The Swedish Financial Supervisory Authority’s Pillar 2 Guidance constitutes appealable decisions
The Swedish Financial Supervisory Authority’s (the “SFSA”) Pillar 2 Guidance is a part of the capital adequacy regulation that Swedish banks and other credit institutions are subject to. The Pillar 2 Guidance aims to ensure that banks and other credit institutions have sufficient capital during difficult financial times. The Pillar 2 Guidance takes the form of a notification from the SFSA to the bank or credit institution regarding the SFSA’s view of that bank’s or credit institution’s capital requirements. The Pillar 2 Guidance is not in itself sanctioned, but a bank or credit institution that does not comply with it risks being subject to, among other things, stricter capital requirements. The Pillar 2 Guidance is also generally relevant to the bank’s or other credit institution’s capital planning and operations.
On 18 October 2022, the SFSA notified Brocc of a Pillar 2 Guidance. Brocc appealed the SFSA’s decision to the Administrative Court in Stockholm, which on 26 March 2024 declined jurisdiction, stating that a Pillar 2 Guidance does not constitute an appealable decision. The Administrative Court ruled in favour of the SFSA’s position and thereby departed from an earlier ruling made by the same court in another case.
Brocc appealed the Administrative Court’s decision to the Administrative Court of Appeal in Stockholm. On 14 March 2025, the Administrative Court of Appeal handed down its judgement in the case and set aside the Administrative Court’s decision. The Administrative Court of Appeal ruled that the SFSA’s notification of a Pillar 2 Guidance has actual effects that are of such significant nature that the Pillar 2 Guidance constitutes an appealable decision. The Administrative Court of Appeal emphasised that the mere fact that the Pillar 2 Guidance contains the SFSA’s assessment of appropriate capital levels generally affects the bank or credit institution to which the Pillar 2 Guidance is directed. The Administrative Court of Appeal therefore set aside the Administrative Court’s decision and sent the case back to the Administrative Court for a decision on the merits.
The SFSA appealed the Administrative Court of Appeal’s decision to the Supreme Administrative Court, which on 30 September 2025 decided not to grant leave to appeal. Consequently, the Administrative Court of Appeal’s decision stands. The outcome is significant for a number of similar appeals pending before the Administrative Court in Stockholm.
Brocc was represented by Mannheimer Swartling in the proceedings before the Administrative Court of Appeal and the Supreme Administrative Court. The firm’s team consisted of Fredrik Sjövall, Daniel Oren, Elina Schönbeck and Susanna Aulin.
