Activities for fund-undertakings (non-UCITS)

A fund undertaking, domiciled outside the EEA or not compliant with Council Directive 85/611/EEC, that wishes to conduct business in Sweden in accordance with Chapter 1 Section 9 of the Act on Investment Funds (2004:46) shall seek authorisation from Finansinspektionen.

The application should include the information specified in Finansinspektionen’s regulations (FFFS 2004:3) governing operations in Sweden by foreign management companies and fund undertakings.

Handling Fee

A handling fee of SEK 65,000 shall be paid to Finansinspektionen at the time of application.

Time from payment to decision

A decision is given within four months from the date of Finansinspektionen’s registration of the fee.

The application shall include

A copy of the undertaking’s authorisation to conduct fund activities.
A certificate issued by the competent authority in the undertaking’s country of domicile, proving that the undertaking is subject to supervision (see the headline "Supervision" below). The certificate shall include information regarding the nature and extent of the supervision and the competent authority’s explicit consent to the activities to be conducted in Sweden.
A detailed account of the undertaking’s business and of the manner in which the undertaking intends to fulfil the legislative demand of sound practice (see the headline "Sound practice" below).
The fund rules and articles of association, if applicable.
A prospectus or similar information material and a simplified prospectus.
The latest annual report and subsequent half-yearly report.
Information regarding routines in conjunction with the sale and redemption of the undertakings fund units in Sweden, including information as to where sale and redemption shall take place.
Information regarding the manner in which the undertaking shall provide the information in Sweden which the undertaking is obligated to provide in accordance with the regulations in its country of domicile.
Information on the level of risk the fund-undertaking aims to achieve and the risk measurement used.
An account of the fund-undertaking’s fee structure in which the highest fixed management fee is stated along with the costs included in this fee. If the fund-undertaking uses a performance-based fee model (pbf), a calculation example containing relevant information shall be prepared in accordance with Report 2006:5 and be attached to the application.

Supervision

In the account of the undertaking’s business, the actual supervisory measures conducted by the competent authority in the country of domicile, are of special interest.

A simple registration process for example is, in this context, not sufficient. The supervision must be of continuous nature and must consist of measures corresponding to Swedish supervisory measures. It must be possible for Finansinspektionen to establish a satisfying exchange of information with the competent authority in question.

If the fund-undertaking/asset management company is under supervision in accordance with EC regulations, no separate documentation regarding the actual supervision is required. In such cases, it is sufficient to provide a certificate from the competent authority in the undertaking’s country of domicile verifying this.

Sound practice

In order to facilitate the procedure, information confirming the compliance with the legislative demand of sound practice, according to the Act on Investment Funds and the UCITS-directive, should be enclosed.

The criteria to be met are equivalent to the rules that apply to Swedish non-UCITS funds. If the undertaking would be accepted as a Swedish non-UCITS fund, authorisation will be granted.

The information to be included is listed below. Please observe that the list is not exhaustive but may serve as a guide when applying. Finansinspektionen reserves the right to demand further information when needed.

If the fund-undertaking/asset management company is authorised in accordance with EC regulations, no separate documentation regarding sound practice is required. In such cases, it is sufficient to provide a certificate from the competent authority in the undertaking’s country of domicile verifying this.

The following information concerning the undertaking should be included:

That collective investments are placed in types of assets recognised by Swedish fund legislation, with capital contributed by the public.
A description of how the principle of risk diversification is upheld, i.e. that the portfolio is not dependent on individual placements.
Information on the criteria for entry and exit from the undertaking and information regarding minimum investments, if applicable.

The following information concerning the management company should be included:

An account of potential conflicts of interest and how these may be avoided and/or dealt with.
An account of the management company’s risk control function and a description of the risk management plan.
A description of the administrative processes.
An account of the information systems used and how security issues are managed.
Information on how the management company ensures that the unit holders’ assets are secured, i.e. that the collective investment remains separate from the management company’s assets.

Self-managed fund-undertakings, e.g. SICAVs and OEICs, should also submit the information listed above concerning management companies. If the undertaking/asset management company is under supervision according to EC-regulation, special documentation regarding the supervision is not required.

In such cases a certificate issued by the competent authority in the country of domicile acknowledging this fact is sufficient. In order to facilitate the authorisation process a checklist should be enclosed.