Swedish Code of Conduct for fund management companies

This Code is designed to promote sound investment fund activities and thereby to safeguard public confidence in the same. The Code comprises rules that exceed the standards imposed on fund management operations by legislative and other statutory requirements.

Adopted by the Board of Directors of the Swedish Investment Fund Association on 6th December 2004. The Code was most recently revised on 26th March 2015.

This is the introduction to the Code of conduct, please download the full document.


This Code is designed to promote sound fund activities and thereby to safeguard public confidence in the same. The Code comprises rules that exceed the standards imposed on fund management operations by legislative and other statutory requirements.[1]

The Code takes into account the principles adopted by the European Fund and Asset Management Association, EFAMA.

The Code applies to the operations conducted by Swedish and foreign fund management companies in Sweden. Where the fund management company has delegated operations to another party, the fund management company shall strive to ensure that the principles of the Code, where relevant, are applied by the contractor.

In those sections where the Code exceeds the legislative and other statutory requirements, the principle to be applied is “comply or explain”, since the preconditions may vary for individual fund management companies with regard, for example, to organization and size. Foreign fund management companies may experience difficulties in complying with every aspect of the Code due to regulatory differences in their home countries. For Swedish fund management companies, however, the intention are that deviations shall not be permitted when the word “must” is used. Members of the Swedish Investment Fund Association must, in their Annual Reports or on their website, clearly state that they comply with the Code and must provide an explanation for any deviations.

The Code is complemented by concrete rules of conduct issued by the Association in other Guidelines. The Association has, in addition to this Code, issued the following Guidelines, which must be adhered to by its members:

  • Guidelines for marketing and information by fund management companies
  • Guidelines for investment fund managers as shareholders
  • Guidelines concerning trading in securities for own and related person’s account
  • Guidelines for key ratio accounting of investment funds

A fund management company is tasked with managing the monies with which it is entrusted. The fund management company must behave with considerable integrity in the fulfillment of this position of trust. The fund management company must, in conjunction with the management of a fund, act exclusively in the common interests of the unit holders, which means that other interests must yield in the event of any conflicts of interest. The operations of the fund management company must be conducted in an honest, fair and professional manner and the conduct of the company and its operations must also otherwise be such that confidence in the fund management company and the sector is maintained. Any person representing a fund management company must act in an ethically acceptable manner.

Fund management companies may, in addition to their fund activities, be licensed to engage in individual portfolio management. This Code focuses primarily on the fund activities. The operations conducted within the framework of individual portfolio management are regulated by the Swedish Securities Market Act (2007:528) and the Swedish Financial Supervisory Authority Regulations, FFFS 2007:16. In cases where the rules laid down in the Code may, in addition to unit holders, include clients in the individual portfolio management sector, the term “investor” is used.

A number of the concepts used in the Code are defined in appendix 1.

Latest update

At the latest review of the Code, that took place in March, 2015, was instated a provision saying that the Board must evaluate on an ongoing basis that the fund’s objectives, risk profile, activity level and returns are consistent with the information about the fund provided in, inter alia, the Key Investor Information Document.

The fund management company should have a process in order to specify an identified target market of end clients for a fund. The risks and distribution strategies must also be suitable for the identified target market.

Other changes to the Code where made in the light of new practice regarding costs for investment research. According to the Code, costs for investment research may be charged with the fund only where the research enhances the quality of the fund management and the unit-holders have been duly informed. This requires that the benefit of the research is considered to correspond to the costs. The costs for research must be separated from the costs for execution of orders.

[1] The Swedish Investment Funds Act (2004:46) and the regulations issued by the Swedish Financial Supervisory Authority, primarily 2013:9 and The Managers of Alternative Investments Act (2013:9) and regulation 2013:10.

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