TITLE: Sweden's Riksbank Supports Fund Share Company Proposal to Strengthen Competitive Fund Market
BODY:
On April 1, 2026, Sweden's Riksbank (central bank) issued its formal response to the Swedish government's consultation on the final report "Fund Share Companies – For a More Competitive Fund Market" (SOU 2025:117), submitted by the Financial Department's Securities Market Unit.
The Riksbank principally supports the proposal to establish association-based funds with variable share capital (fondandelsbolag) in Sweden, recognising this would level the playing field between Swedish and foreign fund managers and expand investment options for Swedish savers. However, the Riksbank identifies potential financial stability risks, particularly regarding liquidity imbalances in open-ended funds investing in illiquid assets.
To mitigate these risks, the Riksbank recommends the government advocate at EU level for strengthened powers for the European Securities and Markets Authority (ESMA) to address cross-border financial stability risks and for additional macroprudential tools to limit liquidity imbalances. The Riksbank supports tax exemptions on returns from liquid assets in European Long-Term Investment Funds (ELTIFs) marketed to retail consumers, but proposes an additional requirement that funds must continuously market to retail investors throughout the tax period to prevent circumvention.
Critically, the Riksbank opposes allowing retail investors to hold ELTIF shares in investment savings accounts (ISK), citing valuation difficulties and liquidity risks. It similarly supports excluding ELTIF investments from insurance-based pension products. The Riksbank emphasises that ELTIFs are largely unproven products, predominantly comprising private equity and private debt funds rather than infrastructure investments, and advocates a gradual approach before incentivising retail participation.
The Riksbank clarifies that fund share companies will constitute financial enterprises under Swedish central bank legislation, potentially triggering certain regulatory obligations.
REFERENCES:
Finansdepartementet, Remissvar: Slutbetänkandet Fondandelsbolag – för en mer konkurrenskraftig fondmarknad (SOU 2025:117), April 1, 2026.