SWEDEN Trends and Developments Contributed by: Niklas Sinander, Elin Carlsson, Axel Schelén and Björn Wendleby, Harvest Advokatbyrå
Credit Operations Act does not appear to be the most effective measure for addressing aggressive market- ing. Less far-reaching but still effective measures can be taken – for example, through changes to the rules on credit marketing. Moreover, the Council considered that the government had not substantiated its argu- ment regarding the risk of circumvention, nor had it demonstrated that the proposal was appropriate and proportionate given its restrictive impact on the free- dom of trade and establishment for intermediaries. The Council recommended that this issue be further examined within the legislative process for implement- ing the EU’s new Consumer Credit Directive. Notwithstanding the criticism mounted by industry stakeholders and the recommendation to reject the proposal by the Council on Legislation (a noteworthy occurrence in itself), the Swedish Parliament resolved to repeal the Consumer Credit Operations Act. New Licensing Requirements The repeal of the Consumer Credit Operations Act means that companies previously operating as con- sumer credit institutions must now obtain authorisa- tion as credit institutions (banks or credit market com- panies) under the Banking Act in order to continue to provide or broker consumer credit. Such authorisation process is both lengthy and resource-intensive. It also imposes significantly more far-reaching requirements than previously, including capital requirements and requirements concerning governance, organisation and risk management. The legislative changes have also removed previous exemptions from the licensing requirement for pay- ment institutions, electronic money institutions and mortgage credit institutions. This has relatively signifi- cant consequences for companies that offer consum- er credit within the framework of a payment institution or a mortgage credit institution. However, companies that are authorised to carry out payment transactions through credit facilities under the Swedish Payment Services Act (SFS 2010:751) still have some scope to provide credit to consumers. The legislative amend- ments do not target credit provided under regulations other than the now-repealed Consumer Credit Opera- tions Act.
However, it is crucial that such credit be provided strictly within the scope of payment transactions where the funds are covered by the user’s credit facility under the Payment Services Act. Should the credit fall outside this definition, a licence under the Banking Act is required. Therefore, for mortgage credit institutions that also engage in consumer credit activi- ties, either such activities must be discontinued or the institution must apply for licence with the SFSA. Applications are assessed by the SFSA, and the application fee is currently SEK1.5 million. A grace period applies to enable an orderly transition. Com- panies that had a licence under the Consumer Credit Operations Act on 1 July 2025 may continue their operations until 31 July 2026, or until their application for a licence under the Banking Act has been finally assessed. In order for the business to continue after the end of the grace period, an application must be both submitted and approved. Given the significant thresholds for authorisation under the Banking Act, it is probable that the majority of the approximately 70 independent consumer credit companies in Sweden will be wound up. Companies applying must (among other things) meet the capital requirements under EU regulations and Swedish law, as well as under the SFSA’s regulations, including minimum requirements for own funds (Pillar 1), additional capital (Pillar 2) and combined buffer requirements. New EU Rules for Third-Country Institutions (CRD VI) In parallel with the national reforms, the EU has adopt- ed the sixth major amendment to the Capital Require- ments Directive (CRD VI), which introduces harmo- nised rules for third-country credit institutions seeking to provide banking services within the EU. The new provisions – which primarily set out minimum requirements – establish an authorisation regime and enhanced supervisory framework for such institutions, subject to certain exceptions. The Directive will apply from 11 January 2027, with some provisions taking effect earlier, on 11 January 2026.
599 CHAMBERS.COM
Powered by FlippingBook