Securities administration – Sweden
The Swedish market is record date based, that is, all entitlements in respect of a corporate event are distributed based on settled holding in the relevant security on record date. Ex-date is one business day before record date as Sweden is a T+2 market. Pay date is one or more business days after record date.
According to market rules, pending transactions are not taken into consideration for corporate events, that is, on market level, only instructions on settled positions are accepted.
Sources of information and event capture
Information on upcoming and ongoing events is provided via several different information sources – press releases, daily newspapers, Euroclear Sweden, Swedish Companies Registration Office and the issuers, for example, websites and Investor Relations departments.
Income collection
For dividends, pay date usually is three business days after record date for payment in SEK and five business days after record date for payment in EUR.
Interest payments and maturity redemptions
For interest payments and maturity redemptions, pay date usually is five days after record date. For some of the maturity redemptions, depending on how the securities are issued in the CSD, pay date is the day after record date.
Corporate actions
Mandatory corporate actions
Common mandatory corporate action types are:
- Compulsory acquisitions;
- Mergers;
- Split and reverse split events;
- Spin-offs;
- Bonus issues.
Entitlement is based on the settled position at close of business on record date, which is one business day before pay date for split/reverse split events and bonus issues for shares. In respect of compulsory acquisition, merger, spin-off and bonus issues for other security types (for example, warrants), the record date is two days before pay date.
| Market record date | Ex-date | Basis for entitlement | |
| Mandatory events | Ex-date + 1 business day | Record date – 1 business day | Settled positions at closing of record date |
| Rights issues | Ex-date + 1 business day | Record date – 1 business day | Settled positions at closing of record date |
Swedish law does not impose any restrictions or regulations if a foreign institute participates in a Swedish corporate action.
Elective corporate actions
Common elective corporate action types are:
- Rights issues
- Tender offers
- Exchange offers
- Redemption offers
- Split redemptions
Instructions on pending positions are not accepted on market level.
Rights issues – Rights distribution and exercise
Rights issues are processed in separate events. The first stage is the distribution of subscription or purchase rights (RHDI). The underlying security for the RHDI is the share. This is a mandatory event with only one option. The entitlement of rights is calculated according to the terms and based on the settled position on close of business record date. The second event, the rights exercise (EXRI), follows the RHDI and the underlying security for the event is the right. Clients are entitled to either exercise the rights or allow them to lapse. If the rights are renounceable, clients can also sell their rights or buy additional rights. The subscription period varies as the dates are set by the issuer, but the minimum subscription period is two weeks starting from record date. Upon registration of instructions to exercise, the rights are blocked. On pay date the subscription payment and rights are debited, and paid interim shares are credited.
Rights issues – Oversubscription
In most cases the rights issue resolution allows subscription without subscription rights. The allotment principles differ but it is common that allotment in the first instance shall be made to those shareholders who have subscribed with subscription rights and, to the extent that this is not possible, by lottery. In the second instance, allotment is usually made to those who have applied for subscription without subscription rights. Any guarantors or underwriters of the rights issue are allotted the remaining shares. However, other allotment principles may be applied, such as allotment based on record date holding.
Reverse rights offer
Reverse rights offers are processed in separate events. The first stage is the distribution of redemption rights (RHDI). The underlying security for the RHDI is the share. This is a mandatory event with only one option. The entitlement of rights is calculated according to the terms and based on the settled position on close of business record date. The second event, the reverse rights offer or BIDS, follows the RHDI and the underlying security for the event is the right. Clients are entitled to either exercise the rights or allow them to lapse. If the rights are renounceable, clients can also sell their rights or buy additional rights. The exercise period varies as the dates are set by the issuer, but it is usually at least two weeks. Upon registration of instructions to exercise, the rights and corresponding shares are blocked in SEB’s system. On pay date the rights and shares are debited, and redemption shares are credited.
General meeting and voting
In Sweden, it is the shareholder who is entitled to attend and vote (either by physical attendance or through digital means) on a general meeting. The shareholder may, however, appoint a representative by Power of Attorney (PoA).
Such PoA can be valid up to five years, but the period of validity needs to be stated on the PoA; if not, the PoA will be valid for one year starting from the date of issuance.
A shareholder, whose shares are nominee-registered, needs to be temporarily registered in the shareholder ledger kept by Euroclear Sweden. The record date is six banking days prior to the general meeting which determines the shareholder eligibility to participate at the general meeting. However, voting rights registration has to be made no later than market deadline, four banking days prior to the general meeting. If the registration has not been made prior to the above-mentioned date, voting rights cannot lawfully be exercised with regard to nominee-registered shares. Therefore, shareholders must notify the nominee of their intentions to participate and vote in adequate time prior to market deadline. After the market deadline, the shareholder’s name will be removed from the register of shareholders kept by Euroclear Sweden.
The Swedish Companies Act enables companies to change the voting procedure.
Companies can amend their articles of association to enable shareholders to vote by correspondence in advance of the general meeting (that is, by proxy cards). Companies may further amend their articles of association allowing for general meetings through digital means. However, a general meeting may be held by digital means, despite of no change to the company’s articles of association if extraordinary circumstances so require. In the legislative history of the changes to the Swedish Companies Act, it is mentioned that “extraordinary circumstances” is an event of force majeure character (for example, COVID-19).