REGULATION

Regulatory Developments in the financial markets today is very extensive both in Sweden and in the EU. SPIS and the Swedish Securities Dealers Association’s goal is to monitor and follow regulatory developments in the securities market to keep members informed and possibly influence the formulation of relevant regulations. An overview of the forthcoming EU rules has been drawn up and accessible only in Swedish by the following link.

MiFID II

Trading Directive on markets in financial instruments, MiFID has brought great changes in the European securities markets, both positive and negative. MiFID II proposal includes new rules in a number of areas that will affect investor protection and information disclosure to consumers. with regards to investor protection, the Commission proposes introducing a new ban on so-called Inducements in individual portfolio management and the independent investment advice. Regarding customer classification proposed that municipalities no longer automatically be classified as professional clients and to the institution of increased disclosure requirements for eligible counterparties.

PRIIPs

The European Commission has for several years announced a proposal on packaged retail investment products, so-called PRIIPs (Packaged Retail Insurance-based Investment Products). In early July 2012, the proposal for a regulation on information document on packaged retail investment products for retail investors. The Commission states that the proposal is expected to be introduced in late 2017.

The proposal aims to introduce a new standard for the products. In a key information document (Key Information Document, KID) to be in an easily understandable way, information on investment products. The text should be consumer friendly by being concise and easy to understand. The document outlines the basic facts about the product and information on the risks and costs associated with an investment in the product. It should be clear whether an investor may lose money or not, and how complex the product is.

Those who develop or have developed an investment product targeted at retail investors are obliged to provide a basic information document for the product. By key information document for different products have a common structure, content and presentation, consumers can use the document to compare different investment products and choose the one that suits them best. The proposal covers the majority of investment products aimed at retail investors, including structured Products.

PROSPECTUS DIRECTIVE

A prospectus shall be drawn up when transferable securities such as structured products, offered to the public or admitted to trading on a regulated market. The prospectus must be submitted to the FSA for review and approval.

A prospectus shall contain all information necessary for an investor to make an informed assessment of the issuer (issuer) and the transferable securities offered or admitted to trading. The information must be written so that it is easy to understand and analyze. Prospectus Rules aimed among others at ensuring a high level of investor protection and to facilitate the raising of capital across borders within the EU.

Normally, the structured products during a so-called base prospectus is valid for 12 months and is a general description of the issuer, the risks, the types of products the base prospectus applies to, etc. For each structured investment then takes the issuer until the final terms that describe what is specific to the current location of risk, characteristics, etc. the final terms are presented only to the FSA for registration.

Read more about Prospect on the FSA website