On June 30 2003 the Norwegian Parliament passed an act replacing the 10% ownership limit in Norwegian financial institutions with a discretionary system. The act entered into force on January 1 2004 and may make Norwegian financial institutions more attractive to investment and take over bids.

The amendments to the Financial Institutions Act (1988) create the possibility for holdings in Norwegian financial institutions to exceed the previous 10% limit on share capital and voting rights. Under the new regime, the acquisition of shareholdings that represent qualified ownership requires the consent of the Norwegian government, with 'qualified ownership' generally defined as the acquisition of 10% or more of the share capital or voting rights. However, even acquisitions of less than 10% may be regarded as qualified ownership if a shareholding would enable substantial influence over the management of the institution and its business.

The amendments also set out the relevant criteria for determining whether consent will be given. The principal requirement is that the shareholder must be considered suitable to exercise the influence that the proposed acquisition will bestow.

For further details on the amendments to the Financial Institutions Act, please see "Discretion in Ownership Limitation for Financial Institutions".

For further information on this topic please contact Joachim Bjerke or Rolf Johan Ringdal at Bugge, Arentz-Hansen & Rasmussen by telephone (+47 22 83 02 70) or by fax (+47 22 83 07 95) or by email ([email protected] or [email protected]).