CFCL Investment regulation – Sweden

Regulatory structure

Please refer to the CBL Market infrastructure - Sweden for the complete information about the regulatory structure.

Holding restrictions 

Disclaimer

The information contained in the Holding Restrictions is based on the legal opinion obtained by CBL that was issued on 26 October 2018. CFCL believes the information to be correct as of that date but disclaims any responsibility as to the accuracy and completeness of the information after that date. In the case of discrepancy between the information provided by CFCL and the local laws and regulations, the latter shall prevail. The Holding Restrictions do not constitute legal advice and Clients should seek advice from independent professional counsel.

Clients are responsible for ensuring compliance with the holding restrictions and agree to indemnify and hold harmless, CFCL, for any loss, expense, liability, damage, or claims, whether direct or indirect, against or incurred by CFCL arising out of or resulting from such non-compliance.

Holding Restrictions – Register Market – Sweden

Restrictions on clients

No general restrictions on client residency for holdings of investment funds held through CFCL. However, certain funds may impose specific restrictions on investor domicile or category. Clients must refer to and abide by the restrictions (if any) contained in the fund prospectus before entering into transactions.

Restrictions on settlement

There are no general restrictions on settlement for Swedish investment funds through CFCL. However, certain funds may impose specific settlement/transfer restrictions. Clients must refer to and abide by the restrictions (if any) contained in the fund prospectus before entering into transactions.

Restrictions on nominee rights

Under Swedish law, a nominee can exercise financial rights such as subscriptions, redemptions, and depending on each Investment Fund’s rules, the right to receive dividend entitlements. For the avoidance of doubt, as the fund unit holder in a mutual fund has no voting right attached to their fund units, nor has the nominee. However, for closed-ended funds structured as limited partnership companies the voting rights may be provided under certain condition, depending on the content of the agreement.

Holding Restrictions – CSD Market – Sweden

There are no holding restrictions for foreign investors in the Swedish market.

Disclosure requirements

Introductory information and categories

This section provides general information about the disclosure requirements for fund securities holdings with which Clearstream Fund Centre must, according to the information available at the time of the present publication, comply with each of the domestic markets and fund markets covered by the Disclosure Requirements.

Fund securities that are held remotely are usually not disclosed by CFCL. A disclosure request received by CFCL regarding such a holding will be forwarded to the relevant client without assessing its validity and the CFCL Client shall handle the request on a voluntary basis

Disclosure Requirements are only available for those countries where CFCL has a link to the respective domestic market or direct access to local domiciled funds that are held in Clearstream’s name on the register.

For fund securities holdings where CFCL has no such link or direct access to the register, clients must be aware that local laws might provide for mandatory disclosure. A disclosure request in this regard will be forwarded to clients without assessing its validity. Clients commit not to unreasonably withhold their consent to such a request and agree to indemnify CFCL for damages resulting directly from non-compliance with mandatory local disclosure requirements.

In most cases, the obligation to disclose is based on the domestic equivalent of a Companies Act, relevant investment funds act or anti-money laundering act and covers all security types.

In some instances, the obligation to disclose is based on stock exchange laws or regulations and only applies to listed domestic and foreign securities.

The Disclosure Requirements do not constitute legal advice and the Clients should seek independent professional advice in relation to fund securities deposited with CFCL, especially as, for those jurisdictions in which no disclosure obligation falls on CFCL, there may be separate disclosure requirements that apply directly to clients of CFCL, shareholders and beneficial owners.

Please note that CFCL is not always given comprehensive information or advised of changes affecting local disclosure requirements.

It remains the sole responsibility of the Client to ensure compliance with local disclosure requirements. If a requirement is not met, it is the Client who will be liable to any related penalty. Clients are therefore advised to seek independent legal advice on the existence and interpretation of local disclosure requirements.

In the case of a discrepancy between the general information contained in this document and the information provided by CFCL for a specific market, as applicable (irrespective of whether this information has been obtained from an agent of Clearstream Fund Centre, or, as the case may be, a foreign regulator of a branch of CFCL), the information provided by CFCL for the specific market as applicable, shall prevail.

N.B.: In all countries, if it is suspected that a disclosure obligation has been breached (for example, that a threshold of holdings under custody has been crossed without being reported), the regulators and the authorities may have the power to investigate. Moreover, in all countries, disclosure obligations might be triggered by enforceable judgements of the competent jurisdiction of the country in question. 

Disclosure categories

Clearstream Fund Centre classifies disclosure scenarios according to the following market categories:

Category 1

Markets where disclosure by Clearstream Banking as a custodian of Clearstream Fund Centre to issuers, investment fund managers and/or to regulators or market authorities is mandatory under applicable law;

Category 2

Markets where disclosure by Clearstream Banking as a custodian of Clearstream Fund Centre of account holders to issuers, investment fund managers and/or foreign regulators or market authorities is a legal obligation in respect of securities in specific circumstances;

Category 3

Markets where there is no obligation for Clearstream Banking as custodian of Clearstream Fund Centre to disclose account holders to issuers, investment fund managers and/or regulators, notwithstanding any disclosure requirement falling directly on clients of Clearstream Fund Centre, shareholders and/or beneficial owners or notwithstanding disclosure necessary to obey an enforceable judgement of the country in question.

Disclosure requirements – Register Market - Sweden

Disclosure Category: 2

Clearstream Fund Centre S.A. (“CFCL”) may be required, upon request, to disclose the identity and holdings of clients and ultimate beneficial owners in the case of holding Swedish investment funds.

Consent

In order to comply with the applicable legislation, Clients with holdings in Swedish investment funds or entering into transactions in Sweden market must consent, and are hereby deemed to consent, to the required legal disclosure. Such consent includes the appointment of the requestor (for example, the Fund Manager, Transfer Agent, Regulator) as their attorney-in-fact, under power of attorney, to collect from CFCL the required information to be disclosed. Clients who do not grant such authority cannot hold such investment funds / financial instruments in their accounts with CFCL.

Disclosure Requirement

Clients are advised that local laws and regulations oblige CFCL to disclose the requested information on ultimate beneficial owners for securities registered in the nominee account to the fund managers, to the extent required by the local legislation relating to the fight against money laundering and the financing of terrorism, as well as Know Your Client (KYC) requirements.

Background and legal basis

In case of holding Swedish investment fund units or shares, CFCL may be obliged under, e.g. the Swedish Money Laundering and Terrorist Financing Act (2017:630) to disclose the identity and holdings of clients and/or ultimate beneficial owners.

Sanctions

The fund management company may refuse entering into a subscription agreement with CFCL if CFCL fails to disclose the required information.

Disclosure requirements – CSD Market - Sweden

Disclosure Category: 3

Clearstream Fund Centre S.A. (“CFCL”), as an intermediary, has no obligation to disclose holdings or other information about its clients. Investors that hold securities in the Swedish market are required to report if they exceed the set thresholds or if they are impacted by the Foreign Direct Investment (FDI) Act.

Consent

Clients are deemed to consent to disclosure and to the appointment of the requestor (for example, but not limited to, the issuer or its agent) as their attorney-in-fact, under power of attorney, to collect from Clearstream Fund Centre such information as is required to be disclosed. Clients not willing to give this consent cannot hold such securities and/or financial instruments in their account with Clearstream Fund Centre.

Disclosure requirements

The disclosure requirements fall on the beneficial owner.

Please refer to the Disclosure Requirements – Sweden for more information.

Disclaimer

The information contained in the Disclosure Requirements is based on the legal opinion obtained by CBL acting as a sub-custodian for CFCL that was issued on 26 October 2018. CFCL believes the information to be correct as of that date but disclaims any responsibility as to the accuracy and completeness of the information after that date. In the case of discrepancy between the information provided by CFCL and the local laws and regulations, the latter shall prevail. The Disclosure Requirements do not constitute legal advice and Clients should seek advice from independent professional counsel.

Clients are responsible for ensuring compliance with the disclosure requirements and agree to indemnify and hold harmless, CFCL, for any loss, expense, liability, damage, or claims, whether direct or indirect, against or incurred by CFCL arising out of or resulting from such non-compliance.