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Global Trustee and Fiduciary Services News and Views
| Issue 47 | 2017
61
The road to a structure for investment funds
On 30 October 2014, the Swedish government
appointed the 2014 Committee to propose
legislation for the implementation of the
UCITS V Directive and make proposals for the
enhancement of the competitiveness of the
Swedish investment funds market including,
for example, additional types of funds for
professional investors.
1
The directives for the 2014 Committee — in part
reflecting the interests of the minority coalition
government between Social Democrats and
Greens, the latter of whom provides the
Financial Markets Minister — were extended
on 18 December 2014 to include the review of
sustainability issues in the investment funds
market.
2
They were further extended on 19
March 2015 to address the distinction between
passive and active fund management styles.
3
On 5 November 2015, the deadline for the final
report of the 2014 Committee was extended
to 30 June 2016, after the delivery of an
interim report on the implementation of UCITS
V in June 2015.
4
The final report was duly
submitted to the government in June 2016.
5
That final report makes several suggestions
for sustainability in fund management, active
and passive fund management styles, certain
clarifications to the investment rules for UCITS
funds, legislation dealing with European Long-
Term Investment Funds (ELTIFs) and certain
other matters concerning professional investors,
certain capital requirements and a new kind of
corporate fund.
Historically, investment funds in Sweden
have only come in the form of contractual
funds, subject to a particular statutory regime
(in various guises in 1974, 1990 and 2004).
There has not been a corporate structure for
investment funds. The need for corporate
investment funds was discussed in an earlier
committee report. However, it was then
concluded that there was no need for the
introduction of corporate funds in Swedish law.
6
This conclusion, however, has now been
reassessed, and the 2014 Committee has
proposed that corporate funds be introduced in
Swedish law through a new act, the Investment
Companies Act (
lag om investeringsbolag
).
“Investment company” (
investeringsbolag
)
is the term suggested for this new type of
investment fund, which will sit alongside other
types of pre-existing funds such as:
• Contractual UCITS funds (
värdepappersfonder
).
• Contractual funds granted exemptions from
the UCITS rules, ”special funds” (
specialfonder
)
(for regulatory purposes, special funds are
“alternative investment funds”).
Below we explore what this new fund entails
and how it will affect fund managers in the
Swedish market.
A look at the investeringsbolag
This new type of fund was broadly based on
similar fund structures in other jurisdictions,
such as Luxembourg SICAVs, British OEICs and
Irish ICAVs. The investment company will be
structured in a way that appears to be a radical
departure from the established principles of
Swedish company law, in that it will have a
variable share capital, though the proposals
are actually less radical than they may seem.
CATCHING UP ON A NEW KIND OF
CORPORATE FUND IN SWEDEN
The final report of the Swedish government’s 2014 Investment Funds Committee
(2014 Committee) makes a number of suggestions concerning sustainability
in fund management, fund management styles, investment rules for UCITS
funds, ELTIF legislation and other matters including professional investors,
capital requirements and — the subject of this article — a new kind of corporate
fund. But before we catch up on this latest funds development in Sweden,
a quick summary of what brought the market to this point is appropriate.