SWEDEN Trends and Developments Contributed by: Björn Wendleby, Rico Benavides, Per Josephson and Stellan Koch, Harvest Advokatbyrå AB
Introduction From the sustainable finance framework to anti- money laundering guidelines, the investment fund sector in Sweden is no exception when it comes to the increase in regulatory detail seen in the past few years. Looking beyond legislation, the sector has been developing rapidly lately, with the headline being the procurement of funds for the Swedish premium pension system. In this trends and development chapter, atten - tion is brought to both sectorial development and the regulatory outlook. While focusing on national trends and developments, it should be noted that the Swedish regulatory landscape for investment funds is largely derived from EU legislation and developments therein. As such, where relevant, reference will be made to devel - opments initiated at the EU level. This chapter focuses on three subject areas of special interest to the Swedish investment fund sector. • Firstly, the procurement of funds for the Swedish premium pension system is a non- stop topic of discussion heavily focused on by management companies. The Swed - ish premium pension system is now being changed from an open market system to a system that instead is procuring funds to be made available for selection in the premium pension, giving rise to new challenges and trends. • Secondly, two major mergers were completed in the Swedish fund market in 2024. The recent consolidations of management com - panies highlight the pressure related to a well- maintained asset under management (AUM) and the ability to keep refining offerings. • Lastly, in efforts towards ensuring the Swed - ish fund market’s competitiveness, the
government has issued a committee review of the Swedish fund legislation. The committee review includes inter alia whether associa - tion-based funds with variable share capital could be the next move for the Swedish fund market. Procurement of Funds for the Swedish Premium Pension System Background and initial tenders Commencing in mid-2023 and ramping up through 2024 and 2025, the Swedish Fund Selection Agency ( Fondtorgsnämnden (FTN)) was established with the task of procuring funds to be made available in the Swedish premium pension system. The procurement is one of a kind and drastically limits the number of funds available for pension savers. The Swedish premium pension system accounts for 2.5% of the overall general pension income. At the beginning of 2022, the premium pension system was managing approximately SEK2 tril - lion (EUR175 billion) and is projected to man - age upwards of SEK4 trillion by 2040. Unlike the general pension system, the premium pension system allows for funds to be chosen on an indi - vidual basis. When no active choice is made, the state-managed fund AP7 Såfa is the default option. In the wake of complex and expensive fund schemes and scandals negatively affecting the Swedish premium pension system, resulting for example in criminal sentences for gross disloy - alty to principal, as seen in the case of Allra (for - merly Svensk Fondservice) and Falcon Funds, new legislation was passed introducing a pro - cedure for the procurement of funds to be made available within the system.
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