Norwegian Rules on Ownership Assessment for Financial Institutions in Breach of EEA Law

In judgment E-24/24, the EFTA Court held that it is contrary to EEA law to maintain an administrative practice that requires notification and approval of acquisitions at thresholds other than those laid down in the CRD IV Directive and the Solvency II Directive. It is also contrary to EEA law to maintain a practice that restricts owners from holding more than 20-25 per cent of the shares in banks or insurance companies without refusal being based on an individual assessment of the owner’s suitability.

Norwegian rules and administrative practice relating to ownership in financial institutions, in particular banks and insurance companies, have been debated for many years. This concerns both the maximum shareholding an owner may hold in a bank or insurance company, and the factors that may be taken into account in assessing whether an owner is considered suitable in subsequent acquisitions. The rules and practice have, among other things, been the subject of court proceedings in the so‑called “Netfonds case” and several infringement actions brought by the EFTA Surveillance Authority (ESA).

In judgment E-24/24 delivered on 30 September 2025, the EFTA Court upheld ESA’s position that Norwegian legislation and practice are contrary to the obligations arising from the CRD IV Directive (Directive 2013/36/EU, “CRD IV”) and the Solvency II Directive (Directive 2009/138/EC, “Solvency II”). The proceedings from ESA focused on:

The rules on suitability assessment for subsequent acquisitions in section 6-3 of the Financial Institutions Act. This provision was amended by the Norwegian authorities on 1 July 2024, but previously contained a list of assessment factors that the Financial Supervisory Authority of Norway “in particular shall take into account” in the suitability assessment. The provision listed more assessment factors than those set out in the directives it was intended to implement.
Norwegian administrative practice which (i) requires notification and approval of acquisitions at thresholds other than those set out in CRD IV and Solvency II (10, 20, 30 and 50 per cent), and (ii) restricts acquisitions of 20–25 per cent or more of the shares in a bank or insurance company by owners other than financial institutions, without the refusal being based on an individual assessment of whether the person concerned is suitable in accordance with the assessment criteria set out in CRD IV and Solvency II.

In its judgment, the EFTA Court holds that the suitability assessment criteria laid down in CRD IV and Solvency II are exhaustive. EEA States may not introduce additional criteria. The Court points out that the use of the word “in particular” in section 6-3 of the Financial Institutions Act creates doubt as to whether the list is exhaustive, which is reinforced by the fact that the provision previously contained more assessment criteria than those laid down in the directives.

The EFTA Court concludes that the Norwegian practice — requiring notification to, and approval by, the Norwegian authorities of acquisitions beyond or between the thresholds in CRD IV and Solvency II — is not compatible with EEA law; for example, a requirement to notify and obtain approval for an increase in a shareholding from 20 to 25 per cent. The Court further notes that the directives lay down fully harmonised rules for the procedure for acquiring a qualifying holding. EEA states may not impose notification or approval requirements for acquisitions more stringent than those set out in those directives, such as deviating thresholds for subsequent acquisitions. The EFTA Court also finds that an administrative practice is not compatible with EEA law if an acquirer is not assessed solely on the basis of the exhaustive list of suitability criteria. For example where an intended acquisition of 25 per cent or more is refused without being based on an individual assessment of the owner’s suitability but on a presumption against granting approval. The Court noted that the Norwegian authorities had not demonstrated that such a case‑by‑case assessment is carried out based on the required criteria.

The EFTA Court does not assess the Norwegian authorities’ practice and conditions on dispersed ownership for the granting of authorisations. The authorities have pointed out that dispersed ownership requirements at the time of authorisation relate to systemic factors in the financial institution and to ensuring that the institution has a sound ownership structure in which no single owner gains control of the undertaking. A debated issue, however, has been how such conditions align with the rules on subsequent acquisitions. The Norwegian authorities’ view has been that the rules on subsequent acquisitions cannot be used to circumvent authorisation requirments. Based on the EFTA Court’s assessment, this position is unlikely to be sustainable, as the Court proceeds on the basis that EEA law permits neither thresholds other than those laid down in the directives nor refusals that are not grounded in an individual assessment of whether the owner is suitable. Divergent thresholds or assessment criteria in secondary‑market transactions therefore cannot be justified by licence conditions.

We expect the Norwegian authorities now to align the ownership assessment rules with the EFTA Court’s ruling. We further expect that a change in administrative practice relating to thresholds will also cover acquisitions of shareholdings in other types of financial insitituions, such as finance companies, payment institutions and e‑money institutions. Section 6-3 of the Financial Institutions Act has already been amended, so further legislative changes as a consequence of the first part of the judgment will not be necessary. Changes to administrative practice in light of the second part of the judgment can, in principle, be implemented immediately, but there have so far been no statements from the Norwegian authorities on how they will align themselves with the EFTA Court’s ruling and how this will affect future suitability assessments of subsequent acquisitions in banking and insurance.