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Swedish Banks and Credit Institutions: A Primer on Authorisation and Control

In Sweden, credit institutions are subject to strict regulations and oversight by the Swedish Financial Supervisory Authority (SFSA). Two key regulated activities are “banking business” and “financing business”. In this article, we will delve into the requirements for authorisation and control of these institutions.

Authorisation Requirements

To obtain a banking licence in Sweden, an applicant must demonstrate that it meets the conditions for authorisation. These include:

Compliance with the Swedish Financial Business Act (BFA) and other relevant legislation
Suitability of owners to exercise significant influence over the undertaking
Comprehensive information on its business plan, organisational structure, internal rules, and risk management practices

Application Process

The application process typically takes 12-18 months from the date of submission, with a handling time of up to 60 working days for regulatory filings. External consultants may be required to assist with the lengthy and costly procedure.

Control Requirements

Once a bank is established, any individual or entity acquiring a qualifying holding (10% or more of capital or voting rights) must obtain prior approval from the SFSA. The regulator will assess whether the acquirer is suitable to own a qualified holding, considering factors such as:

Reputation
Financial strength
Management competence

Regulatory Filings

Applications for approval are made using standard forms provided by the SFSA, which require detailed information about the acquirer’s:

Organisational structure
Financial situation
Management plans

The regulator may request additional information during the assessment period.

Conclusion

In conclusion, obtaining a banking licence in Sweden is a complex and time-consuming process that requires meticulous attention to detail. The SFSA is committed to ensuring the sound and prudent management of Swedish banks and credit institutions, and applicants must demonstrate compliance with strict regulations and oversight requirements.

Source: Chambers Banking Regulation 2020/2021 Global Practice Guide