FundApps, a cloud-based RegTech company, have released their first whitepaper on shareholding disclosure, with data from the Swedish Financial Regulatory Authority (the Finansinspektionen, or FI). In the whitepaper, FundApps statistically analysed and charted data from the past six years, revealing some interesting conclusions.
FundApps' research revealed that companies with an obligation to file a major shareholding or short selling disclosure in Sweden are 30% more likely to be fined if they're a foreign company. Since 2010, there has been roughly one fine for every three companies based outside of Sweden with a disclosure obligation. This contrasts with companies based in Sweden, where there has been one fine for approximately every four companies with a responsibility to disclose.
"This very strongly correlates with feedback given to us by our clients about foreign regimes." said Ebbe Filt, from the Client Services team at FundApps. "Our clients typically have a good grasp of disclosure requirements in their home nation, but international obligations can be a challenge. Staying up to date with changing regulation is by far the biggest issue we see compliance teams facing today."
The whitepaper also goes into a detailed comparison between to whom major shareholding (also known as beneficial ownership) and short selling fines are issued in Sweden. For Sweden-based companies, fines overwhelmingly are issued for major shareholding contraventions. However, for the US and the UK, short selling fines are much more common. Almost 75% of companies from the US or the UK that have filed with the FI are investment management companies, compared to just 31% of Sweden-based companies.
"We are continually monitoring financial regulation from across the globe and this underlies the strength of our rules engine, 'Rapptr'." said Karl Schindler, Head of Content at FundApps. "Our dedicated team of compliance experts is extremely familiar with the intricacies of international regulation, and this knowledge greatly simplifies compliance tasks for our clients."
One of the main aims of the whitepaper, titled 'Shareholding Disclosure in Sweden: Obligations and Sanctions', was to provide examples of common errors companies had made. It includes some case studies, exploring how mistakes in aggregation, dual listing and even corporate action have resulted in fines.