Investor protection in connection with securities trading
To you as a customer, the most important provisions are laid down in the Executive Order on investor protection in connection with securities trading. The purpose of the rules is to improve the protection of customers trading in securities and financial instruments. If you have a mortgage loan, a securities custody account or a framework agreement on financial instruments, you will be subject to the rules.
As a securities dealer, Nykredit is required to divide all customers trading in securities and financial instruments into three customer categories:
1. Retail customers
2. Professional customers
3. Eligible counterparty
The categorisation determines the level of information that we must provide as well as the information that we must obtain in connection with providing advice on securities trading.
Consequences of the rules to you as a customer
Customers trading in securities or financial instruments
Nykredit Bank must supply specific information to customers trading in securities, and we are required to obtain specific information about our customers when providing advice on securities and financial instruments. The rules apply both to trading in traditional securities such as shares and bonds and to trading in financial instruments – so-called derivatives – such as interest rate swaps and options.
Nykredit Bank has compiled a range of information and contractual terms in our Guide to Securities Trading. The Guide contains the terms and conditions now applicable to trading in securities or financial instruments with Nykredit Bank and serves as a supplement to existing agreements, eg, for custody accounts or securities trading. The Guide also provides a definition of the customer categories and additional information which Nykredit is required to provide to customers according to the rules. The Guide will be handed out to new customers as part of their contractual basis.
See Guide to Securities Trading
Customers with mortgage loans
As regards mortgage loans – which imply bond trading – we are also required to provide specific information. The information is available in the Loan Guide, which is handed out in connection with the raising of mortgage loans.