SWEDEN Law and Practice Contributed by: Richard Engblom, Per Josephson, Anna Cumzelius and Amin Bell, Harvest Advokatbyrå
General organisational requirements The company shall ensure that it has an appro - priate, transparent organisational structure with a clear allocation of functions and areas of responsibility that ensure sound and efficient governance of the undertaking and enable the SFSA to conduct efficient supervision. The responsibility of the board of directors and the managing director When the board of directors establishes the company’s strategies, it shall observe long-term financial interests, the risks to which the com - pany is or could perceivably become exposed, and the capital required to cover its risks. Board members shall have sound knowledge and understanding of the company’s organisational structure and processes in order to ensure that they are consistent with the decided strategies. Board members shall be thoroughly familiar with and knowledgeable about the operations and the nature and scope of the risks. The board of directors or managing director shall regularly review and assess the efficiency of the organisational structure, procedures, measures, methods, etc, as established by the company to comply with laws and other statutes regulating the operations that are subject to authorisation. The board of directors or managing director shall also take appropriate measures for addressing any deficiencies therein. Ethical rules The company shall conduct its operations in an ethically responsible and professional manner, and maintain a sound risk culture. Conflicts of interest in the operations The company shall identify and address any conflicts of interest that exist or which could perceivably arise in the operations. The com -
pany shall have internal rules specifying how it addresses conflicts of interest. The internal rules shall be appropriate, taking into account the size and organisation of the company and the nature, scope and complexity of the operations. Risk management The company shall have a risk management framework containing the strategies, processes, procedures, internal rules, limits, controls and reporting procedures required to ensure that the company may, on an ongoing basis, identify, measure, govern, internally report and exercise control of the risks to which it is or could perceiv - ably become exposed. Control functions The company shall have a risk control function, a compliance function and an internal audit func - tion. The control functions shall, in organisational terms, be separate from each other. In smaller companies with less complex operations, the risk control function and the compliance func - tion may be combined. Outsourcing arrangements The company shall have internal rules for man - aging its outsourcing agreements. The company shall exercise due skill, care and diligence when entering into, managing and terminating out - sourcing agreements relating to work or func - tions of material significance to the operations. 4.2 Registration and Oversight of Senior Management Regulatory Approval of Appointment The main requirements applicable to senior management are set out in the Banking and Financing Business Act (SFS 2004:297) which stipulates that any person who is to serve on the board of directors or serve as managing direc - tor, or be an alternate for any of the aforesaid,
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