Financial Crime World

Regulatory Requirements for Banks in Sweden

Overview

The Swedish financial regulatory framework outlines specific rules and guidelines for banks operating in the country. This section provides an overview of the key aspects, including outsourcing agreements, senior management registration and oversight, accountability, remuneration policies, and specially regulated staff.

Key Points Summarized

  • Outsourcing Agreements
    • Banks must exercise due skill, care, and diligence when entering into, managing, and terminating outsourcing agreements related to work or functions of material significance to their operations.
  • Registration and Oversight of Senior Management
    • The Swedish Financial Supervisory Authority (SFSA) assesses the suitability of members of senior management.
    • An application with the SFSA includes information such as employment history, CVs, qualifying ownership, relations, interests, and reputation.
    • A decision is issued within 60 working days provided that the application is complete and a fee has been paid.
  • Accountability
    • The board of directors is accountable for ensuring compliance with regulations.
    • Intervention by the SFSA may occur if there’s infringement of obligations, and senior management may be required to compensate damages caused due to intentional or negligent infringements.
  • Remuneration Requirements
    • Banks must establish a documented remuneration policy that promotes sound risk management and counteracts excessive risk-taking behavior.
    • Variable remuneration for specially regulated staff is limited to the fixed compensation and must be deferred over a certain period, with at least 40% of variable remuneration deferred for this category.
  • Specially Regulated Staff
    • These include employees in strategic management positions, control functions, risk-takers, and those whose total remuneration equals or exceeds that of senior management members.
    • Variable remuneration for specially regulated staff may not exceed fixed compensation, and at least 60% must be deferred for senior management and other high-variable-remuneration staff.