The role of self-regulation in the Swedish securities market

A well-functioning securities market requires consensus and trust from the public, investors, companies, authorities and politicians. Swedish listed companies, their owners and advisers therefore have a strong interest in working to ensure high ethical standards in the market. We are a non-profit association in the securities market that focuses on good practice. We work through self-regulation, which means that experts from different fields collaborate on the setting of regulations and standards, interpret regulations and review how the corporate sector complies with regulations.

The Swedish Corporate Governance Code and the Takeover Rules are examples of areas where Sweden has chosen self-regulation rather than legislation. The main advantage of this approach is that in involves the market's leading expertise and practical experience in the creation and development process. This leads to broad acceptance and commitment, and thus high levels of compliance among those who are to apply the rules.

Another major benefit of self-regulation is that it is flexible and can adapt quickly to changes. Self-regulation is also very likely to result in lower costs for companies compared with the effects of legislation. Self-regulation is therefore an important instrument for avoiding unnecessarily detailed legislation.

At the same time, increasingly broad and detailed EU regulation, with its growing number of mandatory rules, poses challenges for Swedish self-regulation and makes it necessary to find alternative solutions or methods to implement EU regulation in the field of corporate governance.

Although some areas traditionally covered by Swedish self-regulation are now covered by European legislation, new ways to use self-regulation within these new European frameworks have also been developed. For example, public authority powers in the field of securities have been delegated by the Swedish Financial Supervisory Authority to the Swedish Securities Council and the Council for Swedish Financial Reporting Supervision, which underlines the powerful position of self-regulation in Sweden.