Sweden Introduces New Regulation for Credit Institute Authorizations
Stockholm, Sweden - The European Union’s Regulation (EU) 2022/2580 has come into effect, introducing new requirements for credit institute authorizations in Sweden. The regulation aims to enhance regulatory technical standards and ensure efficient supervision of banks.
Application Requirements
Under the new rules, credit institutes must submit a comprehensive application package, including:
- Information about the acquirer
- Registration certificate
- Financial position
- Board of directors and senior management
- Ownership chain
- Relations and interests
- Information about the acquisition
- Financing of the acquisition
- Business plan
The Swedish Financial Supervisory Authority (SFSA) will collect additional information from various sources, such as:
- Swedish Police
- Companies Registration Office
- Tax Agency
- Enforcement Authority
- Credit assessment firms
The authority must issue a decision within 60 working days, with the option to extend the evaluation period if supplementary information is required.
Corporate Governance Requirements
The new regulation also outlines corporate governance requirements for banks in Sweden. According to the SFSA’s regulations and general guidelines, banks must:
- Have an appropriate organizational structure
- Clear allocation of functions
- Sound risk culture
Board members are expected to have sound knowledge and understanding of the company’s operations and processes, as well as regular review and assessment of the efficiency of the organizational structure. Banks must also:
- Maintain ethical rules
- Identify and address conflicts of interest
- Establish internal rules for managing risks
Registration and Oversight of Senior Management
The regulation introduces new requirements for senior management registration and oversight. Any person appointed to the board of directors or serving as managing director must possess sufficient insight and experience to participate in the management of a bank.
The SFSA will conduct a suitability assessment, which includes collecting information from various sources, such as:
- Swedish Police
- Companies Registration Office
The authority must issue a decision within 60 working days, with a fee of SEK16,800. Banks are also subject to joint ESMA and EBA guidelines on the assessment of the suitability of members of the management body.
Impact on Swedish Banks
The new regulation is expected to have a significant impact on Swedish banks, requiring them to adapt their organizational structures and risk management practices. The SFSA will play a crucial role in ensuring compliance with the new regulations and providing guidance to banks.
With the introduction of these new requirements, Sweden aims to strengthen its financial system and enhance consumer protection.