Swedish private and public companies are subject to the Swedish Companies Act. For a company to be listed on a regulated market or certain trading platforms in Sweden, the company must be a public company. The implementation of Directive 2004/25/EC on takeover bids (the “EU Takeover Directive“) provides protection for holders of shares listed on regulated markets and certain trading platforms through a combination of legislation and self-regulation. The Stock Market (Takeover Bids) Act (the “Takeover Act”) regulates the basic framework for takeovers. Statutory rules are found in the Financial Instruments Trading Act (the “Trading Act”), which regulates the duty to provide information. The self-regulatory takeover-rules issued by the Stock Market Self-Regulation Committee (the “Takeover Rules”) complements the statutory rules and contain specific provisions regarding, inter alia, the duty to provide information to the shareholder and the procedures and terms and conditions for the bid. There are two regulated markets in Sweden, Nasdaq Stockholm and Nordic Growth Market (“NGM”). In addition, there are several MTFs in Sweden, including First North Growth Market, NGM Nordic MTF and Spotlight Stock Market.

Both equity and debt (bonds) are financial instruments and subject to Regulation (EU) 2017/1129 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market (the “EU Prospectus Regulation“) and Regulation (EU) 596/2014 on market abuse (the “EU Market Abuse Regulation“). Both regulations apply as Swedish law. The Swedish Financial Supervisory Authority (the “SFSA“) and the stock exchange are tasked to maintain compliance. The Securities Council is authorised by way of delegation from the SFSA and Nasdaq Stockholm and NGM to interpret parts of the Takeover Act and the Takeover Rules and to grant exemptions from certain requirements. The Securities Council also issues statements in individual cases in relation to sound stock market practice.

The main debt markets are Nasdaq Stockholm (regulated), Nordic Derivatives Exchange (regulated) and Nasdaq First North Bond Market (MTF). Due to EU regulation, there is a degree of harmonisation of information requirements between the regulated markets and non-regulated/MTFs but a difference between governance and specific listing requirements. Each individual market has its own approval process of the listing application in relation to the issuer and the relevant instrument. The SFSA is the regulatory body and reviews prospectuses where applicable. In addition to the rules of the relevant market, the EU Market Abuse Regulation applies to bond listed on the markets.

On 24 April 2024, the European Parliament approved the regulation of the European Parliament and the Council amending Regulations (EU) 2017/1129, (EU) No 596/2014 and (EU) No 600/2014 to make public capital markets in the Union more attractive to companies and to facilitate access to capital for small and medium-sized enterprises (the “EU Listing Act”). The EU Listing Act includes changes to the EU Prospectus Regulation and the EU Market Abuse Regulation aimed at enhancing legal clarity, address disproportionate requirements and increase the overall attractiveness of EU capital market. Although the deadline to transpose the EU Listing Act into national law is January 2026, certain provisions will apply from the date the EU Listing Act enters into force in mid July 2024. Notable provisions becoming applicable in July 2024 include, in respect to the EU Prospectus Regulation, expanded prospectus exemptions, relaxed requirements for triggering prospectus supplements and third country equivalence of prospectuses. In respect of the EU Market Abuse Regulation, a notable change is that the list of circumstances where persons discharging managerial responsibilities (“PDMR“) can deal in securities during a closed period will be expanded and the threshold for the obligation for a PDMR (and persons closely associated) to notify their dealings will be raised from EUR 5,000 to EUR 20,000. Another notable change taking effect 18 months after the EU Listing Act comes into force includes that the requirement to disclose inside information as soon as possible will not apply where the inside information relates to an intermediate step in a protracted process, meaning disclosure will be required when the final step in the process is executed.

The EU Prospectus Regulation sets the main regulatory framework and requirements to prepare a prospectus for public offerings. The EU Prospectus Regulation applies to an offer of securities to the public and the listing of securities on a regulated market.

Under the EU Prospectus Regulation as supplemented by the Delegated Prospectus Act, offerings of securities to the public for which the aggregate amount is less than EUR 2,500,000 during a twelve (12) month period, do not require a prospectus to be prepared. Exemptions, which are often combined. include, inter alia, (i) offers of securities addressed solely to qualified investors, (ii) offers addressed to fewer than 150 natural persons or legal persons per EU member state, other than qualified investors, (iii) offers of securities with denomination per unit amounting to at least EUR 100,000 and (iv) offers addressed to investors who acquire securities for a total consideration of at least EUR 100,000 per investor.

As a result of the EU Listing Act, a number of existing exemptions are expanded to include higher thresholds. For example, the obligation to publish a prospectus where fungible securities are admitted to trading and representing less than 20 per cent of the securities currently admitted to trading, will be increased to 30 per cent over a twelve (12) month period and the threshold will be increased from EUR 2,500,000 to EUR 12,000,000 with an option for member states to apply a threshold of EUR 5,000,000.

Insider dealing is prohibited under the EU Market Abuse Regulation. When a transaction, alone or in aggregate during a calendar year amounting to EUR 5,000, is executed, the PDMR must notify the SFSA. The notification is to be made to the SFSA as soon as possible and at the latest within three (3) trading days. PDMRs are prohibited from dealing in securities for a period of 30 calendar days prior to the disclosure of financial reports. An exemption from the prohibitions exists for companies in immediate financial distress. From the date the EU Listing Act enters into force, the threshold over which a PDMR must notify their dealings is increased from EUR 5,000 to EUR 20,000. Member states shall have the right to raise the threshold to EUR 50,000 or decrease it to EUR 10,000. As a result of the EU Listing Act, the list of circumstances where PDMRs can deal in securities during a closed period will be expanded to include, inter alia, investments that do not involve decisions or active involvement by the PDMR, results exclusively from external factors or third parties and when the dealing is carried out on pre-determined terms.

It is important for public companies to establish sufficient internal procedures for trading. Such procedures are usually directed at the PDMRs of the company, and it is important to clarify the personal responsibilities of the PDMR, including the requirement to inform relevant closely associated persons of the PDMR that they also must adhere to certain requirements for trading.

In Sweden, the power of shareholders is primarily exercised through their ability to vote at the company’s general meetings. Shareholders have the opportunity to introduce topics for discussion during these meetings, and they can request that certain items be added to the meeting’s agenda. The scope for shareholders to bring matters to the table is quite broad. Provided that the issue has been communicated to the company within the designated notification period before the general meeting, and provided it relates in some way to the company’s activities, the board of directors is generally not permitted to refuse to discuss it.

The general meeting serves as the primary platform where shareholders can pose questions about the financial status of the company to the managing director and the board. It is expected that these inquiries will be addressed unless doing so would harm the company’s interests.

Minority shareholder also have significant rights in Sweden. Shareholders who hold more than 10 per cent of a company’s shares can request the convening of an extraordinary general meeting. This right also serves as a protective measure against being forcibly bought out by a majority shareholder under a process known as a “squeeze-out.” Conversely, if an individual or group comes to own more than 90 per cent of a company’s shares, the remaining minority shareholders have the right to demand that their shares be bought by the majority shareholder.

Additionally, a shareholder can contest decisions made by the board. If a resolution passed by the board is found to be in violation of the law or the company’s articles of association, shareholders can challenge it. Such a challenge, if successful, can result in the resolution being invalidated. This is an important check on the board’s power, ensuring that it operates within the legal and established framework of the company.

Recent geopolitical events have introduced a degree of uncertainty in global capital markets, and Sweden has been no exception. Despite this uncertainty, there has been a sustained interest in investing in Sweden.

In light of the inflationary pressures, the Swedish Krona (SEK) has depreciated more than some other, more stable international currencies. This depreciation has attracted investors looking for opportunities to invest in Sweden, hoping to leverage the relatively low cost of investment.

When it comes to specific sectors, the energy industry in Sweden has consistently garnered attention. The country’s regulatory environment offers clear frameworks for investment in renewable energy and technologies that contribute to the electrification of society. Given this backdrop, the outlook for fundraising activities in equity and debt within the Swedish market in 2024 appears to be resilient. The established regulatory frameworks are likely to continue to provide an environment conducive to both domestic and international investment.

The essential listing requirements for the regulated market Nasdaq Stockholm are reflected in the table below. Listing on Nasdaq First North Growth Market requires somewhat lower thresholds in certain cases and overall a less through approval process.

A simplified process is available for dual-listing in Sweden. This needs to be assessed on a case by case basis but in essence it remains key that investors understand the nature and the risks of the issuer and the securities that are being offered or admitted to trading on a regulated market.

In Sweden’s capital markets, the concept of weighted voting rights is implemented through the creation of various classes of share.

A common manifestation of this practice is the allocation of different voting rights to different share classes. For example, a company might issue ‘A’ shares with ten (10) votes per share and ‘B’ shares with one (1) vote per share.

Swedish companies may also issue share classes that come with preferential rights concerning dividends and the distribution of assets upon liquidation. Similarly, in the event of liquidation, these shares may have priority over other classes in the distribution of the company’s remaining assets.

While these special rights can provide certain shareholders with significant advantages, it is crucial for companies to maintain transparency and fairness for all investors.

Listing a Special Purpose Acquisition Company (“SPAC”) is permitted in Sweden. The first SPAC was listed in Sweden during 2021. Although a few SPACs were listed and some experienced material success in Sweden, the interest in SPACs has declined, leaving only one remaining in its original form available for public trade.

Since the listing requirements in Sweden include, inter alia, sufficient financial history, which SPACs lack due to their nature as shell companies, separate listing rules applies. According to the SPAC-specific listing requirements, financial history is not required, at least 90 per cent of the equity raised through the IPO is to be deposited with a financial institute independent from the issuer. Within 36 months from the first day of trade, the SPAC must acquire one or more companies with a combined market value of at least 80 per cent of the value in the deposited account. Until such acquisition is completed, all prospective acquisition must be notified to Nasdaq Stockholm prior to being disclosed to the public. If the SPAC has failed to execute sufficient acquisitions within this time, the SPAC must be wound down.

The main liabilities relevant for the Swedish markets are found in the EU Prospectus Regulation, under which liability may arise due to incorrect or incomplete prospectuses. If a flawed prospectus results in an investor suffering financial losses, liability under the EU Prospectus Regulation is intended to have a reparative function and enable the investor to be compensated.

If the SFSA considers a prospectus to be published in violation of the EU Prospectus Regulation, the SFSA may temporarily prohibit a planned or initiated public offer. This prohibition may also be applied if an offer is made to the public without a prospectus first being approved by the SFSA. The SFSA may also intervene against an issuer if the prospectus omits material information or contains misleading information. In such case, the SFSA may penalize the issuer with administrative sanction fees.

The prospectus liability in Sweden is therefore divided into both civil liability, where an investor is to be compensated for financial loss with the liability being placed on board members, CEOs and other responsible persons under the Swedish Companies Act, and liability stemming from administrative sanctions from the authorities.

The main protection for minority shareholders is described above under item 4. The Swedish rules relating to minority protection are based on the principle of equal treatment. The board is under a fiduciary duty to act in the best interest of the shareholder, which includes ensuring that the minority is not being abused for the benefit of larger shareholders. The minority shareholder right to bring a resolution to the agenda for general meetings and the possibility to challenge an unlawful decision or a decision in breach of the articles of associations serves as a check on the board’s power.

Common types of transactions involving public companies that would require regulatory scrutiny and/or disclosure include, inter alia, public takeovers, mergers, acquisitions, and significant changes in share ownership. Such transactions may trigger mandatory bid requirements and/or disclosure obligations, and may require approval from the SFSA or the stock exchange. If the transaction triggers an obligation to prepare a prospectus, the approval process with the SFSA also applies if the shares are listed on a regulated market. Transactions resulting in mandatory bids require regulatory scrutiny and disclosures and are further described below under item 15.

Additionally, any transaction may require disclosures under the EU Market Abuse Regulation subject to information of the transaction being deemed to be price sensitive information and are assumed to have an impact on share price.

The scope of related parties in Sweden includes board members, senior executives, major shareholders and their close associates. Special regulatory approval and disclosure mechanisms are in place to ensure transparency and fair treatment of all shareholders in related parties’ transactions.

Any issue of financial instruments for which the shareholders do not enjoy pre-emption rights must be approved by the general meeting of the issuer with a majority of 2/3 of the votes cast and the shares represented at the general meeting. Any issuance of financial statements for which shareholder do not enjoy pre-emption rights and the financial instruments are issued to any of the persons of the below categories requires approval by a 9/10 majority of the votes cast and the shares represented at the general meeting. The categories are (i) board members of the company or another company within the same group, (ii) the CEO of the company or another company within the same group, (iii) other employees of the company or within the same group, (iv) spouses or co-habiting partners to any of the above persons, as well as (v) legal persons which any of the above persons exercises controlling influence over.

Furthermore, transactions which alone or in aggregate over the most recent year amounts to at least SEK 1,000,000 or at least one percent of the company’s value, carried out between the company and any closely related persons must also be approved by a general meeting. The transaction must be approved by more than half of the votes cast at the general meeting and the shares held by the related party shall not be taken into consideration and neither are shares held by a company within the same group as the related party to be taken into consideration.

Additionally, PDMRs and persons closely associated with PDMRs have an obligation to notify the SFSA of transactions carried out involving the company for which they have a managerial role.

The company must also disclose related party transactions in its annual report, ensuring that all shareholders are informed of any potential conflicts of interest.

Individuals or entities that acquire or dispose of shares in a listed company resulting in their holding reaching, exceeding or falling below thresholds of 5 per cent, 10 per cent, 15 per cent, 20 per cent, 25 per cent, 30 per cent, 50 per cent, two-thirds (66.67 per cent) or 90 per cent are required to notify the SFSA as well as the relevant company. Financial instruments that grant the right to acquire already issued shares of the company must be included in the overall holdings calculation, subject to certain aggregation rules.

See further under item 15 for information of acquisitions triggering mandatory tender offers.

As a point of departure, actions relating to the overall organisation of the company, such as the appointment of directors and auditors, require shareholders’ approval. Additionally, some corporate actions always require a shareholders’ vote, including, inter alia:

• the adoption of income and balance sheet as well as actions relating to the profit or loss incurred;
• the amendment of the articles of association;
• the dissolution of the company by means of liquidation, merger, demerger or conversion; and
• the amendment of a share capital, issue of convertible loans or other financial instruments giving rights to subscribe for shares such as warrants – including authorisations for the board of directors to make any such resolutions.

The obligation to launch a mandatory tender offer is triggered when a person or a collective group acting in concert acquires a shareholding that confers 30 per cent or more of the voting rights in the target company. In case the 30 per cent threshold is exceeded as a result of actions by the listed company, such as through the redemption of shares, will not trigger the mandatory tender offer obligation – any subsequent acquisition of shares by the relevant person/group however will.

The mere acquisition of rights to acquire shares does not trigger the above-mentioned obligation to launch a mandatory tender offer. For example, the acquisition of call options, warrants, or convertible instruments, entailing that the 30 per cent is exceeded, does not trigger the obligation nor does securing irrevocable commitments from shareholders to accept a takeover offer. Nonetheless, case law indicates that parties to derivative contracts or similar agreements may be deemed to be acting in concert, entailing that their respective holdings must be considered on an aggregated level, entailing that their cumulative holdings may trigger the obligation.

The obligation to launch a mandatory tender offer ceases to apply in case the relevant shareholding is reduced below the 30 per cent threshold within four weeks.

Under Swedish legislation, there are no specific statutes addressing the independence of directors. Nevertheless, the Swedish Corporate Governance Code – applicable to companies listed on Swedish regulated markets – articulates the following criteria for directors’ independence:

• a maximum of one (1) director elected by the shareholders’ meeting can concurrently serve as a member of the company’s or its subsidiary’s executive management;
• a majority of the directors elected at the shareholders’ meeting must maintain independence from both the company and its executive management; and
• a minimum of two (2) directors, independent of the company and its executive management, must also be independent in relation to the company’s major shareholders.

According to the Swedish Corporate Governance Code, a director’s independence should be determined by means of a general assessment of all factors that may give cause to question the individual’s independence and integrity with regard to the company or its executive management. Consideration should be given to the following:

• whether the individual currently holds or has held the position of CEO of the company or a closely affiliated company within the previous five (5) years;
• whether the individual has been employed by the company or a closely affiliated company within the preceding three (3) years;
• whether the individual receives, or has received, substantial compensation for consultancy or additional services outside the scope of their board responsibilities from the company, its affiliates, or any member of the executive management;
• whether the individual currently has or has had within the past year, a substantial business relationship or significant financial interactions with the company or a closely affiliated company as a client, supplier, or partner, either personally or as part of the executive management, board, or as a significant shareholder in a company engaged in such a relationship with the entity;
• whether the individual has been a partner in, or as an employee, participated in an audit of the company by the current or previous auditor of the company or a closely affiliated company within the last three years;
• whether the individual is a part of the executive management of another company where any member of that company’s executive management serves on the executive management of this company; and
• whether the individual has close familial ties with any member of the executive management or with any other individuals mentioned previously, and whether such person’s business engagements with the company arere substantial or significant enough to cast doubt on the director’s independence.

The assessment of a director’s independence and integrity must also take into account the nature and extent of the individual’s direct and indirect connections with major shareholders. Directors who hold employment positions or serve on the board of companies that are substantial shareholders are not considered independent.

Issuers must disclose audited historical financial statements covering the latest three (3) financial years as well as the corresponding auditor’s reports. If the issuer has been in operation for a shorter period than three (3) years, financial information must be provided for the period that the issuer has been active. If the issuer is listed on a regulated market, financial statements must as a general rule be prepared in accordance with IFRS-standards.

Sweden’s ESG legislative landscape consists of legislation on a range of issues and is subject to regular changes and developments.

Environmentally, the cornerstone of Sweden’s regulatory regime is the Swedish Environmental Code, which incorporates various EU directives. The code contains rules on land and water resources, the protection of designated areas, adherence to environmental considerations in all activities, and stipulates requirements for environmental impact assessments and the management of environmentally hazardous activities.

Socially, Sweden’s commitment to equality and anti-discrimination is enshrined in several acts, including the Swedish Discrimination Act, the Swedish Work Environment Act, the Swedish Employment Protection Act and the Swedish Act on Co-determination in the Workplace. Collectively, these laws work to combat discrimination and promote equal rights and opportunities across various aspects of society, particularly within the labour market and workspace settings.

In the realm of governance, the implementation of Corporate Sustainability Reporting Directive (“CSRD”) into Swedish law via the Swedish Annual Accounts Act replaces the Non-Financial Reporting Directive (“NFRD”). The CSRD seeks to fortify sustainability investments across the EU and introduces comprehensive sustainability reporting mandates for large corporations, including publicly listed companies with a minimum of 500 employees. The Corporate Sustainability Due Diligence Directive (“CSDDD”) and the Taxonomy Regulation (“SFTR”), slated for incorporation into the Swedish Annual Accounts Act, further complement the CRSD. The CSDDD obligates businesses to conduct due diligence to curtail adverse social and environmental impacts throughout their operations, supply chains, and business relationships. This directive primarily affects EU companies with at least 1,000 employees and global net sales exceeding EUR 450 million. Meanwhile, the SFTR, in congruence with CSRD and CSDDD, mandates companies to disclose the environmental sustainability of their operations. The SFTR’s new requirements are scheduled to be progressively integrated into Swedish law starting in 2024.

The typical offering structures for issuing debt securities in Sweden are mainly Swedish medium-term note programmes (MTNs) and high-yield offerings. These issues are usually listed on the regulated market of NASDAQ Stockholm. Public offerings require the approval and publication of a prospectus. The holding company usually issue debt securities directly and not through an SPV.

Trust structures and the concept of trusts are not recognised in the Swedish legal system and there is no trust regulation in Swedish legislation. However, according to Swedish law, it is possible for lenders to appoint a facility agent and a security agent to represent them in matters relating to the loan and other documentation. This is particularly common for bond issuances.

There are a number of different types of collateral and security interests that can be made available under Swedish law. The most common type is the pledges and guarantees. The type of asset that is pledged as credit enhancement depends on the underlying asset/operative group and structure of the credit, but the most common pledges are share pledges and intragroup loan pledges and then we also see pledges over business mortgages (a type of floating charge over movable assets), real estate mortgages and security over bank accounts. Any property or asset can be validly pledged under Swedish law as a general rule. the most suitable type of security or guarantee depends on the type of financing. Some considerations to consider include any applicable legal restrictions regarding, for example, upstream security and corporate benefit as well as financial assistance.

The terms and conditions of the debt securities includes the terms of payment (i.e. repayment and prepayment), the covenants of the issuer, events of default, enforcement procedures, security packages, certain commitments, the role and protections of the bond agent and the process for decisions to be taken by holders of the security. In Nordic bond issuances, it is still fairly common with financial covenants that are maintenance tested together with incurrence based ratio testing for e.g. incurrence of additional indebtedness and/or paying out dividends from the ringfenced group. The terms and conditions are a key document and they constitute the whole debt securities.

No withholding is imposed on payments of principal or an amount that is considered to be interest for Swedish tax purposes. If amounts are deemed to be interest for Swedish tax purposes are paid by a legal entity domiciled in Sweden (including a Swedish branch, or in certain cases a clearing house within the EEA) to a private individual resident in Sweden for tax purposes, Swedish preliminary taxes are normally withheld by the legal entity or clearing house on such payments.

Securities that are to be traded on a regulated market and instruments that are offered to the public require a securities prospectus to be published. Securities of issuers which are traded are bound by customary insider rules, entailing that the issuer must immediately publish insider information relevant for the assessment of the security’s creditworthiness.