SWEDEN – The Swedish financial regulator has warned ABN Amro’s Banco Fonder over violations to investment rules concerning the amount invested in unlisted securities – Banco says it may have mis-read the regulator’s intentions.

The Swedish Finansinspektionen, or FSA, said on Wednesday that it has warned Banco Fonder that it has violated investment rules by having more than 10% of a fund’s assets invested in unlisted securities. Swedish law sets a cap at 10%.

Banco Fonder’s managing director Anders Malmborg admits that the company broke this rule but says it was in a monthly dialogue with the regulator over the situation and that it may have “mis-read” the FSA’s intentions. Falling markets and a drying up of the initial private offering market have left it with more unlisted securities than planned.

Banco maintains that it has complied with the other relevant regulation, which requires the correct market price to be attached to all securities. “We believe the values we have in the fund are as good an estimation as you’ll get,” said Malmborg.

The bank is now in talks with the regulator to find a way out of the situation. “We’re taking it very seriously,” Malmborg said. He said Banco was never threatened with the loss of its licence.

The funds at the centre of the dispute are two technology funds that invest in Swedish growth stocks.

Banco Fonder is part of AMN Amro’s Alfred Berg division; it is chaired by Kajsa Lindstahl, a former chairman of FEFSi, the European federation of investment managers associations and companies. ABN Amro Asset Management manages 275 million dollars of Swedish pension fund assets.