Eivind Landmark Tandrevold
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As interest in third-party funding in Norway continues to grow, the Norwegian Financial Supervisory Authority (FSA) again confirms its view that funders require authorisation to market and provide litigation and arbitration funding in Norway. This underlines the FSA’s commitment to enhance oversight over the fast-growing new breed of financial services organisations, including legal financiers.
Yesterday, FinansWatch revealed that the FSA has taken steps to stop Therium Nordic from carrying out litigation funding in Norway. According to the documents obtained, the FSA maintains its view that litigation funding qualifies as “financing activities” in the sense of the Norwegian Financial Institutions Act. Under the Act, financing activities are subject to strict licensing requirements. Barring a successful appeal against the FSA’s decision, Therium Nordic is set to be prohibited from providing litigation funding until the organisation petitions for and obtains the necessary authorisations.
In general, any financing activity in Norway is subject to the grant of a licence by the FSA or a cross-border passport under the Capital Requirements Directive (known as CRD IV) (for credit institutions within the EEA). Accordingly, prudential requirements for regulatory capital, organisation and business conduct will apply, unless exemptions can be obtained. As such, Norway goes further in regulating financiers than in other European jurisdictions.
Since the current regulatory framework is not suited for dispute financiers’ specific needs, to operate efficiently funders will have to seek an exemption from the Financial Institutions Act. Arntzen de Besche has extensive experience with both litigation funding and related regulatory issues, and our team stand ready to assist financiers looking into the Norwegian market. Please contact us for further information.