Banking and Finance News Alerts

Implementation of the UCITS IV Directive 

Sweden is in the process of implementing the Directive (2009/65/EC) on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS IV Directive). The UCITS IV Directive is applicable within the European Economic Area (EEA) and will replace the old UCITS Directive (85/611/EEC) (UCITS III Directive).

As Sweden is implementing the UCITS IV Directive, the Act on Investment Funds (Sw: lag (2004:46) om investeringsfonder) and the Act on the Securities Market (Sw: lag (2007:528) om värdepappersmarknaden) will be amended. These amendments will come into force on 1 August 2011. Additionally, the Swedish Financial Supervisory Authority (SFSA) is amending the regulations on investment services and activities (FFFS 2007:16) and the regulations on investment funds (FFFS 2008:11).

A vast majority of these amendments apply only to UCITS funds
(Sw: värdepappersfonder) as the UCITS IV Directive solely applies to UCITS funds. However, some of the amendments will also apply to unregulated funds (Sw: specialfonder). The implementation of the UCITS IV Directive involves changes within five significant areas offering enhanced flexibility and increased opportunities for investment professionals.
 

EU Directive Introduces a 5 per cent Risk Retention Requirement

The Swedish Capital Adequacy and Large Exposures Act (Sw. Lag (2006:1371) om kapitaltäckning och stora exponeringar) has been amended as part of the implementation of the Capital Requirement Directive (2009/111/EC) (CRD II). The amendments came into effect on 30 June 2011.

This New Alert focuses on the newly introduced 5 per cent risk retention rules and due diligence requirements that apply to securitization transactions. The reform aims to address some of the shortcomings revealed by the financial crisis and to address future excessive risk taking by aligning the interests of the originator or sponsor with the interests of the investor.

Please, see attached pdf for the full version.