DENMARK - Danish pension provider ATP has spoken out against a change to a proposed law which limits its investments in insurance companies.
Currently, ATP and pension manager LD are not allowed to hold controlling interests in banks and other financial institutions like insurance companies. But a law proposed last year would harmonise the investment rules for ATP and LD with those of other insurance companies and would allow them controlling interests in financial firms.
However, a recently released draft called for only partial harmonisation. If passed as-is, ATP and LD could hold controlling interests in banks and mortgage providers, but not insurance companies.
"For ATP it is important that we can act with the same investment rules that apply to other institutional investors and thereby protect our investments," said Mona Frandsen, chief legal consultant at ATP.
Other restrictions in the new iteration of the act include forbidding ATP and LD from holding more than a 5% share of market-cap in credit institutions. Meanwhile, it has been suggested by the Danish Competition and Consumer Authority that ATP and LD could potentially be forced to sell at a certain point in time if they do hold a controlling stake in these firms, she said.
Enforcing a time limit "would jeopardise any investment" because it would essentially lead to a forced sale, said Frandsen.
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