rights of the European Union.
The present article analyses whether a non-statutory arm’s length principle exists in relation to transactions within corporate groups in Danish company law. Firstly, the reasons behind intra-group transactions and for not using market terms are briefly touched upon. Secondly, it is determined what constitutes a general principle. Thirdly, it is concluded that there is very little room for not using market terms in groups in the first place when considering the existing provisions in the Danish Companies Act and duties stemming hereof. However, it is argued that in addition to these, a general arm’s length principle applies when transacting with group companies. Furthermore, it is found that it can be acceptable to deviate from the starting point that the terms should be market-corresponding. However, in that case, there must be an advantage equivalent to the disadvantage imposed on the specific group company.
Professor, dr.jur., dr. h.c. Paul Krüger Andersen (ansvarshavende), University of Aarhus
Professor, dr.jur. Jesper Lau Hansen, University of Copenhagen, Denmark
Adj. professor, ekon.lic. Rolf Skog, Justitiedepartementet, Sweden
Professor, dr.juris Tore Bråthen, Handelshøyskolen, Norway Associate
Professor Andri Fannar Bergþórsson, dr. juris, Reykjavik University Menntavegur, Iceland
Professor Matti Sillanpää, dr. juris, Turku School of Economics, Finland LLM Erik Lidman, Handelshögskolan i Göteborg, Sweden.