SWEDEN Trends and Developments Contributed by: Albert Wållgren, Henrik Ossborn and Lionardo Ojeda, Advokatfirman Vinge KB
This article sets out certain key developments in the Swedish securitisation market in recent years, and highlights particular trends currently being observed. Offshore to Onshore and Standardisation In the early days of the Swedish securitisation market, SPVs were typically incorporated in Lux - embourg, Ireland or Jersey due to the regulatory and tax benefits, as well as to international inves - tors’ familiarity with these jurisdictions. However, as the Swedish securitisation market evolved, regulatory changes and a general trend towards promoting transparency and trust in the domestic market led to a shift towards onshore SPVs. Today, most securitisations by Swedish origina - tors or sponsors use SPVs incorporated in Swe - den. This shift has been further supported by the Swedish Financial Supervisory Authority (SFSA) and the broader financial market’s preference for onshore structures, which are perceived as more transparent and reliable. That said, recently, greater interest in the use of SPVs incorporated in Luxembourg or Ireland has been observed. It seems that stakeholders may not be as con - cerned about the optics of an offshore SPV, as seen in some cases. Additionally, the SFSA has changed its policy, requiring that an SPV’s registration as a financial institute be completed before commencing asset acquisition – this has led to concern among par - ties of resultant delays. However, in the authors’ experience this is generally not the case, provided that preparation of the application for registration commences in a timely manner. Access to Public Funding for Non-Banks The acquisition of receivables for financing pur - poses in Sweden is subject to a licensing require - ment if the SPV finances itself using repayable
funds from the public. Repayable funds from the public include deposits and publicly listed bonds or similar capital markets instruments. To avoid this requirement, SPVs must use private fund - ing only. Initially, there was uncertainty about whether privately placed bonds constituted public funds if they were freely transferrable. However, the SFSA clarified that as long as such bonds are only issued to financially regulated entities (so- called eligible institutions) and include con - tractual transfer restrictions (whereby they are transferable to eligible institutions only in the secondary market), they would not be consid - ered public funds. This clarification has provided more certainty for non-bank lenders seeking to access the securitisation market. Growth of Fintech and Alternative Lenders Despite being a relatively small market, Sweden has a vibrant start-up scene. This is particularly true for fintech and alternative lending. Digital challenger banks and other alternative lenders have developed innovative financing solutions – such as P2P lending, forward-flow transactions and securitisations – to compete with traditional banks. Access to affordable funding remains a key challenge for these lenders, especially if they do not hold a banking licence. As a result, many have turned to the private securitisation market, contributing to its stable growth. However, it remains to be seen what effect the Consumer Credit Directive (Directive (EU) 2023/2225 of the European Parliament) will have on the continued development of this market. Additionally, the SFSA has indicated that stricter rules are expected to be imposed on the con - sumer credit market in Sweden (such as heavi - er regulatory burdens on non-bank originators,
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