SWEDEN Law and Practice Contributed by: Robert Karlsson, Helena Rönqvist, Caroline Landerfors and Vilma Slättegård, Magnusson Law
2.3 Compensation Models Compensation and remuneration models vary between the different fintech business models and according to the regulations that apply to such business models. For example, consumer lending businesses will normally charge customers interest and various fees, while asset management services may charge the customers transaction fees, advi - sory fees, commission fees or fees for premium features. Most regulated fintech companies will be sub - ject to extensive disclosure requirements relat - ing to compensation. During the last few years, the SFSA has focused its supervisory activities on certain compensa - tion models, particularly on those that involve third-party commission, which are believed to have inherent conflicts of interest. There has also been a focus on lending business models involving consumer loans with high cost and high interest, which has led to the introduction of a cost and interest rate ceiling in Sweden. 2.4 Variations Between the Regulation of Fintech and Legacy Players Fintech companies and legacy players that con - duct the same type of regulated businesses will, in general, be subject to the same regulations. However, legacy players often have more exten - sive and complex business models, which sub - jects them to more regulatory requirements. Consequently, fintech companies can benefit from less regulatory requirements by providing more streamlined business models or a more limited number of products and services.
On the other hand, many rules and regulations that apply to fintech business models were not constructed with fintech industry participants in mind, but rather based on the more traditional business models carried out by legacy players. This has caused challenges for fintech compa - nies when applying such rules and regulations to their more streamlined and tech-based busi - ness models. 2.5 Regulatory Sandbox The SFSA has not implemented a regulatory sandbox that allows fintech companies to live test innovations or business models in a sand- box environment. Instead, the SFSA has instituted the Innovation Center, which aims to provide information and offer guidance to companies that want to pro - vide innovative products and services on the Swedish market. The Innovation Center arrang - es seminars and industry meetings on innova - tion in the financial sector. Within the framework of the Innovation Center, the SFSA co-operates with, among others, the Swedish central bank, the BIS Innovation Hub Nordic Centre, Vinnova, the Swedish Authority for Privacy Protection (the “Privacy Protection Authority” ), the Swedish Fintech Association, Stockholm Fintech Week and AI Sweden. The Innovation Center is also active in international groups with innovation focus within the Euro - pean Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), the European Securities and Markets Authority (ESMA), the International Organiza - tion of Securities Commissions (IOSCO) and the European Forum for Innovation Facilitators. The Privacy Protection Authority provides in- depth guidance to innovation projects in the
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