Sweden: A Capital Markets: Equity Overview
Introduction and Regulatory Framework
The Swedish equity capital markets (ECM) are among Europe’s most dynamic markets for corporate capital raisings. Sweden has the second-largest number of listed companies in Europe, driven by a sustained period of strong IPO activity and a net increase in listed companies over the past decade – a trend that clearly distinguishes Sweden from most other European markets, where the number of listed companies has declined. Notably, Swedish ECM also feature an active and strong growth segment with multiple trading venues dedicated to such companies alongside the principal regulated market Nasdaq Stockholm, creating a pathway from early-stage listings to main market admission and demonstrating Sweden’s strong listing culture and accessible growth market infrastructure.
The Swedish ECM benefit from a stable legal regulatory framework, primarily a combination of EU harmonised legislation and extensive domestic self-regulation – a distinguishing feature of the Swedish ECM providing both speed and flexibility to legislative updates and corporate decision-making.
Contributing to this strong market environment, retail investor participation is notably high by international standards, with Swedish households holding significant equity positions, often through Investment Savings Accounts, which is a popular and widely used tax-advantaged account type. Further, in Sweden, the Premium Pension (PPM) is part of the public pension system, meaning that virtually all Swedes are invested in public and private investment funds. This has contributed to a large number of funds investing in small-cap companies, which in turn has made smaller IPOs feasible. Alongside the strong prevalence of investment funds and other institutional investors, this highly engaged retail investor base also contributes to market liquidity and provides stable demand across market cycles.
The 2025 IPO Market: Quality Over Quantity
The Swedish IPO market in 2025 marked a continuation of the recovery that began in 2024, following a subdued period from the second half of 2022 through 2023. While the number of listings remained well below the record levels of 2020 and 2021, 2025 was broadly in line with 2024 in terms of transaction count. However, 2025 distinguished itself through the size and quality of transactions executed.
Several IPOs completed in Sweden during 2025 were large in terms of both market capitalisation and transaction value. The standout transaction was the listing of Verisure, with a transaction volume of approximately EUR3.7 billion and a first-day market capitalisation of approximately EUR16.8 billion – the largest IPO in Europe in three years and the largest IPO in Sweden in 25 years. Four of the ten largest European IPOs in 2025 occurred in Sweden. Collectively, these large transactions resulted in Sweden achieving by far the highest IPO transaction volume in Europe during 2025, cementing Stockholm’s position as one of Europe’s most active equity capital markets.
This shift towards larger, more substantial listings reflects improved market conditions following macroeconomic stabilisation, a backlog of private equity exits seeking public market liquidity, and Sweden’s proven ability to execute complex, large-scale transactions efficiently.
Continued Implementation of the Listing Act: Enhanced Access to Capital and Language Flexibility
The EU Listing Act, which entered into force in December 2024, represents the most significant reform of European prospectus and market abuse regulations in recent years. While certain provisions took immediate effect, full implementation extends through 2026.
From mid-2026, the threshold exemption from the obligation to prepare a prospectus is harmonised at EUR12 million across the entire EU, although member states may opt for a lower EUR5 million threshold. The Swedish government has proposed that the higher EUR12 million threshold shall apply in Sweden, which would represent a significant increase from Sweden’s current threshold of EUR2.5 million. Together with the revised and new prospectus exemptions for secondary offerings that were introduced in 2024, this represents a significant easing of the previous regulatory framework, with the prospectus obligation primarily being limited to IPOs going forward.
Another significant change from a Swedish point of view concerns prospectus language. Historically, prospectuses for domestic offerings in Sweden have been required to be prepared in Swedish, with exemptions for English granted sparingly by the Swedish Financial Supervisory Authority. This contrasts with the practice in several other jurisdictions such as Denmark, France, Germany and Norway, where English-language prospectuses have long been accepted. Through the Listing Act, prospectuses for domestic offerings will, from mid-2026, be permitted in either Swedish or English as a default. Though member states may opt out, the Swedish government has proposed that Sweden shall allow prospectuses to be drafted in English. This would enhance accessibility for international issuers and investors and align Swedish practice with several peer markets.
Spin-Offs and Delistings: Regulatory Developments
To further boost Swedish ECM activity, Nasdaq Stockholm introduced new rules for spin-offs at the beginning of 2026, aimed at streamlining and facilitating the process for issuers seeking admission to trading in connection with a spin-off from an existing listed company. This development is particularly relevant given the expected resurgence in spin-off activity following several years of limited activity. Several large Swedish-listed companies have already announced plans to execute spin-offs during 2026 or 2027.
New delisting rules entered into force in 2025, marking a significant change compared to former rules. The previous supermajority and quorum requirements made voluntary delistings for companies meeting the listing requirements practically impossible, unless the delisting was requested in connection with a squeeze-out or a listing on another trading venue. The new rules introduced a more balanced framework permitting voluntary delisting under defined conditions and lower majority requirements, providing companies with strategic flexibility whilst maintaining shareholder protections.
Future Outlook
The outlook for Swedish ECM over the coming 12 months is positive. Sweden’s GDP is expected to accelerate in 2026 mainly driven by rising household consumption as a result of gains in real wages, reduced interest rates and falling inflation. The increased consumption is expected to support increased ECM activity, although geopolitical developments and the evolving global environment may be expected to impact the IPO market in particular. The relatively strong performance of the 2025 IPO market, particularly the successful execution of large-scale transactions including Europe’s largest IPO in several years, demonstrates Sweden’s continued relevance and competitiveness. The regulatory framework continues evolving towards greater efficiency and international alignment, with the Listing Act’s full implementation expected to reduce costs, streamline documentation and enhance international accessibility.