An EEA sub-threshold AIFM which is subject to domestic registration or authorisation in its home member state may obtain a marketing authorisation from SFSA to market EEA and non-EEA funds. The AIF should, according to its investment policy, in general invest in listed or non-listed companies in order to obtain control (more than 30% in relation to listed companies and more than 50% in relation to non-listed companies). The AIF should also not allow investors to redeem fund interest within five years of the first investment by the investor.
The marketing authorization permits the AIFM to market the AIF to professional investors and so-called semi-professional investors (being investors which commit to invest at least EUR 100,000 and, in a document separate from the investment undertaking, confirm being aware of the risks associated with the investment).
As a general comment local counsel notes that the concept of "marketing" under the Swedish Alternative Investment Fund Managers Act (the "AIFMA", implementing the AIFMD) is broad and covers direct or indirect offerings or placements at the initiative of the AIFM or on behalf of the AIFM of units or shares of an AIF it manages to investors domiciled or with a registered office within the EEA. Marketing includes all sale promoting actions such as advertising, telemarketing, brochures, flyers, mail, e-mail, internet and investor events. Websites in Swedish or websites otherwise directed to Swedish investors may also be considered as marketing.
However, marketing is not considered to take place in the meaning of the Swedish AIFM Act until the AIF is deemed to exist. Activities conducted before the fund meets the criteria of an AIF should therefore not be considered as marketing. The SFSA has not issued any detailed guidance in respect of when the AIF shall be considered to come into existence and this should be determined on a case-by-case basis. As a general rule, the AIF is deemed to exist when the fund documentation is so close to final form that it would be possible for an investor to make a binding investment commitment to the fund (in any case no later than upon first closing).
Local counsel notes that marketing towards Swedish investors outside of Sweden generally does not trigger the requirement to obtain a Swedish marketing license, provided that all such marketing activities are exclusively performed outside of Sweden.
The application shall contain the following:
Furthermore, there is a one-time fee of SEK 20,400 (approx. EUR 1,900); no annual fees will need to be paid.
No additional reporting obligations in relation to the SFSA.
As stated above, marketing in the meaning of the AIFMD is not possible until the AIF is deemed to exist. Activities conducted before this point should therefore not be considered as marketing for the purposes of the AIFMD and not trigger a licensing requirement. When the AIF is deemed to exist should be determined on a case-by-case basis. As a general rule, the AIF is deemed to exist when the fund documentation is so close to final form that it would be possible for an investor to make a binding investment commitment to the fund (in any case no later than upon first closing). Having said this, in the event any (pre-)marketing activity is conducted towards a Swedish investor prior to the fund being deemed to exist, such activity may not form basis for "reverse solicitation" and the fund will be under an obligation to obtain a marketing authorization prior to admitting such investor to the fund.
If the AIFM intends to market its fund to investors in Sweden, the application for a marketing authorisation should be submitted not less than 60 days prior to approaching the Swedish investor, provided that the AIF is deemed to exist. In accordance with the above, the AIFM may approach Swedish investors before the fund is deemed to exist. However, any contact must cease when the fund is deemed to start existing and marketing authorization obtained before the marketing activities can resume.
There is no definition of (or guidance relating to) pre-marketing under Swedish law. The SFSA applies a broad meaning to the concept of marketing in general and the concept is not related to the marketing activity as such, but rather whether the AIF is deemed to exist or not.
For example, a typical fundraising deck (information about the fund, portfolio companies in previous fund, exit scenarios, team description), short term sheet and/or general marketing material would require marketing authorization in Sweden if the fund is deemed to exist.
There are no specific requirements as of now. However, local counsel note that the planned changes expressed in Directive 2019/1160 (expected to be implemented on 2 August 2021) sets out a mandatory notification procedure in respect of pre-marketing.
While the requirement to obtain a Swedish marketing license does not apply if the investor exclusively initiates all contacts with the AIFM/AIF since the AIFM is then not considered to have conducted marketing, the concept of reverse solicitation is commonly understood to be applied very restrictively in Sweden.
The information in our toolbox provides managers of private equity or venture capital funds with an initial overview of certain framework conditions in the respective country. It does not provide advice on the law of any country, neither does it substitute such advice. Before marketing a fund into the respective country, it is at all times necessary to seek expert advice. Our team is happy to assist you with all questions at any time.
In collaboration with: Andulf Advokat
