Swedish Financial Regulatory Landscape Shapes Up: New Rules and EU Adherence

Sweden’s financial sector is undergoing significant changes as the Swedish Financial Supervisory Authority (SFSA) introduces new regulations and aligns with updated European Banking Authority (EBA) guidelines. In this article, we provide a summary of the recent regulatory developments and their potential impact on market participants.

Changes to Currency Exchange and Other Financial Operations (1 January 2024)

From 1 January 2024, the Swedish financial sector will be subject to new rules governing currency exchange and other financial operations, as per the Currency Exchange and Other Financial Operations Act (1996:1006). The SFSA published new regulations and guidelines outlining the following key changes:

1. Expanded registration obligation: More operators will need to register with the SFSA, including those engaging in professional currency exchange or other financial operations, regardless of their scale.
2. Changed business orientation: Institutions undergoing business orientation transformations (from currency exchange to other financial operations or vice versa) must apply for a new registration.
3. Suitability assessment: Operators and senior management will undergo a suitability assessment by the SFSA, considering their general law-abidingness, experience, and judgment.
4. Reporting changes: Registered institutions must promptly report changes in their circumstances to the SFSA.
5. Sanction fees: The SFSA may impose sanction fees for non-compliance, such as failing to provide required information or conducting unregistered activities.

New EBA Guidelines on ML/TF Risk Management and Product Governance

The SFSA has adopted two new EBA guidelines:

1. ML/TF Risk Factors Guidelines: These guidelines aim to strengthen anti-money laundering and terrorist financing measures in the European Union.
2. Policies and controls for the effective management of ML/TF risks: These guidelines provide minimum requirements for establishing and implementing policies, procedures, and controls to mitigate ML/TF risks.

MiFID II Product Governance Requirements (Revised on 3 August 2023)

The Swedish financial market is subject to new MiFID II product governance requirements, which were revised by the European Securities and Markets Authority (ESMA) on 3 August 2023. These rules apply to financial instruments and structured deposits and clarifies the expectations for manufacturers and distributors regarding sustainability-related objectives and distribution strategies.

SFSA Review of Sustainability Risk Integration by Fund Managers

The SFSA has announced a review of how fund managers integrate sustainability risks and information into their business. The focus is on rules related to sustainability integration, sustainability-related information, and the risk of greenwashing.

Stay informed about these updates and their implications for your organization by contacting us for expert guidance and insights. Additionally, subscribe to Cirio’s Financial Regulation Newsletter to stay ahead in the ever-evolving Swedish and European financial landscape.

For a more comprehensive overview of the recent regulatory landscape changes, please also refer to our article Swedish Financial Regulation Overview: 2023 Updates.