SWEDEN Law and Practice Contributed by: Johannes Wårdman and Erik Frykenholt, CMS Wistrand
ent companies, but, rather, acts independently on the market and has its own management. The competition authority will review whether the creation of the JV may affect the market – by way of dominance of a sector – to such an extent that the creation should be forbidden or mitigated by conditions. Both the setting-up and operation of a JV are also to be reviewed in line with general competition rules; ie, the prohibition on entering into anti-competitive agreements and abusing a dominant market position. The creation of a JV between competitors may be considered an anti-competitive agreement. There are guidelines from the European Commission on the formation of JVs and there are many “exemp - tions” from the above-mentioned prohibitions, for instance, for JVs undertaking certain research activi - ties (which could yield positive outcomes for the broader public). The competition law aspects should always be con - sidered before the formation but also regularly (if for instance partners are changed) and on a case-by- case basis. 3.5 Listed Companies and Market Disclosure Rules If a JV partner is a listed company, certain market disclosure regulations should be considered. It should initially be recognised that the JV and the listed JV partner are two separate and distinct legal entities. Thus, as a starting point, the rules for private limited companies apply to the JV irrespective of whether it has a public party or not. However, as an exception to the above, when a publicly listed company participates in a JV, certain requirements and considerations set it apart from pri - vately held entities, as outlined below. Disclosure and Transparency Publicly listed companies are obliged to comply with strict disclosure regulations. Significant events, such as entering into a JV, must be disclosed promptly by the listed company to ensure equal access to mate - rial information for shareholders and market partici - pants. This requirement is governed by market rules
and legislation concerning market abuse. Even though the requirement directly applies to the listed company and not the JV, the JV is indirectly affected by the dis - closure requirements should any circumstances arise in the JV that are of such a nature that they could constitute material information for shareholders and market participants in relation to the listed company. Financial Reporting Standards The listed JV party shall apply specific accounting standards applicable to publicly listed companies. This includes the recognition and valuation of the JV in financial statements, often with heightened scrutiny due to the transparency required in financial report - ing for listed entities. In this context, it means that the JV is subject to more stringent reporting require - ments with regards to its listed JV partner than would be the case if both partners were private companies. The JV could, as long as the listed JV party presents consolidated group-level accounts according to Inter - national Financial Reporting Standards (IFRS), choose to not apply the same IFRS and instead apply K2 or K3 reporting standards; however, this means that the JV’s figures need to be restated for inclusion in the group consolidated accounts. 3.6 Transparency and Ownership Disclosure The majority of Swedish companies, associations, and other legal entities must register beneficial own - ership information with the SCRO. A beneficial owner is a natural person who: • controls more than 25% of the total number of votes in the legal person by virtue of ownership of shares, other equity or membership; • has the right to appoint or remove more than half of the directors or equivalent officers of the legal person; or • by virtue of an agreement with the owner, a mem - ber or the legal person, or a provision in its stat - utes, articles of association or similar documents, can exercise the control referred to in the two previous bullet points. The above-mentioned information must be registered with the SCRO and be provided without delay at the request of an authority. The information must also be made available to an operator upon request, should
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