Alternative investment funds (AIFs) can take the legal form of a so-called special fund, a common contractual fund or an association, such as a limited liability company, trading partnership or limited partnership (kommanditbolag). Whether an association constitutes an AIF is, however, determined based on the object of the association – ie, if the object meets the criteria of an AIF pursuant to Article 4 of the Alternative Investment Fund Managers Directive (AIFMD; 2011/61/EU).

In Sweden, real estate funds and private equity funds are commonly structured as limited liability companies or limited partnerships.

AIFs are regulated by the Swedish Alternative Investment Fund Managers Act (AIFMA; lag (2013:561) om förvaltare av alternativa investeringsfonder), which primarily governs AIF managers (AIFMs). Additional regulation of AIFs is provided under the regulations of the Swedish Financial Supervisory Authority (SFSA; Finansinspektionen) regarding AIFMS (Finansinspektionens författningssamling (FFFS) 2013:10).

An AIF structured as, for example, a Swedish limited liability company or a limited partnership must also comply with applicable company law.

For a special fund that falls within the definition of an AIF, the Swedish Undertakings for Collective Investment in Transferable Securities (UCITS) Act and the SFSA’s regulations regarding Swedish collective investment in transferable securities (UCITS) funds (FFFS 2013:9) apply where relevant.

Registration

For a Swedish AIFM, registration with the SFSA is sufficient if the following criteria are met:

• the assets of the AIFs, including those acquired through financial leverage, do not exceed EUR100 million; or
• the assets of the AIFs do not exceed the equivalent of EUR500 million in Swedish krona, provided that the portfolios consist of AIFs that are unleveraged and have no redemption rights exercisable during for a period of five years following the date of initial investment in each AIF.

An application for registration to manage AIFs shall include the following:

• information regarding the AIFM, the AIFs and their investment strategies;
• the information set out in Article 5 (1) and (2) of Delegated Regulation 231/2013/EU regarding AIFMs (Annex IV need not be completed at registration);
• information about the investors’ right to redemption; and
• a description of how marketing to retail investors is prevented.

Authorisation

If the assets of the AIFs exceed the aforementioned thresholds, Swedish AIFMs must apply for authorisation. Compared to the registration process, a licence application requires additional documentation, which is detailed in AIFMA and FFFS 2013:10.

An external AIFM can obtain authorisation for discretionary portfolio management. Additionally, such a manager can apply for authorisation to provide investment advice under the Swedish Securities Market Act and the SFSA’s regulations on investment services and activities (FFFS 2017:2), which implement Markets in Financial Instruments Directive (MiFID) II (2014/65/EU).

Once the application has been filed and the application fee (currently SEK378,000) has been paid, the SFSA begins processing the application. The standard processing time is three months, but the SFSA may extend this by an additional three months under special circumstances. However, applicants should anticipate a handling time of six to nine months due to potential delays.

As a main principle, an investor in an AIF is only liable to the amount invested. However, exceptions may occur based on the legal structure of the AIFM. For example, in relation to an internal AIFM legally structured as a limited partnership, the general partner and investor (kommanditdelägaren) is personally responsible for the agreements and debts of the limited partnership.

Disclosure Requirements

A disclosure document (prospectus) in accordance with the rules in Article 23 of the AIFMD is required if an AIF is to be marketed to professional investors within the EEA.

A more extensive prospectus is required if an AIF is to be marketed to retail investors. Marketing towards retail investors resident in Sweden is possible if the manager is managing a special fund or has been granted a specific additional licence to market a fund that is a company and has its shares listed on a regulated market.

The prospectus must contain the following minimum information, where applicable:

• general information on the investment fund;
• the investment policy of the investment fund;
• risks and investor profile;
• the manager, depositary and auditor;
• outsourcing;
• the issue, redemption and conversion of units; and
• past performance.

There are also specific minimum information requirements for the prospectus of closed-end public AIFs.

In addition to the prospectus, so-called key investor information must also be provided. The key investor information was supplemented by the key information document (KID) in accordance with the European Packaged Retail and Insurance-based Investment Products (PRIIP) Regulation.

For retail funds, the prospectus shall inform the investors about the “facilities” established for local investors under the EU Directive on cross-border distribution of investment funds (Directive (EU) 2019/1160).

Reporting Requirements

Each AIFM must, within six months from the end of each fiscal year, submit an annual report for:

• each EEA-based AIF managed by the AIFM; and
• each AIF marketed by the AIFM within the EEA.

The annual report must be made available to the AIF’s investors upon request. Additionally, the SFSA and, if applicable, the home country authority of the AIF (if domiciled outside Sweden), must receive the report.

For special funds, an AIFM must submit a quarterly report to the SFSA at the end of each calendar quarter. This report must include:

• a profit and loss account and a balance sheet with specifications; and
• information on the calculation of own funds and capital requirements.

The quarterly report must reflect the conditions as of the last day of the quarter and be submitted by the following deadlines: 21 April, 21 July, 21 October and 21 January.

In addition, AIFMs must provide regular reports to the SFSA regarding:

• the principal markets where the AIFM operates;
• the financial instruments traded; and
• each fund’s principal exposures and risk concentrations.

AIFMs must provide the SFSA with the following information for each EEA-established AIF they manage, and for each fund they market within the EEA:

• the percentage of the fund’s assets that are illiquid;
• any amendments or new arrangements for liquidity management;
• the fund’s risk profile and the risk management systems used;
• details of the main categories of assets in which the fund invests; and
• the results of stress tests performed on the fund.

Upon request by the SFSA, AIFMs must also provide:

• a detailed list of the AIFs managed, updated at the end of each quarter; and
• annual reports for each fund managed and marketed within the EEA.

Alternative funds in Sweden attract capital from institutional investors such as pension schemes, insurance companies, taxable and tax-exempt pension funds and banks, and from private investors such as family offices and high net worth individuals. Institutional investors typically invest via managed accounts, often as single- or group-investor funds.

An AIFM can be either internal or external. An internal AIFM administers the AIF itself as part of its legal structure (eg, a limited liability company that constitutes the AIF). An external AIFM, on the other hand, is a separate entity from the AIFs it manages (eg, a Swedish limited liability company authorised to manage AIFs).

There are restrictions on marketing to retail investors. AIFMs marketing AIFs to professional investors must implement measures to prevent the marketing of units and shares in the AIF to retail investors.

Sweden-Based AIFMs

Swedish AIFMs authorised under AIFMA can market special funds to retail investors resident in Sweden. Other AIFs may also be offered to the public, but only if the AIF has been admitted to trade on a regulated market.

A Swedish AIFM registered under AIFMA may also, with approval from the SFSA, market units to a retail investor who (i) commits to investing a minimum of EUR100,000, and (ii) provides written acknowledgment, in a separate document, of the risks associated with the investment. In that case, however, the investor must lack the right to redemption for at least five years from the first investment, and the fund must – according to its investment policy – generally invest in issuers or unlisted companies to acquire control.

EES-Based and Non-EES-Based AIFMs

The marketing of units or shares in AIFs to retail investors by EES-based and non-EES-based AIFMs requires authorisation from the SFSA. If a foreign AIF is considered equivalent to a special fund, it is possible to apply for authorisation to market the fund to the public, even if it is not admitted to trade on a regulated market. However, in practice, the SFSA rarely approves such applications.

AIFs are regulated by AIFMA, although AIFMA primarily addresses AIFMs. Further regulation of AIFs is stipulated under the SFSA’s regulations regarding AIFMs (FFFS 2013:10).

AIFs structured as, for example, a Swedish limited liability company or a limited partnership must also comply with applicable company law.

For a special fund, which falls within the definition of an AIF, relevant parts of the Swedish UCITS Act and the SFSA’s regulation regarding Swedish UCITS funds (värdepappersfonder) (FFFS 2013:9) apply.

There are generally no investment limitations for AIFs. However, there are investment restrictions with regard to Swedish special funds. A Swedish special fund must adhere to the following requirements:

• the fund’s sole purpose must be to invest in liquid financial assets only (in principle, eligible assets as defined under the UCITS Directive (2009/65/EU), although the SFSA may grant exemptions from the UCITS requirements);
• the fund must apply the principle of risk diversification;
• the fund units are repurchased or redeemed at the unit holder’s request at least once every year; and
• the fund must adhere to specific requirements concerning the acquisition of non-listed companies and issuers.

In general, there is no registration or regulation requirement for non-local service providers such as administrators, custodians and services providers in Sweden. However, when a Swedish manager outsources portfolio or risk management, the service provider must be authorised or registered in their home country. Additionally, any service provider domiciled outside the EU must appoint a domestic authorised agent to whom notifications and service of process can be directed by the respective Swedish authority.

An outsourcing partner who provides services falling under MiFID will be subject to a licence requirement under the SFSA regulations.

If Swedish regulatory law requires a depositary for a Swedish AIF, the depositary – or at least a branch thereof – must be domiciled in Sweden.

EU Managers

EU managers are allowed to perform management services in Sweden under the AIFMD passport regime with regard to AIFs. They may also use the AIFMD passport to provide other services and ancillary services (such as MiFID investment advice or discretionary individual portfolio management). EU managers can also apply with the SFSA to manage a Swedish special fund.

Non-EU Managers

Non-EU managers are currently not allowed to manage AIFs in Sweden. This might change in the future with regard to AIFMs in those countries for which the passporting regime under the AIFMD for third-country managers will eventually become effective.

The handling time for the application for regulatory approval is three months, but under special circumstances the SFSA can extend the processing time by an additional three months. However, it should be noted that the process can be delayed, and applicants should expect a handling time of six to nine months.

An AIFM may engage in preliminary marketing of EEA-based AIFs under certain conditions. This marketing must not enable investors to commit to acquiring fund shares, include subscription forms or provide final versions of key documents like fund rules or company by-laws. Draft documents must clearly state that they are incomplete and not an offer to invest. The EU pre-marketing rules also apply to non-EEA managers.

Managers must ensure that potential investors cannot acquire fund shares through preliminary marketing and must only use marketing methods permitted in Sweden. All such activities must be documented, and the SFSA must be notified within two weeks, detailing the marketing period, strategies and funds involved.

Preliminary marketing can be delegated, but only to certain authorised entities such as investment firms, credit institutions or authorised AIFMs. Delegated parties must also comply with the requirements for documenting and notifying with respect to preliminary marketing activities.

In Sweden, marketing is considered to encompass any activities designed to directly or indirectly offer or place units or shares in an investment fund. Reverse solicitation is currently not regarded as marketing, but its scope is limited due to the pre-marketing regime.

Marketing materials must be in line with the European Securities and Markets Authority (ESMA) guidelines on fair and not misleading content of marketing materials and shall also, in relation to Swedish special funds, be in line with the Guidelines for Marketing and Information by Fund Management Companies of the Swedish Investment Fund Association (Fondbolagens Förening).

There are restrictions on marketing to retail investors. AIFMs marketing AIFs to professional investors must take measures to prevent units and shares in the AIF from being marketed to retail investors.

Sweden-Based AIFMs

Swedish AIFMs authorised under AIFMA can market AIFs to professional investors and AIFs that are special funds to retail investors. Other AIFs can also be offered to the public, but the AIF must have been admitted to trade on a regulated market, and a specific approval must have been granted by the SFSA.

A Swedish AIFM authorised under AIFMA can also, after approval by the SFSA, market units to a retail investor who (i) undertakes to invest a minimum of EUR100,000, and (ii) in writing, in a separate document, confirms their awareness of the risks associated with the investment. In that case, however, the investor must lack the right to redemption for at least five years from the first investment, and the fund must – according to its investment policy – generally invest in issuers or unlisted companies to acquire control.

EES-Based AIFMs

An EES-based AIFM can market EEA AIFs to professional investors in Sweden under the AIFMD passport regime. The marketing of non-EEA AIFs towards professional investors requires authorisation from the SFSA. Furthermore, marketing towards retail investors requires authorisation from the SFSA and can be granted if the fund is a special fund, a fund equivalent to a special fund or a fund listed on a regulated market. More information about the application process can be found in 3.3.8 Marketing Authorisation/Notification Process.

Non-EES-Based AIFMs

Non-EU managers that want to market a non-EEA AIF in Sweden towards professional investors must apply for an approval by the SFSA. More information about the application process can be found in 3.3.8 Marketing Authorisation/Notification Process.

.

Authorisation or registration is required by the SFSA prior to the marketing of alternative funds. Please see 2.1.2 Common Process concerning the setting-up of investment funds.

For Swedish authorised AIFMs, ongoing post-marketing requirements include, inter alia, informing investors of material changes in the information provided to investors in the marketing phase. Furthermore, a licensed AIFM needs to notify the SFSA of material changes in the documents submitted thereto, to obtain approval from the SFSA for the marketing and management of the AIF. The SFSA in principle has one month to decide as to whether it will object to the change, which can be extended by another month. In addition, investors need to be informed of certain types of conflicts of interest before conducting business on their behalf. Finally, investors need to be provided with an AIF report, on an annual basis, which complies with the requirements of Article 22 of the AIFMD.

For AIFMs authorised in Sweden under the fully licensed regime, the investor protection rules pursuant to the AIFMD apply. Generally speaking, no gold plating of the AIFMD has taken place in Sweden, which means that, inter alia, AIFMD investor protection rules on the following topics should be taken into account:

• operating conditions, including requirements regarding remuneration, conflict of interest and risk management;
• the requirement to appoint a depositary;
• fair treatment of investors; and
• transparency requirements.

The SFSA generally complies with established deadlines but retains discretion to determine when sufficient material has been submitted in a given case, marking the start of the processing period. As a result, actual processing times may in practice exceed those prescribed by laws and regulations.

The SFSA does include face-to-face meetings in their supervisory activities, as well as during the application process. Such meetings are also possible before an application is filed.

Investment funds that can be marketed to retail investors without a marketing licence are either UCITS or special funds.

UCITS and Swedish special funds are common contractual funds and may not acquire rights or assume obligations. Nor shall the fund have legal capacity to sue in, or be brought before, courts of law or any other public authority.

The main advantage of the contractual fund is that it is a well-known structure and not liable to pay any tax. A common criticism is that a Swedish UCITS cannot be established through a limited liability company, for example as a société d’investissement à capital variable (SICAV; investment company with variable capital) or Irish collective asset-management vehicle (ICAV). However, this issue is currently under investigation by an inquiry chair. More information regarding this matter can be found in 4.1 Recent Developments and Proposals for Reform.

Setting up a retail fund in Sweden, either as a regular UCITS or a special fund, requires approval of the fund rules by the regulator. The fund rules for a new fund shall be approved if the rules are equitable for the fund’s shareholders. An application of approval shall contain:

• information on the board meeting at which the fund rules were adopted, or the minutes of that meeting;
• the fund rules in accordance with Chapter 4, Section 8 of the Swedish UCITS Act (lag (2004:46) om värdepappersfonder) and Chapter 23 of the FFFS 2013:9;
• the fund’s prospectus (informationsbroschyr); and
• a KID according to EU PRIIP Regulation 1286/2014.

When applying for approval to manage a Swedish UCITS for the first time, a foreign management company authorised in its home state to manage foreign UCITS funds, and with authorisation to conduct operations in Sweden, must also include:

• a certificate showing that the management company in its home country is authorised to manage UCITS funds; and
• the agreement with the custodian as well as information about any outsourcing arrangements related to the management or related administration of the fund.

The SFSA shall make its decision within 60 days from the day that a complete application was filed.

The application fee has recently increased significantly and is currently SEK49,000 (approximately EUR4,250).

The fund shareholders are not responsible for obligations relating to the fund. The management company of the fund represents the shareholders in all matters relating to the fund, and the fund cannot acquire rights or assume obligations. Nor does the fund have any legal capacity to sue in, or be brought before, courts of law or any other public authority.

A fund management company must provide investors with an annual report within four months of the expiry of the financial year and a half-yearly report on the first six months of the financial year within two months following the expiry of the half-year.

The annual and half-yearly reports must contain all information necessary to assess the fund’s development and financial position.

A fund management company shall submit a quarterly report for its operations to the SFSA at the end of every quarter. The quarterly report shall contain a profit and loss account and a balance sheet with specifications, as well as information regarding the calculation of own funds and capital requirements. The quarterly report shall relate to the conditions on the last day of every calendar quarter (the report date), and the SFSA shall have received the report no later than 21 April, 21 July, 21 October or 21 January.

A fund management company must also be able to, at any given time, present a list of each investment fund’s asset holdings (as stated in the Swedish UCITS Act).

Sweden has a long history of public distribution of investments funds, particularly through the public pension system. Swedish retail investors are therefore generally well informed. Investors are often willing to take risks, but retail funds are considered a good basis for retail investors to build on. It is not uncommon for retail investors to have a monthly automatic purchase of shares.

As stated in the foregoing, UCITS and special funds can only be common contractual funds.

While UCITS funds must be distributed to the public, special funds can be restricted to an objectively defined group of investors as long as it is not too small, which would be considered discretionary portfolio management. The target investor group of special funds must be stated in the fund rules of the fund.

Both UCITS and special funds can have different share classes, with different terms for:

• dividends;
• fees;
• the minimum subscription amount;
• the distribution of shares;
• currency hedging; and/or
• the currency in which the units are subscribed and redeemed.

Note that share classes with a minimum subscription of SEK50,000 or more are not considered available to the public, and UCITS must have at least one open share class.

Swedish UCITS are regulated by the Swedish UCITS Act and the SFSA regulations on UCITS funds (FFFS 2013:9).

Swedish special funds are technically AIFs, regulated by Chapter 12 of AIFMA (SFS 2013:561) and the SFSA regulations on AIFMs (FFFS 2013:10). These provisions refer to the Swedish UCITS Act and the SFSA’s regulations on UCITS funds (FFFS 2013:9), relevant parts of which therefore apply.

Each Swedish UCITS shall maintain a suitable diversification of investments, taking into consideration the spreading of risk associated with the fund’s investment focus pursuant to the fund rules.

Assets of a Swedish UCITS may, subject to the limitations stipulated in the UCITS Directive and regulations issued by the SFSA, be invested in liquid financial assets, which consist of transferable securities, money market instruments, derivative instruments and units in collective investment undertakings. The fund may also include liquid assets necessary for the management of the fund. Assets may also be invested in deposits with Swedish credit institutions and foreign credit institutions having their registered offices within the EEA, and with other foreign credit institutions if they are subject to prudential rules equivalent to those laid down by local law.

The same rules apply to special funds, but the SFSA can authorise special funds to deviate from these investment restrictions if the principle of risk diversification is considered to be upheld. The kind of deviations that the SFSA will approve is decided on a case-by-case basis.

Non-local service providers are generally not subject to any local regulation or registration requirements, However, when a Swedish manager outsources portfolio or risk management, the service providers must be authorised or registered in their home country. Additionally, any service provider domiciled outside the EU must appoint a domestic authorised agent to whom notifications and service of process can be directed by the relevant Swedish authority.

An outsourcing partner who provides services falling under MiFID will be subject to a licence requirement under the SFSA regulations.

The depositary for a retail fund – or at least a branch of the depositary – must be domiciled in Sweden.

Non-local managers of retail funds in Sweden are obliged to follow the same regulatory requirements as local managers.

Setting up a retail fund in Sweden, either as a regular UCITS or a special fund, requires approval of the fund rules by the regulator. The SFSA shall make its decision within 60 days from the day that a complete application was filed. Normally, the regulator will use all 60 days.

Pre-marketing of retail funds in Sweden is not regulated.

The regulatory frameworks that apply to the marketing of public funds in Sweden are:

• the Swedish Marketing Practices Act;
• the Swedish UCITS Act;
• AIFMA; and
• the Guidelines for Marketing and Information by Fund Management Companies of the Swedish Investment Fund Association.

All marketing shall be designed and formulated in accordance with good marketing practice (laws and other ordinances, legal precedents, good business practice, etc). In the marketing of funds to customers, relevant and factual information shall be provided, and the risks associated with the product offered shall be explained. The information shall be expressed clearly.

In the marketing of funds, it shall always be made clear that such investments involve a risk.

Retail funds are free to be marketed to the general public. However, restrictions are stipulated in the so-called target market rules in MiFID II, as implemented in the Swedish Securities Act (SFS 2007:528) and the SFSA regulations regarding investment services and activities (FFFS 2017:2), which are applicable to securities firms as well as AIFMs and fund companies with ancillary authorisation for portfolio management or investment advice.

UCITS

There is no authorisation required for Swedish fund companies to market Swedish-domiciled UCITS funds in Sweden.

The marketing licence for EEA-domiciled UCITS can be passported into Sweden according to the UCITS Directive, as implemented in the member state of the fund manager.

AIFs Marketed to Retail Investors

Foreign counterparts to special funds (AIFs) established within the EEA

An EEA-based AIFM may, with permission from the SFSA, market units or shares in a foreign EEA-based AIF managed by the AIFM to non-professional investors in Sweden. Permission may only be granted if:

• the fund’s sole purpose is to make collective investments in UCITS assets with capital from the general public or from a certain specified and defined circle of investors;
• the fund applies the principle of risk diversification;
• at the request of the unit or shareholders, the fund’s units or shares are repurchased or redeemed with funds from the fund’s assets;
• the AIFM provides functions in Sweden to (i) process orders to subscribe, repurchase or redeem units or shares and make payments to the unit or shareholder owners; (ii) provide investors with information on how orders can be placed and on payment for the repurchase or redemption of units or shares; (iii) facilitate the handling of information on how investors can exercise the rights arising from their investments in the fund; (iv) provide the information that the fund manager is required to provide; and (v) provide investors with relevant information about the tasks performed by the functions; and
• there is a fact sheet (KID) for the fund.

An EEA-based AIFM may, with permission from the SFSA, market units or shares in a non-EEA-based AIF managed by the AIFM to non-professional investors in Sweden. Permission may only be granted if:

• there is reason to assume that the AIFM will fulfil all requirements according to AIFMA and other statutes that regulate the business;
• the requirements for foreign EEA-based AIFs (as stated in the foregoing) are met;
• there are appropriate co-operation arrangements between the SFSA and the supervisory authority in the country where the fund or recipient fund or its manager is established; and
• the country where the fund or recipient fund, or its AIFM, is established has taken the necessary measures to counter money laundering and terrorist financing.

Permission to market units or shares in a non-EEA-based AIF may also be granted if the requirements regarding depositaries are not fulfilled, and if the AIFM has ensured that one or more entities have been appointed to monitor the AIF’s cash flows; deposit all financial instruments; monitor the ownership rights of other assets; execute the instructions of the AIFM; ensure the accurate sale, issuing, repurchase, redemption and cancellation of units; ensure the correct valuation of units/shares; ensure immediate remuneration of transactions affecting the AIF; and ensure the AIF’s income is used in accordance with the provisions of AIFMA and the AIF’s prospectus or equivalent regulations. The trustee must inform the SFSA regarding who is responsible for these tasks.

Foreign EEA-based AIFMs may also, with permission from the SFSA through the approval of the fund’s rules, manage a Swedish special fund.

AIFs admitted to trading on a regulated market or an equivalent market outside the EEA

An EEA-based AIFM may, with permission from the SFSA, market units or shares in an AIF managed by the AIFM to non-professional investors in Sweden in cases other than those mentioned in the foregoing, if the units or shares in the fund are admitted to trading on a regulated market or an equivalent market outside the EEA and there is a fact sheet (KID) for the fund.

If the marketing concerns units or shares in a non-EEA-based AIF – or in a feeder fund to an AIF whose recipient fund, or its manager, is not EEA-based – the same requirements that apply to non-EEA based AIFs, as detailed in the foregoing, also apply here (except the requirements for foreign EEA-based AIFs).

Other AIFs that may be marketed towards certain non-professional investors

An EEA-based AIFM may, with permission from the SFSA, market units or shares in an EEA-based AIF managed by the AIFM to non-professional investors that commit to investing an amount equivalent to at least EUR100,000 and confirm in writing that they are aware of the risks associated with the commitment or investment (“semi-professional” investors) if the AIF is closed for redemptions, for at least five years from the first investment, and generally invests in companies to acquire control.

Such marketing is also permitted for a non-EEA-based AIF if there are appropriate co-operation arrangements between the SFSA and the supervisory authority in the country where the fund or recipient fund – or its manager – is established, and the country where the fund or recipient fund, or its AIFM, is established has taken the necessary measures to counter money laundering and terrorist financing.

Upon request, the full prospectus, the key investor information document, the most recent annual report and, where applicable, the half-yearly report published thereafter shall be provided or sent free of charge to any party intending to purchase units in a UCITS or special fund. An investor shall also, without request, be offered the KID in due time prior to investment in a retail fund.

Upon demand by a unit holder or a party intending to purchase units in a Swedish UCITS or special fund, the management company shall provide supplemental information regarding the risk management of the fund, including the quantitative limitations applicable to investments of fund assets, the management methods chosen and the most recent trends in risk levels and yields in the most important categories of assets in which fund assets are invested.

There are no particular investor protection rules related to certain categories of investors in certain types of retail funds. However, the fund manager must act exclusively in the common interest of the fund unit owners.

UCITS

A fund management company must provide investors with:

• an annual report within four months of the expiry of the financial year; and
• a half-yearly report on the first six months of the financial year within two months following the expiry of the half-year.

The annual and half-yearly report must contain all information necessary to assess the fund’s development and financial position.

A fund management company shall submit a quarterly report for its operations to the SFSA at the end of every quarter. The quarterly report shall contain a profit and loss account and a balance sheet with specifications, as well as information regarding the calculation of own funds and capital requirements. The quarterly report shall relate to the conditions on the last day of every calendar quarter (the report date), and the SFSA shall have received the report no later than 21 April, 21 July, 21 October or 21 January.

A fund management company must also be able to present a list of each UCITS’ asset holdings (as stated in the Swedish UCITS Act) at any time.

Special Funds

Each AIFM shall, within six months of the end of each fiscal year, provide an annual report for each:

• EEA-based AIF managed by the AIFM; and
• AIF marketed by the AIFM within the EEA.

The fund’s investors shall be provided with the annual report on request. The SFSA shall subsequently be provided with the annual report, as well as the home country authority if the fund’s home country is not Sweden.

An AIFM that manages a special fund shall submit a quarterly report for each special fund to the SFSA at the end of every quarter. The quarterly report shall include the same information as the quarterly report for UCITS.

An AIFM shall provide regular reports to the SFSA on:

• the principal markets where the AIFM trades;
• the financial instruments the AIFM trades in; and
• each fund’s principal exposure and concentration of risks.

AIFMs shall, for each EEA-established AIF managed by the AIFM and for each of the funds it markets in the EEA, provide the following information to the SFSA:

• the percentage of the fund’s assets that are illiquid in nature;
• any amendments or new arrangements for managing the liquidity;
• the fund’s risk profile and the risk management systems employed to manage those risks;
• information on the main categories of assets in which the fund invests; and
• the results of stress tests performed for the fund.

AIFMs shall, on the SFSA’s request, provide the following documents:

• a detailed list of the AIFs managed by the AIFM updated at the end of each quarter; and
• the annual reports for each fund managed by the AIFM and marketed in the EEA.

The SFSA generally complies with established deadlines but retains discretion to determine when sufficient material has been submitted in a case, marking the start of the processing period. As a result, actual processing times may, in practice, exceed those prescribed by laws and regulations.

The SFSA does include face-to-face meetings in their supervisory activities as well as during the application process. Such meetings are also possible before an application is filed.