Aggregated News From Investment Management Regulators

Proposed general guidelines for exemption from amortisation requirements on special grounds


Please complete the required fields.

The proposal provides mortgage undertakings with the possibility of granting all new and existing mortgagors a temporary exemption from amortisation requirements. The exemption possibility applies during a severe downturn in the Swedish economy. The current situation due to the spread of the corona virus is a clear example of when the exemption may be granted to all mortgagors amortising in accordance with the amortisation regulations.

Finansinspektionen is proposing new general guidelines to clarify when a mortgage undertaking may grant exemption from the amortisation requirements set out in Finansinspektionen’s regulations (FFFS 2016:16) regarding amortisation of loans collateralised by residential property (the amortisation regulations).

Finansinspektionen is now clarifying that it is possible under extraordinary circumstances that lead to a severe downturn in the Swedish economy for the term “special grounds” to be interpreted in such a way that mortgage undertakings may grant temporary exemption from the amortisation requirements for all mortgagors amortising in accordance with the amortisation regulations. The general guidelines also clarify that the granting of such an exemption may be given at the point in time when the mortgage is being issued during a severe downturn in the Swedish economy. However, the mortgage undertakings must still consider other relevant regulations, such as rules on credit assessment and the Consumer Credit Act, which requires, among other things, a firm to consider consumers’ interests with due care.

The current situation due to the spread of the coronavirus provides a clear example of when a broad interpretation of the term “special grounds” may be applied. Finansinspektionen’s proposal clarifies that the current situation allows a mortgage undertaking to grant amortisation exemption even without the income of an individual borrower having been directly impacted. This provides mortgagors with greater manoeuvrability for managing their personal finances. It continues, however, to be the responsibility of the banks to decide if an individual borrower may be granted amortisation exemption.

The general guidelines are proposed to enter into force on 14 April 2020

Regulator Information

Abbreviation: FI
Jurisdiction: Sweden

Recent Articles

Proposed Rule Change to Amend FINRA Rule 2231 (Customer Account Statements)

Financial Industry Regulatory Authority, Inc.

Revision of Recommendation 25 – White Paper for Public Consultation

The Financial Action Task Force (FATF) is conducting a review of Recommendation 25 (R.25) on the transparency and beneficial ownership (BO) of legal arrangements....

ASIC warns super trustees to be transparent in their underperformance communications to members

ASIC today released the findings from its review of superannuation trustees’ communications with their members following the first annual performance test for MySuper products. The...

EBA replies to European  Commission’s call for advice on the Mortgage Credit Directive review

The European Banking Authority (EBA) published today an Opinion and Report in response to the European Commission’s Call for Advice (CfA) on the review of the Mortgage Credit Directive (MCD) .

Get the latest from Regulatory.News in your inbox!