prop · GX0330en · 2009-10-13 00:00:00 — Government proposal: An average of the amount guaranteed during the financial year will be deducted from the fee basis for a credit institution to which the Debt Office has issued a guarantee for debt securities pursuant to the Government Support to (2008:814). The average shall be calculated based on the credit institution's guaranteed obligations at the end of each quarter. The proposal contained in the memorandum with a draft proposal referred to for consideration differs from the Government proposal. According to the memorandum, half of the amount paid under the Government Guarantees to Banks and others Ordinance (2008:819) (the ''), and which refers to the same period of time, shall be deducted from the stability fee. However, the lowest amount that a stability fee can be reduced to is (zero). A joint deduction should be made in some circumstances for several parties required to pay the fee and which form part of the same group according to the provisions of the Act. Consultation bodies: Several consultation bodies object to the proposal contained in the memorandum concerning a deduction for guarantee fees paid. The Swedish is of the opinion that the impact analysis is inadequate in terms of how competition in the market may be affected by a credit institution that is in a rather worse state than other institutions using the and consequently avoiding the stability fee that other 'more sound' institutions must pay. Bostadsfinansieringsaktiebolag () considers that deducting half of the guarantee fee should be permitted at an aggregate level within a group; that is, it should be possible to deduct the guarantee fee that one or more institutions in a group have paid in relation to the aggregate stability fee for the institutions within the group. Debt Office, the of , , and consider that the fees are of a different nature. The fee for participating in the emanates from and promotes the self-interest of the institution concerned, but will not benefit any other institution, whereas the stability fee promotes a collective benefit. If an institution that has received a state guarantee is granted the right to deduct the fee for this, or parts thereof, this will benefit this institution in relation to Government 2009/10:30 institutions that do not participate in the . However, the of may accept a deduction for double administrative costs incurred as a result of processing the fees. The consultation bodies also maintain that a deduction counteracts the incentive for the institutions to resume a For this reason, they consider that it would be unreasonable for the guarantee fee, or parts thereof, to be deducted from the stability fee. The has raised the issue of whether there is cause to consider also deducting from the fee-based obligations such obligations that are already covered by protection from the central government, such as deposits covered by the deposit guarantee and obligations guaranteed under the , to avoid a fee being imposed twice. The proposal contained in the memorandum with a draft corresponds with the Government proposal. Consultation bodies: Debt Office questions the point of complicating the system by introducing a deduction that has negligible effects in monetary terms. The Confederation of Swedish Enterprise is opposed to all deductions and considers that the Government has not taken due regard to the fundamental problem of individual institutions benefiting from the deduction. Swedish Finance Houses considers that the new deduction model is better than those that were previously proposed, but the Association is still fundamentally opposed to any deduction. finansieringsaktiebolag () approves of institutions that have joined the and issued guaranteed debt securities not being compelled to pay twice, but at the same time emphasises that the proposed deduction model referred to for consideration would be preferable. proposal contained in the memorandum and states that the rules on deduction from the fee basis for guarantees issued lie very much in line with what the previously recommended in the The Riksbank considers that the proposals contained in the memorandum are an acceptable compromise, although the impact of the deduction will be smaller than desired. Reasons for the Government proposal: The Government considers that it is reasonable for institutions that have joined the Programme to be entitled to deduct such obligations as are guaranteed within the framework of the programme from the basis on which the stability fee is calculated. The measures being taken by the central government to protect financial stability will benefit all institutions through more stable business conditions and lower borrowing costs. However, in the current situation, it is only those institutions that have joined the and issue loans within the framework of this programme that pay for financial stability. Confederation of Swedish Enterprise considers that a deduction will benefit individual institutions. However, if there is no deduction, the institutions participating in the would Government 2009/10:30 continue to have to bear a disproportionately high cost, which is unreasonable. For this reason, credit institutions that have chosen to use the central government's , and consequently already help fund systems to ensure financial stability, should not have to pay as much to the stability fund via the stability fee as credit institutions that have chosen not to join the . The Government does not share the opinion of the Swedish that institutions should only be deemed to be in a worse condition if they choose to participate in the but instead considers that an institution may choose to join the because it (for instance) wishes to increase its lending. does the Government share the view of the of that institutions will not have sufficient incentive to leave the , as this programme will only exist for as long as there is a need. As regards the objection that the fees are of a different nature, the Government considers that they nevertheless constitute compensation for partly the same thing, which is further clarified by the new proposal. In the proposal referred to for consideration, it was suggested that fees paid to the could be partly deducted from the stability fee. The proposed deduction has been slightly reworked considering the EC State Aid rules. The new proposal means that the obligations guaranteed by the central government may be deducted from the fee basis used to determine the stability fee. In the assessment of the Government, the deduction model currently being proposed is a measure that is not subject to the EC State Aid rules. A deduction of guaranteed obligations from the fee basis means that the effect of the deduction for the institutions would be less than if the guarantee fees were to be deducted directly from the stability fee, which was proposed in the referral to for consideration. It is likely that the most appropriate method of calculating the amount of the sum guaranteed would be to determine an average based on the relevant credit institution's guaranteed obligations at the end of each quarter. The reason for this is that the guarantees may have terms of different length and that an average would thereby provide a fairer reflection of the credit institution's guaranteed obligations during the year. As regards the issue raised by the Finansinspektionen concerning a deduction for deposits not subject to deposit guarantee, this will be investigated in conjunction with the forthcoming amalgamation of the present charging system with the deposit guarantee system. Government 2009/10:30 5Funding of compensation paid under the Government Guarantees for Depositors at Swedish Branches of Foreign Institutions Act Government proposal: Compensation paid under the Government Guarantees for Depositors at Swedish Branches of Foreign Institutions Act (2008:812) shall be charged to the stability fund. funds that the central government may receive from a foreign guarantee system or an institution's country of origin shall be deposited in the stability fund. The proposals contained in the memorandum on the draft proposal referred to for consideration and in the memorandum on the draft correspond to the Government proposal. Consultation bodies: The Swedish Bankers' Association and the of question the proposal that compensation relating to Government guarantees for depositors at Swedish branches of foreign institutions should be funded from the stability fund. If funding is provided from the stability fund, there is a consequent risk that Swedish institutions, at least in theory, will have to pay higher stability fees as a result of mismanagement on the part of competitors or other countries. The Confederation of requests a more detailed explanation as to why this should be funded from the stability fund and considers that such compensation should instead be dealt with under the deposit guarantee rules and consequently paid out by or, more appropriately, should be a central government commitment. Reasons for the Government proposal: Through the Government Guarantees for Depositors at Swedish Branches of Foreign Institutions Act (2008:812), the Government may, under certain conditions, issue guarantees to ensure that depositors at Swedish branches of foreign institutions receive compensation corresponding to the amount that would have been paid under the system for guaranteeing deposits in the institution's country of origin. The guarantee may only be issued if there is a risk that the foreign guarantee may not be discharged and it is considered that inadequate performance of this obligation would entail disruptions to the Swedish financial system. As a result of the new Act, a new framework appropriation of ,000,000 was introduced for the 2008 budget year under expenditure area 26 (Interest on the national debt, etc.) (Government 2008/09:49). After that was presented to the Riksdag, a entitled 'Measures to strengthen the stability of the Swedish financial system' (Government 2008/09:61) was presented, after which the Riksdag made a decision on the Support Act. The stability fund was established under the Act. The Riksdag decided to appropriate billion into this fund. As mentioned above, the Government 2009/10:30 intention is for the funds received owing to deposit guarantee rules to eventually be deposited in the stability fund. It is reasonable that the stability fund also funds the form of support measures entailed by the government guarantees for depositors at Swedish branches of foreign institutions. The main reason for this is that the aim of such a support measure is to lead to financial stability that will in turn benefit Swedish institutions. funds that the central government may receive from a foreign guarantee system or an institution's country of origin as a result of such a support measure being taken should be deposited in the stability fund. The following can be added as a result of comments made by the Swedish Bankers' Association and the of . When establishing the stability fund, the central government deposited billion into the fund. For this reason, it is not only the Swedish institutions that will have contributed to the fund. The stability fund has been established as a step towards ensuring financial stability, and possible compensation resulting from a guarantee to depositors in a foreign branch can only be paid with the aim of ensuring financial stability in . The stability fund is also based on an insurance approach, where the institutions contribute a premium. The fees paid by institutions are consequently not their own funds, but are deposited there to be used for various support measures. Government 2009/10:30 Government proposal: It should be possible to make an appeal to a general administrative court against a decision regarding stability fees made by the Debt Office in its capacity as a supporting authority. Leave to appeal is required for consideration at the administrative court of appeal. The proposals contained in the memorandum on the draft proposal referred to for consideration and in the memorandum on the draft correspond to the Government proposal. The consultation bodies did not make any comments on the proposal. Reasons for the Government proposal: According to the current wording of Chapter 8, Section 3 of the Support Act, appeals may not be made against decisions made under the Act. According to the proposal referred to here, the supporting authority (Debt Office) will make a decision on a fee (stability fee; see Section 4). In the opinion of the Government, it should be possible to make an appeal to a general administrative court against such a decision, in the first instance to the county administrative court. Leave to appeal ought to be required when making an appeal to the administrative court of appeal. The system now proposed corresponds with the system applicable to the decisions of the guarantee authority on fees under the Deposit Guarantee Scheme Act (1995:571). Government 2009/10:30 7 Entry into force and transitional provisions Government proposal: Amendments to the Government Support to (2008:814) shall enter into force on . The stability fee for 2009 and 2010 shall be reduced to half of the amount calculated. The proposals contained in the memorandum on the draft proposal referred to for consideration and in the memorandum on the draft correspond to the Government proposal. The consultation bodies did not make any comments on the proposal. Reasons for the Government proposal: As indicated by the statements of the Government referred to above (Section 4.2), it is important for the stability fee system to enter into force as soon as possible. For this reason, the provisions should enter into force on . As a consequence of this, the supporting authority will be able to make decisions on the imposition of the stability fee with reference to the situation in financial years ending after this date. As also indicated in Section 4.2, the stability fee for 2009 and 2010 will be reduced by half. Government 2009/10:30 8Secrecy when reviewing owners of investment fund management companies and central securities depositories Government proposal: Secrecy shall apply to information about the personal or financial circumstances of a private party if it may be assumed that the private party would suffer harm or damage if the information were to be disclosed and the information appeared in a matter with a central government authority concerning holdings of shares in investment fund management companies or shares or participating interests in central securities depositories. Reasons for the Government proposal: Act (2004:46) contains provisions on reviewing owners of investment fund management companies. Owners are reviewed when the is considering whether a company should be granted a licence to conduct fund operations and thereby become an investment fund management company (Chapter 2, Sections 1 and 2). A licence for a Swedish limited liability company to run an investment fund operation can only be granted if there are reasons to assume that the party that has, or may be expected to obtain, a certain holding in the company will not impede the operation being conducted in a way that complies with the Act and other legislation governing the company's operation, and is also generally suitable to exercise significant power over the management of an investment fund management company. Owners should also be reviewed in the event of major changes to the ownership of investment fund management companies (Chapter 11). Provisions on reviewing owners of investment fund management companies are also contained in the 's Regulations (FFFS 2008:11) (Chapter 5 and Appendices 1 a and 1 b). In conjunction with the review of owners, the will compile information from, among others, , the Registration Office, the , the () AB. In this connection, the may also ask foreign supervisory authorities to provide it with information. The provisions on reviewing owners of investment fund management companies correspond to those that apply when reviewing owners of limited banking companies and securities companies under the Banking and Financing Business Act (2004:297) (Chapter 3, Section 2 and Chapter 14; see also Sections 4-6 of the 's Ownership and Regulations [FFFS 2007:22] and Appendices 1 a and 1 b) of the Securities Market Act (2007:528) (Chapter 3, Sections 1 and 2 and Chapter 24; see also Chapter 5, Sections 3-5 of the 's Securities Business Regulations [FFFS 2007:16] and Appendices 3 a and 3 b)). Earlier this year, the Government proposed amendments to the provisions on the review of owners of credit institutions and securities Government 2009/10:30 companies without proposing corresponding amendments for investment fund management companies (Government 2008/09:155, p. 104 ff.). However, the amendments are irrelevant to the current context. also provisions on reviewing owners in respect of membership banks, limited insurance companies and credit market undertakings (see, for instance, the 's Ownership and Investment fund management companies are also treated in the same way as other kinds of financial undertakings in the 's Regulations and General on the reporting of an owner's qualified holdings and ownership interests (FFFS 2004:17). Secrecy provisions covering information received in conjunction with the review of owners have been included in Chapter 30, Section 5 of the Public Access to Information and Secrecy Act (2009:400) since 1 These provisions were transferred from Chapter 8, Section 5, second paragraph of the Secrecy Act with only a linguistic modernisation having been made (Government 2008/09:150, p. Chapter 8, Section 5, second paragraph of the Secrecy Act, secrecy applied to information about the personal or financial circumstances of a private party if it could be assumed that the private party would suffer harm or damage if the information were to be disclosed and the information appeared in a matter with a central government authority concerning holdings of shares or participating interests, among other things, in certain specified types of financial undertaking. was introduced following a request from and Trade in conjunction with the Committee's deliberations on a proposal from the previous government to introduce rules according to which the would be given powers to consider the appropriateness of major owners of banks (see Government 1992/93:89, Report 1992/93:NU9, 1992/93:109 and SFS 1992:1474). The Committee concluded here that the , when dealing with matters concerning the review of owners, will compile information from other authorities; for example, may obtain extracts from criminal records, central personal and criminal records held by , and from the Disqualification According to the Committee, such information should also be subject to secrecy at the to the extent that it is classified as strictly secret at the disclosing authority and refers to the personal or financial circumstances of a private party. In line with this, the Committee proposed that a new provision on secrecy in matters at government authorities concerning the holding of shares in limited banking companies and credit market undertakings should be included in Chapter 8, Section 5 of the Secrecy Act as a new second paragraph (see a. Report, p. This secrecy provision has subsequently been supplemented in conjunction with the rules on reviewing owners of other kinds of financial undertaking having been introduced in different contexts (see, for instance, Government 1994/95:50, p. 330, Government 1994/95:184, p. 123 and 311 f. and Government 1996/97:114, p. Rules on reviewing owners of investment fund management companies were introduced when the Act Government 2009/10:30 replaced the Act (1990:1114) (see Government 2002/03:150, p. 160 ff.). However, no proposal was made to amend the secrecy rules when reviewing the owners in this context. Investment fund management companies were consequently not mentioned in the list contained in the provisions of Chapter 8, Section 5, second paragraph of the Secrecy Act, despite the fact that it is the same kind of information about the personal or financial circumstances of a private party that is compiled when reviewing owners of investment fund management companies as in connection with reviewing owners of other kinds of financial undertaking. The same reasons for secrecy as currently apply as regards an owner of, for example, a bank or a securities company consequently also apply as regards an owner of an investment fund management company. In light of this, the fact that investment fund management companies were not included in the list contained in the provision of the Secrecy Act appears to be a simple omission. Chapter 2, Section 2 of the Act on Registration of (1998:1479) and Chapter 9, Section 1 of the same Act, together with the provisions contained in Section 24 of the Securities Market Act, contain provisions on reviewing the owners of central securities depositories. Earlier this year, the Government proposed amendments to these provisions that are basically the same as the amendments that were simultaneously proposed in the provisions on reviewing owners of credit institutions and securities companies (Government 2008/09:155, p. 102 f.). were central securities depositories included in the list of financial undertakings contained in Chapter 8, Section 5, second paragraph of the Secrecy Act. The same reasons for secrecy also apply as regards reviewing owners of central securities depositories as for other kinds of financial undertaking. Secrecy should consequently also apply to information about the personal or financial circumstances of a private party if it may be assumed that the private party would suffer harm or damage if the information were to be disclosed and the information appeared in a matter with a central government authority concerning holdings of shares in an investment fund management company or shares or participating interests in a central securities depository. The secrecy rules when reviewing owners of financial undertakings will thereby be the same for investment fund management companies and central securities depositories as for other kinds of financial undertaking. Government 2009/10:30 9 Consequences of the proposals Why introduce this fee? A financial crisis can result in significant socio-economic costs. The central government therefore plays a key role in protecting financial stability and working to achieve functional credit markets for companies, households and other stakeholders. Important work is being conducted within the EU to reinforce crisis management efforts both nationally and jointly. As a consequence of the global financial crisis, different support programmes have been developed to meet national needs that prevail both within individual institutions and within the financial market sector as a whole. It is probably impossible to identify completely uniform systems that would effectively deal with the problems experienced by all Member States. At the same time, support programmes should be designed to as far as possible avoid different conditions for competition. is at the forefront of work to take the support measures necessary. In the autumn of 2008, the Government presented the Support Act as a key tool for dealing with the crisis. The Government has taken several measures under the Act to promote increased financial stability. For example, in October 2008 the Government decided on support in the form of a central government , and in February 2009, a decision was taken on a central government Capital Infusion Programme. It is unreasonable if taxpayers have to bear the costs of the support measures taken, which would be the case if the costs were funded through the central government budget.