Disclosure Requirements - Sweden
Disclosure Category: 3
Background and legal basis
The Swedish rules regarding disclosure of changes in shareholdings are found in the Financial Instruments Trading Act (1991:980) and in regulation FFFS 2007:17, Chapter 12 of Finansinspektionen, the Swedish Financial Supervisory Authority (FSA).
The provisions are based on the requirements imposed by the Transparency Directive (2004/109/EC) and, as of 1 February 2016, the EU’s revised Transparency Directive (2013/50/EU).
The disclosure requirements fall on the beneficial owner.
Obligation to report threshold crossings
The statutory provisions apply in connection with acquisitions or disposals of shares in Swedish companies whose shares are listed on a regulated market in Sweden or admitted to trading on a regulated market in another state within the European Economic Area (EEA). Under certain circumstances the disclosure requirements also apply to shares issued by a company domiciled outside the EEA.
The disclosure obligation is triggered if a holding reaches, exceeds or falls below any of the 5%, 10%, 15%, 20%, 25%, 30%, 50%, 66?% and 90% thresholds of the votes or the number of shares in a company. A company's acquisition and transfer of its own shares shall also be reported if the transaction implies that the holding reaches, exceeds or falls below any of the above thresholds.
The disclosure obligation also includes types of financial instruments other than shares, for example, depository receipts with attached voting rights for the underlying shares and financial instruments that grant the right to acquire shares.
When calculating holdings and percentage thresholds, the following types of shares shall also be considered:
- Shares held by a third party with which an agreement is concluded for a concerted exercise of the voting rights regarding a lasting common policy towards the management of the company;
- Shares held by a subsidiary;
- Shares held by a third party under an agreement that provides for the temporary transfer, for consideration, of the voting rights;
- Shares lodged as collateral, if the voting rights are controlled and a declaration is made of the intention to exercise the voting rights;
- Shares on deposit, if the depository controls the exercise of the voting rights;
- Shares for which the voting rights may be exercised by proxy, if the proxy holder controls the exercise of the voting rights.
Exceptions to the disclosure obligation are, however, made in certain cases, for example:
- Shares acquired for the sole purpose of clearing and settlement within the usual short settlement cycle;
- Shares held by custodians in their custodian capacity, provided that such custodians can only exercise the voting rights under written instructions;
- Shares held in the trading book of investment firms and credit institutions, provided that the shares and voting rights do not exceed 5% of the company and that the voting rights are not exercised or otherwise used to intervene in the management of the company;
- Shares held by a market maker, under certain circumstances;
- Shares held by a parent of a fund management company, a management company or an investment firm, under certain circumstances.
Disclosure shall be made to the company and to the FSA at the latest on the third trading day following the transaction day. FSA shall, no later than 12:00 noon on the trading day after the day the report was received, make the disclosure public. The notification to the FSA should include the ISIN code and the number of shares and voting rights both before and after the transaction. The disclosure shall be made in writing or in electronic form via the FSA’s website.
Furthermore, a listed company that increases or decreases the total number of shares or voting rights shall, on the last trading day in the calendar month in which the change occurred, make such change public.
A fine can be levied in the case of non-compliance with the disclosure obligations. For legal entities, a maximum fine will apply up to approximately MSEK 89, 5 % of the legal entity’s turnover, or two times the profit procured or the costs avoided as a result of the violation.