SFSA Grants Licenses to Few Applicants Amid Stricter Review Process
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The Swedish Financial Supervisory Authority (SFSA) has been reviewing license applications with a more discerning eye in recent years, granting licenses to only a handful of applicants. This shift in approach has led many would-be licensees to withdraw their applications or face non-approval.
A Longer and More Costly Process
The application process has become increasingly lengthy and costly, requiring external consultants with expertise in regulatory matters and capital adequacy. According to a source familiar with the matter, “the application process has become lengthy and costly, requiring external consultants with expertise in regulatory matters and capital adequacy.”
Control Transactions Face Stricter Scrutiny
The SFSA has been scrutinizing control transactions more closely, assessing not only whether an acquiring entity meets formal requirements but also whether it has a credible plan for generating returns over the long term.
- The agency assesses the reputation and financial strength of acquiring entities
- It examines the competence and experience of their management teams
- It considers factors such as shareholder agreements and close ties between acquirers when determining whether they act in concert
Regulatory Filings: A Lengthy Process
The application process for control transactions is complex and time-consuming. Applicants must provide extensive information about:
- Organizational structure
- Financial situation
- Management team
- Business plans
- Financing strategies
The SFSA has a 60-working-day deadline to review applications, although this can be extended if additional information is required. The agency may also gather information from other Swedish authorities and foreign regulatory bodies as part of its assessment.
If the SFSA Opposes a Proposed Transaction
If the SFSA opposes a proposed transaction, it must inform the acquiring entity in writing. The decision can be appealed to Sweden’s administrative courts.
Specialist Advice Required
As the SFSA continues to prioritize long-term viability and risk assessment, applicants seeking control transactions would do well to seek specialist advice from regulatory experts and capital adequacy specialists. Only by understanding the agency’s evolving approach can entities navigate the increasingly complex application process successfully.