SWEDEN - Financial services firm SEB has been fined SEK30m (€3.2m) by the regulator for failing to have risk or compliance controls in place at its two pensions businesses, and been given three months to put things right.

 "SEB Trygg Liv and SEB Gamla Liv have failed in their internal management and control," said Finansinspektionen (FI), the Swedish financial supervisory authority, in a statement. "The failures are so serious that Finansinspektionen has given the companies a warning and a penalty of 15 million kronor each."

FI has also objected to Anders Mossberg being not only managing director of SEB Gamla Liv, but also both managing director of SEB Trygg Liv Holding and chairman of SEB Trygg Liv.

"The problem is not with the actual person but the fact that he has several roles," Lars Malmström, acting director of communications at FI, explained to IPE.

"We have told the company it has to make a change within three months of the decision."

The beginning of that three-month period will be 20 days from today (June 4), he added.

"They do not have routines for risk controls, they do not have structures for compliance or an independent function for risk control," he said, adding controls had been inadequate at the SEB firms for several years.

The watchdog does not yet know how SEB would solve the problem of Mossberg's multiple roles, said Malmström, but SEB's response to the FI's intervention has so far been satisfactory.

"Because they have made a lot of changes in their routines and compliance, we are satisfied with this, and a warning was enough," he said.

Commenting on the fine and reasons issued by FI, Mossberg said: "We take this very seriously, and everything is now in accordance with those procedures that were required by the authority."

SEB Gamla Liv is now closed to new contributions but managed SEK231bn in life insurance and funds insurance for 528,000 customers in 2007, while SEB Trygg Liv - which does accept new contributions - manages SEK125bn for 797,000 customers.
The two companies are subsidiaries of SEB Trygg Liv Holding which is owned by Skandinaviska Enskilda Banken AB (SEB).

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