These involved in foreign exchange, money transfers, deposits and SMS loans. Such companies are currently subject to limited regulation and are not under full supervision. The new rules would apply to companies that are registered with the Financial Supervisory Authority (Finansinspektionen, or FI), but operate outside the supervision of FI.
The government has now given FI a mandate to assess whether these companies need tighter inspection. The proposal could lead to more businesses in the future being subject to full supervision. Companies that could benefit from increased supervision include so-called SMS-loan companies.
“Some financial activities are currently registered with FI, but are not under its full control, which may be misleading to consumers,” Financial Markets Minister Mats Odell said in a statement. “The government now wants FI to review the rules and propose changes that will increase consumer protection in this area.”
Certain types of financial companies are registered, but under limited supervision, which has been highlighted by FI and the Agency for Public Management (Statskontoret). The companies that are subject to registration with FI are mainly financial institutions, deposit companies and savings and loan associations.
“Since supervision is limited, it is difficult to ensure that the various laws are enforced,” added Odell. “Registration may give consumers a false sense of security because it gives the impression that companies are under the full supervision of FI.”
FI will determine whether better consumer protection is strong enough grounds to justify the costs of permits and increased oversight leads. If consumer protection currently in place can be enhanced through special information initiatives, these efforts will be presented.
Should FI determine the need for enhanced supervision of relevant financial businesses or business groups, the authority will make proposals for such rules and regulations, including constitutional proposals that preferably should be designed.
The proposals should specify the consequences for FI and the companies involved in consumer protection. The directive also includes comments on the financial implications of the proposal. FI will also seek input from relevant industry associations or individual companies.
The review should be completed before March 31st and the proposals presented must be within the framework of FI’s existing portfolio.