Government proposes criminal liability for unauthorised financial activity despite criticism

On 9 October 2025, the Government submitted a draft bill to the Council on Legislation proposing the introduction of a new law on penalties for unauthorised financial activity.

The Government's proposal entails criminalisation of intentionally or through gross negligence conducting financial activity without authorisation or registration with the Financial Supervisory Authority, where such authorisation or registration is required for the activity. The penalty for unauthorised financial activity is proposed to be a fine or imprisonment for a maximum of two years. For serious unauthorised financial activity, the penalty is proposed to be imprisonment for a minimum of six months and a maximum of six years.

It is noted that the majority of consultative bodies were critical of the proposal, including the Financial Supervisory Authority, which amongst other things considered that criminalisation should be limited to activities relating to currency exchange, payment services and crypto-assets, where the risk of criminal activity occurring is higher. The criminal liability would in that case not cover other financial activities such as banking, insurance or securities business, as the FSA assessed that there was no clear need for it. The FSA further noted in its consultation response that even for the authority it can be difficult to determine where the boundary for authorisation requirements lies in many cases, which argues against extensive criminal liability. Criticism which has thus not been heeded in the drafting of the proposal now submitted to the Council on Legislation.

The new law is proposed to enter into force on 1 March 2026.