Freetrade gets the green light to operate in Sweden and Europe
Swedish regulator gives Freetrade the green light to launch products to investors when the do-it-yourself platform takes its first steps into Europe
- The Swedish supervisory authority gives Freetrade permission to offer its product to investors
- Investors will have commission-free access to thousands of stocks and ETFs
- The approval marks the platform’s long-awaited move into Europe
The Swedish supervisory authority has given Freetrade the green light to offer its products to investors, which paves the way for its long-awaited expansion across Europe, This is Money can reveal.
Finansinspektionen recently gave Freetrade permission to offer its product to Swedish private investors, which means that investors in the Scandinavian country will now have commission-free access to thousands of European, British and American shares and ETFs.
Freetrade Sweden will also make sure to offer local investors an ISK account in the coming months – which is the Swedish version of an Isa.
Freetrade Sweden, led by Karl Broomé, has been approved by the Swedish regulatory authority to kick-start the platform’s move to the continent
The platform plans to launch a closed beta version for those who have signed up for the waiting list in the coming months, before it is rolled out to the public.
Freetrade has long talked about a move into Europe, after incorporating a separate unit in Sweden last year.
Its marketing manager Victor Nebehaj told This Is Money last year: “We chose Sweden … because it has a very reputable regulatory jurisdiction and not a lightweight one”.
Regulators in both Europe and the UK have begun to crack down on what they consider to be “gamification” of both investment and crypto investment in a broader direction.
Where Freetrade has the upper hand, especially across Europe, is that it does not use payment for order flows.
The European Commission will ban this practice, which means that brokers receive payments from third parties to control the flow of client orders to them as execution sites.
Even if the Swedish regulator’s approval marks a significant step in Freetrade’s European expansion, it will still need to apply to every regional regulator in the EU.
However, it is understood that due to the passport, the approval is likely to speed up the process.
While the investment platform has taken a significant share of the UK market, Freetrade will now compete with rivals such as Sequoia-backed Trade Republic and eToro.
Earlier this year, Freetrade entered into an agreement to offer its clients direct access to the German stock exchange via the CBOE and Equiduct, usually reserved for institutional investors, rather than using the CREST system that charges a fee.
This followed the arrival of Finnish shares on the platform in December 2021 and users can now also trade Dutch, Swedish, Portuguese and Austrian shares on the platform.
Freetrade has expanded rapidly since its launch in 2018.
It has built a loyal following largely due to its referral system promising a free share worth up to £ 200, which has helped push the customer number to over 1 million.
It has been brought to the attention of the Financial Conduct Authority, which last month said it was considering banning refer-a-friend bonuses or new company offers. It is currently in the consultation stage.
Its valuation has also doubled from £ 270 million to £ 650 million in less than a year.
Trade volumes in 2021 increased by 313 percent while revenues increased by 647 percent, according to recent figures.
Karl Broomé, CEO and Freetrade’s Sweden manager, said: “I am proud to be able to share our mission to get everyone to invest in Sweden.
“This development is proof of our team’s hard work and we look forward to developing how private investors in Sweden, and eventually, across Europe, access global stock markets.
Adam Dodds, Freetrade’s founder and CEO, added: “There is a huge opportunity for our business to offer European private investors a cheap and easy way to invest in the long term.
“We have always put our customers first in everything we do, and we are happy to now be able to bring this to the rest of Europe.”
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