Monetary Review - 4th Quarter 2005

Purpose of the Memorandum of Understanding
1. The purpose of this Memorandum of Understanding is to lay down the overall framework for the ongoing cooperation between Danmarks Nationalbank and Finanstilsynet. This Memorandum of Understanding confirms the informal and pragmatic cooperation the Parties have enjoyed for several years. This Memorandum of Understanding is supplemented by sub-memoranda for special areas of cooperation.

Danmarks Nationalbank and Finanstilsynet each carry out central tasks in relation to financial undertakings and markets. The Parties thus agree to strengthen their ongoing cooperation. This Memorandum of Understanding focuses on the following areas:

transparency in the cooperation
efficiency improvement through clearer division of tasks based on the division of competences
easier administration
exchange of knowledge and information in relevant areas

This Memorandum of Understanding is also to be seen as a supplement to the Memorandum of Understanding concerning Financial Supervision between Danmarks Nationalbank, the Ministry of Finance, the Ministry of Economic and Business Affairs (the Department and Finanstilsynet), cf. section 10 of this Memorandum of Understanding.

The cooperation thus respects this broader cooperation and its purpose and principles, including the principle of not disregarding the Parties' areas of responsibility and competences as well as duties of confidentiality. This means that Finanstilsynet may only divulge information it becomes aware of through its activities, if this is necessary for Danmarks Nationalbank in its capacity as authority within the field of monetary policy or in its oversight of payment systems. This also means that the role of Danmarks Nationalbank as an independent central bank is not affected by this Memorandum of Understanding.

Procedures for cooperation
2. Cooperation is to take place through meetings between the board of governors of Danmarks Nationalbank and the board of management of Finanstilsynet and in special working groups, cf. the special sub-memoranda on the stability of the financial system, statistics and payment systems, etc.

Ad-hoc working groups may also be set up as needed.

There may be written consultations at all levels.

Each institution is responsible for preparing its own cases and for keeping the necessary records of the results of cooperation.

Meetings of the top management
3. The board of governors of Danmarks Nationalbank and the board of management of Finanstilsynet are to convene at least once a year and discuss matters of common interest, including subjects covered by this Memorandum of Understanding.

The board of governors of Danmarks Nationalbank and the board of management of Finanstilsynet coordinate the cooperation to the extent necessary.

Exchange of knowledge and continued training
4. The Parties will continuously endeavour to contribute mutually to strengthened competences in relevant areas.

Emphasis will be placed on offering mutual participation in relevant internal initiatives regarding continued in-service training and seminars.

Evaluation and possible amendments to the Memorandum of Understanding
5. Each Party may, at any time, propose amendments to the Memoranda or their accompanying Annexes.

Adoption of amendments to the Memoranda or their Annexes requires the consent of the other Party.

Finanstilsynet and Danmarks Nationalbank may, at any time, and separately terminate this Memorandum of Understanding in its entirety or a sub-memorandum.

Annex 1: Memorandum of Understanding between Danmarks Nationalbank and Finanstilsynet on the Stability of the Financial System.

Annex 2: Memorandum of Understanding between Danmarks Nationalbank and Finanstilsynet as regards Financial Statistics.

Annex 3: Memorandum of Understanding between Danmarks Nationalbank and Finanstilsynet concerning Payment Systems and Clearing Centres.

ANNEX 1

Memorandum of Understanding between Danmarks Nationalbank and Finanstilsynet on the Stability of the Financial System

1. In order to contribute to the strengthening of the stability of the financial system, Danmarks Nationalbank and Finanstilsynet have, as an extension of the Memorandum of Understanding of 8 April 2005, entered into a sub-memorandum on the Stability of the Financial System.

2. The ongoing cooperation on the stability of the financial system is to be carried out by a Working Group where the Parties are represented at high level (deputy director general/heads of department). In addition to this, the Parties will determine their representation as needed.

The Working Group will meet as needed and no less than three times a year.

The Working Group may set up sub-groups. The Working Group is to monitor the work of the sub-groups.

3. The overall purpose of the working group is to discuss and exchange views and information on subjects related to the stability of the financial system.

The Working Group has the following general tasks:

It discusses the situation and developments in the financial sector, including in financial undertakings and groups significant to the stability of the financial system, international trends and policy changes within the area.
It discusses whether policy initiatives, market developments, etc. outside the financial area could have derived consequences for the stability of the financial system.
It may exchange views as regards the two institution's ongoing analysis work of significance for financial institutions and the stability of the financial system. The two Parties may present individual analyses within the area for discussion in the Working Group, but any public disclosure is effected at the responsibility of the individual institution.
It may discuss the views of Danmarks Nationalbank and Finanstilsynet in international forums.

4. The Working Group is also responsible for discussing the ongoing Danish initiatives regarding the stability of the financial system and crisis management.

The Working Group will, in this connection, focus particularly on:

division of responsibilities, transparency and exchange of information
national lists of contacts and crisis management exercises
international work on the stability of the financial system
new, and updates of, existing Memoranda of Understanding (MoU) and other international agreements related to the stability of the financial system and crisis management.

ANNEX 2

Memorandum of Understanding between Danmarks Nationalbank and Finanstilsynet as regards Financial Statistics

Object
1. As an extension of the Memorandum of Understanding of 8 April 2005, Danmarks Nationalbank and Finanstilsynet has agreed upon a supplementary Memorandum on cooperation as regards financial statistics, including exchange of data.

The object of this Memorandum is to coordinate the collection of data, ensure the best possible utilisation of resources and, to the extent possible, ease the burdens on the financial sector.

Implementation of the Memorandum
2. A Working Group on Financial Statistics will be set up where the Parties are represented at the level of the Deputy Director General/Head of Department.

3. On the basis of the information being gathered by Finanstilsynet and Danmarks Nationalbank from the financial sector, the Working Group shall continuously assess the possibilities of coordinating statistical tasks, and discuss issues pertaining to the ongoing mutual exchange of data.

4. Coordination of the collection of data shall be effected on the basis of:

Mapping of points of mutual interest, identification of differences in principles of compilation and assessment of the possibilities of coordinating reporting requirements.
Assessment of the possibilities of exchanging information between the Parties.
Assessment of possibilities and perspectives pertaining to coordination of reporting formats and technology.

The Working Group shall consult Statistics Denmark where relevant.

5. The Working Group shall coordinate Danish views as regards issues relating to financial statistics in relevant international fora.

ANNEX 3

Memorandum of Understanding between Danmarks Nationalbank and Finanstilsynet concerning Payment Systems and Clearing Centres

Objective and delineation

Well-functioning payment systems and clearing centres are vital to financial stability. Systemically important systems have the potential to trigger financial disruptions or to spread financial problems to the financial system in a broader perspective, thereby threatening financial stability. The objective of the Memorandum of Understanding is to contribute to efficient and stable payment systems and clearing centres in Denmark . One aspect is to ensure that systemically important systems adhere to internationally recognised standards. The Memorandum of Understanding concerns functions which interface between the Danish Financial Supervisory Authority and Danmarks Nationalbank in this respect. The Memorandum of Understanding does not reduce the system owners' responsibility to ensure that their systems fulfil their relevant obligations.
The tasks and responsibilities of the Danish Financial Supervisory Authority in connection with payment systems and clearing centres are set out in the Danish Securities Trading Act. The Act stipulates the obligations and rights of the Financial Supervisory Authority in connection with establishment, registration and supervision.
Pursuant to the Danmarks Nationalbank Act the task of Danmarks Nationalbank as the central bank of Denmark is to maintain a safe and secure currency system and to facilitate and regulate the traffic in money. Danmarks Nationalbank considers this to entail contributing to the efficiency and stability of payment systems and clearing centres.

Definitions

The following definitions shall apply in this Memorandum of Understanding:

a. Payment system: A system of which the sole purpose is clearing and settlement of money transactions.

b. Clearing centre: A securities clearing enterprise which clears and settles transactions in securities and derivatives thereof, including related payments.

c. Internationally recognised standards: Standards and recommendations adopted by international organisations and forums directed at payment systems and clearing centres.

d. Supervision: The statutory obligations of the Danish Financial Supervisory Authority vis-à-vis payment systems and clearing centres, including supervision of whether the systems and the participants therein fulfil their statutory obligations.

e. Oversight: Danmarks Nationalbank's task of contributing to the efficiency and stability of payment systems and clearing centres.

Payment systems and clearing centres comprised by the Memorandum of Understanding

This Memorandum of Understanding comprises all systemically important payment systems and clearing centres which at the same time are approved or registered by the Danish Financial Supervisory Authority and which use Danmarks Nationalbank as settlement bank, cf. Annex 1. The Memorandum of Understanding does not include Danmarks Nationalbank's own payment systems.
The Danish Financial Supervisory Authority and Danmarks Nationalbank may decide to add other systemically important payment systems and clearing centres to the scope of the Memorandum of Understanding.
Under this Memorandum of Understanding, a payment system or clearing centre shall be considered systemically important if this is agreed between the Financial Supervisory Authority and Danmarks Nationalbank.

Coordination of tasks and consultation

To the greatest possible degree, the Financial Supervisory Authority and Danmarks Nationalbank shall coordinate their joint tasks concerning verification of the compliance of payment systems and clearing centres with the internationally recognised standards stated in Annex 2.
To the greatest possible degree, the Financial Supervisory Authority and Danmarks Nationalbank shall consult each other prior to any ruling or decision of vital importance to the payment systems or clearing centres covered by the Memorandum of Understanding.

Collection and exchange of information

To the greatest possible degree, the Financial Supervisory Authority and Danmarks Nationalbank shall coordinate the collection of information in connection with supervision or oversight of the payment systems and clearing centres covered by the Memorandum of Understanding.
To the greatest possible degree, the Financial Supervisory Authority and Danmarks Nationalbank shall exchange information of significance to the supervision or oversight of payment systems and clearing centres covered by the Memorandum of Understanding. The information shall be exchanged with due regard for current provisions on confidentiality, etc.

Amendment and termination of the Memorandum of Understanding

Either party may at any time propose amendments to the Memorandum of Understanding or its annexes. On amendment of an annex to this Memorandum of Understanding, the date of the annex shall be amended, while the date of the Memorandum of Understanding shall remain unchanged. Adoption of amendments to the Memorandum of Understanding or its annexes shall be subject to the consent of the other party.
Either the Danish Financial Supervisory Authority or Danmarks Nationalbank may at any time terminate this Memorandum of Understanding in its entirety at 30 days' notice.

Annex 1: Payment systems and clearing centres covered by the memorandum of understanding
The following payment systems and clearing centres are covered by the Memorandum of Understanding between Danmarks Nationalbank and the Danish Financial Supervisory Authority concerning Payment Systems and Clearing Centres:

Sumclearing
c/o the Danish Bankers Association
Finansrådets Hus
Amaliegade 7
DK-1256 Copenhagen K

VP Securities Services
Helgeshøj Allé 61
DK-2630 Taastrup

Annex 2: Internationally recognised standards covered by the Memorandum of Understanding
The following internationally recognised standards are covered by the Memorandum of Understanding between Danmarks Nationalbank and the Danish Financial Supervisory Authority concerning Payment Systems and Clearing Centres:

Core Principles for Systemically Important Payment Systems The standards are reproduced in the report of 15 January 2001 from the Committee on Payment and Settlement Systems of the G-10 central banks.
Recommendations for Securities Settlement Systems.
The recommendations are presented in the draft report of January 2001 from the Committee on Payment and Settlement Systems of the G-10 central banks in cooperation with IOSCO (International Organization of Securities Commissions).


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				Memorandum of Understanding between Danmarks Nationalbank and Finanstilsynet on 11 October 2005
					Purpose of the Memorandum of Understanding 1. The purpose of this Memorandum of Understanding is to lay down the overall framework for the ongoing cooperation between Danmarks Nationalbank and Finanstilsynet. This Memorandum of Understanding confirms the informal and pragmatic cooperation the Parties have enjoyed for several years. This Memorandum of Understanding is supplemented by sub-memoranda for special areas of cooperation. Danmarks Nationalbank and Finanstilsynet each carry out central tasks in relation to financial undertakings and markets. The Parties thus agree to strengthen their ongoing cooperation. This Memorandum of Understanding focuses on the following areas: transparency in the cooperation efficiency improvement through clearer division of tasks based on the division of competences easier administration exchange of knowledge and information in relevant areas This Memorandum of Understanding is also to be seen as a supplement to the Memorandum of Understanding concerning Financial Supervision between Danmarks Nationalbank, the Ministry of Finance, the Ministry of Economic and Business Affairs (the Department and Finanstilsynet), cf. section 10 of this Memorandum of Understanding. The cooperation thus respects this broader cooperation and its purpose and principles, including the principle of not disregarding the Parties' areas of responsibility and competences as well as duties of confidentiality. This means that Finanstilsynet may only divulge information it becomes aware of through its activities, if this is necessary for Danmarks Nationalbank in its capacity as authority within the field of monetary policy or in its oversight of payment systems. This also means that the role of Danmarks Nationalbank as an independent central bank is not affected by this Memorandum of Understanding. Procedures for cooperation 2. Cooperation is to take place through meetings between the board of governors of Danmarks Nationalbank and the board of management of Finanstilsynet and in special working groups, cf. the special sub-memoranda on the stability of the financial system, statistics and payment systems, etc. Ad-hoc working groups may also be set up as needed. There may be written consultations at all levels. Each institution is responsible for preparing its own cases and for keeping the necessary records of the results of cooperation. Meetings of the top management 3. The board of governors of Danmarks Nationalbank and the board of management of Finanstilsynet are to convene at least once a year and discuss matters of common interest, including subjects covered by this Memorandum of Understanding. The board of governors of Danmarks Nationalbank and the board of management of Finanstilsynet coordinate the cooperation to the extent necessary. Exchange of knowledge and continued training 4. The Parties will continuously endeavour to contribute mutually to strengthened competences in relevant areas. Emphasis will be placed on offering mutual participation in relevant internal initiatives regarding continued in-service training and seminars. Evaluation and possible amendments to the Memorandum of Understanding 5. Each Party may, at any time, propose amendments to the Memoranda or their accompanying Annexes. Adoption of amendments to the Memoranda or their Annexes requires the consent of the other Party. Finanstilsynet and Danmarks Nationalbank may, at any time, and separately terminate this Memorandum of Understanding in its entirety or a sub-memorandum. Annex 1: Memorandum of Understanding between Danmarks Nationalbank and Finanstilsynet on the Stability of the Financial System. Annex 2: Memorandum of Understanding between Danmarks Nationalbank and Finanstilsynet as regards Financial Statistics. Annex 3: Memorandum of Understanding between Danmarks Nationalbank and Finanstilsynet concerning Payment Systems and Clearing Centres. ANNEX 1 Memorandum of Understanding between Danmarks Nationalbank and Finanstilsynet on the Stability of the Financial System 1. In order to contribute to the strengthening of the stability of the financial system, Danmarks Nationalbank and Finanstilsynet have, as an extension of the Memorandum of Understanding of 8 April 2005, entered into a sub-memorandum on the Stability of the Financial System. 2. The ongoing cooperation on the stability of the financial system is to be carried out by a Working Group where the Parties are represented at high level (deputy director general/heads of department). In addition to this, the Parties will determine their representation as needed. The Working Group will meet as needed and no less than three times a year. The Working Group may set up sub-groups. The Working Group is to monitor the work of the sub-groups. 3. The overall purpose of the working group is to discuss and exchange views and information on subjects related to the stability of the financial system. The Working Group has the following general tasks: It discusses the situation and developments in the financial sector, including in financial undertakings and groups significant to the stability of the financial system, international trends and policy changes within the area. It discusses whether policy initiatives, market developments, etc. outside the financial area could have derived consequences for the stability of the financial system. It may exchange views as regards the two institution's ongoing analysis work of significance for financial institutions and the stability of the financial system. The two Parties may present individual analyses within the area for discussion in the Working Group, but any public disclosure is effected at the responsibility of the individual institution. It may discuss the views of Danmarks Nationalbank and Finanstilsynet in international forums. 4. The Working Group is also responsible for discussing the ongoing Danish initiatives regarding the stability of the financial system and crisis management. The Working Group will, in this connection, focus particularly on: division of responsibilities, transparency and exchange of information national lists of contacts and crisis management exercises international work on the stability of the financial system new, and updates of, existing Memoranda of Understanding (MoU) and other international agreements related to the stability of the financial system and crisis management. ANNEX 2 Memorandum of Understanding between Danmarks Nationalbank and Finanstilsynet as regards Financial Statistics Object 1. As an extension of the Memorandum of Understanding of 8 April 2005, Danmarks Nationalbank and Finanstilsynet has agreed upon a supplementary Memorandum on cooperation as regards financial statistics, including exchange of data. The object of this Memorandum is to coordinate the collection of data, ensure the best possible utilisation of resources and, to the extent possible, ease the burdens on the financial sector. Implementation of the Memorandum 2. A Working Group on Financial Statistics will be set up where the Parties are represented at the level of the Deputy Director General/Head of Department. 3. On the basis of the information being gathered by Finanstilsynet and Danmarks Nationalbank from the financial sector, the Working Group shall continuously assess the possibilities of coordinating statistical tasks, and discuss issues pertaining to the ongoing mutual exchange of data. 4. Coordination of the collection of data shall be effected on the basis of: Mapping of points of mutual interest, identification of differences in principles of compilation and assessment of the possibilities of coordinating reporting requirements. Assessment of the possibilities of exchanging information between the Parties. Assessment of possibilities and perspectives pertaining to coordination of reporting formats and technology. The Working Group shall consult Statistics Denmark where relevant. 5. The Working Group shall coordinate Danish views as regards issues relating to financial statistics in relevant international fora. ANNEX 3 Memorandum of Understanding between Danmarks Nationalbank and Finanstilsynet concerning Payment Systems and Clearing Centres Objective and delineation Well-functioning payment systems and clearing centres are vital to financial stability. Systemically important systems have the potential to trigger financial disruptions or to spread financial problems to the financial system in a broader perspective, thereby threatening financial stability. The objective of the Memorandum of Understanding is to contribute to efficient and stable payment systems and clearing centres in Denmark . One aspect is to ensure that systemically important systems adhere to internationally recognised standards. The Memorandum of Understanding concerns functions which interface between the Danish Financial Supervisory Authority and Danmarks Nationalbank in this respect. The Memorandum of Understanding does not reduce the system owners' responsibility to ensure that their systems fulfil their relevant obligations. The tasks and responsibilities of the Danish Financial Supervisory Authority in connection with payment systems and clearing centres are set out in the Danish Securities Trading Act. The Act stipulates the obligations and rights of the Financial Supervisory Authority in connection with establishment, registration and supervision. Pursuant to the Danmarks Nationalbank Act the task of Danmarks Nationalbank as the central bank of Denmark is to maintain a safe and secure currency system and to facilitate and regulate the traffic in money. Danmarks Nationalbank considers this to entail contributing to the efficiency and stability of payment systems and clearing centres. Definitions The following definitions shall apply in this Memorandum of Understanding: a. Payment system: A system of which the sole purpose is clearing and settlement of money transactions. b. Clearing centre: A securities clearing enterprise which clears and settles transactions in securities and derivatives thereof, including related payments. c. Internationally recognised standards: Standards and recommendations adopted by international organisations and forums directed at payment systems and clearing centres. d. Supervision: The statutory obligations of the Danish Financial Supervisory Authority vis-à-vis payment systems and clearing centres, including supervision of whether the systems and the participants therein fulfil their statutory obligations. e. Oversight: Danmarks Nationalbank's task of contributing to the efficiency and stability of payment systems and clearing centres. Payment systems and clearing centres comprised by the Memorandum of Understanding This Memorandum of Understanding comprises all systemically important payment systems and clearing centres which at the same time are approved or registered by the Danish Financial Supervisory Authority and which use Danmarks Nationalbank as settlement bank, cf. Annex 1. The Memorandum of Understanding does not include Danmarks Nationalbank's own payment systems. The Danish Financial Supervisory Authority and Danmarks Nationalbank may decide to add other systemically important payment systems and clearing centres to the scope of the Memorandum of Understanding. Under this Memorandum of Understanding, a payment system or clearing centre shall be considered systemically important if this is agreed between the Financial Supervisory Authority and Danmarks Nationalbank. Coordination of tasks and consultation To the greatest possible degree, the Financial Supervisory Authority and Danmarks Nationalbank shall coordinate their joint tasks concerning verification of the compliance of payment systems and clearing centres with the internationally recognised standards stated in Annex 2. To the greatest possible degree, the Financial Supervisory Authority and Danmarks Nationalbank shall consult each other prior to any ruling or decision of vital importance to the payment systems or clearing centres covered by the Memorandum of Understanding. Collection and exchange of information To the greatest possible degree, the Financial Supervisory Authority and Danmarks Nationalbank shall coordinate the collection of information in connection with supervision or oversight of the payment systems and clearing centres covered by the Memorandum of Understanding. To the greatest possible degree, the Financial Supervisory Authority and Danmarks Nationalbank shall exchange information of significance to the supervision or oversight of payment systems and clearing centres covered by the Memorandum of Understanding. The information shall be exchanged with due regard for current provisions on confidentiality, etc. Amendment and termination of the Memorandum of Understanding Either party may at any time propose amendments to the Memorandum of Understanding or its annexes. On amendment of an annex to this Memorandum of Understanding, the date of the annex shall be amended, while the date of the Memorandum of Understanding shall remain unchanged. Adoption of amendments to the Memorandum of Understanding or its annexes shall be subject to the consent of the other party. Either the Danish Financial Supervisory Authority or Danmarks Nationalbank may at any time terminate this Memorandum of Understanding in its entirety at 30 days' notice. Annex 1: Payment systems and clearing centres covered by the memorandum of understanding The following payment systems and clearing centres are covered by the Memorandum of Understanding between Danmarks Nationalbank and the Danish Financial Supervisory Authority concerning Payment Systems and Clearing Centres: Sumclearing c/o the Danish Bankers Association Finansrådets Hus Amaliegade 7 DK-1256 Copenhagen K VP Securities Services Helgeshøj Allé 61 DK-2630 Taastrup Annex 2: Internationally recognised standards covered by the Memorandum of Understanding The following internationally recognised standards are covered by the Memorandum of Understanding between Danmarks Nationalbank and the Danish Financial Supervisory Authority concerning Payment Systems and Clearing Centres: Core Principles for Systemically Important Payment Systems The standards are reproduced in the report of 15 January 2001 from the Committee on Payment and Settlement Systems of the G-10 central banks. Recommendations for Securities Settlement Systems. The recommendations are presented in the draft report of January 2001 from the Committee on Payment and Settlement Systems of the G-10 central banks in cooperation with IOSCO (International Organization of Securities Commissions).


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Memorandum of Understanding between Danmarks Nationalbank and Finanstilsynet on 11 October 2005

ANNEX 1

ANNEX 2

ANNEX 3