Garantum Fondkommission receives a remark and administrative fine

Finansinspektionen has investigated Garantum Fondkommission’s compliance with the provisions in, among other regulations, the Securities Market Act that aim to ensure the consideration of customer interests when providing investment advice to retail customers. The investigation was limited to such advice provided by the company’s tied agents with regard to two types of structured products (warrants and autocalls).

The investigation shows that Garantum Fondkommission has been in violation of the provisions governing the contents of the suitability report to the customer and the presentation of costs and fees for the customer. These provisions are of key importance for protecting customers, in particular when the company recommends to retail customers to invest in complex and high-risk financial instruments.

The company has also not documented its advice in the manner required under the regulation with regard to the obligation to ensure that the customers have the right knowledge and experience for the investments they are being recommended to make. The same applies to the documentation that refers to the company’s obligation to conduct an analysis of and inform customers about the benefits and costs associated with a recommendedswitch of financial instruments

Finansinspektionen makes the assessment that the violations have been of such a nature that there are grounds on which to intervene against the company. However, the violations are not so serious that there are grounds on which to withdraw the company’s authorisation or issue the company a warning. Finansinspektionen is therefore issuing Garantum Fondkommission a remark and an administrative fine of SEK 15 million.