Financial Crime World

Regulatory Framework for Fintech Businesses in Sweden

Sweden has established a comprehensive regulatory framework to govern fintech businesses, ensuring their operations are transparent, secure, and compliant with consumer protection legislation. This article provides an overview of the key regulatory regimes applicable to fintech businesses in Sweden.

Financial Regulators

  • Swedish Financial Supervisory Authority (SFSA): The SFSA regulates fintech businesses, requiring them to obtain separate authorizations and adhere to consumer protection legislation.
  • Consumer Protection Legislation: Fintech businesses must comply with the Swedish Consumer Agency’s guidelines on distance contracts, cooling-off periods, and consumer rights.

Data Protection

  • General Data Protection Regulation (GDPR): The GDPR applies to organizations established in Sweden or offering goods/services to Swedish consumers. Non-EU/EEA organizations must also adhere to the regulation due to its territorial scope.
  • Cyber Security: The GDPR includes cyber security requirements, while the NIS 2 Directive and Protective Security Act impose specific regulations on operators of essential services and digital service providers.

Sanctions

Fintech businesses in Sweden may face administrative fines up to EUR 20 million or 4% of their worldwide turnover for GDPR infringements. Additionally, damages claims may be brought against organizations found liable for non-compliance with the regulation.

Additional Regulatory Regimes

Anti-Money Laundering and Financial Crime

  • AML Act: The AML Act regulates anti-money laundering activities in Sweden.
  • Penalties for Money Laundering Offences Act (PMLA): PMLA imposes penalties on individuals and organizations involved in money laundering activities.
  • Penalties for Financing of Particularly Serious Crimes Act (PSCA): PSCA regulates the financing of terrorism and other serious crimes.

Artificial Intelligence

  • AI Act: The AI Act will become applicable from six months after its entry into force, imposing regulations on artificial intelligence systems.