SWEDEN Law and Practice Contributed by: Niclas Rockborn, Pär Johansson, Daniel Sveen, Arijan Kan and Erik Schwartz, Gernandt & Danielsson Advokatbyrå
information requirements in case of overlaps between the parties, including submission of internal documen - tation. The new regulations should, therefore, have limited implications for private equity-backed deals. Foreign Direct Investments and the Security Act Refer to 2.1 Impact of Legal Developments on Funds and Transactions regarding notification requirements under the Security Act and “Foreign Direct Invest - ments”. Foreign Subsidy Regulation (FSR) The EU FSR regime is generally relevant when the tar - get has EUR500 million or more in EU turnover as pri - vate equity funds typically meet the other thresholds, in particular private equity funds linked to sovereign wealth funds. Under the EU FSR regime, the Commission has the authority to investigate financial contributions made by non-EU governments to companies operating within the EU. Should the Commission determine that a financial contribution distorts the internal market, it may impose remedial measures. Transactions exceeding the relevant thresholds require parties to notify the Commission and obtain prior approval before completion. Additionally, the Commission may request ad-hoc notifications for transactions below the established thresholds when it suspects the presence of distortive foreign subsi - dies. Consequently, the EU FSR regime may increase disclosure obligations and regulatory scrutiny for sub - stantial EU transactions involving private equity firms backed by sovereign investment funds. The AIFM Act The Swedish Alternative Investment Fund Managers Act (AIFM Act) transposes Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD) into Swedish law. It sets out key provisions on authori - sation, operational requirements, and disclosure obligations for alternative investment fund managers (AIFMs) in relation to the marketing and management of alternative investment funds (AIFs) within the EU. The Swedish Financial Supervisory Authority (SFSA) is the competent supervisory authority under the AIFM Act.
As a main rule, no Swedish AIFM may manage an AIF unless authorised by the SFSA under the AIFM Act. However, Swedish sub-threshold AIFMs may instead apply for registration with the SFSA. The AIFM Act also governs the marketing of both EEA-based and non-EEA-based AIFs by Swedish and foreign AIFMs to professional and non-professional investors in Sweden and abroad. The Directive on Cross-Border Distribution of Funds (2019/1160/EU) has also been implemented in this context. Further, the AIFM Act imposes notification require - ments on certain acquisitions and disposals. For instance, if an AIF acquires control – defined as 50% or more of the voting rights in a non-listed company or 30% or more in a listed company – the AIFM must notify the SFSA, the target company, and its share - holders. This includes information on the identity of the AIFM, its conflict-of-interest policies, and, for non-listed targets, the AIF’s ownership structure and financing arrangements. An AIFM managing an AIF that acquires control of a listed or non-listed company is also subject to a two-year restriction on facilitating, supporting, or instructing certain distributions, capital reductions, share redemptions, or acquisitions of own shares by the target. Finally, the AIFM Act imposes extensive general notifi - cation obligations. Any material changes to an AIFM’s operations or organisation – such as the appointment of board members or a new CEO, changes in own - ership, or changes in leverage – must be notified in advance and is subject to prior approval by the SFSA. AIFMD II The final text of the amendments to the AIFMD – known as “AIFMD II” – was published in the Official Journal of the European Union on 26 March 2024, and entered into effect on 15 April 2024. EU member states are granted a period of two years from the date of publication to incorporate the rules into their nation - al legislation. Consequently, AIFMD II will be applica - ble starting 16 April 2026, although certain provisions will be subject to a transitional period.
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