En komparativ studie mellan Sverige och Storbritannien gällande framtida eventuell reglering av private equity marknaden
(2007)Department of Law
- Abstract
- The private equity market has grown considerably the recent decade and has evolved into a substantial market in the overall economy. With regards to regulation of the private equity market, Sweden and the UK both differ as well as share common views. The intent of this thesis is to analyze the main differences between the two countries and analyze a further regulatory engagement. The private equity market is not specifically regulated in Sweden, in contrary to the UK. The regulation, in Sweden, of interest for the private equity players are the common laws regarding investments and acquisitions. In many cases, private equity firms are exempt from regulation concerning investments due to the fact that they are not advising the investors,... (More)
- The private equity market has grown considerably the recent decade and has evolved into a substantial market in the overall economy. With regards to regulation of the private equity market, Sweden and the UK both differ as well as share common views. The intent of this thesis is to analyze the main differences between the two countries and analyze a further regulatory engagement. The private equity market is not specifically regulated in Sweden, in contrary to the UK. The regulation, in Sweden, of interest for the private equity players are the common laws regarding investments and acquisitions. In many cases, private equity firms are exempt from regulation concerning investments due to the fact that they are not advising the investors, neither has the fund the characteristics of a conventional fund. The fund is often a Limited Partnership and the ownership is not subject to trade which exempts the fund from several laws including the law on investment funds (Sw. Lag om investeringsfonder). Not even through the new directive MiFID will the private equity firms be regulated, thus the firms are not advising their clients as defined in the directive. Consequently there is little to show for a regulation in the near future. What the author has concluded is that four questions have to be answered to encourage a regulation. First, if there are minority interests or other groups that require protection through legislation. It is the author's opinion that this is not the case. The minority shareholders have a protection in the Swedish Companies Act and the other participants in the private equity market are professionals and should be capable to anticipate and foresee the risks associated with the investment. Secondly, the question of whether size and importance of a deal has implications on a third party, and therefore requires regulations. The regulation in this area is today vast and can be found in several laws and to be sufficient. Nothing shall constrain private equity firms from investing in companies, with the sole reason that the investment is of a considerable amount. Thirdly, are there unreasonable profits and/or exploitation that from a legal point of view suggest the need for regulation? A corner stone in today's economy is the free market. When profit opportunities arise, it is not the legislator's role to restrain or regulate based on the size of the investment. Finally, are the risks involved in private equity specific for the market and therefore requires a specific private equity regulation? Some of the risks the private equity show is unique for this market but not to the extent to which a specific private equity regulation is called for. This could hamper the market growth that has been shown during the recent decade. The market needs a free market to evolve and to develop new and improved investment vehicles. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/1556855
- author
- Dahlstedt, Filip
- supervisor
- organization
- year
- 2007
- type
- H3 - Professional qualifications (4 Years - )
- subject
- keywords
- Associationsrätt
- language
- Swedish
- id
- 1556855
- date added to LUP
- 2010-03-08 15:55:20
- date last changed
- 2010-03-08 15:55:20
@misc{1556855,
abstract = {{The private equity market has grown considerably the recent decade and has evolved into a substantial market in the overall economy. With regards to regulation of the private equity market, Sweden and the UK both differ as well as share common views. The intent of this thesis is to analyze the main differences between the two countries and analyze a further regulatory engagement. The private equity market is not specifically regulated in Sweden, in contrary to the UK. The regulation, in Sweden, of interest for the private equity players are the common laws regarding investments and acquisitions. In many cases, private equity firms are exempt from regulation concerning investments due to the fact that they are not advising the investors, neither has the fund the characteristics of a conventional fund. The fund is often a Limited Partnership and the ownership is not subject to trade which exempts the fund from several laws including the law on investment funds (Sw. Lag om investeringsfonder). Not even through the new directive MiFID will the private equity firms be regulated, thus the firms are not advising their clients as defined in the directive. Consequently there is little to show for a regulation in the near future. What the author has concluded is that four questions have to be answered to encourage a regulation. First, if there are minority interests or other groups that require protection through legislation. It is the author's opinion that this is not the case. The minority shareholders have a protection in the Swedish Companies Act and the other participants in the private equity market are professionals and should be capable to anticipate and foresee the risks associated with the investment. Secondly, the question of whether size and importance of a deal has implications on a third party, and therefore requires regulations. The regulation in this area is today vast and can be found in several laws and to be sufficient. Nothing shall constrain private equity firms from investing in companies, with the sole reason that the investment is of a considerable amount. Thirdly, are there unreasonable profits and/or exploitation that from a legal point of view suggest the need for regulation? A corner stone in today's economy is the free market. When profit opportunities arise, it is not the legislator's role to restrain or regulate based on the size of the investment. Finally, are the risks involved in private equity specific for the market and therefore requires a specific private equity regulation? Some of the risks the private equity show is unique for this market but not to the extent to which a specific private equity regulation is called for. This could hamper the market growth that has been shown during the recent decade. The market needs a free market to evolve and to develop new and improved investment vehicles.}},
author = {{Dahlstedt, Filip}},
language = {{swe}},
note = {{Student Paper}},
title = {{En komparativ studie mellan Sverige och Storbritannien gällande framtida eventuell reglering av private equity marknaden}},
year = {{2007}},
}