Chelton AB – Licence and registration

Chelton AB conducts foreign exchange trading, which means that the company provides a discretionary management service where it carries out spot FX transactions (transactions in currencies) on behalf of its clients. Foreign exchange trading is a financial activity that banks and credit institutions may conduct by Chapter 7, Section 1, paragraph 12 of the Banking and Financing Business Act (2004:297) (“BFL”)(https://lagen.nu/2004:297#K7).

A license from Finansinspektionen is usually required to conduct financial activities. For certain activities, however, the law stipulates that it is sufficient if the company has been registered with Finansinspektionen. Foreign exchange trading is such an activity where it is sufficient for a company to be registered as a “financial institution” under section 2 of the Foreign Exchange and Other Financial Activities Act (1996:1006) (“LVAFV”). Foreign exchange trading under Chapter 7, Section 1, point 12 of the BFL is included in the definition of “other financial activities” under Section 1, point 2 of the LVAFV. LVAFV, i.e. such activities that may be conducted by a company that has obtained registration with the Swedish Financial Supervisory Authority under this law (https://lagen.nu/1996:1006)

Chelton AB is registered as a financial institution with the Swedish Financial Supervisory Authority with institution number 70413. The registration can be checked in the Swedish Financial Supervisory Authority’s company register: https://fi.se/sv/vara-register/foretagsregistret/details/?id=663244

Chelton AB – Advice

Chelton AB does not offer advice and is, therefore, not authorised.

There are two main types of financial advice: 1) investment advice and 2) insurance distribution (insurance brokerage). Furthermore, the Swedish Act (2003:862) on Financial Advice to Consumers (“LFRK”) contains additional rules regarding both types of advice(https://lagen.nu/2003:862). The advice concepts are clearly defined in law, and Chelton’s marketing of currency management services falls outside of all definitions.

Investment advice
According to Chapter 1. 4 c § of the Securities Market Act (2007:528) (“LVPM”), “investment advice” is defined as “the provision of personal recommendations to a client in respect of one or more transactions relating to financial instruments”. Thus, for investment advice to be provided, it must be “personal recommendations” relating to “financial instruments”. What constitutes a “financial instrument” is also clearly defined in Chapter 1, section 4 of the LVPM. 4 § LVPM(https://lagen.nu/2007:528)

Buying/selling currencies Spot FX does not involve a financial instrument. Currency derivatives, on the other hand, are financial instruments, but Chelton does not work with this.

Chelton markets a currency management service that does not involve financial instruments. Therefore, it falls outside the definition of “investment advice” set out above.

Insurance distribution

According to Chapter 1, Section 1 of the Insurance Distribution Act (2018:1219) (“LFD”), insurance distribution is defined as “activities consisting of 1) advising on or proposing insurance contracts or carrying out other preparatory work before an insurance contract is concluded, 2) concluding an insurance contract, or 3) assisting in the management or performance of an insurance contract.”(https://lagen.nu/2018:1219)

Here, the key term in the definition is ‘insurance contract’. Chelton’s activities do not involve insurance contracts in any respect, so they do not constitute insurance distribution.

Financial advice to consumers

The scope of the LFRC is set out in section 1: “This Act applies to financial advice provided by a trader to a consumer which involves the investment of the consumer’s assets in financial instruments or life insurance with a savings element. However, the Act does not apply where the person providing the advice merely recommends an investment apart from those mentioned above.”(https://lagen.nu/2003:862)

The above definition means that the LFRK applies to investment advice (financial instruments) and insurance distribution relating to life insurance with a savings element (a narrower definition than the LFD). As noted above, Chelton’s activities fall outside investment advice and insurance distribution definitions. Thus, Chelton AB does not provide “financial advice” under the LFD either.

Chelton AB – Measures against money laundering and terrorist financing

As a financial institution, Chelton AB must comply with the regulatory requirements from the Act (2017:630) on measures against money laundering and terrorist financing(https://lagen.nu/2017:630) and other laws and regulations in this area. This means, among other things, that Chelton AB must obtain sufficient customer knowledge before agreeing with the customer. Furthermore, Chelton AB is obliged to conduct follow-up checks continuously on its customers during customer relationships. Customer due diligence includes, among other things, identifying the customer and beneficial owner, checking against sanction lists, checking the status as a PEP, checking the origin of assets, ongoing transaction monitoring, etc.