SWEDEN Law and Practice Contributed by: Niclas Rockborn, Rikard Sundstedt and Robin Entenza, Gernandt & Danielsson
tion against them, citing concerns that regulatory sandboxes may lead to differential treatment and con- flicts of interest, that legislation inhibits and restricts the SFSA’s ability to grant waivers or exemptions from applicable regulations, and that there is insufficient evidence of regulatory sandboxes having meaningful impact and beneficial effects on the market. This posi- tion by the SFSA has been criticised and challenged by the industry. As an alternative, the SFSA has launched an initia- tive called the Innovation Compass – an initiative for structured dialogue between the SFSA and financial sector stakeholders on matters relating to innovation and business development. The process involves market participants submitting topic proposals, the SFSA selecting which to pursue, forming reference groups for discussion, and publishing the outcomes in reports. While the SFSA has traditionally been perceived as conservative in providing proactive guidance, the Innovation Compass potentially signals a shift towards a more open and collaborative approach. 1.1.3 Regulation of Blockchain Technology Blockchain technology, as such, is not regulated under Swedish law. However, many use cases of blockchain are subject to broader technology-oriented regulation. DLT Regulation The DLT Regulation is a major component of block- chain use-case regulation, supplemented by pro- posed domestic Swedish legislation. The DLT Regulation introduces a time-limited pilot regime enabling operators of DLT market infrastruc- tures to be exempt from certain regulatory require- ments that would ordinarily apply to market infra- structure providers. This facilitates testing, trading and settlement of DLT-based financial instruments in a less heavily regulated environment. Operators may opt into the regime by applying to the SFSA and, if approved, benefit from the reduced requirements. The Swedish legislative proposal seeks to supplement the DLT Regulation by amending relevant Swedish
legislation to facilitate the use of DLT in securities trad- ing and settlement. Key proposed changes include: • adaptations to Swedish law addressing the pos- sibilities of DLT-based financial instruments being nominee-registered and managed by, for example, a bank (a nominee) on behalf of a client; and • changes to Swedish companies law declaring distributed ledgers as share registers, which is equivalent to share registers managed by a central securities depositary. The amendments were proposed to take effect from 1 January 2025 but have been delayed, and no new effective date has been set. Data Privacy At face value, the Swedish laws and regulations that apply to data privacy fundamentally apply to opera- tions with blockchain-based products and services in the same way as for other operations, without any specific derogations for blockchain-related operations specifically. To date, there is no case law or guidance from the Swedish Authority for Privacy Protection spe- cifically addressing blockchain-based data process- ing. As in other EU jurisdictions, the main source of data privacy-related rights and obligations in Sweden is the General Data Protection Regulation (Regulation (EU) 2016/679, or GDPR), which governs matters such as individuals’ right to: • access their personal data that is being processed; • the rectification of incorrect information about them; and • the erasure of personal data that it is no longer necessary to process, for whatever purpose it was originally collected and processed. The rights and obligations in the GDPR require care- ful analysis when being practically implemented in blockchain-based operations. Data protection meas- ures should take into account the inherent charac- teristics of blockchain technology, particularly that services and products often operate on public block- chains, which do not require any special permissions
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