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Sweden’s Fintech Regulations: A Balancing Act
Sweden has taken a proactive approach to regulating its fintech industry, striking a balance between promoting innovation and protecting consumers. In recent years, the country has introduced several laws and regulations aimed at addressing concerns around consumer credit, marketing, and financial services.
Consumer Credit
The Swedish Financial Supervisory Authority (SFSA) has implemented stricter rules on consumer credit marketing, requiring lenders to present information in a neutral and factual manner. The SFSA has also banned payment service providers from making credit purchases the default option for online transactions.
Secondary Market Loan Trading
Sweden does not impose any specific restrictions on trading loans in the secondary market. However, companies involved in such activities must comply with anti-money laundering (AML) regulations and obtain necessary licenses.
Crowdfunding
The EU’s Crowdfunding Regulation will apply to Swedish crowdfunding services from November 2021, establishing a harmonized framework for these providers. Currently, there is no specific regulation of crowdfunding in Sweden, but certain schemes may fall under the general financial services framework.
Invoice Trading
Companies participating in invoice trading must register their operations with the SFSA and comply with AML regulations.
Payment Services
Sweden has implemented the Second Payment Services Directive (PSD2), which regulates payment services such as money remittance, execution of payment transactions, and account information services.
Open Banking
The PSD2 requires financial institutions to make customer data available to third parties, promoting competition in the fintech industry.
Insurance Products
Fintech companies selling or marketing insurance products in Sweden must comply with the Swedish Insurance Distribution Act (IDA), which regulates insurance distribution and includes stricter regulations than the EU’s Insurance Distribution Directive (IDD).
Credit References
Credit references and credit information services are regulated under the Swedish Credit Information Act and the Swedish Credit Information Regulation. A license from the SFSA is required for carrying out credit- rating operations in Sweden.
Disclaimer
As of July 10, 2020, these regulations are accurate.