Chapter 1. Introductory provisions
section 1 of this Act contains provisions concerning the various categories of
capital buffers and if intervention and restrictions when a
institution fails to meet the combined buffer requirement.
That certain provisions of this law also applies to fund management companies
and the aifm is apparent from Chapter 2. 10 and 10 bis of the law
(2004:46) about mutual funds and Chapter 7. section 6 of the Act
(2013:561) on alternative investment fund managers.
section 2 of this Act means
1. mixed financial holding company within the EEA: company
referred to in article 4.33 of European Parliament and Council
Regulation (EC) no 575/2013 of 26 June
prudential requirements for credit institutions and investment firms and
amending Regulation (EU) No 648/2012
(enforcement regulation),
2. subsidiary: such an undertaking referred to in article 4.16 of the
prudential regulation,
3. EEA: European economic area,
4. The ESRB ESRB pursuant to
European Parliament and Council Regulation (EC) no 1092/2010 by
november 24, 2010 on macro-prudential oversight of the financial
system at EU level and establishing a European
systemic risk Board,
5. financial holding companies within the EEA: the company that
referred to in article 4.31 in prudential regulation,
6. institutions: credit institutions under the Act (2004:297) on banking
and finance law, Swedish skeppshypotekskassan and
securities companies,
7. capital adequacy directive: European Parliament and Council
Directive
2013/36/EC of 26 June 2013 on access to the
the business of credit institutions and the prudential supervision of credit institutions
and securities companies, amending Directive 2002/87/EC
and repealing Directive 2006/48/EC and 2006/49/EC,
8. core tier 1 capital: capital referred to in article 50 of
prudential regulation,
9. the parent institutions within the EEA: undertakings referred to in article 4.68 in
prudential regulation,
10. on a consolidated or sub-consolidated basis: the way that institutions in
accordance with the provisions on supervision at group level in
articles 6 to 24 in prudential regulation must comply with the standards of
requirements,
11. system risk: the risk of a disruption in the financial
the system, which can have serious negative consequences for the
financial system and the economy,
12. system important institutions: an institution whose default rates
or improper operation can lead to systemic risk,
13. prudential regulation: European Parliament and Council
Regulation (EC) no 575/2013 of 26 June
prudential requirements for credit institutions and investment firms and
amending Regulation (EU) No 648/2012,
14. total risk-weighted exposure amount: the amount referred to in
Article 92 in prudential regulation,
15. investment companies: a Swedish Corporation that has a
permission to operate securities operations under the Act
(2007:528) securities market, and that is not a
banking companies or credit market companies under the law on
banking and finance law, and
16. transfers of value attached to the core tier 1 capital:
a) payout in the form of a cash dividend,
b) bonus issue or partial stock dividend or transfer
or distribution of fully or partly paid bonus shares or
other capital instruments referred to in article 26 (1) (a) in
prudential regulation,
c) redemption or purchase of own shares or
other capital instruments referred to in article 26 (1) (a) in
prudential regulation,
d) refund of the amount paid related to
instruments referred to in article 26 (1) (a) in
prudential regulation,
e) a transfer or distribution of items referred to in
Article 26 (1) (b) to (e) of prudential regulation.
section 3 of the enforcement of the provisions of
This law is followed.
Chapter 2. Institution specific requirements on capital buffers
Combined buffer requirement
1 § Institutions must, in addition to the requirements on core tier 1 capital
the provisions of article 92 of the regulation and supervision of a decision
If the particular capital base requirements under Chapter 2. section 1 of the Act (2014:968)
If the special supervision of credit institutions and
securities companies, have a core tier 1 capital equal to the
combined buffer requirement calculated in accordance with section 2.
2 § the combined buffer requirement is the sum of the
requirements for core tier 1 capital under this law follows from
capital conservation buffer, the institution specific
countercyclical capital buffer and
1. in the case that the systemic risk buffer is applied to
exposures in another country, the highest of the
systemic risk buffer and the applicable capital buffer under 5
Cape. section 6,
2. in the case that the systemic risk buffer applies only to
exposures in Sweden, the sum of the systemic risk buffer and
the applicable capital buffer according to Chapter 5. section 6.
Chapter 3. Buffer requirement
1 § Institutions must on an individual and group level have a
buffer requirement.
section 2 of capital conservation buffer to consist of
core tier 1 capital equivalent to 2.5% of the institution's
total risk-weighted exposure amounts.
section 3 of the small and medium-sized securities companies, fund management companies and
Aifm may be exempted from the requirement of
buffer requirement in accordance with the provisions
delivered with the support of 10. 1 § 1.
Chapter 4. Systemic risk buffer
General information about systemic risk buffer
section 1 of the financial supervision authority may, in order to prevent a
structural systemic risk that can cause serious
consequences for the stability of the financial system and
the real economy in Sweden, decide that institutions of all
or some of their exposures at the individual level,
in the group level and group level shall have a systemic risk buffer.
section 2 of the systemic risk buffer according to § 1 shall consist of
core tier 1 capital and amount to at least 1 per cent of
the institution's risk-weighted exposure amounts based on the
exposures that systemic risk buffer should be applied according to
3 – 7 sections.
Systemic risk buffer on exposures in Sweden and beyond
The EEA
paragraph 3 of the financial supervision authority, a month after the
the inspection has completed the notification requirement of article
133.11 in solvency directive in accordance with the
the conditions imposed by article 133.14 thereof
decide that the Institute should have a systemic risk buffer that is
to a maximum of 5% of the institution's risk-weighted
exposure amounts based on the institution's exposures in
Sweden or outside the EEA.
Systemic risk buffer must be set at more than 5 per cent of
the amount referred to in the first subparagraph only if
The FSA completed the notification requirement of article
133.12 in the solvency ratio directive and the measure approved by the
The European Commission in accordance with article 133.15 in same
directive.
Systemic risk buffer on exposures outside Sweden but within
The EEA
paragraph 4 of the financial supervision authority, a month after the
the inspection has completed the notification requirement of article
133.11 in solvency directive may decide that an institution
to have a systemic risk buffer which amounts to no more than 3%
of the institution's risk-weighted exposure amounts based on the
the institution's exposures outside Sweden but within the EEA.
§ 5 If the FSA decides whether a systemic risk buffer in
accordance with paragraph 4, to the same buffer level apply to the institution's
all exposures outside Sweden but within the EEA.
paragraph 6 of the financial supervision authority may decide that the Institute should have a
systemic risk buffer that is more than 3% of the
exposure amounts referred to in paragraph 4, if the inspection completed
the notification requirement in article 133.12 in
the capital adequacy directive, such a measure is approved by the
The European Commission in accordance with article 133.15 in same
directive.
Recognition of other countries ' systemic risk buffers
section 7 If the FSA recognised a systemriskbuffertvärde
established in another country within the EEA, the inspection
decide that institutions with exposures in the country for these
exposures shall have a systemic risk buffer equivalent to that
established in the country.
Chapter 5. Buffers for systemically important institutions and financial
holding company
Capital buffer at the group level for global systemically important
Institut
section 1 of the financial supervision authority shall decide which institutions on
group level should have a capital buffer for global systemically important
institutions under paragraph 2.
The first subparagraph shall not apply to institutions which are subsidiaries of
either a parent institution, a financial
holding company or a mixed financial
holding company in the EEA.
section 2 of the capital buffer according to § 1 shall consist of
core tier 1 capital and amount to at least 1 per cent and not more than
3.5% of the institution's overall risk-weighted
exposure amounts.
Capital buffer for other systemically important institutions
paragraph 3 of the financial supervision authority may, in addition to what follows from 1 and 2
§§, decide to Institute at the individual level, below group level
or group level should have a capital buffer in the case of the other
systemically important institutions under paragraph 4.
section 4 of the capital buffer for other systemically important institutions should
consist of core tier 1 capital and may be set to a maximum of 2
percent of the institution's overall risk-weighted exposure amounts.
§ 5 If an institution that should have a capital buffer in the case of the other
systemically important institution is a subsidiary of a global
systemically important institutions or to a parent institution within the EEA
who should have a capital buffer of other systemically important
institutions, the following applies. The capital buffer for
systemically important institutions that the institution may be ordered to have at
individual level or sub-group level must not be more
than the maximum of 1 per cent of its total risk-weighted
exposure amounts and the buffer value that applies to the Group
at the group level in accordance with the applicable capital buffer for
systemically important institutions.
Competing buffer requirements
section 6 Of the application of paragraphs 1 to 4 would lead to a
institutions have to at the group level have more than one
capital buffer for systemically important institutions, at the level
only the highest of these capital buffers may apply.
section 7 an application of 1 – 4 and 6 §§ would lead to a
institutions have to at the group level have both a
capital buffer for systemically important institutions and in accordance with
Chapter 4. a systemic risk buffer on the institution's exposures in a
other country, shall be the highest of these buffers on
group level.
If the need for a systemic risk buffer applies only to
exposures in Sweden, however, the capital requirement as a result
of systemic risk buffer in addition to the capital requirements of the
the applicable capital buffer for systemically important institutions.
section 8 Of the application of paragraphs 3 to 5, should lead to a
institution on an individual or sub-consolidated basis is
required to have a capital buffer of other systemically important
institutions and the application of Chapter 4. would lead to the
the Institute also is required to have a systemic risk buffer for
the institution's exposures in another country, should only the
the highest of these capital buffers on each level.
If demands for a systemic risk buffer applies only to
exposures in Sweden, however, the demand arising from the
systemic risk buffer in addition to the capital requirements of a
capital buffer for other systemically important institutions.
Chapter 6. Countercyclical capital buffer
The size of the institution specific countercyclical
the capital buffer
(1) an institution shall have an institution specific counter-cyclical
capital buffer consisting of core tier 1 capital, which amounts to
the institution's overall risk-weighted exposure amounts multiplied
with a weighted average of the countercyclical buffer
as referred to in paragraphs 4 and 5 shall apply for those countries in which the institution
have their relevant credit exposures.
2 § the countercyclical capital buffer should also be met at
group level.
Exemption from the requirement of a countercyclical capital buffer
section 3 of the small and medium-sized securities companies, fund management companies and
Aifm may be exempted from the requirement of counter-cyclical
capital buffer in accordance with regulations issued by
support of 10. 1, § 8.
Countercyclical buffer
4 § the institution specific countercyclical capital buffer should
are calculated on the basis of the countercyclical buffer as
determined in accordance with Chapter 7.
§ 5 if there has been established a countercyclical
buffer value for credit exposures in another country,
be applicable to the calculation of the institution-specific
countercyclical capital buffer the countercyclical
buffer value that the competent authority of that State has decided,
not more than 2.5%.
section 6, If the institution specific countercyclical capital buffer
shall be calculated on the basis of a countercyclical buffer value that has
established by a foreign competent authority in the EEA, shall
buffertvärdena with effect from the date
established by the foreign authority.
If the institution specific countercyclical capital buffer should
calculated based on a countercyclical buffer value that has
established by a competent authority outside the EEA, decision
to increase the setting take effect twelve months after the
date on which the new value is published by the authority.
Decision which means that the buffer is reduced shall apply
immediately.
Requirements on methods to calculate the maximum available amount
section 7 an institution shall have procedures that make it possible to
accordance with the regulations issued pursuant to Chapter 10. 1
§ 10 continuous calculate senior
disposal amount.
Chapter 7. Decision on countercyclical buffer
Determination of countercyclical buffer
section 1 of the financial supervision authority shall determine, for each quarter, a
countercyclical buffer Guide and a countercyclical
buffer value.
The countercyclical buffer Guide should be used as a
reference value for determining the countercyclical
is increased.
The countercyclical buffer rate should be the basis for
the calculation of the size of the institution-specific
countercyclical capital buffer in accordance with Chapter 6.
2 § The countercyclical buffer Guide and buffer rate
shall be determined in the manner and on the basis of the factors listed
in article 136(2) and 136.3 in capital adequacy directive.
3 § the countercyclical buffer rate should be between 0 and
2.5% of total risk-weighted exposure amounts and specified in
interval of 0.25%. If it is justified on the basis of the
factors referred to in article 136(2) and 136.3 in
the capital adequacy directive, the FSA set
a countercyclical buffer value that is higher than 2.5%
of the total risk-weighted exposure amount.
Decision on countercyclical buffer for exposures in
other countries
section 4 If a foreign authority has established a
countercyclical buffer value amounting to more than 2.5
% of total risk-weighted exposure amount,
The financial supervision authority may decide that the Swedish Institute for relevant
credit exposures in the country should implement a buffer value
exceeding 2.5% of total risk-weighted
exposure amounts.
Decision referred to in the first subparagraph may not lead to institution
for exposures concerned shall apply a higher buffer value
than that set by the foreign authority.
paragraph 5 of the financial supervision authority may establish a countercyclical
buffer value as Swedish institutes of credit exposures in
a country outside the EEA to apply in the calculation of the
institution specific countercyclical capital buffer if the competent
authority in that country
1. has not established and published a countercyclical
buffer value, or
2. has established a countercyclical buffer value that is
insufficient to adequately protect
institutions against the risks associated with excessive
credit growth in the country.
The date when the decision on buffer settings take effect
paragraph 6 of the decision to establish or increase a
countercyclical buffer value must contain an indication of the
time when the buffer begins to take effect.
Decisions to the effect that the level of buffer rate increases should begin
expire twelve months after the decision was announced.
If there are special reasons, the decision takes effect at a
previous date.
The decision to lower the buffer value will apply immediately.
7 § When a countercyclical buffer value is lowered, the decision
contain information about how long the lower buffer rate
is expected to continue.
Publication of decisions
paragraph 8 of the financial supervision authority shall inform the ESRB and publish
decision on countercyclical buffer in accordance with
Articles 136.7, 137(2) and 139(5) in
the capital adequacy directive.
Chapter 8. Interference and restrictions on the combined
buffer requirement is not met
Maximum available amount and capital preservation plan
(1) an institution that does not meet the combined
buffer requirement under Chapter 2. section 2 of the financial supervision authority shall be
1. in accordance with the regulations issued on the basis of 10
Cape. 1 § 10 report the highest available amount, and
2. within five working days of the buffer requirement does not
longer met submit a capital preservation plan
shows how the Institute, within a reasonable period of time to achieve the
combined buffer requirement.
If, having regard to the nature and extent of the institution's
operations there are reasons for it, the financial supervision authority may permit
to capital preservation plan be submitted to the supervision authority within the
a maximum of 10 working days.
section 2 Of the financial supervisory authority considers that the measures shown
capital preservation plan does not restore the Institute's
core tier 1 capital, the Inspectorate to intervene.
The financial supervision authority shall then submit to the Institute to strengthen
the capital base or impose restrictions that are stricter
than those referred to in paragraph 3.
Restrictions on institutions ' right to take value transfers
accommodation
section 3, an institution that does not meet the combined
buffer requirement may not
1. make a transfer of value linked to the institution's
core tier 1 capital,
2. commit to pay variable remuneration or
discretionary pension benefits or pay out such mobile
compensation where the obligation to pay arose at a
time that the Institute did not satisfy the combined
buffer requirement,
3. make payments linked to tier 1 capital.
An institution may not take any measure referred to in
the first subparagraph, if the action causes the Institute no longer
meet the combined buffer requirement.
Actions that do not result in a decrease of the profit
or core tier 1 capital are not covered by the prohibition laid down in the first
paragraph.
section 4 of the prohibition in section 3 does not apply
1. an institution which, in accordance with paragraph 1 are calculated
maximum available amount and measures within this
amount, or
2. If the application of the provision leads to a
cessation of payments that can be the basis for putting
Institute of business.
§ 5 an institution that intends to take action under paragraph 4 of
1 shall inform the financial supervision authority before action is taken.
section 6, if an institution does not comply with the requirements of this chapter;
the financial supervision authority may apply the provisions of intervention
in the laws that regulate the activities of the Institute.
The same applies if the
1. an institution does not comply with a systemic risk buffer as
determined by the financial supervisory authority in accordance with Chapter 4, and
2. an action pursuant to section 2 is not expected to lead to a
satisfactory management of systemic risk.
Chapter 9. Fees
section 1 of the financial supervision authority may charge fees for the examination of
applications and notifications under this Act.
10 Cape. Appropriations
section 1 of the Government or the authority, as the Government determines
may provide for
1. criteria for which securities companies, fund management companies and
Aifm in accordance with Chapter 3. paragraph 3 may be exempted from the requirement
to maintain a buffer requirement,
2. the principles to be taken into account when determining and
the grading of the systemic risk buffer according to Chapter 4. section 1,
3. the determination of the geographic affinity of exposures
with respect to the systemic risk buffer as well as how the geographical
systemriskbuffertkraven, consistent,
4. assessment criteria for when an institution shall be appointed to
global system essential or should be moved to a higher
category of global systemically important institutions,
5. what other systemically important institutions should be identified and how
assessment of the associated kapitalbuffertkrav in accordance with 5
Cape. 3 and 4 sections,
6. which credit exposures in accordance with Chapter 6. paragraph 1 shall
taken into account in the calculation of the
the capital buffer,
7. the calculation of the weighted average of the
countercyclical buffertvärdena according to Chapter 6. section 1,
8. criteria for which securities companies, fund management companies and
Aifm in accordance with Chapter 6. paragraph 3 may be exempted from the requirement
maintaining a countercyclical capital buffer,
9. obligation on the institutions to enter their
geographic area of credit exposures,
10. how the maximum available amount in accordance with Chapter 8. paragraph 1 shall
be calculated and reported,
11. the requirement that a capital conservation plan under Chapter 8. 1 §
shall comply with, and
12. notification obligation in accordance with Chapter 8. § 5.
section 2 of the Government may provide for such fees
referred to in Chapter 9. § 1.
11 kap. Appeals
paragraph 1 of the decision taken by the financial supervision authority notifies the according to this law
or pursuant to regulations adopted on the basis of
the law may be appealed to the administrative court. This
does not apply to decisions on matters referred to in section 20 of the first
paragraph 5 the Administrative Procedure Act (1986:223).
Leave to appeal is required for an appeal to the administrative court.
The financial supervision authority may decide that the decision shall apply
immediately.