Financial Crime World

Risks in Credit Institutions and Securities Companies: Finansinspektionen’s Regulations and Guidelines

======================================================

Finansinspektionen, Sweden’s Financial Supervisory Authority, has issued a set of regulations and guidelines to ensure the stability and security of credit institutions and securities companies. The guidelines aim to mitigate risks and promote good governance practices.

Customer Protection

Credit institutions and securities companies must include measures in their business plan to ensure compliance with consumer protection legislation. They must also provide information on:

  • Complaint handling procedures, including the name of the person or senior manager responsible for handling complaints.
  • Measures taken to ensure compliance with consumer protection legislation.

Ethical Rules

Branches should append guidelines for handling ethical issues to their business plan, outlining:

  • How common knowledge of ethical rules will be disseminated within the branch and who is responsible for it.
  • Follow-up, control, and reporting procedures as well as internal information and training on ethical issues.

Incidents of Significant Importance

Branches must include guidelines for handling and reporting events of material significance in their business plan. These guidelines should set forth:

  • Decision-making and reporting procedures in such matters.
  • The structure and operation of the review function, including how it will be organized, which instructions it will follow, and how often it will report to management.

Measures to Combat Money Laundering and Financing of Terrorism

Credit institutions and securities companies must append a description of measures taken or intended to be taken to prevent money laundering and financing of terrorism to their business plan. This should include:

  • A description of the measures taken or intended to be taken to prevent money laundering and financing of terrorism.
  • Proposed instructions with guidance available from Finansinspektionen’s regulations on this matter.

Internal Audit Function

Branches must describe the structure and operation of their independent internal audit function in their business plan. This includes information on:

  • How the review function will be organized, which instructions it will follow, and how often it will report to management.
  • The frequency and scope of audits, including who is responsible for conducting them.

Representation Offices

Foreign credit institutions with representation offices in Sweden must provide information on:

  • The office’s business name, address, and responsible person.
  • Planned operations and branches of business.
  • Changes to this information must be notified to Finansinspektionen at least one month before implementing such changes.

Establishment of Branches outside the EEA

Credit institutions seeking to establish a branch outside the European Economic Area (EEA) must provide:

  • A business plan for the branch’s operations.
  • A forecast of anticipated financial results for the next three years.
  • A person responsible for the operations, who will be domiciled in the country where the branch is established.

Changes to Branch Operations

Credit institutions with branches outside the EEA must notify Finansinspektionen in writing of any changes to their branch’s operations, address, or senior management at least one month before implementing such changes. They must also notify the supervisory authority in the country where the branch is established.

Effective Date

Finansinspektionen’s guidelines will enter into force on July 18, 2023, repealing its previous general guidelines on application for authorization to conduct banking and financing business.