SWEDEN Law and Practice Contributed by: Robert Karlsson, Helena Rönqvist, Caroline Landerfors and Vilma Slättegård, Magnusson Law
9. Regtech 9.1 Regulation of Regtech Providers
7.4 Regulation of Programmers and Programming
Individual programmers that merely design and devel - op trading algorithms and other electronic trading tools are not subject to supervision or regulatory over - sight. However, investment firms that utilise such pro - grammes will have an obligation to ensure that such programmers have sufficient knowledge and experi - ence to program the tools and will also be responsible for the use and functioning of the tools.
Sweden currently lacks regulations that explicitly tar - get regtech. Depending on the nature of the services offered, regtech providers may have to adhere to vari - ous financial regulations. Additionally, some general regulatory frameworks for technology may apply. For instance, the AI Act may be applicable if the regtech application incorporates AI. 9.2 Contractual Terms to Ensure Performance and Accuracy When a financial service firm outsources services to a regtech provider, it must comply with the outsourcing rules that apply to its operations. These regulations must be considered and incorporated into contractual terms to ensure the provider’s performance and accu - racy. See 2.8 Outsourcing of Regulated Functions for more details. 10. Blockchain 10.1 Use of Blockchain in the Financial Services Industry The SFSA has expressed that blockchain and distrib - uted database technology has potential and that such techniques could be used within a number of sec - tors, for example to increase efficiency in share trad - ing and to increase resilience against cyber-attacks. At the same time, the SFSA has been clear that it sees a number of challenges with crypto-assets, not only related to investor protection but also to fraud, money laundering and terrorist financing. In 2017, the Swedish Central Bank decided to inves - tigate whether issuing a central bank digital currency (e-krona) would be feasible. The proportion of the Swedish public using cash as payment has been steadily decreasing over the last few years. The Swed - ish central bank has stated that the e-krona could be a potential option to ensure that the general public has secure access to state-guaranteed money. The e-krona is not a cryptocurrency. Some traditional players on the financial market still have a slightly sceptical attitude towards cryptocur -
8. Insurtech 8.1 Underwriting Processes
Insurance underwriting is the process of evaluating risks to determine if the insurance company is able to issue insurance policies and the pricing of such policies. In their underwriting activities, insurance companies must adhere to, for example, the IBA and the Swedish Insurance Contracts Act. These Acts contain provi - sions that largely cover the life span of an insurance policy, from inception until termination. The manufacturing of insurance products is also gov - erned by the IDA, and by Delegated Regulation (EU) 2017/2358 regarding product oversight and govern - ance. 8.2 Treatment of Different Types of Insurance Insurance regulations generally distinguish between life insurance and non-life insurance. For example, dif - ferent capital requirements apply for life insurers and non-life insurers, and only life insurance operations are in scope of the Swedish Anti-Money Laundering Act. There are also noteworthy differences in regulation and treatment depending on whether an insurance policy is issued to a consumer or to a company.
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