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Reliable & efficient financing systems are an essential component of any successful economy. The secret to Sweden’s prosperity lies in the fact that its financial system is managed by highly effective banking & other credit institutions. 

Planning on applying for a banking institution license in the state of Sweden? Then this article is definitely for you.

How Can One Become an Owner of a Banking Institution?

Any entities (be they physical or legal ones) that hold a majority stake in a banking institution must obtain an SFSA license. Holding a majority stake gives them the right to purchase stakes (from ten percent to ad infinitum) or grants a decisive vote in a banking institution in the state of Sweden.

Obtaining a banking service provider license in Sweden requires passing an SFSA-initiated compliance check. The regulator will look into the candidate’s track record & financial status, including their compliance with all the necessary legal requirements.

Responsibilities of Legal & Physical Entities That Own a Banking Institution

Swedish legislation contains no limitations regarding business operations of the intended owner of a banking institution. Basically, it means that a non-domestic banking institution engaged in provision of non-financial services can actually acquire a bank in the state of Sweden. However, the non-domestic banking institution’s owners must report the current status of its senior management to SFSA.

Registering a holding entity in Sweden, which qualifies as an FHC or MFHC, will require compliance with SFSA requirements. Putting it simply, for an entity to be considered an FHC or MFHC, it must ensure that its daughter companies are either banking institutions or investment-oriented entities.

Bankruptcy & Its Repercussions

Acquiring a Swedish banking institution or purchasing a controlling stake in a bank in Sweden means that the stakeholder will be responsible for repaying any liabilities it may incur.

SFSA can decrease the banking institution’s share capital if its general financial situation deteriorates. It is also worth noting that SFSA can have the banking institution’s debts written off or transform some of them (and more specifically, subordinated ones) into equity.

Need legal advice on banking legislation in Sweden? Struggling to understand the intricacies of international banking law? IQ Decision UK can lend you a helping hand.

What Does ‘Owning a Banking Instution’ Involve?

Purchasing & transferring stakes in a banking institution in the state of Sweden require obtaining SFSA’s.approval. It is particularly true of instances when a stakeholder acquires a twenty, thirty or fifty percent stake in a banking institution.

Individuals owning a banking institution are also required to notify antitrust regulators of whatever changes in its senior management. That also applies to banking institutions whose stakes are traded on Swedish stock exchanges.

Non-Domestic Purchasers 

Non-domestic banking institutions may provide their services by establishing subsidiaries in Sweden. For that they must notify SFSA & receive its positive response within a 2-month period. They must also submit the following information:

  • a business plan regarding the operation of their subsidiary
  • their address, as well as the addresses of their senior managers
  • amount of capital & ability to meet their debt & other obligations

EEA-based banking institutions may render their services in the state of Sweden without setting up subsidiaries. To be able to do that, they must notify SFSA of the kind of services they intend to furnish in the state of Sweden.

Non-EEA-based banking institutions must apply for an SFSA license if they wish to open their subsidiary in the state of Sweden.

Deadline for Acquiring a Swedish Bank

After getting a request for purchasing a bank in the state of Sweden, SFSA must appoint its representative to B of D of the intended purchaser. It usually takes sixty days for SFSA to grant or deny its approval.

Receiving approval depends on many factors, including SFSA’s workload & the purchasing institution’s structure. 

Considering buying a banking institution in the state of Sweden? Thinking about having a branch of a foreign banking institution registered in the state of Sweden?

IQ Decision UK can help you select a proper jurisdiction for registering a bank, provide legal support in acquiring a Swedish bank, as well as perform due diligence of Swedish banking institutions.