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Markets and Securities Services |
Sweden
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The 2014 Committee has not fully taken notice
of the implications of the implementation of
the AIFMD in Sweden.
7
The AIFMD means that
Swedish limited liability companies (
aktiebolag
)
— without any adjustments to company law —
are treated as “funds” for regulatory purposes.
The share capital of limited liability companies
are always fixed. However, by using various
debt instruments as the means for investors to
make investments (so-called fund units), it has
been possible to set up — and get regulatory
approval for — alternative investment funds
organised as limited liability companies with,
in effect, variable capital.
8
funds, have not been in any way addressed
by legislation or regulation.
9
This includes the
classification of the fund units that, for the
purposes of civil law are debt instruments,
under the AIFMD, and, prima facie, the fund
units themselves, as they are debt instruments,
may be thought to constitute “leverage”” for
AIFMD purposes.
The new investment companies will, however,
only be permitted for funds authorised
as UCITS funds. Under the proposals, the
regulatory category of UCITS funds would
correspond to two alternative structures in civil
law: either the traditional contractual form or
the new form of an investment company. The
current proposals do not envisage investment
companies organised to function as alternative
investment funds, except that exceptions to
the UCITS regulations will be permitted on the
same terms as for current special funds.
The statutory regime for investment
companies is not, in the current proposals,
entirely independent of general company law.
Instead, investment companies will be subject
to general company law (
aktiebolagslagen
),
with certain specified adjustments. This model
has already been used for credit institutions
and insurance undertakings organised as
corporations. Investment companies will be
able to operate either as internally managed or
externally managed funds.
For externally managed funds, adjustments are
particularly called for to allow the manager
effectively to take the position of the general
meeting of shareholders and the board of
directors in internally managed funds (and
regular companies). Where an externally
managed investment company retains a board
of directors, the board may not intervene in the
day-to-day running of the company but will be
acting as a supervisory board overseeing the
managerial discharge of its obligations.
Under the proposals, fund managers will
be permitted to manage more than one
investment company. Though the 2014
Committee discussed, but decided against,
permitting umbrella funds in the form of
investment companies, it did permit the use
of more than one series of shares (each series
differing in terms of voting rights, dividends,
fees, minimum purchase price, distribution,
currency hedging and the currency for
purchases and redemptions). Investment
The 2014
Committee
explicitly intends
the proposed rules
on investment
companies to be
a test case, to
be evaluated as
to their practical
impact.
The corporate alternative investment funds
throw up a number of legal issues, such as the
interrelationship between the role of the board
of directors that a limited liability company
necessarily has, even when it is categorised as
an externally managed alternative investment
fund. The contradictions that arise from this
structure, e.g. the competition between the
effective authority of the managers and that of
the board of directors and the general meeting
of shareholders of the alternative investment