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					                       THE BANKING BUSINESS ACT
                                         (SFS 1987:617)

                               [Amendments up to 1 March, 2000]

                               Chapter 1. Introductory provisions

                                             Section 1.
This Act contains common provisions for banks regarding the business which a bank may
conduct and also regarding supervision, etc. In addition, this Act contains certain specific
provisions for banking companies and provisions concerning auditing, general examinations,
damages, etc., and names of savings banks and members banks.
In this Act, “bank” means banking companies, savings banks, and members banks. In this Act,
“banking company” means a limited liability company licensed to conduct banking business.
That which is prescribed in relation to companies in general shall apply to banking companies,
unless otherwise prescribed by this Act or as prescribed separately. Where references are
contained in the Swedish Companies Act (SFS 1975:1385) to the provisions of the same Act and,
where the provisions of this Act apply in lieu of, or in addition to, the provisions of the
Companies Act, such references shall refer in lieu of, or in addition to, the provisions of this Act
in conjunction with matters concerning banking companies. Provisions regarding the manner in
which savings banks and members banks are established and their organisation, etc., are
contained in the Savings Banks Act (SFS 1987:619) and the Members banks Act (SFS
1995:1570). In this Act, a bank‟s “by-laws” means regulations for savings banks and by-laws for
members banks.
Each bank must have a head office in Sweden.
Foreign banking undertakings which conduct business via branch offices in Sweden are subject to
the provisions of this Act, where applicable, and are otherwise subject to the Foreign Branch
Offices Act (SFS 1992:160).
This Act shall not apply to operations conducted by the Central Bank of Sweden or the Swedish
National Debt Office. (SFS 1999:911).


                                             Section 2.
In this Act, “banking business” means operations which include the acceptance of deposits on
account where the balance is determined in nominal amounts and is available to the depositor on
short notice. Banking business may only be conducted following authorisation (charter).
Authorisation may only be given to banks. Provisions regarding the entitlement of foreign
banking undertakings to conduct banking business are contained in sections 4 and 5. (SFS
1999:222).


                                            Section 2a.
Where an undertaking accepts customer funds on account, such do not constitute deposits as
referred to in Section 2, first paragraph, provided the balance for each customer does not exceed
SEK 15,000 and the balance is only available to the customer:
1. for payment for goods and services which are produced or sold by the undertaking or by
   another undertaking in the same group or in the same group of undertakings with close
   economic affiliation; or
2. in connection with the closure of the account. (SFS 1995:1572).

                                           Section 2b.
Banking business in accordance with Section 2, first paragraph shall not be deemed to exist when
an economic association conducts deposit operations, provided the association:
1.   receives deposits only from its own members;
2.   only intends to use members‟ deposits to satisfy the financing requirements of the members;
3.   only accepts natural persons as members; and
4.   has no more than 1,000 members. (SFS 1995:1572).

                                           Section 2c.
An undertaking which offers deposits on account in accordance with sections 2 a or 2 b shall
specify in conjunction with its advertising, displays, and other marketing of account services that
the balance on the account is not covered by the deposit guarantee in accordance with the Deposit
Guarantees Act (SFS 1995:1571). Prior to execution of an account agreement in accordance with
sections 2 a or 2 b, the account operator undertaking must inform the depositor that the balance
on the account is not covered by the deposit guarantee. The information must be provided in
writing.
The Marketing Practices Act (SFS 1995:450) shall apply in the event an undertaking fails to
provide the information set forth in the first or second paragraphs or information which is
otherwise of particular significance from a consumer perspective. (SFS 1995:1572).


                                            Section 3.
For the purposes of this Act:
1. “EEA” means the European Economic Area;
2. “Qualified holding” means direct or indirect ownership in an undertaking where the holding
   represents ten per cent or more of the share capital or the voting capital or where the holding
   otherwise renders it possible to exercise significant influence over the management of the
   undertaking;
3. “Branch office” means an independently managed branch office. Where a foreign banking
   undertaking is established in Sweden in accordance with Section 4, first paragraph, sub-
   Section 1, or Section 5, sub-Section 1, the establishment shall be regarded as a single branch
   office notwithstanding that several operating locations have been established.
A banking undertaking and another undertaking shall be deemed to have a close affiliation where:
1. one undertaking, directly or indirectly via a subsidiary or subsidiaries, owns 20 per cent or
   more of the share capital or controls 20 per cent or more of all voting capital in the other
   undertaking;
2. one undertaking directly or indirectly constitutes the parent company of the other
   undertaking, or there is another similar affiliation between the undertakings; or
3. both undertakings are subsidiaries of, or possess a similar affiliation with the same legal
   entity, or have a corresponding relationship to a single natural person. Close affiliation also
   exists between a natural person and a banking company where the natural person:
   1. owns more than 20 per cent of the share capital or controls more than 20 per cent of all of
       the voting capital in the banking undertaking; or
    2. in some other manner exercises such influence over the banking undertaking that the
       person‟s position is equivalent to that held by a parent company in its relationship to a
       subsidiary, or where there is another similar affiliation between such natural person and
       the banking undertaking. (SFS 1996:746).



                                           Section 4.
A foreign banking undertaking may:
1. conduct banking business via branch offices following the grant of a licence to do so; or
2. following notification to the Swedish Financial Supervisory Authority, conduct operations
   which primarily relate to representation and brokering of banking services from offices or
   other permanent establishments (representative offices). An application for a licence in
   respect of the establishment of a branch office in accordance with the first paragraph, sub-
   Section 1 shall be determined by the Financial Supervisory Authority. However, cases
   involving matters of principle or of exceptional significance shall be determined by the
   Government. A licence for the establishment of a branch office in accordance with the first
   paragraph, sub-Section 1 shall be granted where:
   1. the planned business may be assumed to fulfil the requirements of a sound banking
       operation; and
   2. deposits with the branch office are covered by the guarantee in accordance with the
       Deposit Guarantees Act (SFS 1995:1571), or by a foreign guarantee which covers
       deposits as referred to in Section 2 of the Deposit Guarantees Act and which have a
       maximum compensation level of not less than an amount corresponding to 20,000 euros
       prior to any deductions, where applicable, for excess in an amount not exceeding 10 per
       cent of an individual depositor‟s guaranteed deposit. A licence may not be denied on the
       basis that no further banks are required. (SFS 1999:159).
Banking undertakings domiciled in another country within the EEA


                                           Section 5.
A licence pursuant to Section 4 is not required for banking undertakings which maintain their
registered office in a country within the EEA and which hold a licence to conduct banking
business in such country (the “home country”). Such undertakings may:
1. conduct banking business via branch offices in Sweden commencing two months following
   receipt of notification by the Financial Supervisory Authority from a competent governmental
   authority in the undertaking‟s home country containing the information set forth in Section 6,
   second paragraph, or prior thereto, where the Financial Supervisory Authority grants
   permission to commence such operations;
2. conduct banking operations by offering and providing services from its home country
   commencing at such time as the Financial Supervisory Authority receives notification from a
   competent governmental authority in the undertaking‟s home country which contains the
   information set forth in Section 8. (SFS 1997:116).
                           Operations in a country outside of the EEA

                                             Section 6.
A banking company may, pursuant to a licence from the Financial Supervisory Authority,
establish a branch office in a country outside of the EEA. Such a licence shall be granted where
the intended business may be assumed to fulfil the requirements of a sound banking operation.
Applications for a licence must contain:
1. a plan for the contemplated branch office‟s operations, with information in respect of the
   branch office‟s organisation; and
2. information in respect of the country in which the branch office is to be established and the
   address of the branch office and the names of the responsible management. (SFS 1997:116).


                            Operations in a country within the EEA

                                            Section 7.
A banking company which intends to establish a branch office in another country within the EEA
must inform the Financial Supervisory Authority prior to the commencement of operations. The
notification must contain the information set forth in Section 6, second paragraph.
Where there is no cause to call into question the bank‟s administrative structure or financial
situation, the Financial Supervisory Authority shall, within three months of receipt of the
notification, forward the same to the competent governmental authority in the country in which
the branch office is to be established. The Financial Supervisory Authority shall append to the
notification information in respect of the size of the bank‟s capital base and capital adequacy
ratio, in addition to information regarding the deposit guarantee and the investor protection
applicable to the bank‟s customers.
When the Financial Supervisory Authority forwards the notification pursuant to the second
paragraph, the Financial Supervisory Authority shall inform the bank of the same.
Where the Financial Supervisory Authority finds that there is no cause to forward the notification
referred to in the second paragraph, the Financial Supervisory Authority shall render a decision in
respect of the same within three months from the date of receipt of the notification. (SFS
1999:159).


                                           Section 7a.
The branch office may commence operations two months after the competent governmental
authority in the other country receives the information pursuant to Section 7 or, prior thereto,
where the governmental authority grants authorisation to commence operations. (SFS 1997:116).
Section 7 b. Where any of the conditions set forth in the bank‟s notification to the Financial
Supervisory Authority pursuant to Section 7 must be amended after the branch office is
established, the bank must notify the Supervisory Authority and the competent governmental
authority in the other country not later than one month prior to the implementation of the
amendment.
Where the Financial Supervisory Authority finds that the amendment may not be effected, the
Supervisory Authority shall render a decision in respect of the same within one month from the
date of receipt of the notification by the Supervisory Authority. The competent governmental
authority in the other country must be informed of the decision immediately.
In the event of a change in the deposit guarantee or investor protection as referred to in Section 7,
second paragraph, the Financial Supervisory Authority shall notify the competent governmental
authority in the country in which the branch office is situated in respect of the change. (SFS
1999:159).



                                     Cross-border operations

                                              Section 8.
A banking company which intends to conduct operations in another country within the EEA by
offering and providing services without establishing branch offices in such country shall inform
the Financial Supervisory Authority prior to commencing such operations. The notification shall
contain information in respect of the country in which the operations will be conducted and the
services to be offered. The Financial Supervisory Authority shall, within one month from the
date of receipt of the notification, forward the same to the competent governmental authority in
the country in which the operations will be conducted. (SFS 1997:116).



                                     Other general provisions

                                           Section 9.
No body other than a bank, the Central Bank of Sweden, the Swedish General Mortgage Bank
and such banking undertakings as referred to in sections 4 or 5 may use the word “bank” in its
name or otherwise in conjunction with a description of its business.
However, an association or other legal entity with a close affiliation to an undertaking as referred
to in the first paragraph may, following authorisation by the Financial Supervisory Authority, use
the word “bank” in its name. Notwithstanding the provisions of this section, an undertaking
subject to the Pawnbrokers Act (SFS 1995:1000) may use the words “pawnbroker” in its name or
otherwise in its business. (SFS 1995:1001).


                                            Section 10.


An individual‟s relationship to a bank may not be unduly disclosed. The provisions of the
Secrecy Act (SFS 1980:100) shall apply instead to the public sector.
A person who contravenes the prohibition set forth in the first paragraph shall not be subject to
criminal liability pursuant to Chapter 20, Section 3 of the Swedish Penal Code. The above-stated
shall also apply to an auditor who contravenes the prohibition against disclosing information
regarding a bank‟s operations set forth in Chapter 3, Section 14, first paragraph. Section 5 a of the
Credit Information Act (SFS 1973:1173) contains provisions whereby the duty of confidentiality
in accordance with the first paragraph does not prevent the exchange of information in certain
cases for the purpose of obtaining credit information. (SFS 1997:557).


                                            Section 11.
Where a bank is part of a group, the provisions of this Act and the Capital Adequacy and Large
Exposures (Credit Institutions and Securities Companies) Act (SFS 1994:2004) regarding the
bank‟s business and supervision of the bank shall apply, where applicable, to other undertakings
within the group. The limitations imposed on the bank‟s business shall relate to the undertakings
jointly. The first paragraph shall not apply to insurance undertakings and such subsidiary
undertakings of insurance undertakings which do not conduct any form of financial operations.
Where special cause exists, an undertaking may be granted a further exemption from the
provisions of the first paragraph. Issues regarding such exemptions shall be determined by the
Financial Supervisory Authority. However, cases involving matters of principle or of exceptional
importance may be determined by the Government. Group contributions may only be given by
the bank following the consent of the Financial Supervisory Authority.
Other undertakings within the group shall provide the Financial Supervisory Authority with any
information regarding their operations and any circumstances connected therewith which the
Supervisory Authority requires in order to exercise its supervision of the bank. (SFS 1999:222).



                              Chapter 2. The business Operations

                                            Section 1.
A bank is obliged to accept deposits on account from the general public.
(SFS 1992:1613).

                                            Section 2.
Subject to compliance with the provisions of this Chapter, a bank may:
1. borrow funds, inter alia, by issuing bonds or other similar debt instruments;
2. grant and broker loans, inter alia, in the form of consumer loans and loans secured
by real property or instruments of indebtedness;
3. participate in conjunction with financing, inter alia, by acquiring claims and leasing personal
    property;
4. negotiate payments;
5. provide means of payment;
6. issue guarantees and assume similar obligations;
7. participate in issues of securities;
8. provide financial advice;
9. hold securities in safekeeping;
10. conduct documentary credit operations;
11. act as a custodian institution for securities funds;
12. participate in sales of insurance services;
13. provide debt collection services;
14. provide bank safe deposit services;
15. conduct currency trading;
16. conduct securities business subject to the conditions prescribed in the Securities
    Operations Act (SFS 1991:981); and
17. provide credit information subject to the conditions prescribed in the Credit Information Act
    (SFS 1973:1173).
    In addition, a bank may conduct operations which have a natural connection with deposits or
    with operations as set forth in the first paragraph, sub-sections 1-15. The Government or,
    pursuant to authorisation by the Government, the Financial Supervisory Authority, may issue
    detailed regulations regarding what operations a bank may conduct.
    Where special cause exists, a bank may be authorised to provide postal services. Issues
    regarding such authorisation shall be determined by the Financial Supervisory Authority.
    However, cases involving matters of principle or of exceptional importance shall be
    determined by the Government. (SFS 1999:222).


                                              Section 3.
    A foreign banking undertaking which conducts operations pursuant to Chapter 1, Section 4,
    sub-Section 1 or Chapter 1, Section 5, may conduct such operations as referred to in Section 2
    only to the extent such operations are covered by the banking undertaking‟s licence to
    conduct operations in the country in which the undertaking maintains its registered office.
    (SFS 1992:1613).


                                              Section 3a.
    A bank‟s operations must be conducted by the bank‟s own personnel and at the bank‟s own
    premises. However, withdrawals from accounts without passbooks may also be provided in
    another manner.
    The Financial Supervisory Authority may grant a bank a licence to provide the following
    services on behalf of the bank via agents outside the bank‟s premises, namely:
1. deposits into bank accounts;
2. withdrawals from bank accounts with passbooks; and
3. payment transfer services.
The Financial Supervisory Authority may also grant a bank a licence to provide specifically
stated services other than those stated in the second paragraph through certain specified agents
outside the bank‟s premises.
A licence in accordance with the second and third paragraphs may only be granted if:
1. the bank is liable for the operations to the customer; and
2. there are grounds to believe that the operations will be conducted in a monitored and secure
   manner. (SFS 1995:1572).



                                            Section 4.
A bank may acquire:
1. real property, site-leasehold interests in government land and tenant owners‟ rights in order to
   obtain premises for the operations or to satisfy requirements connected therewith;
2. shares or interests in undertakings which have the sole object of managing real property or
   site-leasehold interests in government land which are intended for the purposes stated in sub-
   Section 1 above;
3. equipment which is acquired for the business or property owned by the bank or for premises
   otherwise held by the bank;
4. real property, site-leasehold interests in government land, and tenant owners‟ rights to
   provide accommodation for any person employed by the bank; and
5. personal property to be leased. (SFS 1991:1018).
                                                Section 5.
A bank may acquire another bank‟s business, provided the acquisition is not be deemed to be
prejudicial to the public interest. Authorisation is required for the acquisition where the
acquisition relates to all or a significant part of the business. Issues regarding such authorisation
shall be determined by the Financial Supervisory Authority. However, cases involving matters of
principle or of exceptional importance shall be determined by the Government. (SFS 1999:222).
Section 6. Following authorisation, a bank may acquire shares or interests in a Swedish or foreign
banking undertaking or in a Swedish or foreign undertaking the objects of which may be deemed
beneficial for the banking system or the general public. Issues regarding such authorisations shall
be determined by the Financial Supervisory Authority. However, cases involving matters of
principle or of exceptional importance shall be determined by the Government. The provisions of
the first paragraph shall also apply to issues concerning guarantee fund certificates or
subordinated debentures issued by undertakings referred to in the first paragraph. The issuance of
guarantee fund undertakings shall be deemed to be the equivalent of the acquisition by the bank
of guarantee fund certificates. Section 6 a applies to the acquisition of shares or interests in
insurance undertakings.
    (SFS 1999:222).


                                               Section 6a.
A banking company may be authorised to acquire shares or interests in a Swedish or foreign
insurance undertaking, and a savings bank or members bank may be authorised to acquire shares
in a Swedish insurance company, where the acquisition is included as a part of the organisation of
the operations. Issues regarding such authorisation shall be determined by the Financial
Supervisory Authority. However, cases involving matters of principle or of exceptional
importance shall be determined by the Government. (SFS 1999:222).


                                              Section 7.
Repealed. (SFS 1991:1018).


                                              Section 8.
In order to secure a claim, a bank may:
    1. at a public auction or on a Swedish or foreign securities exchange or an authorised
         marketplace, or at a public auction, purchase property which is subject to levy of
         execution or which constitutes security for the claim; and
    2. as payment for the claim, take over property which constitutes security for the claim or
         other property where there is reason to assume that the bank otherwise would suffer
         significant loss.
The first paragraph shall not apply to shares in the bank itself or shares in the parent company.
The provisions of Chapter 7, Section 2 of the Companies Act (SFS 1975:1385) apply to the
acquisition of such shares. Nor shall the first paragraph apply to certificates regarding interests in,
or contributions to, members banks. The provisions of Chapter 5, Section 7, first paragraph of the
Savings Banks Act (SFS 1987:619) apply to questions concerning a savings bank‟s acquisition of
certificates for contributions to guarantee funds or the paid-up capital of savings banks. In
exchange for property purchased or taken over in accordance with the first paragraph, a bank may
acquire shares in a company which is formed in order to manage the property or to continue
operations which are conducted with such property.
Where shares have been acquired in accordance with the first or third paragraphs, the bank may
acquire further shares in the same company where there is an obvious risk that the bank will
otherwise suffer significant loss.
Where shares have been acquired pursuant to the first, third, or forth paragraphs the bank may
exchange such acquired shares for shares in the transferee company in the event that the company
transfers its assets to another company. Property acquired by the bank in accordance with this
Section shall be disposed of as soon as such is deemed appropriate taking into account the market
conditions. However, the property must be disposed of as soon as such a disposal may be made
without giving rise to a loss for the bank. The bank shall annually submit a separate report
regarding the property to the Financial Supervisory Authority. (SFS 1998:1500).



                             Capital adequacy and cash reserves

                                           Section 9.
Provisions regarding capital adequacy and large exposures are contained in the Capital Adequacy
and Large Exposures (Credit Institutions and Securities Companies) Act (SFS 1994:2004).
A bank‟s capital base may not be less than the amount which was required in accordance with
Chapter 9, Section 4, second paragraph of this Act, and Chapter 2, Section 2, second paragraph of
the Savings Banks Act (SFS 1987:619), or Chapter 1, Section 4, second or third paragraphs of the
Members banks Act (SFS 1995:1570) at the time the business was commenced. As regards a
bank which has changed its accounting currency, the capital base may not be less than the highest
of the amounts as referred to in sections 6 and 7 of the Change of Accounting Currency
(Financial Undertakings) Act (SFS 2000:35).

                                          Section 9a.
Repealed. (SFS 1994:2007).


                                          Section 10.

A bank must maintain satisfactory payment ability taking into account the scope and nature of the
   business.
The Government or, pursuant to authorisation by the Government, the Financial Supervisory
Authority, may issue detailed regulations regarding payment ability. (SFS 1995:1572).



                                       Currency position

                                          Section 11.


The Government or, pursuant to authorisation by the Government, the Financial Supervisory
Authority, may issue regulations regarding a bank‟s maximum permitted currency position. (SFS
1996:1001).

                                          Section 12.
Repealed. (SFS 1994:2007).
Lending

                                             Section 13.


Loans may only be granted provided there is due cause to believe the borrower will fulfil the loan
obligation. In addition, satisfactory security is required in real property or personal property or in
the form of a guarantee. The bank may waive such security, however, where such is deemed
unnecessary or where there are specific reasons to waive the requirement for such security.
The provisions set forth in Chapter 7, Section 2, first paragraph of the Companies Act (SFS
1975:1385) regarding the prohibition against a company accepting its own shares as security shall
also apply to subordinated debentures issued by a banking company.
A savings bank may not accept as security subordinated debentures issued by the savings bank,
nor may it accept as security certificates of contributions to guarantee funds or to paid-up capital
in the savings bank.
A members bank may not accept as security subordinated debentures issued by the bank, nor may
it accept as security certificates of interests in, or contributions to, the bank. (SFS 1998:1500).


                                             Section 14.


A loan agreement executed between the bank and the customer may not include a provision
subordinating the bank‟s claim to the other claims of the borrower‟s other creditors.
Pursuant to authorisation, a bank may, however, agree upon such terms and conditions as referred
to in the first paragraph in conjunction with the granting of loans to another bank, foreign banking
undertakings, or such Swedish or foreign undertakings the purpose of which may be deemed to be
beneficial to the banking system or the general public. Issues regarding such authorisation shall
be determined by the Financial Supervisory Authority. However, cases involving matters of
principle or of exceptional importance shall be determined by the Government. Further
provisions regarding the entitlement to grant loans subject to terms and conditions as stated in the
first paragraph are set forth in Section 15 a. (SFS 1999:222).


                                             Section 15.


Other than in accordance with the provisions of Section 15 a, a bank may not in loan agreements
or its business generally reserve the right to a share of the profits of transactions which the bank is
not entitled to conclude. Nor may a bank in any other manner be granted a share of the profits of
operations which the bank is not entitled to conduct itself. The aforementioned, however, does
not apply to share dividends or any other rights vested in the bank as an owner of shares. (SFS
1991:1768).


                                            Section 15a.
In addition to that which is set forth in sections 4, 6, 6 a, and 8, a bank may acquire shares equal
to thirty per cent of the capital base and may grant loans subject to such terms and conditions as
referred to in sections 14 and 15. Such holdings and obligations in a single undertaking may not
exceed an aggregate of five per cent of the limit.
Where the bank is part of a group, the limitations set forth in the first paragraph shall apply to
each undertaking within the group with the exception of insurance undertakings and such
subsidiaries of insurance undertakings which do not conduct any form of financial operations.
A shareholding pursuant to the first paragraph may not, without the consent of the Financial
Supervisory Authority, exceed five per cent of the voting capital for all of the shares in the
company. Where the bank is part of a group, this limitation shall apply to the group‟s total
shareholdings. However, in conjunction with the calculation of the group‟s holdings, shares
which are held by insurance undertakings within the group or by subsidiaries of insurance
undertakings shall be disregarded. Where, following the acquisition, any of the limits in this
Section are exceeded, the holding or the obligations shall be disposed of to the extent of the
excess as soon as such disposal is appropriate. (SFS 1999:1126).

                                             Section 16.

Repealed. (SFS 1994:2007).


                                             Section 17.

A bank may not grant a loan to the following persons subject to terms and conditions different
    than those normally imposed:
    1. a member of the board of directors;
    2. a delegate in a management position who, alone or together with a third party, is
        authorised to determine lending matters incumbent on the board of directors;
    3. an employee who hold a senior position within the bank;
    4. shareholders or owners of interests other than the State with a holding equal to at least
        three per cent of the issued share capital;
    5. a spouse or cohabitee of a person referred to in sub-sections 1-4 above; or
    6. a legal entity in which such persons as referred to in sub-sections 1-5 have a significant
        financial interest in their capacity as owners or members. Nor may a members bank grant
        a loan to a lay auditor of the bank subject to terms and conditions other than those
        normally applied by the bank. The Financial Supervisory Authority shall determine
        whether a delegate or employee holds such a management position as referred to in the
        first paragraph, sub-sections 2 and 3.
The bank‟s boards of directors shall include information in a register concerning loans granted to
persons or undertakings referred to in the first and second paragraphs. The Government or,
pursuant to authorisation by the Government, the Financial Supervisory Authority, may issue
regulations regarding which information shall be included in the register.
The first to fourth paragraphs shall apply mutatis mutandis to loans secured by guarantees or debt
instruments issued by any person as referred to in the first or second paragraph. The
aforementioned shall also apply to a claim which the bank acquires and for which any person
referred to in the first or second paragraph is obligated to make payment. (SFS 1999:911).


                                             Section 18.
The provisions regarding loans set forth in sections 13-15 a and Section 17 shall also apply to
guarantees issued by the bank. (SFS 1995:1572).


                                            Section 19.


The maturity date for loans shall be determined in such a manner that the date is in accordance
with the terms and conditions of the bank‟s obligations. Where a loan is not redeemable within a
period of one year, the bank shall reserve the right to demand repayment not later than within the
stated period. However, the bank may grant loans with terms in excess of one year which are not
subject to the reservation set forth in the second paragraph up to an aggregate amount which,
from time to time, corresponds to not more than 25 per cent:
    1. of the shareholders equity and deposits for banking companies and members banks;
    2. of own funds and deposits for savings banks.
The provisions of the second and third paragraphs shall not apply where the State, a municipality,
or organisation comparable therewith is either wholly or partly liable for the repayment of a loan.
(SFS 1995:1572).


                                            Section 20.

Repealed. (SFS 1991:1018).


                                        Specific provisions
                                           Section 21.

Passbooks or other evidence of funds on account issued by a bank must be issued to a specific
person and must contain a provision that a transfer may only take place to a specific person and
that the transfer should be notified to the bank. The bank may not agree to reserve the right to
effect payment to any person other than the lawful holder of a passbook.
Special provisions apply to notification of loss and cancellation of lost passbooks.


                                            Section 22.


The decision of a bank to establish a branch office shall be notified to the Financial Supervisory
Authority without delay.
The above-stated shall also apply to a bank‟s decision to acquire another bank‟s business or part
thereof pursuant to Section 5.
Acquisitions undertaken to protect claims pursuant to Section 8 must be notified to the
Supervisory Authority according to the detailed regulations issued by the Government or,
pursuant to authorisation by the Government, by the Financial Supervisory Authority. (SFS
1991:1768).


                                            Section 23.
A person lacking legal capacity may, without the consent of the guardian, dispose of funds which
the minor himself deposited with the bank from such time that he attains the age of sixteen. The
bank may not disburse such funds to the guardian without the consent of the minor. The minor
may no longer dispose of such funds where the guardian has obtained the consent of the chief
guardian to take charge of the funds and has produced evidence of such consent. Such restriction
on the minor‟s entitlement must be recorded in the deposit receipt or in the passbook upon
production of the receipt or passbook at the bank. Funds managed by a guardian, trustee, or
administrator in accordance with the Code on Parents, Guardians, and Children may be only be
withdrawn without the consent of the chief guardian where a reservation has been made in
accordance with Chapter 14, Section 8 of the aforementioned Code or interest is withdrawn.
Pursuant to Chapter 14, Section 21 of the Code on Parents, Guardians, and Children, the chief
guardian may order that such a reservation shall not apply. The order shall be recorded on the
receipt or in the passbook issued in relation to the deposit. The bank is obliged upon request of a
chief guardian, guardian, trustee, or administrator to issue a receipt for the amount of the funds
which are deposited or represent the balance and, where applicable, shall certify that the notified
consent has not been utilised. Where parents are guardians, they may withdraw funds managed
by them in accordance with the Code on Parents, Guardians, and Children without the consent of
the chief guardian provided the funds have not been stated as having been deposited subject to the
reservation that they may not be withdrawn without consent or that they are subject to specific
chief guardian control in accordance with Chapter 16, Section 11, of the Code on Parents,
Guardians, and Children. The chief guardian may, pursuant to Chapter 13, Section 19 of the
aforementioned Code, order other restrictions on the parents‟ entitlement to withdraw funds. The
limitations on the entitlement to withdraw funds as referred to in this paragraph shall be recorded
on the receipt or passbook issued in relation to the deposit. (SFS 1994:1445).



                  Chapter 3. Auditors of savings banks and members banks

                                             Section 1.
Savings banks and members banks must have at least two auditors. The auditors shall be elected
by the general meeting unless it is otherwise prescribed in the by-laws that one or more of such
persons, however, not all persons, shall be elected in another manner.
An auditor‟s term of office applies for the period specified in the by-laws. Where the term of
office shall not apply for an indefinite period, the term shall be determined so that the office
expires at the end of the annual general meeting at which an election of auditors shall be held.
The general meeting may appoint one or more alternate auditors. The provisions of this Act, the
Savings Banks Act (SFS 1987:619), and the Members banks Act (SFS 1995:1570) shall apply to
alternate auditors, where applicable. (SFS 1998:1500).


                                             Section 2.
Each person entitled to vote in a savings bank or in a members bank is entitled to propose that a
request be made to the Financial Supervisory Authority to appoint an auditor (additional auditor)
to participate in the audit together with the other auditors. The proposal shall be presented to the
general meeting where the election of auditors shall take place, or where the proposal according
to the notice of the general meeting shall be addressed. The Financial Supervisory Authority
shall, upon request of a person entitled to vote and following consultation with the bank‟s board
of directors, appoint an auditor for the period up to and including the annual general meeting
during the next financial year, provided the proposal is supported:
     1. in a savings bank, by not less than one tenth of all trustees or one third of all those
         trustees present; or
     2. in a members bank, by not less than one tenth of all persons entitled to vote or one third
         of those persons present and entitled to vote.
In a members bank, holders of subordinated debentures may make a request to the board of
directors for the appointment of an additional auditor. Where such a request is made by holders of
subordinated debentures with a total amount corresponding to at least one tenth of the total paid
capital contributions, the board of directors shall submit a request to the Financial Supervisory
Authority for the appointment of an additional auditor within a period of two months. In the event
that such a request is not made, any person holding a subordinated debenture may make such a
request. (SFS 1998:1500).


                                            Section 3.
Any person who is a bankrupt or subject to an injunction against trading or for whom an
administrator has been appointed in accordance with Chapter 11, Section 7, of the Code on
Parents, Guardians, and Children may not be appointed as an auditor of a savings bank or a
members bank.
Only those persons who are chartered accountants or approved accountants may be appointed as
auditors of a savings bank or of a members bank. An auditor shall possess the knowledge in, and
experience of, accounting and economics which, taking into account the nature and scope of the
bank‟s operations, are required in the performance of his duties.
A registered firm of chartered accountants may also be appointed as auditor. The provisions
regarding the person whom shall be primarily responsible for the auditing and notification
obligations are contained in Section 12 of the Auditors Act (SFS 1995:528). The provisions in
Section 5 regarding authority, in Section 8 a regarding the reporting duty, and in Section 13
regarding the entitlement to be present at general meetings shall apply to the person who is
primarily responsible. (SFS 1999:911).




                                            Section 4.
At least one of the auditors elected by the general meeting of a savings bank or a members bank
must be a chartered accountant. (SFS 1999:911).




                                            Section 5.
A person may not be an auditor of a savings bank or a members bank where such person:
    1. is a member of the board of directors of the bank or its subsidiary undertakings, or a
       delegate of the bank or assists in the bank‟s bookkeeping or administration of funds or
       the bank‟s supervision thereof;
    2. is employed by the bank or, in any other manner, holds a subordinate or dependent
       position to the bank or to any person referred to in sub-Section 1 or works in the same
       undertaking as any person who assists the bank in a professional capacity in conjunction
         with bookkeeping or administration of funds, or the supervision by the bank in respect
         thereto;
     3. is married to, or cohabiting with, or is a sibling of, or relative in directly ascending or
         descending relation to a person referred to in sub-Section 1, or is related by marriage to
         such a person in directly ascending or descending relation or where one person is married
         to the other person‟s sibling; or
     4. is indebted to the bank or another undertaking in the same group or has obligations for
         which the bank or such an undertaking has provided security. Any person who is a
         trustee in a savings bank may not be appointed auditor as referred to in Section 4.
Any person who is not authorised to be appointed auditor in accordance with this Section may
also not be appointed auditor of a subsidiary undertaking of the bank. In conjunction with audits,
an auditor may not appoint any person who is not authorised to be an auditor pursuant to this
section. Where the bank has employees or delegates with the task of solely or primarily attending
to the bank‟s internal audits, the auditor may, however, appoint such persons to the extent
compatible with generally accepted auditing practice. (SFS 1999:911).




                                             Section 6.
A term of office as an auditor of a savings bank or of a members bank shall be terminated
prematurely where the auditor, or any person who appointed such person, so requests.
Notification in respect of such termination must be made to the board of directors and, where an
auditor not elected by the general meeting wishes to resign, to the person who appointed such
auditor.
An auditor of a savings bank or a members bank who was not appointed by the Financial
Supervisory Authority and whose term of office is terminated prematurely shall immediately
notify the Supervisory Authority in respect thereof. The notification shall contain a report by the
auditor of his findings in conjunction with the audit during that part of the current financial year
to which his duties extend. The provisions of Section 11, third and fourth paragraphs shall apply
regarding the auditor‟s report, where applicable, to the notification. A copy of the notification
shall be forwarded to the bank‟s board of directors.
Where an auditor‟s term of office is terminated prematurely or where he is prevented from
continuing as auditor pursuant to sections 3 to 5 or the by-laws, and there is no alternate auditor
for such person, the board of directors shall take measures to appoint a new auditor for the
remainder of the term of office. Where special cause exists, the Financial Supervisory Authority
may consent to the appointment of an auditor at the next annual general meeting. (SFS 1999:911).




                                             Section 7.
Unless rectification is effected without delay by the person who appoints the auditor, the board of
directors shall notify the Financial Supervisory Authority where:
    1. a chartered accountant is not elected in accordance with Section 4;
    2. an auditor is not authorised in accordance with Section 3, first or second paragraphs or
       Section 5 or pursuant to the by-laws; or
    3. a provision of this Act or the by-laws regarding the number of auditors has been
       breached.
Any person may give notice in accordance with the first paragraph. Provisions regarding the
Financial Supervisory Authority‟s possibilities to cause rectification are set forth in Chapter 7.
(SFS 1999:911).




                                             Section 8.
The auditors of a savings bank or of a members bank shall, to the extent compatible with
generally accepted auditing practice, audit the bank‟s annual report and financial statements and
the management by the board of directors. Where a savings bank or a members bank is a parent
undertaking (parent bank), the auditors shall also audit the group financial statements and the
inter-group dealings in general.
Auditors appointed by a party other than the Financial Supervisory Authority shall comply with
the specific regulations adopted by the general meeting, provided such regulations are not
contrary to law, the by-laws, or generally accepted auditing practice. (SFS 1998:1500).




                                            Section 8a.
Where an auditor, in the performance of his duties on behalf of a savings bank or a members
bank, becomes aware of circumstances which:
    1. may constitute a material breach of the legislation which regulates the bank‟s operations;
    2. may have a negative effect on the bank‟s future operations; or
    3. may lead to the auditor advising against the adoption of the balance sheet or profit and
        loss account or to rendering a qualified opinion in accordance with Section 11; the auditor
        shall immediately report such circumstances to the Financial Supervisory Authority.
The auditor has a corresponding reporting obligation where he or she becomes aware of
circumstances as referred to in the first paragraph in conjunction with the performance of his
duties as an auditor of the bank‟s parent undertaking or subsidiaries or in an undertaking which
has a similar relation to the bank. (SFS 1998:1500).




                                             Section 9.
The board of directors of a savings bank or a members bank shall afford the auditors the
opportunity to perform the audit to the extent deemed necessary by the auditors and shall provide
any information and assistance requested by the auditors. The above-stated obligation shall also
apply to the management of the undertaking and the auditors of a subsidiary undertaking toward
the auditors of the parent bank. (SFS 1998:1500).




                                            Section 10.


Following completion of the audit by the auditors of a savings bank or a members bank, such
persons shall write a reference to the auditor‟s report in the annual report and, in respect of a
parent bank, to the group financial statements. In the event the auditors determine that the balance
sheet or the profit and loss account should not be adopted, they shall include a note to this effect.
With respect to a parent bank, the same shall apply to consolidated balance sheets and
consolidated profit and loss accounts. (SFS 1998:1500).




                                             Section 11.


The auditors of a savings bank or a members bank shall submit an auditor‟s report to the general
meeting in respect of each financial year. The report must be provided to the bank‟s board of
directors not later than two weeks prior to the annual general meeting. The auditors shall return
the accounting documents delivered to them to the board of directors within the same period. The
auditors‟ report shall contain a statement as to whether the annual report has been prepared in
accordance with the Annual Reports (Credit Institutions and Securities Companies) Act (SFS
1995:1559). Where the annual report does not contain such information as required in accordance
with the aforementioned Act, the auditors shall state this fact and provide the necessary
information in their report, provided such can take place.
Where the auditors, in their audit, find that any act or omission by a member of the board of
directors may give rise to liability to pay compensation, or that a member has otherwise acted in
contravention of this Act, the Annual Reports (Credit Institutions and Securities Companies) Act,
the Savings Banks Act ((SFS 1987:619) or the Members banks Act (SFS 1995:1570), or in
contravention of the by-laws, a statement to this effect shall be included in the report. The
auditors‟ report shall also contain a statement regarding discharge from liability of the members
of the board of directors. The auditors may otherwise include information in the report which
they wish to bring to the attention of the trustees or members.
The auditors‟ report shall also contain a statement as to whether the auditors are of the opinion
that the bank has not fulfilled its obligations:
    1. to make tax deductions in accordance with the Tax Payments Act (SFS 1997:483);
    2. to submit tax returns in accordance with Chapter 10, sections 9 or 10 of the Tax
       Payment Act; or
    3. to effect timely payment of taxes and fees referred to in sub-sections 1-2 above.
       Where the auditors‟ report contains notes to the effect that the bank has failed to fulfil its
       obligations as specified in the fourth paragraph, sub-sections 1–3, the auditors shall
       immediately submit a copy of the report to the tax authorities. The auditors‟ report must
       contain specific statements regarding adoption of the balance sheet and profit and loss
       account and in respect of proposals regarding allocations of the bank‟s profits or losses
       which have been set forth in the management report.
        In a parent bank, the auditors shall provide a separate auditors‟ report regarding the
        group. In such context, the first, second, third, and sixth paragraphs shall apply. (SFS
        1998:1500).


                                             Section 12.


Criticisms submitted by the auditors of a savings bank or a members bank to the board of
directors which have not been noted in the auditors report shall be noted in minutes or some other
document. The document shall be submitted to the board of directors and maintained by the board
of directors in a secure manner. (SFS 1998:1500).




                                            Section 13.


The auditors of a savings bank or a members bank shall be entitled to be present at the bank‟s
general meetings. They shall be obliged to be present at general meetings where, in consideration
of the matters to be addressed, their presence may be deemed necessary. (SFS 1998:1500).




                                            Section 14.


The auditors of a savings bank or a members bank may not disclose information to an individual
trustee, member, or third party regarding affairs of which they become aware in the performance
of their duties and where such may be prejudicial to the bank.
Chapter 1, Section 10 prescribes that an individual‟s relationship to a bank may not be unduly
disclosed.
The auditors are obliged to:
    1. present to the general meeting all information which may be requested by the general
        meeting, provided such would not be significantly prejudicial to the bank or to the
        significant disadvantage of an individual;
    2. furnish all necessary information regarding the bank‟s affairs to co-auditors, lay auditors,
        examiners as referred to in Section 15, new auditors and, where the bank has been placed
        into insolvent liquidation, to a liquidator; and
    3. upon request, furnish information regarding the bank‟s affairs to the officer in charge of a
        criminal investigation.
Provisions regarding the auditor‟s reporting obligation to the Financial Supervisory Authority are
contained in Section 8 a. (SFS 1999:911).




                                            Section 15.


Each person entitled to vote in a savings bank or in a members bank may submit a proposal that
the Financial Supervisory Authority shall appoint an examiner to conduct a special examination
of the management and financial statements of the bank during a specified period of time or of
particular actions or circumstances within the bank. The proposal must be submitted at an annual
general meeting or a general meeting where the matter shall be addressed pursuant to the notice
of the general meeting. The Financial Supervisory Authority shall, upon request of a person
entitled to vote and after having consulted the bank‟s board of directors, appoint one or more
examiners where the proposal is supported:
    1. in a savings bank, by not less than one tenth of all trustees or one third of those trustees
       present; or
     2. in a members bank, by not less than one tenth of the total number of persons entitled to
         vote or one third of those present and entitled to vote. In a members bank, the holders of
         subordinated debentures may submit a request to the board of directors for the
         appointment of an examiner. Where such a request is submitted by subordinated
         debenture holders representing a total amount corresponding to not less than one tenth of
         the contributed capital, the board of directors shall submit a request with respect hereto to
         the Financial Supervisory Authority within two months. In the event that this request is
         not made, any debenture holder may submit such a request.
The provisions relating to auditors set forth in Section 3, first and fourth paragraphs, sections 5, 8
a, 9, 13 and 14, and Chapter 5, sections 2, 4, 6 and 7 shall also apply in relation to examiners. A
minor may not be appointed examiner. A report in respect of the examination must be presented
to the general meeting. The report must be open for inspection by trustees, members, or other
persons entitled to vote, during a period of at least one week prior to the general meeting and
must be sent immediately to each person who so requests. The report must also be presented to
the general meeting. In the same manner, the report must also be available for, and must be sent
to, subordinated debenture holders where the examiner has been appointed upon request of such a
holder. (SFS 1999:911).




                         Chapter 4. General examinations Lay auditors

                                             Section 1.
Unless otherwise prescribed in its by-laws, a savings bank or a members bank may appoint one or
more persons (lay auditors) to perform such examination as referred to in Section 4. (SFS
1999:911).




                                             Section 2.
One or more alternate lay auditors may be appointed for each lay auditor. The provisions of this
Act relating to auditors shall also apply, where applicable, to alternate lay auditors. (SFS
1999:911).




                                             Section 3.
The provisions of this Act relating to auditors shall not apply to lay auditors. (SFS 1999:911).



                                       Duties of lay auditors

                                             Section 4.
The lay auditor shall examine whether the bank‟s operations have been conducted in a manner
consistent with their purpose and, from a financial perspective, in a satisfactory manner and
whether the bank‟s internal controls are sufficient. The examination shall be as thorough and
extensive as required by customary practice for this type of examination. (SFS 1999:911).
                                             Section 5.
The lay auditor shall comply with the instructions issued by the general meeting, unless such
instructions are contrary to law, the by-laws, or customary practice. (SFS 1999:911).


                                             Section 6.
The lay auditor shall submit a report to the general meeting following each financial year.
Provisions regarding the contents of the report and the time of submission of the report to the
company‟s board of directors are set forth in Section 14. (SFS 1999:911).


                                             Section 7.
The lay auditor may not sign an auditor‟s report as referred to in Chapter 3, Section 11, first
paragraph. (SFS 1999:911).
Provision of information, etc.


                                             Section 8.
The board of directors shall afford the lay auditor the opportunity to perform the examination to
the extent the lay auditor deems necessary and shall provide any information and assistance
requested by the lay auditor. The above-stated obligation is also incumbent upon the
management of the undertaking, the auditors, and the lay auditors of subsidiaries toward the lay
auditor of the parent bank. (SFS 1999:911).



                           Procedure for appointment of lay auditors

                                             Section 9.
The lay auditor shall be elected by the general meeting, unless the by-laws contain provisions for
appointment of such person in another manner. (SFS 1999:911).



                                   Grounds for disqualification

                                            Section 10.


Any person who is a minor or a bankrupt or subject to an injunction against trading or for whom
an administrator has been appointed pursuant to Chapter 11, Section 7 of the Code on Parents,
Guardians, and Children may not serve as a lay auditor. (SFS 1999:911).
                                      Conflicts of interest

                                            Section 11.


No person may serve as a lay auditor who:
    1. is a member of the board of directors of the bank or its subsidiary undertakings or is a
        delegate of the bank, or assists in the bank‟s bookkeeping or management of funds or the
        bank‟s supervision thereof;
    2. is employed by the bank or, in any other manner, holds a subordinate or dependent
        position to the bank or to any person referred to in sub-Section 1 or works in the same
        undertaking as any person who represents the bank in a professional capacity in
        conjunction with bookkeeping or management of funds or the supervision by the bank in
        respect thereto;
    3. is married to, or cohabiting with, or is a sibling of, or relative in directly ascending or
        descending relation to a person referred to in sub-Section 1, or is related by marriage to
        such a person in directly ascending or descending relation or where one person is married
        to the other person‟s sibling; or
    4. is indebted to the bank or another undertaking in the same group or has obligations for
        which the bank or such an undertaking has provided security. The provisions of the first
        paragraph, sub-Section 4 shall only apply in relation to lay auditors where the amount of
        the debt or the security exceeds what is normally associated with membership of the
        bank.
A person who is disqualified as a lay auditor in accordance with this Section may not serve as a
lay auditor of a subsidiary undertaking of the bank. (SFS 1999:911).



                              Retaining the services of assistants

                                            Section 12.


The lay auditor may not, for the purposes of an examination, retain the services of any person
who is disqualified as a lay auditor in accordance with Section 11. Where the bank has employees
or delegates with the task of solely or primarily performing the bank‟s internal bookkeeping, the
lay auditor may, however, appoint such persons to the extent compatible with customary practice.
(SFS 1999:911).



                                    Removal of lay auditors

                                            Section 13.


The term of office of a lay auditor shall terminate where the lay auditor or the person who
appointed the lay auditor gives notice that the term of office shall be terminated. Notification
must be made to the board of directors. Where a lay auditor who is not appointed by the general
meeting wishes to resign, he must also notify the person who appointed him. (SFS 1999:911).
                              The lay auditor’s examination report

                                            Section 14.


The examination report shall be submitted to the board of directors of the bank not later than two
weeks prior to the annual general meeting. The examination report shall contain a statement by
the lay auditor of those circumstances referred to in Section 4 and such circumstances regarding
which he is obliged to examine in accordance with Section 5. Where the lay auditor finds cause to
criticise any member of the board of directors, he shall state such in the report together with
information regarding the cause for the criticism. The lay auditor may also include information in
the examination report where he is of the opinion that the trustees of a savings bank or members
and holders of subordinated debentures of a members bank should be made aware of such
information. (SFS 1999:911).


                                            Section 15.


The examination report shall be sent to the trustees of a savings bank in the same manner as
stated in Chapter 4, Section 9, fourth paragraph of the Savings Banks Act (SFS 1987:619) and
shall be presented to the general meeting. The examination report shall be made available and
sent to members and holders of subordinated debentures of members banks in the same manner as
stated in Chapter 7, Section 8, fourth paragraph of the Members banks Act (SFS 1995:1570) and
shall be presented to the general meeting. (SFS 1999:911).



                        Presence of the lay auditor at general meetings

                                            Section 16.


The lay auditor shall be entitled to be present at general meetings. He shall be obliged to be
present at general meetings where his presence may be deemed necessary taking into
consideration the matters to be addressed. (SFS 1999:911).



                            The lay auditor’s duty of confidentiality

                                            Section 17.


A lay auditor may not disclose information to an individual trustee, member, or third party
regarding such matters of which he becomes aware in the performance of his duties where such
disclosure would be prejudicial to the bank. Chapter 1, Section 10 prescribes that information
regarding an individual‟s relationship to a bank may not be unduly disclosed. (SFS 1999:911).
                               The lay auditor’s duty of disclosure

                                            Section 18.


The lay auditor shall be obliged to furnish any information requested by the general meeting,
unless this would be materially prejudicial to the bank or to the significant disadvantage of an
individual. (SFS 1999:911). Section 19. The lay auditor shall be obliged to provide auditors,
other lay auditors, special examiners as referred to in Chapter 3, Section 15 and, where the bank
has been placed into insolvent liquidation, liquidators with any information required regarding the
bank‟s affairs.
In addition, the lay auditor shall also be obliged, upon demand, to provide information regarding
the bank‟s affairs to the officer in charge of a criminal investigation. (SFS 1999:911).




   Chapter 5. Provisions for savings banks and members banks regarding damages, etc.


                                             Section 1.
Where a founder, trustee, members of the board of directors or delegate either intentionally or
negligently causes a loss to a savings bank or a members bank in the performance of his duties,
such person shall compensate for such loss. The above-stated shall also apply where the damage
is caused to a member or any other person as a result of a breach of this Act, the Annual Reports
(Credit Institutions and Securities Companies) Act (SFS 1995:1559), the Savings Banks Act (SFS
1987:619), the Members banks Act (SFS 1995:1570), or the bank‟s by-laws. (SFS 1998:1500).


                                             Section 2.
An auditor or a lay auditor of a savings bank or of a members bank shall be liable to pay
compensation according to the grounds referred to in Section 1. The auditor or the lay auditor is
also liable for any loss which is intentionally or negligently caused by one of his assistants. (SFS
1999:911).
Where a registered firm of chartered accountants is the auditor, the obligation to pay
compensation shall be borne by such undertaking and the person who is primarily responsible for
the audit.


                                             Section 3.
A member of a members bank or a person entitled to vote who is not a member shall be obliged
pay compensation for a loss which he intentionally or through gross negligence causes to the
members bank, a member or a third party as a result of his participation in a breach of this Act,
the Annual Reports (Credit Institution and Securities Companies) Act (SFS 1995:1559), the
Members banks Act (SFS 1995:1570) or the bank‟s by-laws. (SFS 1998:1500).


                                             Section 4.
Where any person is obliged to pay compensation in accordance with sections 1-3 above, the
damages may be adjusted by the amount deemed reasonable taking into account the nature of the
act, the amount of the loss, and the circumstances in general.
Where more than one person shall pay compensation in respect of the same loss, each person
shall be jointly and severally liable in damages to the extent the obligation to pay damages has
not been adjusted in accordance with the first paragraph. Any person who has paid damages shall
have a right of contribution from the other persons according to what is reasonable in the
circumstances.


                                            Section 5.
Repealed. (SFS 1998:1500).
Claims in damages which are based upon criminal offences may always be commenced by the
board of directors.


                                            Section 6.
Claims in damages brought by a savings bank in accordance with sections 1 or 2 may be
commenced where, at a general meeting of a savings bank, those trustees representing the
majority or a minority of not less than one third of the trustees, have supported a proposal to
commence an action for damages or who voted against a proposal to grant any member of the
board of directors a discharge from liability. A settlement regarding liability in damages may only
be entered into by the general meeting of the savings bank and only on condition that not more
than one tenth of the total number of trustees opposes the proposal for a settlement.
Notwithstanding the provisions of the last sentence, an action against a delegate for damages to
the savings bank may be commenced by the board of directors. Claims on behalf of the savings
bank against a member of the board of directors for damages based upon a resolution or an action
during a financial year must be commenced not later than one year from such time that the annual
report and the auditors‟ report for the financial year is presented to the general meeting of the
savings bank.
Where a resolution has been adopted to grant a discharge from liability or to refrain from
commencing an action in damages without at least the number of trustees as referred in the first
paragraph having voted in favour of the resolution, or where the time for the commencement for
the action has expired in accordance with the second paragraph, an action may, however, be
commenced in accordance with the first paragraph where the annual report or the auditors report
or other information provided to the general meeting contain materially false and incomplete
information regarding a resolution or a measure upon which the claim is based. Claims in
damages which are based upon the commission of criminal offences may always be commenced
by the board of directors.


                                            Section 7.
Claims in damages on behalf of a members bank in accordance with sections 1 to 3 may be
commenced where, at a general meeting of the members bank, a majority or a minority consisting
of not less than one tenth of the total number of persons entitled to vote have voted in favour of a
proposal to commence an action for damages or have voted against a proposal to grant any
member of the board of directors a discharge from liability. A settlement regarding liability in
damages may only be entered into by the general meeting of the members bank and only on
condition that no more than one tenth of the total number of persons entitled to vote oppose the
proposal for a settlement. A claim in damages by a member of the bank on behalf of the bank
may not be settled without the consent of such member. Notwithstanding the aforementioned, an
action by the bank for damages against a delegate may be commenced by the board of directors.
Claims in damages on behalf of a members bank may be commenced by persons entitled to vote
who constitute not less than one tenth of the total number of persons entitled to vote. Where a
person entitled to vote withdraws after proceedings have been commenced, the other members
may complete such proceedings. Any person who has commenced proceedings is liable for the
litigation costs, but shall be entitled to compensation from the bank for any sums awarded to the
bank in the litigation. Claims on behalf of members banks against a member of the board of
directors for damages relating to a resolution or an action during a financial year must be
commenced not later than one year from the date when the annual report and the auditor‟s report
was presented to the general meeting of the members bank. Where a resolution has been adopted
to grant a discharge from liability or to refrain from commencing a claim in damages without the
minimum number of persons entitled to vote as referred to in the first paragraph having voted
against the resolution, or where the period for the commencement of the action has expired in
accordance with the third paragraph, an action may, however, be commenced in accordance with
the first or second paragraph where the annual report or the auditors report or other information
provided to the general meeting contain materially false and incomplete information regarding a
resolution or a measure upon which the claim is based.
Claims in damages which are based upon criminal offences may always be commenced by the
board of directors. (SFS 1995:1572).




                                             Section 8.
Proceedings on behalf of the bank in accordance with sections 1 to 3 above which are not based
upon criminal offences may not be commenced against:
    1. members of the board of directors five years after the end of the financial year during
        which the resolution or the measure upon which the action is founded was adopted or
        taken;
    2. delegates three years after the end of the financial year during which the resolution or the
        action upon which the action is founded was adopted or taken;
    3. auditors five years after the end of the financial year to which the auditors‟ report relates;
    4. lay auditors five years after the end of the financial year to which the examination report
        relates;
    5. examiners as referred to in Chapter 3, Section 15 five years after the date when the
        statement in respect of the special examination was presented to the general meeting;
    6. founders five years after the date of the resolution to incorporate the bank adopted at the
        first general meeting; and
    7. trustees or members of members banks or persons entitled to vote who are not members
        two years after the resolution or the measure upon which the action is based.
Where a bank is placed into insolvent liquidation pursuant to a petition presented
before the end of the period stated in the first paragraph, the estate in liquidation may
commence proceedings in accordance with sections 1 to 3 notwithstanding that a
discharge from liability in damages has been granted in accordance with sections 6 or
    7. However, following the expiration of the aforementioned time, an action may not be
        commenced later than six months from the date of the hearing in respect of
        administration of oaths. (SFS 1999:911).
                                            Section 9.
Where a loss has been incurred by a savings bank in the circumstances referred to in sections 1 or
2, the Financial Supervisory Authority may allow an action to be commenced against any person
who is liable therefor unless the limitation period has expired pursuant to sections 6 and 8. (SFS
1992:1613).




                   Chapter 6. Names of savings banks and members banks


                                            Section 1.
The name of a savings bank must include the word “savings bank”. The name of a members bank
must include the word “members bank”. The name must be registered in the bank register.
Where the name shall be registered in two or more languages, all versions shall be specified in the
bank‟s by-laws. (SFS 1998:1500).


                                            Section 2.
A savings bank‟s or a members bank‟s name shall be clearly distinguishable from other existing
names registered in the bank register and from names of foreign banking undertakings which are
commonly known in Sweden. The provisions of the Trade Names Act (SFS 1974:156) shall
otherwise apply to the registration of names. (SFS 1998:1500).


                                            Section 3.
The board of directors of a savings bank or a members bank may adopt secondary names. The
provisions of Section 1, second paragraph and Section 2 regarding the name also apply to
secondary names. The words “bank”, “savings bank” or “members bank” may only be used in
secondary names for banking operations. (SFS 1998:1500).


                                            Section 4.
Documents which are issued for a savings bank or a members bank should be signed in the
bank‟s name. Where the board of directors or other representatives of the bank have issued a
document without such being signed on behalf of the bank, and it is not clear from the contents of
the document that it has been issued on behalf of the bank, the persons who signed the document
shall be jointly and severely liable for any obligations assumed pursuant to the document.
However, the aforementioned shall not apply where it was evident from the circumstances at the
time of the document‟s creation that it was issued on behalf of the bank and where the person to
whom the document was issued by the bank receives a duly signed acknowledgement of the
document without unreasonable delay after a request is made in respect thereof or personal
liability is asserted against the signatories. (SFS 1998:1500).


                                            Section 5.
The Trade Names Act (SFS 1974:56) contains provisions regarding restrictions on the use of
names and deregistration of names.


                                            Section 6.
Repealed. (SFS 1998:1500).




                                   Chapter 7. Supervision
The manner in which the supervision of banks shall be conducted


                                            Section 1.
A bank is subject to the supervision of the Financial Supervisory Authority and must be
registered with the Supervisory Authority. The bank must furnish the Supervisory Authority with
any information regarding its operations and circumstances connected therewith requested by the
Supervisory Authority. The Supervisory Authority may carry out investigations at the bank at
such times as the Supervisory Authority considers such to be necessary. (SFS 1992:1613).


                                            Section 2.
The Government or, pursuant to authorisation by the Government, the Financial Supervisory
Authority may issue regulations regarding:
    1. information which a bank shall provide to the Supervisory Authority;
    2. safekeeping and inventory of securities and financial instruments; and
    3. crime prevention measures at the bank. (SFS 1992:1613).

                                            Section 3.
In conjunction with its supervision of banks, the Financial Supervisory Authority shall ensure the
furtherance of a sound development of the operations. (SFS 1992:1613).


                                            Section 4.
The board of directors of a savings bank or a members bank is obliged to immediately cause a
separate balance sheet to be prepared where there is reason to assume that the bank is unable to
fulfil the capital adequacy requirements pursuant to the Capital Adequacy and Large Exposures
(Credit Institutions and Securities Companies) Act (SFS 1994:2004).
The balance sheet shall be examined by the auditors. Where the assumption regarding the bank‟s
financial position is confirmed, the board of directors shall immediately inform the Financial
Supervisory Authority. (SFS 1998:1500).


                                            Section 5.
The Financial Supervisory Authority shall appoint one or more auditors to participate in the audit
of the bank together with the other auditors. The Supervisory Authority may revoke the
appointment of an auditor and appoint a new auditor.
The auditor is entitled to reasonable compensation from the bank for his work. The amount of his
fee shall be determined by the Supervisory Authority. The Financial Supervisory Authority shall
issue instructions for auditors appointed by the Supervisory Authority. (SFS 1995:1572).




                                            Section 6.
The Financial Supervisory Authority may, at such times as it deems necessary, convene a meeting
of the board of directors of a bank. In the event the board of directors has not complied with a
request by the Supervisory Authority to convene an extraordinary general meeting, such general
meeting may be convened by the Supervisory Authority.
Representatives of the Supervisory Authority may be present at general meetings and such board
meetings convened by the Supervisory Authority and may take part in the deliberations. (SFS
1992:1613).




                                            Section 7.
During a bank‟s liquidation, the Financial Supervisory Authority shall possess the same authority
regarding the liquidators and general meetings as otherwise vests in the Supervisory Authority
regarding the boards of directors and general meetings. (SFS 1992:1613).
Specific provisions regarding supervision of branch offices of foreign banking undertakings
domiciled within the EEA


                                            Section 8.
The Financial Supervisory Authority shall exercise supervision in co-operation with the
competent governmental authority in the home country to ensure that the liquidity of a branch
office established in Sweden by a banking undertaking domiciled in the EEA is satisfactory.
Following notification to the Financial Supervisory Authority, a competent governmental
authority in another country within the EEA may undertake investigations at a branch office
established in Sweden of a banking undertaking domiciled in the other country. (SFS 1992:1613).


                                            Section 9.
As regards foreign banking undertakings domiciled within the EEA which conduct operations in
Sweden via branch offices or through the direct provision of services, the Financial Supervisory
Authority shall provide any information to the competent governmental authority in the bank‟s
home country which such authority requires in order to exercise its supervision of the bank. (SFS
1992:1613). Ownership determination, etc.


                                           Section 10.
A direct or indirect acquisition of shares or interests in a bank which causes the acquirer‟s total
holdings to amount to a qualified holding may only take place pursuant to consent by the
Financial Supervisory Authority. The above-stated shall also apply to acquisitions which involve
an increase in a qualified holding so that it amounts to or exceeds 20, 33, or 50 per cent of the
share capital or the voting capital for all shares or interests or which cause the bank to become a
subsidiary. Consent in accordance with the first paragraph must be granted prior to the
acquisition. Where the acquisition has occurred as a result of division of joint marital property, by
inheritance, by will, corporate distribution, or in any other similar manner, consent shall instead
be required for the acquirer to retain the shares or interests which are obtained. The acquirer shall
apply for consent to such an acquisition within six months from such time as the shares or
interests are obtained. (SFS 1996:746).


                                            Section 11.


Consent shall be granted to the acquisition as referred to in Section 10 where it may be assumed
that the acquirer will not hinder the sound development of the bank‟s operations and where the
acquirer is otherwise suitable to exercise a significant influence over the management of the bank.
Consent may not be granted where the acquirer, to a significant extent, has failed to perform his
obligations in commercial operations or in other financial affairs or has been convicted of a
serious criminal offence.
Where the acquisition would result in close affiliation between the bank and a third party, consent
shall be granted only where the affiliation does not hinder an effective supervision of the bank.
The Financial Supervisory Authority may prescribe a certain period within which an acquisition
must be completed.
The Financial Supervisory Authority shall render a decision in the matter in accordance with this
Section within three months from the date of the application for consent. (SFS 1996:759).


                                            Section 12.


The Financial Supervisory Authority must be informed in the event that any person intends to
divest himself of a qualified holding or such a significant part thereof that the holding will
accordingly be less than any of the limits as specified in Section 10. (SFS 1992:1613).


                                            Section 13.


When a banking company or a members bank becomes aware that shares or interests in the bank
have been acquired in the manner referred to in Section 10 or are the subject of such a divestiture
as referred to in Section 12, the bank shall notify the acquisition or divestment to the Financial
Supervisory Authority as soon as possible.
When a banking company or a members bank in other cases becomes aware that it has a close
affiliation with a third party, the bank shall notify the Financial Supervisory Authority as soon as
possible.
A banking company or a members bank shall submit an annual statement to the Financial
Supervisory Authority containing the names of persons who hold a qualified holding of shares or
interests in the bank and the amount of such holding. (SFS 1996:746).




                                            Section 13a.
Where a legal entity holds a qualified holding in a bank, such legal entity shall inform the
Financial Supervisory Authority as soon as possible concerning any changes to its management.
(SFS 1996:746).




                                             Section 14.


Where any person which holds a qualified holding of shares or interests exercises, or may be
deemed to be able to exercise its influence in a manner which hinders sound development of the
operations of the bank, the Financial Supervisory Authority may determine that such person, in
conjunction with general meetings, may not represent more shares or interests than those which
correspond to a holding which is not qualified. The aforementioned shall also apply where such a
holder, to a significant extent, has failed to perform its obligations in commercial operations or in
other financial affairs or has been convicted of a serious criminal offence. Where a person which
holds a qualified holding of shares or interests fails to submit an application for consent to an
acquisition as referred to in Section 10, the Supervisory Authority may determine that such
person, in conjunction with general meetings, may not represent the shares or the interests to the
extent such are covered by a requirement for consent.
Where any person, in contravention of a decision by the Supervisory Authority, possesses a
qualified holding of shares or interests, such person may not represent the shares or interests at a
general meeting to the extent the holding is in contravention of the decision.
The Financial Supervisory Authority may order an owner as referred to in the first paragraph to
divest himself of a sufficient number of the shares or interests such that thereafter the holding is
no longer qualified. An owner as referred to in the second or third paragraph may be ordered to
divest himself of a sufficient number of the shares or interests such that the holding is no longer
in contravention of the Supervisory Authority‟s decision.
Shares which are subject to injunctions or orders in accordance with this Section shall not be
taken into account when calculating the consent required of owners of a certain number of shares
in the company for a decision to be valid or authority to be exercised. However, this shall not
apply to a nominee appointed in accordance with Section 14 a. (SFS 1998:1500).




                                            Section 14a.
Where special cause exists, the Financial Supervisory Authority may request that the district court
appoint an appropriate person as nominee to represent such shares or interests which, pursuant to
Section 14, may not be represented by the owner. Such an application shall be determined by the
district court in the district where the owner is domiciled or, if the owner is not domiciled in
Sweden, by the Stockholm District Court.
A nominee shall be entitled to reasonable compensation for his work and disbursements. The
compensation shall be paid by the owner of the shares or interests and shall be advanced by the
bank upon request. Where any person liable to make payment fails to accept the nominee‟s claims
for compensation, the amount of compensation shall be determined by the district court. (SFS
1996:746).


                                             Section 14b.
Where a bank has a close affiliation with a third party and such affiliation hinders the effective
supervision of the bank, the Financial Supervisory Authority may order the holder of shares or
interests which gives rise to close affiliation to divest itself of a sufficient number of shares or
interests such that close affiliation no longer subsists.
The Financial Supervisory Authority may also determine that person(s) who are subject to a
decision in accordance with the first paragraph may not represent the shares or interests at general
meetings. In such circumstance, the provisions set forth in Section 14 a shall apply. (SFS
1996:746).



                                    Intervention against banks

                                             Section 15.


Where a Swedish bank has taken a decision which is in contravention of this Act or any other
legislation which regulates the bank‟s operations, or against a regulation issued by virtue of such
legislation or against the bank‟s articles of association, the Financial Supervisory Authority may
enjoin the execution of the decision. Where the decision has already been executed, the
Supervisory Authority may order the bank to rescind the decision, where possible. (SFS
1992:1613).


                                             Section 16.


A Swedish bank‟s charter shall be revoked where:
    1. the bank has not submitted an application for registration within the prescribed period or
       the application has been withdrawn or cancelled as a result of a decision which has
       become final;
    2. the bank has not commenced banking operations within one year after the grant of the
       charter or the bank, prior thereto, has declared that it will not be utilising the charter;
    3. the bank has transferred its entire business;
    4. the bank has not conducted banking operations during a continuous period of six months;
    5. the bank, as a result of the breach of a provision referred to in Section 15 or in any other
       manner, has proved itself to be unsuitable to exercise such operations to which the charter
       relates;
    6. the bank‟s capital base is less than the minimum amount which is required in accordance
       with Chapter 2, Section 9, second paragraph and the deficiency has not been covered
       within three months from the discovery of the deficiency by the bank;
     7. the bank has failed to fulfil its obligations in accordance with the Deposit Guarantees Act
        (SFS 1995:1571) and has not undertaken rectification within one year from such time as
        the Supervisory Authority ordered the bank to comply with its obligations with a warning
        that the bank‟s charter will otherwise be revoked; or
     8. any person who is a member of the bank‟s board of directors, or its managing director, or
        the acting managing director fails to fulfil the requirements set forth in Chapter 9, Section
        3, third paragraph, sub-Section 3, fourth paragraph of this Act, Chapter 2, Section 3,
        fourth paragraph, sub-Section 2 of the Savings Banks Act (SFS 1987:619), or Chapter 2,
        Section 2, fourth paragraph, sub-Section 3 and paragraph five of the Members banks Act
        (SFS 1995:1570).
In those circumstances referred to in the first paragraph, sub-sections 4 and 5, a warning may be
issued in lieu of revocation of a charter where such is deemed sufficient.
Issues regarding revocation of charters and the issuance of warnings shall be determined by the
Financial Supervisory Authority. However, cases involving matters of principle or of exceptional
importance shall be determined by the Government. The Government‟s determination shall take
place following notification by the Financial Supervisory Authority.
Where special cause exists, the Supervisory Authority may grant an extension to
cover the deficiency in those circumstances referred to in the first paragraph, sub-section
6. In those circumstances referred to in the first paragraph, sub-Section 8, the charter may only
   be revoked where the Financial Supervisory Authority has taken a decision to complain about
   a person being a member of the board of directors and that he or she, following a specified
   period determined by the Supervisory Authority, remains a member of the board of directors.
   Where the charter is revoked, the governmental authority which decided to revoke the charter
   may determine the manner in which the winding up of the business shall take place.
    An injunction against future operations may be ordered together with a decision in respect of
    revocation. (SFS 1999:222).




                                            Section 17.


Where the Financial Supervisory Authority is informed by a competent governmental authority in
another country within the EEA of the fact that a Swedish bank has violated the laws of that
country applicable to the bank, the measures stated in sections 15 and 16 may be taken against the
bank where any circumstance corresponding to that which is set forth therein exists. The
Supervisory Authority shall inform the competent governmental authority in the other country of
the measures undertaken. (SFS 1999:222).
    Specific provisions regarding intervention against foreign banking undertakings




                                            Section 18.


Where a banking undertaking which is domiciled in a country outside the EEA conducts banking
operations from branch offices in Sweden and, in such context, breaches a provision as referred to
in Section 15 or in any other manner proves itself to be unsuitable to conduct banking operations,
the branch office‟s licence shall be revoked or a warning shall be issued if such is deemed to be
sufficient. Issues regarding revocation of branch office licences and the issuance of warnings
shall be determined by the Financial Supervisory Authority. However, cases involving matters of
principle or of exceptional importance shall be determined by the Government. The
Government‟s determination shall occur following notification by the Supervisory Authority.
    Where deposits at the branch office are covered by a guarantee as a result of a decision in
    accordance with Section 3, second paragraph of the Deposit Guarantees Act (SFS 1995:1571)
    and the licence for establishment of the branch office would not have been issued without
    such a decision, the Supervisory Authority may, in the event that the banking undertaking
    fails to fulfil its obligations in accordance with the Deposit Guarantees Act, order the banking
    undertaking to undertake rectification with a warning that the branch office‟s licence will
    otherwise be revoked. The licence may be revoked in the event that the banking undertaking
    has not undertaken the rectification within one year from the date of the order. The provisions
    of the second paragraph shall apply, where applicable, in conjunction with such
    determination. The provisions of Section 16, paragraphs five and six shall apply, where
    applicable, in the event the branch office‟s licence is revoked.
    The Supervisory Authority shall inform the supervisory authority in the country where the
    banking undertaking has its registered office of the measures undertaken pursuant to this
    section. (SFS 1999:159).




                                            Section 19.


Where a banking undertaking domiciled in another country within the EEA conducts operations
in Sweden via branch offices or through the direct provision of services and, in such context,
breaches a provision referred to in Section 15 or in any other manner proves itself to be unsuitable
to conduct such operations, the Financial Supervisory Authority may order the banking
undertaking to effect rectification.
    Where the banking undertaking fails to comply with the order, the Supervisory Authority
    shall inform the competent governmental authority in the undertaking‟s home country.
    Where rectification is not effected notwithstanding the above-stated order, the Supervisory
    Authority may enjoin the banking undertaking from assuming further obligations in Sweden.
    Prior to the issuance of the injunction, the Supervisory Authority shall inform the competent
    governmental authority in the banking undertaking‟s home country. In cases of urgency, the
    Supervisory Authority may issue the injunction without prior notification to the home country
    authority. The home country authority must thereafter be notified as soon as possible. (SFS
    1992:1613).


                                            Section 20.


Where the operating licence of a banking undertaking which is domiciled in another country
within the EEA and which conducts operations in Sweden via branch offices or through the direct
provision of services has been revoked in its home country, the Financial Supervisory Authority
shall immediately enjoin the banking undertaking from entering into further obligations in
Sweden. (SFS 1992:1613).
                      Intervention against any person without a licence

                                           Section 21.


Where any person conducts banking business without being licensed to do so, the Financial
Supervisory Authority shall order such person to cease such operations.
Where there is doubt as to whether the operations include deposits, the Supervisory Authority
may order the person conducting the operations to furnish any and all information regarding the
operations which is required in order to determine whether deposit operations are being
conducted.
As regards foreign undertakings, an order pursuant to this Section may be addressed to both the
undertaking as well as any person conducting operations in Sweden on behalf of the undertaking.
(SFS 1995:1572).



                         Fees to the Financial Supervisory Authority

                                           Section 22.


Swedish banks and foreign banking undertakings with branch offices in Sweden shall bear the
costs of the operations of the Financial Supervisory Authority through the payment of an annual
fee pursuant to detailed regulations issued by the Government. (SFS 1995:1572).



                                       Conditional fines

                                           Section 23.


The Financial Supervisory Authority may issue orders or injunctions in accordance with this Act
on pain of a conditional fine. (SFS 1992:1613).


                                           Section 24.


The Financial Supervisory Authority‟s decisions in accordance with sections 6 and 21, second
paragraph may not be appealed. The above-stated shall also apply to the Supervisory Authority‟s
decision to submit a matter to the Government for determination.
Decisions of the Supervisory Authority in accordance with Chapter 1, sections 4 and 6, Section 7,
fourth paragraph and Section 7 b, second paragraph, Chapter 2, sections 5 and 6 a, sections 16-18
of this Chapter in relation to revocation of charters and branch office licences and Chapter 9,
sections 3, 23 and 28 may be appealed to the Administrative Court of Appeal. The above-stated
shall also apply to the Supervisory Authority‟s decisions in accordance with Chapter 2, Section 3,
Chapter 7, sections 5 and 8, and Chapter 8, Section 6 of the Savings Banks Act (SFS 1987:619) as
well as Chapter 2, Section 2, and Chapter 10, sections 5 and 8 of the Members banks Act (SFS
1995:1570).
Other decisions issued by the Supervisory Authority pursuant to this Act, the Savings Banks Act,
and the Members banks Act may be appealed to the County Administrative Court. The
aforementioned shall not apply, however, to decisions in matters referred to in Section 20, first
paragraph, sub-Section 5 of the Administrative Procedure Act (SFS 1986:223).
Leave to appeal is required for appeals to the Administrative Court of Appeal from a decision of
the County Administrative Court.
The Supervisory Authority may determine that a decision regarding an injunction, an order, or
revocation shall apply with immediate effect. (SFS 1999:222).




                                             Section 25.


Where a decision in a matter regarding a charter has not been issued within six months from
receipt of the application, the applicant shall be entitled to be informed by the Supervisory
Authority of the reasons therefor. The applicant may thereafter request a declaration by the
Administrative Court of Appeal that the matter has been unreasonably delayed. Where a decision
has not been issued within six months from the date of the declaration, the application shall be
deemed to have been denied.
Where the Financial Supervisory Authority fails to forward a notification as referred to in Chapter
1, Section 7, first paragraph to the competent foreign governmental authority within three months
from receipt of the notification and a decision is not issued within the same period, the
Supervisory Authority shall inform the applicant of the reasons therefor. The applicant may
thereafter request a declaration from the Administrative Court of Appeal that the matter has been
unnecessarily delayed. Where notification has not been forwarded within three months from the
date of the declaration, a decision shall be deemed to have been issued in accordance with
Chapter 1, Section 7, fourth paragraph. (SFS 1999:222).




                                        Specific provisions

                                             Section 26.


When a bank has been placed into insolvent liquidation, the Financial Supervisory Authority shall
appoint a public representative. The public representative shall act as the liquidator in the
administration of the estate in liquidation together with the liquidator or liquidators appointed
pursuant to the Insolvency Act (SFS 1987:672).
The public representative may, as regards additional liquidators, make such proposals as referred
to in Chapter 7, Section 5 of the Insolvency Act. The public representative may participate in the
administration of the estate in liquidation in its entirety notwithstanding the issuance of a decision
in respect of the administration of such estate.
The provisions of the Insolvency Act regarding fees to liquidators also apply to the public
representative. (SFS 1992:1613).




                                            Section 27.


Any person who is a member or alternate member of the board of directors of the Financial
Supervisory Authority or an officer of the Financial Supervisory Authority may not serve as a
member of the board of directors of a bank or be employed by a bank. Nor may such a person
own shares in a banking company or be a trustee of a savings bank.
The Government may issue specific provisions regarding the granting of loans to such persons as
referred to in the first paragraph. (SFS 1992:1613). Section 28. The Financial Supervisory
Authority shall ensure that the assets of a pension foundation or a personnel foundation which
belongs to a bank and the assets of which are primarily derived from funds provided by the bank
are invested in such a manner which ensures reasonable security. In such context, the
foundation‟s objects shall be observed and consideration shall be given to the provisions of this
Act regarding the investment of a bank‟s funds. Where the foundation‟s assets are not invested in
a satisfactory manner, the Supervisory Authority may order the foundation to undertake
rectification.
Any person who represents the foundation shall, upon request by the Financial Supervisory
Authority, make available for examination the foundation‟s cash and other assets as well as
books, financial statements, and other documents. Such person shall also furnish the Supervisory
Authority with any and all information regarding the foundation requested by the Supervisory
Authority. (SFS 1992:1613). Chapter 8. Registration, etc.



                                          Bank register

                                           Section 1.
The Financial Supervisory Authority shall maintain a bank register for registration in accordance
with this Act, the Companies Act (SFS 1975:1358), the Savings Banks Act (SFS 19987:619), the
Members banks Act (SFS 1995:1500), or other legislation. (SFS 1998:1500).



                   Registration, etc., of savings banks and members banks

                                            Section 2.
The Financial Supervisory Authority shall give public notice in the Official Gazette (Post- och
Inrikes Tidningar) without delay of any information recorded in the bank register regarding
savings banks and members banks, with the exception of notices in accordance with:
1. Chapter 2, Section 14 of the Savings Banks Act (SFS 1987:619) and Chapter 2, Section 7, of
   the Members banks Act (SFS 1995:1570) regarding the date of the public notice regarding
   the opening of the business;
2. Chapter 6, Section 19 of the Savings Banks Act and Chapter 9, Section 20 of the Members
   banks Act from the district court that the bank has been placed into insolvent liquidation, that
    a decision regarding insolvent liquidation has been revoked, or that the insolvent liquidation
    is completed; and
3. Chapter 7, Section 5 of the Savings Banks Act and Chapter 10, Section 5 of the Members
    banks Act regarding consent to a merger.
A public notice which relates to changes in a circumstance previously entered on the register shall
only state the nature of the change. (SFS 1998:1500).


                                             Section 3.
Any information registered in the bank register in respect of savings banks and members banks
shall be deemed to have come to a third party‟s notice where published in the Official Gazette
(Post- och Inrikes Tidningar) in accordance with Section 2 and where it is not clear from the
circumstances that such third party knew or should have known of the information contained in
the notice. (SFS 1998:1500).


Section 3a. Repealed. (SFS 1998:1500).


                                             Section 4.
Where, in conjunction with an application for registration, an applicant has failed to comply with
the provisions regarding the application, the applicant shall be ordered within a stated period of
time to submit comments or undertake rectification. The above-stated shall also apply where the
Financial Supervisory Authority considers that a decision, which is notified for registration and
the validity of which does not require the consent of the Government or the Supervisory
Authority, or a document which is appended to the application:
1. has not been duly submitted;
2. contravenes this Act or other legislation or the by-laws; or
3. is materially ambiguous or misleading.
The application shall be refused where the applicant fails to correct the application following an
order to do so. A notice regarding this sanction shall be included in the order. Where an
impediment to registration exists notwithstanding the submission of the statement, and where the
applicant has been given the opportunity to comment in respect of the impediment, registration
shall be refused in the absence of a reason to afford the applicant the opportunity to enter a new
order against the applicant. The provisions of the first paragraph shall not prevent the registration
of a decision of a general meeting where the limitation period in respect of the decision has
expired pursuant to Chapter 4, Section 17, second paragraph of the Savings Banks Act (SFS
1987:619) or Chapter 7, Section 18, second paragraph of the Members banks Act (SFS
1995:1570). (SFS 1999:222).


                                            Section 4a.
Repealed (SFS 1998:1500).




                                             Section 5.
The Financial Supervisory Authority shall immediately inform a savings bank or a members bank
in writing when the Supervisory Authority:
1. declares that a merger has lapsed in accordance with Chapter 7, Section 7, third paragraph of
   the Savings Banks Act (SFS 1987:619) or Chapter 10, Section 5, third paragraph of the
   Members banks Act (SFS 1995:1570);
2. imposed a conditional fine in accordance with this Act; or
3. declared that a savings bank‟s conversion into a banking company has lapsed in accordance
   with Chapter 8, Section 8 of the Savings Banks Act. (SFS 1998:1500).


                                             Section 6.
The Trade Names Act (SFS 1974:156) contains provisions regarding the deletion of a name from
the register following a final judgment regarding the cancellation of a name registration.

                                            Section 7.
Repealed. (SFS 1998:1500).


                                            Section 8.
A decision of the Financial Supervisory Authority denying an application or registration of an
application in accordance with Section 4, second paragraph may be appealed to a general
administrative court within two months from the date of the decision. The above-stated shall also
apply to decisions of the Financial Supervisory Authority as referred to in Chapter 7, Section 7,
third paragraph and Chapter 8, Section 8 of the Savings Banks Act (SFS 1987:619) as well as
Chapter 10, Section 5, third paragraph of the Members banks Act (SFS 1995:1570). Leave to
appeal is required in conjunction with an appeal to the Administrative Court of Appeal. (SFS
1998:1500).




       Chapter 9. Specific provisions for banking companies Application for charter


                                            Section 1.
A charter may be issued to a Swedish limited liability company. A charter application may be
submitted prior to the formation of the company. Where such an application has been submitted
within six months from the execution of the instrument of incorporation, the period prescribed in
Chapter 2, Section 9, first paragraph of the Companies Act (SFS 1975:1385) shall be calculated
from the decision regarding the charter. (SFS 1998:1500).


                                            Section 2.
A plan for the intended operations and a proposal for the articles of association or amendments
thereto must be appended to the charter application. (SFS 1998:1500).
                 Charter conditions and approval of the articles of association

                                              Section 3.
Charter applications and approval of articles of association shall be determined by the Financial
Supervisory Authority. However, cases involving matters of principle or of exceptional
importance shall be determined by the Government. In conjunction with the processing of an
application for approval of the articles of association, it shall be determined whether the articles
of association accord with this Act, the Companies Act (SFS 1975:1385), and other legislation,
and to what extent specific provisions are required, taking into account the scope and nature of
the company‟s operations.
The articles of association shall be approved and a charter granted where:
1. the planned business is deemed to fulfil the requirements of a sound banking operation;
2. it may be assumed that the persons who will possess a qualified holding in the company will
     not impede the sound development of the company‟s operations and that such persons are
     otherwise suitable to exercise a significant influence over the management of a bank; and
3. the persons who will constitute the company‟s boards of directors or serve as the managing
     director or the acting managing director possess sufficient insight and experience in order to
     participate in the management of a bank and are otherwise suitable for such a task.
The articles of association may not be approved and a charter application may not be granted
where it may be assumed that any person who will possess a qualified holding in the bank has
failed, to a significant extent, to comply with his obligations in commercial operations or in other
financial affairs or has been convicted of serious criminal offences.
Where the company will have a close affiliation with a third party, the articles of association may
only be approved and a charter granted where the relations will not impede the effective
supervision of the bank.
Any amendments to the articles of association must be approved. In such context, paragraphs one
to three shall apply, where applicable. A charter may not be refused on the basis that no further
banks are required. (SFS 1999:222).




                              The banking company’s share capital

                                           Section 4.
A banking company‟s share capital shall be determined taking into account the scope and nature
of the planned business.
Following commencement of the business, a banking company must have a restricted equity
which, at the time of the decision regarding a charter, amounts to not less than five million euros.
Chapter 5, Section 4, third paragraph of the Annual Reports of Credit Institutions and Securities
Companies Act contains provisions concerning what constitutes restricted equity. (SFS
1998:1500).
Amendments to the articles of association


                                             Section 5.
Repealed. (SFS 1999:222).

Subscription for shares




                                             Section 6.
Where subscription for shares would result in any person, who has not been subject to a
determination in accordance with Section 3, third paragraph, sub-Section 2 or paragraph four,
holding a qualified holding in the banking company, the company may not be formed until the
determination is conducted. The company may not be formed in the event that the person is
deemed to be unsuitable. (SFS 1999:222).




                                  Reduction of the share capital

                                              Section 7.
The Financial Supervisory Authority may consent to the reduction of the share capital without
authorisation by the court in accordance with Chapter 6, Section 6, first paragraph of the
Companies Act (SFS 1975:1385) where the banking company, concurrently with the reduction,
undertakes measures which guarantee that neither the company „s restricted equity nor its share
capital will be diminished as a result of the decision regarding reduction. (SFS 1998:1500).


                                             Section 8.
The provisions of this Section shall apply in lieu of the provisions in Chapter 6, Section 6, second
to fourth paragraphs of the Companies Act (SFS 1975:1385).
An application for court authorisation must be lodged not later than two months from registration
of the decision regarding reduction of the share capital. Evidence of registration must be
appended to the application.
The court shall obtain a report by the Financial Supervisory Authority without delay as to
whether and, in such case, to what extent the reduction may affect the rights of depositors. The
application shall be immediately denied where, taking into consideration the contents of the
report, the court finds that the reduction should not be implemented. In other cases, the court shall
summon the company‟s creditors and request such persons who wish to oppose the application to
submit notice in writing to the court not later than a specific date. The notice must state that those
persons who do not submit an objection shall be deemed to have consented to the application.
A concise summary of the Supervisory Authority‟s report shall also be included in the
notice. The court shall ensure that the notice is published expeditiously in the Official
Gazette (Post- och Inrikes Tidningar).
Consent shall be granted where the application is not opposed or where those creditors who
oppose the application receive full payment or satisfactory security for their claims. The fact that
a depositor opposes the application shall not, however, constitute any impediment where the
report of the Supervisory Authority sets forth grounds for granting consent. (SFS 1998:1500).
                                    Own shares as security

                                             Section 9.
A banking company may accept its own shares or shares in its parent company as security where
such shares constitute a minor part of the shares which are provided as security for a loan. The
Government or, pursuant to authorisation by the Government, the Financial Supervisory
Authority may issue detailed regulations as to the limitations which shall apply in such
circumstances. (SFS 1998:1500).



                                 The company’s management

                                          Section 10.


The board of directors of a banking company shall consist of not less than three members. The
majority of the members must be persons who are not employed by the bank or an undertaking
which is part of the group of which the bank is the parent company. (SFS 1998:1500).

                                          Section 11.

The managing director shall be appointed by the boards of directors.
The company‟s managing director may not be the chairman of the boards of directors.
(SFS 1998:1500).



                                          Section 12.


The right to sign the company name on behalf of a banking company may only be exercised by
two or more persons acting jointly unless otherwise prescribed in Chapter 8, Section 30 of the
Companies Act (SFS 1975:1385) regarding the managing director‟s entitlement to sign on behalf
of the company. No other restrictions may be registered. (SFS 1998:1500).




                                          Section 13.


Prior to elections of members of the board of directors of a banking company, the chairman of the
general meeting must provide information to the general meeting regarding positions held by
those persons to be elected in other undertakings. (SFS 1998:1500).
                                       General meetings

                                           Section 14.


In addition to that which is prescribed regarding the duty to provide information and supervision
in Chapter 9, sections 22 and 24 of the Companies Act (SFS 1975:1385), information may only
be disclosed where such may occur without significant prejudice to an individual.
The provisions of Chapter 9, Section 23 of the Companies Act shall also apply where the board of
directors finds that information requested in accordance with Chapter 9, Section 22, cannot be
provided to the shareholders without significant prejudice to an individual. (SFS 1998:1500).



                                          Auditing, etc.

                                           Section 15.


At least one of the auditors elected by the general meeting of a banking company must be a
chartered accountant.
An auditor appointed by the Financial Supervisory Authority shall comply with any instructions
which the Supervisory Authority issues for him or her, notwithstanding any instructions from the
general meeting.
Where a chartered accountant is not elected at the annual general meeting, the provisions
regarding the appointment of an auditor by the County Administrative Board in Chapter 10,
sections 24 and 26 of the Companies Act (SFS 1975:1385) shall apply. (SFS 1999:911).




                                           Section 16.


In addition to that which is prescribed regarding the duty to provide information in accordance
with Chapter 10, Section 41, Chapter 11, sections 18 and 21 of the Companies Act (SFS
1975:1385), information may only be disclosed where such may occur without significant
prejudice to an individual. (SFS 1998:1500).


                                           Section 17.


Where, during the performance of his duties for a banking company, an auditor or a special
examiner becomes aware of circumstances which:
1. may constitute a significant breach of the legislation which regulates the operations of banks;
2. may have a negative effect upon the bank‟s future operations; or
3. may lead to the auditor advising against the adoption of the balance sheet or profit and loss
   account or to qualification in accordance with Chapter 10, sections 30 or 31 of the Companies
    Act (SFS 1975:1385); the auditor shall immediately report such circumstance to the Financial
    Supervisory Authority.
The auditor and the special examiner have a corresponding reporting obligation where he or she
becomes aware of circumstances as referred to in the first paragraph in conjunction with the
performance of duties for the bank‟s parent undertaking or subsidiaries, or an undertaking which
has a similar relation to the bank. (SFS 1998:1500).
Loan prohibition, etc.




                                            Section 18.


The provisions of this Section and Chapter 2, sections 17 and 18, shall apply in lieu of the
provisions of Chapter 12, sections 7-9 of the Companies Act (SFS 1975:1385).
A banking company may not grant a loan for debtors to acquire shares in the company where the
total amount of such loan would thereafter exceed the company‟s unrestricted equity. (SFS
1998:1500).



                                           Liquidation

                                            Section 19.


With the exception of those cases set forth in Chapter 13, sections 3 and 4 of the Companies Act
(SFS 1975:1385), the court shall order that a banking company be placed into liquidation where
its charter has been revoked. (SFS 1998:1500).


                                            Section 20.


A petition for liquidation in accordance with Section 19 of this Chapter or Chapter 13, Section 2
of the Companies Act (SFS 1975:1385) may also be lodged by the Financial Supervisory
Authority. (SFS 1998:1500).




                                              Merger

                                            Section 21.


Only a banking company may acquire another banking company‟s total assets and liabilities by
merger. (SFS 1998:1500).
                                           Section 22.


The provisions of Chapter 14, sections 13-18 of the Companies Act (SFS 1975:1385) shall not
apply in conjunction with a merger with a banking company. The provisions of sections 23-25 of
this Chapter shall apply in lieu thereof. (SFS 1998:1500).


                                           Section 23.


Following approval of a merger plan by the companies, the transferor company and the transferee
company shall apply for consent to execute the plan. Issues regarding such consent shall be
determined by the Financial Supervisory Authority. However, cases involving matters of
principle or of exceptional importance shall be determined by the Government. In addition, in
conjunction with a merger through consolidation, the companies shall apply for a charter and
approval of the articles of association for the transferee company in accordance with Section 3.
The application must be submitted within one month from the date that the merger plan was
approved for both companies and not later than two years after the public notice of the merger
plan in accordance with Chapter 18, Section 2 of the Companies Act (SFS 1975:1385). (SFS
1999:222).


                                           Section 24.


In conjunction with the determination of an application for consent to execute a merger plan,
consideration shall be given to whether the companies‟ creditors will be afforded satisfactory
security where such security is required taking into account the merging companies‟ financial
circumstances and whether the creditors have not already received such security. (SFS 1999:222).


                                           Section 25.


An application in accordance with Section 23 shall be denied where:
1. the merger has been prohibited in accordance with the Swedish Competition Act (SFS
    1993:20), or by legislation, agreements, or other decisions which result from Sweden‟s
    accession to the European Union, or where such a determination of the merger is pending;
2. in conjunction with consolidation, it is not apparent from the merger plan that the transferor
    company‟s total actual value to the transferee company amounts to at least the share capital in
    the transferor company; or
3. the company‟s creditors are not ensured such satisfactory security as referred to in Section 24,
    or the merging companies‟ financial circumstances in general are such that the merger may
    not be deemed to be compatible with depositors‟ or other claimants‟ interests.
Where the application cannot be granted due to the fact that a determination is pending in
accordance with the first paragraph, sub-Section 1, and the determination may be assumed to
require a short time, the question of consent may, however, be suspended for a period of not more
than six months. (SFS 1999:222).


                                           Section 26.
An application in accordance with Chapter 14, Section 19 of the Companies Act (SFS 1975:1385)
must be submitted within two months from such time that consent has been granted. (SFS
1999:222).


                                           Section 27.


A merger through the merger of a wholly-owned subsidiary into its parent may take place
notwithstanding that there is property in the subsidiary which the banking company may not
acquire in accordance with this Act. Such property must be divested not later than one year
following registration. Where special cause exists, the Financial Supervisory Authority may
extend this period. (SFS 1998:1500).


                                           Section 28.


The provisions of Chapter 14, sections 26 and 27 of the Companies Act (SFS 1975:1385) shall
not apply in conjunction with the merger of a wholly-owned subsidiary into its parent. The
provisions of this Section shall apply in lieu thereof. The parent company shall apply for consent
to execute the merger plan not less than one month and not more than two months following
public notice of registration of the merger plan. Issues regarding such consent shall be determined
by the Financial Supervisory Authority. However, cases involving matters of principle or of
exceptional importance shall be determined by the Government. The provisions of sections 24-25
shall apply, where applicable, in relation to such matters. References to the transferor company
shall be deemed to refer to subsidiary companies and references to the transferee company shall
be deemed to refer to parent companies. (SFS 1999:222).



                                        Company names

                                           Section 29.


A banking company‟s name must include the word “bank”. (SFS 1998:1500).


                                           Section 30.


A banking company which has acquired the business of a savings bank in conjunction with
conversion in accordance with Chapter 8 of the Savings Banks Act (SFS 1987:619), may,
following the consent of the Financial Supervisory Authority, use the words “savings bank” in its
name. The above-stated shall apply to a banking company which has subsequently acquired such
a business. (SFS 1998:1500).

				
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