SFSA Approves First Batch of Applications in Record Time

The Swedish Financial Supervisory Authority (SFSA) has announced that it has approved its first batch of applications within a year of the application being granted, marking a significant departure from recent years.

Faster Evaluation Process

In a surprise move, the SFSA has sped up the evaluation process, granting licenses to several applicants who met the criteria described in the previous sections. This is a notable change compared to recent years, where the SFSA had been notoriously slow in granting approvals, with many applications taking several years to be processed.

Factors Contributing to the Change

Industry insiders attribute the change in pace to the SFSA’s increased focus on:

• The applicant’s business model and strategy, which must demonstrate the ability to generate returns on a long-term basis
• Assessing whether applicants have a credible plan for sound and prudent management of the bank

Control Requirements

The SFSA has also clarified its requirements for acquiring or increasing control over a bank. Any individual or entity seeking to acquire a qualifying holding (defined as at least 10% of the capital or voting rights) must be subject to prior approval and ownership assessment by the SFSA.

• The authority will assess whether the acquirer is suitable to own a qualified holding, taking into account factors such as:
  • Reputation
  • Financial strength
  • Management competence
  • Experience
• The acquisition must not impede the sound and prudent management of the bank or its ability to comply with applicable legal requirements

Regulatory Filings

Applicants seeking approval for acquiring or increasing control over a bank must file an application using standard forms provided by the SFSA. The magnitude of information required varies depending on the size of the holding, but includes details about:

• Organisational structure
• Financial situation
• Management
• Business and financing plans

The SFSA has a handling time of up to 60 working days from the date a formally complete application is filed. During this period, the authority may request additional information, suspending the assessment process.

Appeals

If the SFSA decides to oppose a proposed transaction, it must inform the proposed acquirer in writing. The decision may be appealed to the administrative courts of Sweden.

Industry Reaction

The SFSA’s move to speed up the evaluation process is seen as a welcome development by industry players, who had grown frustrated with the lengthy and costly approval process. However, the authority remains committed to ensuring that applicants have a credible business plan and strategy in place before granting licenses.