Structured Global Programme for the Continuous Issuance of Debt Instruments

Application has been made to the Financial Services Authority in its capacity as competent authority under the Financial Services and Markets Act 2000 (the "UK Listing Authority") for debt instruments (the "Instruments") issued under the programme (the "Programme") described in the Information Memorandum during the period of 12 months from the date hereof to be admitted to the official list of the UK Listing Authority (the "Official List") and to the London Stock Exchange plc (the "London Stock Exchange") for such Instruments to be admitted to trading on the London Stock Exchange's Gilt Edged and Fixed Interest Market. References in this Information Memorandum to Instruments being "listed" (and all related references) shall mean that such Instruments have been admitted to trading on the London Stock Exchange's Gilt Edged and Fixed Interest Market and have been admitted to the Official List. The London Stock Exchange's Gilt Edged and Fixed Interest Market is a regulated market for the purposes of Directive 93/22/EC (the "Investment Services Directive"). Application will be made for trading of Instruments in the Private Offerings, Resales and Trading through Automated Linkages ("PORTAL") market of the National Association of Securities Dealers, Inc.

 

Under this Programme the Bank may, subject to all applicable legal and regulatory requirements, from time to time issue Instruments in bearer and/or registered form (respectively "Bearer Instruments" and "Registered Instruments") each denominated in any currency agreed between the Bank and the Dealers (as defined below).

 

 

The Instruments will be represented initially by global Instruments, without interest coupons, which will be deposited either with a common depositary or common safekeeper for Clearstream, Luxembourg and Euroclear or with a custodian for DTC on the date of issuance thereof. Temporary Global Instruments in bearer form will be exchangeable either for a Permanent Global Instrument in bearer form or for definitive securities in bearer form following the expiration of 40 days after the issuance thereof, upon certification as to non-U.S. beneficial ownership and as may be required by U.S. tax laws and regulations, as described under "Notice to Purchasers and Holders of Instruments and Transfer Restrictions".

 

The Instruments have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and will be offered and sold only (i) to purchasers outside of the United States in accordance with Regulation S under the Securities Act and (ii) in the United States to purchasers who are qualified institutional buyers ("QIBs") as defined in, and in reliance on, Rule 144A under the Securities Act.

 

 

This Information Memorandum comprises a base prospectus for the purposes of Article 5.4 of Directive 2003/71/EC (the "Prospectus Directive").

 

Skandinaviska Enskilda Banken AB (publ) (the "Bank" or "SEB") accepts responsibility for the information contained in this document. To the best of the knowledge of the Bank (which has taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. References in this Information Memorandum to "Group" are to the Bank and its subsidiaries, taken as a whole.

 

This Information Memorandum is to be read in conjunction with all documents which are deemed to be incorporated herein by reference (see "Documents Incorporated by Reference" below).

The Bank has confirmed to the dealers (the "Dealers") named under "Subscription and Sale" that this Information Memorandum (as defined below) is true and accurate in all material respects and not misleading; that there are no other facts in relation to the information contained or incorporated by reference herein the omission of which would, in the context of the issue of the Instruments, make any statement herein misleading in any material respect; and that all reasonable enquiries have been made to verify the foregoing. The Bank has further confirmed to the Dealers that this Information Memorandum (subject to being supplemented by a final terms supplement (the "Final Terms") referred to herein) contains all such information as investors and their professional advisers would reasonably require, and reasonably expect to find, for the purpose of making an informed assessment of the assets and liabilities, financial position, profits and losses, and prospects of the Bank and its subsidiaries and of the rights attaching to the relevant Instruments.

 

This document should be read and construed with any supplement thereto (this document, as supplemented from time to time, the "Information Memorandum"), with any Final Terms and with any other documents incorporated by reference.

 

The Bank has not authorised the making or provision of any representation or information regarding the Bank or the Instruments other than as contained or incorporated by reference in this Information Memorandum, in the Dealership Agreement (as defined herein), in any other document prepared in connection with the Programme or any Final Terms or as approved for such purpose by the Bank. Any such representation or information should not be relied upon as having been authorised by the Bank, the Dealers or any of them.

 

No representation or warranty is made or implied by the Dealers or any of their respective affiliates, and neither the Dealers nor any of their respective affiliates makes any representation or warranty or accepts any responsibility, as to the accuracy or completeness of the information contained herein. Neither the delivery of this Information Memorandum or any Final Terms nor the offering, sale or delivery of any Instrument shall, in any circumstances, create any implication that there has been no adverse change in the financial situation of the Bank since the date hereof or, as the case may be, the date upon which this document has been most recently supplemented or [30th June], 2006, the balance sheet date of the Bank's most recent interim unaudited financial statements which are deemed to be incorporated into this document by reference.

 

The distribution of this Information Memorandum and any Final Terms and the offering, sale and delivery of the Instruments in certain jurisdictions may be restricted by law. The Dealers do not represent that this Information Memorandum may be lawfully distributed, or that any Instruments may be lawfully offered, in compliance with any applicable registration or other requirements in any such jurisdiction, or pursuant to an exemption available thereunder, or assume any responsibility for facilitating any such distribution or offering. Accordingly, no Instruments may be offered or sold, directly or indirectly, and neither this Information Memorandum nor any advertisement or other offering material may be distributed or published in any jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this Information Memorandum or any Final Terms comes are required by the Bank and the Dealers to inform themselves about and to observe any such restrictions. For a description of certain restrictions on offers, sales and deliveries of Instruments and on the distribution of this Information Memorandum or any Final Terms and other offering material relating to the Instruments, see "Subscription and Sale". In particular, Instruments have not been and will not be registered under the United States Securities Act of 1933 (as amended) (the "Securities Act") and may include Instruments in bearer form which are subject to U.S. tax law requirements. Subject to certain exceptions, Instruments may not be offered, sold or delivered within the United States or to U.S. persons. Neither this Information Memorandum nor any Final Terms may be used for the purpose of an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such an offer or solicitation.

 

The Instruments have not been approved or disapproved by the U.S. Securities and Exchange Commission (the "SEC") or any state securities commission in the United States nor has the SEC or any State securities commission passed upon the accuracy or the adequacy of this Information Memorandum. Any representations to the contrary are a criminal offence in the United States.

 

The Instruments have not been and will not be registered under the Securities Act or with any securities regulatory authority of any State or other jurisdiction of the United States and may include Instruments in bearer form that are subject to U.S. tax law requirements. Subject to certain exceptions, the Instruments may not be offered, sold or delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act ("Regulation S")). See "Subscription and Sale".

 

This Information Memorandum has been prepared by the Bank for use in connection with the offer and sale of the Instruments in reliance upon Regulation S outside the United States to persons other than U.S. persons and, with respect to Instruments in registered form only, within the United States in reliance upon Rule 144A under the Securities Act ("Rule 144A") to QIBs as defined in, and in reliance on, Rule 144A and in accordance with any applicable exemption from the U.S. Investment Company Act of 1940 and any applicable securities laws of any state of the United States and any other relevant jurisdiction. Prospective purchasers are hereby notified that sellers of the Instruments may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A.

 

To permit compliance with Rule 144A under the Securities Act in connection with sales of Instruments, the Bank will furnish upon the request of a holder of Instruments or of a beneficial owner of an interest therein to such holder or beneficial owner or to a prospective purchaser designated by such holder or beneficial owner, the information required to be delivered under Rule 144A(d)(4) under the Securities Act and will otherwise comply with the requirements of Rule 144A(d)(4) under the Securities Act, if at the time of such request, the Bank is not a reporting company under Section 13 or Section 15(d) of the U.S. Securities Exchange Act of 1934 (the "Exchange Act"), or exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act.

 

Neither this Information Memorandum nor any Final Terms constitutes an offer or an invitation to subscribe for or purchase any Instruments and should not be considered as a recommendation by the Bank, the Dealers or any of them that any recipient of this Information Memorandum or any Final Terms should subscribe for or purchase any Instruments. Each recipient of this Information Memorandum or any Final Terms shall be taken to have made its own investigation and appraisal of the condition (financial or otherwise) of the Bank.

 

All references in this Information Memorandum to "SEK" or "Kronor" are to the currency of the Kingdom of Sweden, to "JPY" or "Japanese Yen" are to the currency of Japan, to "GBP" or "Pounds Sterling" are to the currency of the United Kingdom, to "CHF" or "Swiss Francs" are to the currency of Switzerland, to "USD" or "United States Dollars" are to the currency of the United States of America and to "€" or "euro" are to the currency of the member states of the European Union that have adopted the single currency in accordance with the Treaty establishing the European Community, as amended.

 

NOTICE TO NEW HAMPSHIRE RESIDENTS

 

 

 

 

 

SEB believes that the following factors may affect its ability to fulfil its obligations under Instruments issued under the Programme. Most of these factors are contingencies which may or may not occur and SEB is not in a position to express a view on the likelihood of any such contingency occurring.

 

 

 

 

 

SEB's results are affected by general economic and other business conditions. These conditions include changing economic cycles that affect demand for investment and banking products. Such cycles are also influenced by global political events, such as terrorist acts, war and other hostilities as well as by market specific events, such as shifts in consumer confidence and consumer spending, the rate of unemployment, industrial output, labour or social unrest and political uncertainty.

 

SEB's commercial and consumer banking business will also be affected during recessionary conditions as there may be less demand for loan products or certain customers may face financial problems. Interest rate rises may also have an impact on the demand for mortgages and other loan products and credit quality.

 

SEB's investment banking, securities trading, asset management and private banking services, as well as its investments in, and sales of products linked to, financial assets, will be influenced by several factors such as the liquidity of the global financial markets, the level and volatility of equity prices and interest rates, investor sentiment, inflation and the availability and cost of credit which are related to the economic cycle.

 

The impact of the economy and business climate on the credit quality of borrowers and counter-parties can affect the recoverability of loans and amounts due from counter-parties.

 

For a discussion of how credit and market risk is managed by SEB, see pages 39 - 42 of SEB's 2005 Annual Report.

 

 

Fluctuations in interest rates and foreign exchange rates, particularly in SEB's Swedish home market but also in its other home markets in Germany, the other Nordic countries and the Baltic States, also influence SEB's performance. These changes are not predictable and are beyond SEB's control.

 

The results of SEB's banking operations are affected by its management of interest rate sensitivity. Interest rate sensitivity refers to the relationship between changes in market interest rates and changes in net interest income. The composition of its assets and liabilities, and any gap position resulting from the composition, causes the net interest income to vary with changes in interest rates and thereby also to have an impact on margins (see page 42 of SEB's 2005 Annual Report). In addition, variations in interest rate sensitivity may exist within the re-pricing periods or between the different currencies in which SEB holds interest rate positions. A mismatch of interest-earning assets and interest-bearing liabilities in any given period may, in the event of changes in interest rates, have a material effect on the financial condition or result from operations of SEB's business.

 

SEB publishes its consolidated financial statements in Swedish Kronor. Fluctuations in exchange rates used to translate other currencies into Swedish Kronor will have an impact on SEB's reported consolidated financial condition, results of operations and cash flows from year to year. Fluctuations in exchange rates will also impact the Swedish Kronor value of SEB's investments and the return on its investments, as well as its obligations. A discussion of the effect of these exchange rate fluctuations is set out on page 42 of SEB's 2005 Annual Report.

 

For a discussion of how interest rate risk and foreign exchange rate fluctuation risk is managed see page 42 of SEB's 2005 Annual Report.

 

 

Life insurance risk is the risk of a loss due to the fact that estimated surplus values (that is, the present value of future gains from existing insurance contracts) cannot be realised due to slower than expected capital growth, cancellations or unfavourable price/cost developments.

 

Life insurance operations are exposed to the risk of shifts in mortality rates: lower rates lead to more long-term pension commitments, whereas higher rates result in higher death claims. These risks are only applicable to SEB as regards unit-linked insurance. The mutual character of traditional life insurance means that the risks are collectively borne by the policy holders.

 

Life insurance risks are controlled with the help of an actuarial analysis and stress testing of the existing insurance portfolio. Mortality and morbidity risks are reinsured against unexpectedly large individual claims or against several claims caused by the same event. The risks inherent in guaranteed return products are mitigated through standard market risk techniques and monitored through scenario analysis.

 

 

There is substantial competition for the types of banking and other products and services that SEB provides in the regions in which it conducts large portions of its business, including Sweden, the other Nordic countries, Germany and the Baltic States. Such competition is affected by consumer demand, technological changes, the impact of consolidation, regulatory actions and other factors. SEB expects competition to intensify as continued merger activity in the financial services industry produces larger, better-capitalised companies that are capable of offering a wider array of products and services, and at more competitive prices. In addition, technological advances and the growth of e-commerce have made it possible for non-depositary institutions to offer products and services that traditionally were more usually offered by depositary institutions and for financial institutions to compete with technology companies in providing electronic and internet-based financial solutions. If SEB is unable to provide attractive product and service offerings that are profitable, it may lose market share or incur losses on some or all activities.

 

 

SEB is subject to banking and financial services laws and government regulation in each of the jurisdictions in which it conducts business. Regulatory agencies have broad administrative power over many aspects of the financial services business, which may include liquidity, capital adequacy and permitted investments, ethical issues, money laundering, privacy, record keeping, and marketing and selling practices. Banking and financial services laws, regulations and policies currently governing SEB and its subsidiaries may change at any time in ways which have an adverse effect on its business. Furthermore, SEB cannot predict the timing or form of any future regulatory initiatives. Changes in existing banking and financial services laws and regulations may materially affect the way in which SEB conducts its business, the products or services it may offer and the value of its assets. If SEB fails to address, or appears to fail to address, appropriately these changes or initiatives, its reputation could be harmed and it could be subject to additional legal risk, which could, in turn, increase the size and number of claims and damages asserted against it or subject it to enforcement actions, fines and penalties. Despite SEB's best efforts to comply with applicable regulations, there are a number of risks, particularly in areas where applicable regulations may be unclear or where regulators revise their previous guidance or courts overturn previous rulings. The regulators have the power to bring administrative or judicial proceedings against SEB, which could result, among other things, in suspension or revocation of its licences, cease and desist orders, fines, civil penalties, criminal penalties or other disciplinary action which could materially harm SEB's results of operations and financial condition.

 

 

SEB, like all financial institutions, is exposed to many types of operational risk, including the risk of fraud or other misconduct by employees or outsiders, unauthorised transactions by employees or operational errors, including clerical or record keeping errors or errors resulting from faulty computer or telecommunications systems. Given SEB's high volume of transactions, certain errors may be repeated or compounded before they are discovered and successfully rectified. In addition, SEB's dependence upon automated systems to record and process its transactions volume may further increase the risk that technical system flaws or employee tampering or manipulation of those systems will result in losses that are difficult to detect. SEB may also be subject to disruptions of its operating systems, arising from events that are wholly or partially beyond its control (including, for example, computer viruses or electrical or telecommunication outages), which may give rise to losses in service to customers and to loss or liability to SEB. SEB is further exposed to the risk that external vendors may be unable to fulfil their contractual obligations to it (or will be subject to the same risk of fraud or operational errors by their respective employees as SEB is), and to the risk that its (or its vendors') business continuity and data security systems prove not to be sufficiently adequate. SEB also faces the risk that the design of its controls and procedures prove inadequate, or are circumvented, thereby causing delays in detection or errors in information. Although SEB maintains a system of controls designed to keep operational risk at appropriate levels, there can be no assurance that it will not suffer losses from operational risks in the future that may be material in amount.

 

For a discussion of how operational and business risk is managed see page 42-43 of SEB's 2005 Annual Report.

 

 

To the extent any of the instruments and strategies SEB uses to hedge or otherwise manage its exposure to market or credit risk are not effective, it may not be able to mitigate effectively its risk exposures in particular market environments or against particular types of risk. SEB's balance sheet growth will be dependent upon the economic conditions described above, as well as on its determination to securitise, sell, purchase or syndicate particular loans or loan portfolios. SEB's trading revenues and interest rate risk are dependent upon its ability to identify properly, and mark to market, changes in the value of its financial instruments caused by changes in market prices or rates. SEB's earnings will also be dependent upon how effectively its critical accounting estimates prove accurate and upon how effectively it determines and assesses the cost of credit and manages its risk concentrations. To the extent SEB's assessments of migrations in credit quality and of risk concentrations, or its assumptions or estimates used in establishing its valuation models for the fair value of its assets and liabilities or for its loan loss reserves, prove inaccurate or not predictive of actual results, SEB could suffer higher-than-anticipated losses. The successful management of credit, market and operational risk is an important consideration in managing SEB's liquidity risk, as evaluation by rating agencies of the management of these risks affects their determinations as to SEB's credit ratings. Rating agencies may reduce or indicate their intention to reduce the ratings at any time. The rating agencies can also decide to withdraw their ratings altogether, which may have the same effect as a reduction in SEB's ratings. For more information relating to SEB's credit ratings as at the date of this document, please refer to page 22 of SEB's 2005 Annual Report. Any reduction in SEB's ratings may increase its borrowing costs, limit its access to capital markets and adversely affect the ability of SEB's businesses to sell or market their products, engage in business transactions - particularly longer-term and derivatives transactions - and retain their current customers. This, in turn, could reduce SEB's liquidity and have a negative impact on its operating results and financial condition.

 

 

Concerns about, or a default by, one institution could lead to significant liquidity problems, losses or defaults by other institutions because the commercial soundness of many financial institutions may be closely related as a result of credit, trading, clearing or other relationships between institutions. This risk is sometimes referred to as "systemic risk" and may adversely affect financial intermediaries, such as clearing agencies, clearinghouses, banks, securities firms and exchanges with which SEB interacts on a daily basis, and could adversely affect SEB.

 

 

SEB's banking businesses establish provisions for lending losses, which are reflected in the provision for credit losses on its income statement, in order to maintain its allowance for lending losses at a level which is deemed to be appropriate by management based upon an assessment of prior loss experience, the volume and type of lending being conducted by each bank, industry standards, past due loans, economic conditions and other factors related to the collectibility of each entity's loan portfolio. For further information on SEB's credit risk management, please see pages 39-40 of SEB's 2005 Annual Report. Although management uses its best efforts to establish the provision for lending losses, that determination is subject to significant judgment, and SEB's banking businesses may have to increase or decrease their provisions for lending losses in the future as a result of increases or decreases in nonperforming assets or for other reasons. Any increase in the provision for lending losses, any lending losses in excess of the previously determined provisions with respect thereto or changes in the estimate of the risk of loss inherent in the portfolio of non-impaired loans could have an adverse effect on SEB's results of operations and financial condition.

 

 

In deciding whether to extend credit or enter into other transactions with customers and counterparties, SEB may rely on information furnished to it by or on behalf of customers and counterparties, including financial statements and other financial information. SEB may also rely on representations of customers and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. For example, in deciding whether to extend credit, SEB may assume that a customer's audited financial statements conform with generally accepted accounting principles and present fairly, in all material respects, the financial condition, results of operations and cash flows of the customer. SEB also may rely on the audit report covering those financial statements. SEB's financial condition and results of operations could be negatively affected by relying on financial statements that do not comply with generally accepted accounting principles or that are materially misleading.

 

 

 

 

 

 

 

Unless otherwise provided with respect to a particular Series of Registered Instruments in the applicable Final Terms, the Registered Instruments of each Tranche of such Series offered and sold in reliance on Regulation S, which will be sold to persons other than U.S. persons (as defined in Regulation S) outside the United States, will initially be represented by a Regulation S Global Instrument in registered form which will, depending on the option specified in the applicable Final Terms, either (i) be deposited with a custodian for, and registered in the name of a nominee of, DTC or (ii) be deposited with a common depositary for Euroclear and Clearstream, Luxembourg and registered in the name of a nominee for such common depositary, in each case on its issue date.

 

Unless otherwise provided with respect to a particular Series of Registered Instruments in the applicable Final Terms, Registered Instruments of each Tranche of such Series offered and sold in the United States in private transactions to QIBs will initially be represented by a Rule 144A Global Instrument in registered form (together with the Regulation S Global Instrument, the "Registered Global Instruments") which will, depending on the option specified in the applicable Final Terms, either (i) be deposited with a custodian for, and registered in the name of a nominee of, DTC or (ii) be deposited with a common depositary for Euroclear and Clearstream, Luxembourg and registered in the name of a nominee for such common depositary, in each case on its issue date. Registered Global Instruments are subject to restrictions on transfer and will bear legends detailing such restrictions as set out under "Notice to Purchasers and Holders of Instruments and Transfer Restrictions". Registered Global Instruments will be exchangeable for definitive Registered Instruments only in the limited circumstances as more fully described herein.

 

Persons holding beneficial interest in Registered Global Instruments will be entitled or required, as the case may be, under the circumstances described in Condition 2, to receive physical delivery of definitive Registered Instruments.

 

Payments of principal of the Registered Instruments will, in the absence of provision to the contrary, be made to the persons shown on the Register at the close of business on the business day immediately prior to the relevant payment or delivery date, in accordance with Condition 8B.02. Payments of interest on Registered Instruments will be made on the relevant payment date to the person in whose name such Instruments are registered on the third business day immediately preceding such payment date. None of the Bank, the Fiscal Agent, any Paying Agent, the Registrar or the Alternative Registrar will have any responsibility or liability for any aspect of the records relating to or payments or deliveries made on account of beneficial ownership interests in the Registered Global Instruments or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

 

The Bearer Instruments of each Tranche will be initially represented by a Temporary Global Instrument without receipts, interest coupons ("Coupons") or talons, which will:.

 

(i)   if the Global Instruments are intended to be issued in NGN form, as stated in the applicable Final Terms, be delivered on or prior to the original issue date of the Tranche to a common safekeeper for Euroclear and Clearstream, Luxembourg; and

 

(ii)  if the Global Instruments are not intended to be issued in NGN form, be delivered on or prior to the original issue date of the Tranche to a common depositary for Euroclear and Clearstream, Luxembourg.

 

While any Bearer Instrument is represented by a Temporary Global Instrument, payments of principal and interest (if any) due prior to the 40th day after the later of the date of issue of the relevant Instruments and the completion of the distribution of such Instruments of each Series (the "Distribution Compliance Period") will be made (against presentation of the Temporary Global Instrument, if the Temporary Global Instrument is not intended to be issued in NGN form) only to the extent that certification (in a form to be provided) to the effect that the beneficial owners of interest in such Instrument are not within the United States or its possessions or are not U.S. persons or persons who have purchased for resale to any U.S. person, as required by U.S. Treasury regulations, has been received by Euroclear and/or Clearstream, Luxembourg, and Euroclear and/or Clearstream, Luxembourg, as applicable, has given a like certification (based on the certifications it has received) to the Fiscal Agent.

 

On the expiry of the Distribution Compliance Period, interests in such Temporary Global Instrument will be exchangeable (free of charge) upon a request as described therein either for interests in a Permanent Global Instrument (together with the Temporary Global Instruments, "Bearer Global Instruments") without receipts, interest coupons or talons or for definitive Bearer Instruments with, where applicable, receipts, interest coupons and talons attached (as indicated in the applicable Final Terms and subject, in the case of definitive Bearer Instruments, to such notice period as is specified in the applicable Final Terms) in each case against certification of beneficial ownership as described in the second sentence of the immediately preceding paragraph unless such certification has already been given. The holder of a Temporary Global Instrument will not be entitled to collect any payment of interest or principal due on or after the Exchange Date unless a Permanent Global Instrument or definitive Bearer Instrument have not been issued in exchange for the Temporary Global Instrument in accordance with their terms.

 

In the case of a Permanent Global Instrument, payments of principal and interest (if any) on the Permanent Global Instrument will be made through Euroclear and/or Clearstream, Luxembourg (against presentation or surrender (as the case may be) of the Permanent Global Instrument if the Permanent Global Instrument is not intended to be issued in NGN form) without any requirement for certification. Unless otherwise specified in the applicable Final Terms, a Bearer Global Instrument will only be exchangeable (free of charge), in whole but not in part for Definitive Instruments with, where applicable, receipts, interest coupons and talons attached in the circumstances specified in Condition 1 of the Terms and Conditions.

 

Pursuant to the Fiscal Agency Agreement (as defined under "Terms and Conditions of the Instruments" below) the Fiscal Agent shall arrange that, where a further Tranche of Instruments is issued, the Instruments of such Tranche shall not be assigned (where applicable) a common code, an ISIN number, a CUSIP number and a CINS number assigned to Instruments of any other Tranche of the same Series until the relevant Tranches are consolidated and form a single Series.

 

All Instruments will be issued pursuant to the Fiscal Agency Agreement.

 

For so long as any of the Instruments is represented by a Bearer Global Instrument deposited with a common depositary or a common safekeeper for Euroclear and Clearstream, Luxembourg or so long as a nominee for the common depositary for Euroclear and Clearstream, Luxembourg or for DTC, as the case may be, is the registered holder of a Registered Global Instrument, each person who is for the time being shown in the records of Euroclear or of Clearstream, Luxembourg or, as the case may be, DTC as entitled to a particular nominal amount of Instruments (in which regard any certificate or other document issued by Euroclear, Clearstream, Luxembourg or DTC or its nominee as to the nominal amount of Instruments standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest error) shall be deemed to be the holder of such nominal amount of such Instruments for all purposes other than with respect to the payment of principal or interest on the Instruments for which purpose such common depositary, common safekeeper or, as the case may be, nominee shall be deemed to be the holder of such nominal amount of such Instruments in accordance with and subject to the terms of the relevant global Instrument and the Fiscal Agency Agreement (and the expression "Instrumentholder" and related expressions shall be construed accordingly).

 

No beneficial owner of an interest in a Registered Global Instrument will be able to exchange or transfer that interest, except in accordance with the applicable procedures of DTC, Euroclear and Clearstream, Luxembourg, in each case, to the extent applicable.

 

The following legend will appear on all Bearer Global Instruments, definitive Instruments, receipts, interest coupons and talons:

 

"Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations in Sections 165(j) and 1287(a) of the United States Internal Revenue Code of 1986, as amended."

 

The sections referred to provide that United States holders, with certain exceptions, will not be entitled to deduct any loss on Bearer Instruments, receipts or interest coupons and will not be entitled to capital gains treatment of any gain on any sale, disposition, redemption or payment of principal in respect of Bearer Instruments, receipts or interest coupons.

 

Any reference in this section "Forms of the Instruments" to Euroclear and/or Clearstream, Luxembourg and/or DTC shall, whenever the context so permits except in relation to Instruments issued in NGN form, be deemed to include a reference to any additional or alternative clearing system approved by the Bank, the relevant Dealer and the Fiscal Agent.

 

 

SKANDINAVISKA ENSKILDA BANKEN

 

			Per cent of
Share series	Number of Shares	Votes	Capital	Votes
A.............................................................................	663,004,123	663,004,123	96.5	99.6
C.............................................................................	24,152,508	2,415,251	3.5	0.4
Total.......................................................................	687,156,631	665,419,374	100.0	100.0

 

As at 31st December, 2005, of the Bank's 303,104 shareholders, only two could exercise more than three per cent. of the votes attaching to the Bank's issued shares. The Bank's 10 largest shareholders were collectively entitled to exercise 43.3 per cent. of the votes attaching to its issued shares.

The following table shows information relating to the Bank's five largest shareholders as at 31st December, 2005:

 

		Percentage of Total
Shareholder	Number of Shares	Capital	Votes
Investor AB..............................................................	123,027,895	17.9	19.0
Trygg-Foundation.....................................................	65,677,962	9.6	10.2
AFA Försäkring ......................... .............................	18,726,432	2.7	2.8
SHB/SPP Funds........................................................	16,615,354	2.4	2.6
Robur Funds ...........................................................	16,190,145	2.4	2.5

 

 

In accordance with article three of the Bank's articles of association, its principal corporate objects and purposes are to carry on such banking and financial activities as are referred to in Chapter 1, Section 3 and Chapter 7, Section 1 of the Swedish Banking and Financing Business Act (2004: 297), together with all activities related thereto. The Bank's articles of association are incorporated by reference into this Information Memorandum.

 

 

The Group's activities are carried out through the following divisions:

 

                     SEB Merchant Banking;

                     Nordic Retail & Private Banking;

                     German Retail & Mortgage Banking;

                     Eastern European Banking;

                     SEB Asset Management; and

                     SEB Trygg Liv.

 

 

This division is responsible for all of SEB's activities relating to large and medium sized corporations, financial institutions, international banks and commercial real estate clients. It operates in 13 countries.

 

In 2005, SEB Merchant Banking strengthened its investment and corporate banking activities by combining the two previously separate business areas of Merchant Banking (which was responsible for, among other businesses, cash management, currency and fixed income securities trading, debt capital markets, lending, structured finance, import and export finance and custody) and Enskilda Securities, which conducts equity trading, equity research, equity capital markets and corporate finance. Enskilda Securities' advisory unit will form an independent business area within SEB Merchant Banking to create an integrated investment and corporate banking service.

 

The following table sets out certain financial and other information, extracted from the Bank's Annual Report 2005, for the SEB Merchant Banking division for each of the years indicated:

 

	As at 31st December,
	2005	2004
Total operating income (SEK millions)	12,155	10,513
Total operating expenses (SEK millions)	(6,799)	(5,968)
Operating profit (SEK millions)	5,333	4,530
Percentage of Group total income(1)	36	35
Percentage of Group operating result(1)	48	45
Percentage of Group staff(2)	18	18
Cost/income ratio	0.56	0.57
Business equity (SEK billions)	18.0	15.7
Return on equity(3)(%)	21.3	20.8

 

 

(1)   Calculated without giving effect to joint group items (treasury, group staff functions, goodwill amortisation and goodwill funding costs).

 

(2)   Approximately 8.5 per cent. of SEB's staff are not allocated to a particular division.

 

(3)   Return on equity is calculated using as an assumed tax rate the standard Swedish corporate tax rate of 28 per cent.

 

 

In addition to Sweden, SEB Merchant Banking carries out activities in 12 other countries. Its main areas of activity and responsibility are as follows:

 

                     lending;

                     trading in currencies, interest-bearing instruments, derivatives and futures;

                     advisory services, brokerage and research within equity and debt markets;

                     equities trading and research;

                     cash management and payments services;

                     export, project and trade finance;

                     corporate and acquisition finance;

                     venture capital;

                     securities related financing solutions;

                     management of the Group's liquidity portfolio;

                     custody and fund services; and

                     leasing and factoring products.

 

 

The Nordic Retail & Private Banking division serves approximately 1.6 million private customers and approximately 138,000 are small and medium-sized corporate customers. This division's customers have access to the complete range of the Group's product offerings and services through its branch offices, Internet banking and telephone banking services.

 

The following table sets out certain financial and other information, extracted from the Bank's Annual Report 2005, for the Nordic Retail & Private Banking division for each of the years indicated:

 

 

	As at 31st December,
	2005	2004
Total operating income (SEK millions)	9,266	8,401
Total operating expenses (SEK millions)	(5,776)	(5,323)
Operating profit (SEK millions)	3,299	2,966
Percentage of Group total income(1)	27	28
Percentage of Group operating result(1)	29	30
Percentage of Group staff(2)	25	26
Cost/income ratio	0.62	0.63
Business equity (SEK millions)	12.2	11.0
Return on equity(3)(%)	19.5	19.4

 

(1)   Calculated without giving effect to joint group items (treasury, group staff functions, goodwill amortisation and goodwill funding costs).

 

(2)   Approximately 8.5 per cent. of SEB's staff are not allocated to a particular division.

 

(3)   Return on equity is calculated using as an assumed tax rate the standard Swedish corporate tax rate of 28 per cent.

 

Nordic Retail & Private Banking's business is focused on three primary business areas:

 

Retail Banking, which comprises 200 Swedish branch offices, as well as internet and 24 hour telephone banking services. Retail banking's customers have access to approximately 2,800 automatic teller machines ("ATMs") in Sweden of which approximately 380 are self-owned. In addition, there are approximately 110 self-owned cash deposit machines (CDMs). The Group's Swedish mortgage company, SEB BoLån, is also part of this business area.  Approximately 57 per cent. of the operating profits from the Nordic Retail & Private Banking division originate from this business area.

 

Private Banking, which includes SEB Enskilda Banken with representation in seven Swedish cities and International Private Banking with its presence in nine countries including Luxembourg, the United Kingdom, Switzerland and Norway. In Sweden, SEB Enskilda Banken is the largest asset manager for foundations and the leading financial advisor and asset manager for private customers. Approximately 19 per cent. of the operating profit from the Nordic Retail & Private Banking division originates from this business area.

 

SEB Kort is the Group's card business with some 2.9 million charge, credit, debit and cobranded cards. SEB Kort has operations in Denmark, Finland, Norway and Sweden under the Diners Club brand and in Sweden, Denmark and Norway under the Eurocard brand. Approximately 24 per cent. of the operating profit from the Nordic Retail & Private Banking division originates from this business area.

 

 

The German Retail & Mortgage Banking division serves approximately one million customers all over Germany. Customers have access to the division's services through 175 branches, more than 2,000 ATMs, Internet banking and telephone banking services.

 

The following table sets out certain financial and other information, extracted from the Bank's Annual Report 2005, for the German Retail Mortgage & Banking Division for each of the years indicated:

 

	As at 31st December,
	2005	2004
Total operating income (SEK millions)	4,903	4,850
Total operating expenses (SEK millions)	(3,739)	(3,801)
Operating profit (SEK millions)	598	608
Percentage of Group total income(1)	14	16
Percentage of Group operating result(1)	5	6
Percentage of Group staff(2)	16	17
Cost/income ratio	0.76	0.78
Business equity (SEK millions)	9.9	9.5
Return on equity(3) (%)	4.4	4.6

 

(1)   Calculated without giving effect to joint group items (treasury, group staff functions, goodwill amortisation and goodwill funding costs).

 

(2)   Approximately 8.5 per cent. of SEB's staff are not allocated to a particular division.

 

(3)   Return on equity is calculated using as an assumed tax rate the standard Swedish corporate tax rate of 28 per cent.

 

In 2005, SEB launched several new sales initiatives to improve profitability within the retail business, such as enhancing sales capacity through a mobile sales force and selective staff increases in certain branches.

 

 

The Eastern European Banking division comprises the Group's three wholly owned Baltic banks SEB Eesti Ühispank (Estonia), SEB Unibanka (Latvia) and SEB Vilniaus Bankas (Lithuania). The Baltic banks together have approximately 4,800 employees and serve more than 2.3 million customers, including 1.1 million Internet customers through a branch network of 200 branch offices and internet banking. The combined market shares for the Baltic banks were 29 per cent. for loans and 29 per cent. for deposits (including the non-resident market in Latvia, where SEB is not active) in 2005.

 

The Group's mutual funds company in Poland, SEB TFI also forms part of the division. On July 31, 2006 SEB sold its 47 per cent. share in BOS in Poland. Poland remains an important market to SEB and the Bank plans to open a branch in Poland during 2006.

 

The Group has taken further steps to support its customers in the Eastern European markets with SEB Vilnius Bankas' acquisition of Bank Agio in the Ukraine (which was renamed SEB Bank on 24th May, 2006). During 2005, the acquisition of Bank Agio and the bank's integration within the Group were completed and, as at 31st December, 2005, SEB owned 99 per cent. of the shares in Bank Agio. In August 2005, SEB Unibanka acquired the Latvian life assurance company Balta Life, now re-branded as SEB Life Insurance. In Russia, the Group has a leasing company in St. Petersburg and, in early 2006, acquired Petro-EnergoBank, a Russian bank based in St. Petersburg.

 

The following table sets out certain financial and other information, extracted from the Bank's Annual Report 2005, for the Eastern European Banking division for each of the years indicated:

 

 

 

	As at 31st December,
	2005	2004
Total operating income (SEK millions)	3,150	2,631
Total operating expenses (SEK millions)	(1,673)	(1,439)
Operating profit (SEK millions)	1,401	1,107
Percentage of Group total income(1)	9	9
Percentage of Group operating result(1)	12	11
Percentage of Group staff(2)	25	23
Cost/income ratio	0.53	0.55
Business equity (SEK millions)	4.8	4.0
Return on equity(3)(%)	21.0	19.8

 

 

(1)   Calculated without giving effect to joint group items (treasury, group staff functions, goodwill amortisation and goodwill funding costs).

 

(2)   Approximately 8.5 per cent. of SEB's staff are not allocated to a particular division.

 

(3)   Return on equity is calculated using as an assumed tax rate the standard Swedish corporate tax rate of 28 per cent.

 

 

SEB Asset Management offers a broad range of investment management expertise and services to institutions, life insurance companies and retail clients. The product range includes equity and fixed income management, private equity and real estate and hedge funds. SEB Asset Management has offices in Copenhagen, Helsinki, Frankfurt, Luxembourg and Stockholm. Around 110 portfolio managers and analysts work within the division. As of 31st December, 2005, total assets under management in this division amounted to SEK 789 billion of the Group's total assets under management of SEK 1,118 billion.

 

The division distributes its services mainly through the branch network of the Group and private banking units but also via the Internet, through the sales force and through call centres.

 

The following table sets out certain financial and other information, extracted from the Bank's Annual Report 2005, for the SEB Asset Management division for each of the years indicated:

 

 

 

	As at 31st December,
	2005	2004
Total operating income (SEK millions)	1,935	1,624
Total operating expenses (SEK millions)	(984)	(852)
Operating profit (SEK millions)	951	772
Percentage of Group total income(1)	6	5
Percentage of Group operating result(1)	8	8
Percentage of Group staff(2)	2	2
Cost/income ratio	0.51	0.52
Business equity (SEK millions)	1.8	1.8
Return on equity(3)(%)	38.0	30.9

 

 

(1)   Calculated without giving effect to joint group items (treasury, group staff functions, goodwill amortisation and goodwill funding costs).

 

(2)   Approximately 8.5 per cent. of SEB's staff are not allocated to a particular division.

 

(3)   Return on equity is calculated using as an assumed tax rate the standard Swedish corporate tax rate of 28 per cent.

 

 

SEB is the second largest life insurer in the Nordic countries in terms of technical reserves. Operations comprise insurance products within the investment and social security area for individuals and corporations. SEB Trygg Liv provides both unit-linked and traditional insurance and has approximately 1.5 million customers.

 

While SEB Trygg Liv offers both unit-linked and traditional insurance, its sales focus is on unit-linked insurance, which as of 31st December, 2005 represented over 90 per cent. of the divisions' total sales. As of 31st December, 2005, according to the Association of Swedish Insurance Companies, SEB Trygg Liv was the market leader in the unit-linked market with a market share of 25.6 per cent. (24.5 per cent. in 2004) of assets under management in Sweden. SEB confirms that the market share information contained in the previous sentence has been accurately reproduced from the Association of Swedish Insurance Companies' statistical database and, so far as SEB is aware and is able to ascertain from information published by the Association of Swedish Insurance Companies, no facts have been omitted which would render the reproduced information inaccurate or misleading. The share of weighted new business, namely single premiums plus regular premiums multiplied by 10, was 32.4 per cent. for the year ended 31st December, 2005 compared to 34.6 per cent. for 2004.

 

Traditional life insurance operations are conducted through the mutual insurance companies Nya Livförsä kringsaktiebolaget SEB Trygg Liv and Gamla Livförsä kringsaktiebolaget SEB Trygg Liv. These entities are run according to mutual principles and are therefore not consolidated with the SEB Trygg Liv's accounts. For the year ended 31st December, 2005, assets under management in Gamla Liv totalled SEK 171 billion and SEK 8 billion in Nya Liv, compared to 156 billion and 11 billion, respectively in 2004. SEB Pension (renamed from Codan Pension) is one of Denmark's largest private pension companies, based on annual gross premiums for the year ended 31st December 2005 of SEK 5.6 billion. As at 31st December 2005, SEB Pension had approximately SEK 91 billion in assets under management.

 

The following table sets out certain financial and other information, extracted from the Bank's Annual Report 2005, for the SEB Trygg Liv division for each of the years indicated:

 

 

 

	As at 31st December,
	2005	2004
Total operating income (SEK millions)	2,866	1,932
Total operating expenses (SEK millions)	(1,933)	(1,362)
Operating profit (SEK millions)	933	570
Change in surplus value, net (SEK millions)	1,280	1,427
Business result(1)(SEK millions)	2,213	1,997
Percentage of Group staff(2)	6	5
Business equity (SEK millions)	7.2	5.2
Return on equity based on business result(3)(%)	22.8	27.7
Percentage of Group total income(4)	8	6
Percentage of Group operating result(4)	8	6

 

 

(1)   An insurance company's costs for an insurance policy mainly arise when the contract is written. Income, on the other hand, accrues regularly throughout the duration of the policy. This means that in periods of rapid sales' growth in the insurance portfolio, actual costs exceed income, which thus has a negative impact on the operating result. At the same time, surplus values in operations increase. In order to provide a more true presentation of the life insurance business, the total result is presented including the current period change in surplus values being the present value of future profits from existing insurance contracts.

 

(2)   Approximately 8.5 per cent. of SEB's staff are not allocated to a particular division.

 

(3)   Return on equity is calculated using as an assumed tax rate the standard Swedish corporate tax rate of 28 per cent.

 

(4)   Calculated without giving effect to joint group items (treasury, group staff functions, goodwill amortisation and goodwill funding costs).

 

 

The Swedish banking system is one of the most consolidated in Europe with the four largest banking groups accounting for more than 80 per cent. of the total assets on the banking market as of June 2005. They represent cumulatively nearly 80 per cent. of total customer deposits and nearly 70 per cent. of total customer lending as of June 2005. SEB confirms that the market share information contained in the previous sentence has been accurately reproduced from Banks in Sweden: Facts about the Swedish Banking Market, published in September 2005 by the Swedish Banker's Association and, so far as SEB is aware and is able to ascertain from information published by the Swedish Banker's Association in that publication no facts have been omitted which would render the reproduced information inaccurate or misleading.

 

The four principal banking groups in Sweden are SEB, Svenska Handelsbanken, FöreningsSparbanken and Nordea. Each of these banks offers comprehensive banking services to the entire Swedish client base of both retail and corporate customers. Acquisitions mainly over the last five years have resulted in Swedish banks expanding their product offerings to life insurance and asset management. Given such entrenched positions and the competitiveness of the market, the foreign banking competition in Sweden is limited. However, the competition from international investment banks is fierce in relation to the services offered by such entities to large corporations and institutions in the Group's markets.

 

Despite their significant incumbent market shares, the four largest Swedish banks compete keenly both in terms of price as well as service. This is evidenced by the relatively low margins in Sweden for both retail and corporate business, which is common for a well developed and consolidated European banking market.

 

Competition is fierce, especially for key product areas such as customer deposits and single family mortgage loans. This competition, however, has not typically been achieved to the detriment of profitability and credit quality. This is demonstrated by the low level of credit losses as well as the continued profitability experienced by the four largest Swedish banks. Over the last three years, SEB has been gaining market share in mortgage lending to households and has maintained its market share in deposits.

 

Given the level of competition, all the major Swedish banks have over the last few years put in place detailed cost efficiency programmes in order to maintain their profitability.

 

In the Nordic region outside of Sweden, i.e. Denmark, Norway and Finland, SEB has a strong position in selected areas such as the card business (travel and entertainment cards), asset management, life insurance and merchant and investment banking. SEB has approximately 1,700 employees and 1.5 million customers in these countries. The competition from domestic banks is strong.

 

In Germany, the subsidiary SEB AG is one of seven nation-wide banks. The bank focuses on the household market (particularly savings and mortgage loans), real estate customers, merchant banking and asset management. SEB has approximately 3,700 employees and one million customers in Germany. The domestic banking market is very fragmented resulting in strong competition in particular within the retail sector. There are fewer competitors within the merchant banking sector, but this sector is still very competitive. In this sector, competition is strong not only from German banks but also from large international banks.

 

In the three Baltic countries, SEB has three subsidiary banks with approximately 4,500 employees in total and approximately 2.3 million customers. These three banks have strong positions in their respective markets, both in terms of total size and deposits/lending. SEB Eesti Ühisbanka is the second largest bank in Estonia after Hansabank. In Latvia, SEB Ühisbanka is number three in size but number one in terms of lending/deposits. SEB Vilnius Bankas is the biggest bank in Lithuania and market leader within deposits and lending. SEB confirms that the market share information in this paragraph has been accurately reproduced from information published by each of the Central Bank of Estonia, the Association of Commercial Banks of Latvia and the Central Bank of Lithuania and, so far as SEB is aware and is able to ascertain from information published by those organisations, no facts have been omitted which would render the reproduced information inaccurate or misleading.

 

Subsidiaries and Affiliates

 

A full list of the Bank's subsidiaries and affiliates as at 31st December, 2005 is set out in notes 25 and 26 to the Consolidated Financial Statements as at and for the year ended 31st December, 2005 incorporated by reference in this Information Memorandum. Save as described below under the heading "Recent Developments", there have been no changes to the list of subsidiaries and affiliates set out in the Consolidated Financial Statements as at and for the year ended 31st December, 2005.

 

SEB AG Group, which comprises SEB's operations in Germany, namely the German Retail & Mortgage Banking division (which comprises retail and commercial real estate businesses), Merchant Banking Germany and Asset Management Germany, is the Bank's most significant subsidiary.

 

The following table sets out certain financial and other information, extracted from the Bank's Annual Report 2005, for the SEB AG Group for each of the years indicated:

 

 

 

	As at 31st December,
	2005	2004
Total operating income (SEK millions)	6,469	6,140
Total operating expenses (SEK millions)	(4,696)	(4,628)
Operating profit (SEK millions)	1,175	1,070
Percentage of Group total income(1)	19	20
Percentage of Group operating result(1)	10	11
Percentage of Group staff(2)	18	19
Cost/income ratio	0.73	0.75
Business equity (SEK millions)	12.2	11.7
Return on equity(3) (%)	6.9	6.6

 

 

(1)   Calculated without giving effect to joint group items (treasury, group staff functions, goodwill amortisation and goodwill funding costs).

 

(2)   Approximately 8.5 per cent. of SEB's staff are not allocated to a particular division.

 

(3)   Return on equity is calculated using as an assumed tax rate the standard Swedish corporate tax rate of 28 per cent.

 

SEB AG's financial results are included with the results of the relevant division. For example, Asset Management Germany's results are included in the financial results of SEB Asset Management.

 

 

The Group's principal executive offices are located at Kungsträdgårdsgatan 8, SE-106 40, Stockholm, Sweden (telephone number: +46 771 23 18 18). It also operates through a number of other offices and branches located throughout the North European region and elsewhere internationally. Except for properties in the Baltic region, all of the Group's material properties are leased.

 

 

SEB and the other companies within the Group are parties to a number of civil law disputes, both as plaintiffs and defendants, incidental to the normal conduct of their businesses. No single current or pending dispute or litigation is expected to have, or recently has had, a material adverse effect on the Group's financial position.

 

 

Management believes that the companies within the Group carry insurance of a type customary for the industries in which they operate and at a level which is adequate.

 

Recent developments

 

 

At the Annual General Meeting held on 4th April 2006, the shareholders of the Bank decided on remuneration principles for the President and the other members of the Group Executive Committee and on a long-term incentive programme, identical with last year's programme and based on performance shares, for approximately 500 senior officers.

 

It was furthermore decided to provide the Board of Directors with mandates to repurchase own shares in order to create an efficient hedging arrangement for the long-term incentive programme and to create a flexible tool for an efficient capital structure and for the securities business.

 

All Board Directors were re-elected and Marcus Wallenberg was re-elected Chairman of the Board.

 

The dividend was raised to SEK 4.75.

 

 

In order to strengthen SEB's customer offerings, increase efficiency and facilitate further growth in areas of strength, a new Group structure was announced on 25 September, 2006. As part of this new Group structure, which will be established on 1 January, 2007, SEB will integrate its retail units in five countries to create one retail banking unit.  Furthermore, SEB will increase its asset management and private banking activities by integrating the current Asset Management and Private Banking units.  In addition, support functions will be more integrated in order to provide a basis for enhanced operational efficiency.

 

As from 1 January, 2007, the new Group structure includes four customer-focused divisions and three support functions, as follows:

 

Management

 

On 25th September, 2006, the following senior management appointments were announced:

 

The Group Executive Committee will, as from 1st January, 2007, comprise Annika Falkengren, Magnus Carlsson, Bo Magnusson, Fredrik Boheman, Per Arne Blomquist, Hans Larsson and Anders Mossberg.

 

MANAGEMENT

 

The Board of Directors has overall responsibility for the activities of the Group and decides on the nature of its business and its business strategies and goals.

 

The President is responsible for the day-to-day management of the Group's activities in accordance with the guidelines and established policies and instructions of the Board of Directors. The President reports to the Board.

 

The Group has three control functions, independent of the business operations: Internal Audit, Compliance and Risk Control.

 

 

Members of the Board of Directors are appointed by the shareholders at the annual general meeting for a term of office that lasts until the end of the next annual general meeting. SEB's articles of association specify that the Board of Directors shall consist of not less than six and not more than twelve members, with a maximum of six deputies. In addition, and in accordance with Swedish law, there must be directors that are appointed by SEB's employees. At present, the Board of Directors has ten members that were elected by the shareholders, and two members and two deputies that were appointed by SEB's employees. The President is the only member of the Board of Directors elected by the shareholders that is also an SEB employee.

 

If the Chairman is not appointed by the shareholders, the Board appoints the Chairman of the Board. The Board also appoints each of the President and his deputy, each Executive Vice President, the Group Credit Officer, each member of the Group Executive Committee and the head of Group Internal Audit.

 

 

At present, there are three committees within the Board of Directors: the Risk and Capital Committee, the Audit and Compliance Committee and the Compensation and Human Resources Committee. Minutes are kept of each committee meeting and the committees submit regular reports to the Board. Neither the President nor any other officer of the Bank is a member of the Audit and Compliance Committee or the Compensation and Human Resources Committee. The President is a member of the Risk and Capital Committee of the Board. The work of the Board committees is regulated through instructions adopted by the Board.

 

 

The task of the Risk and Capital Committee is to support the Board in establishing and reviewing the Bank's organisation so that it is managed in such a way that all risks inherent in the Group's activities are identified and defined and that the risks are measured, monitored and controlled in accordance with external and internal rules. The Committee decides the principles and parameters for measuring and allocating risk and capital within the Group. The Committee reviews and makes proposals for Group policies and strategies, such as risk policy and risk strategy, credit policy, capital policy, liquidity and pledging policy as well as trading and investment policy, for decision by the Board, and monitors whether these policies are applied. The Committee monitors the credit portfolio and the credit process within the Group on a continuous basis. This work also includes the issuance of credit policies and the adoption of minor changes in the Credit Instructions of the Board. The Risk and Capital Committee also makes decisions on individual credit matters of principle or major importance.

 

 

The Audit and Compliance Committee maintains regular contact with the external and internal auditors of the Bank and makes sure that issues raised by the auditors are addressed. It also ensures the quality of the Bank's financial reports, considers matters such as internal control and regulatory compliance, evaluates the external auditors' work and independence and prepares proposals for new auditors prior to their election by the shareholders at the annual general meeting. In addition, the Committee adopts the overall work plan for the internal audit function. The work plan of the compliance function is adopted by the President. The internal audit activities and the compliance activities are monitored on a continuous basis.

 

 

The Compensation and Human Resources Committee of the Board prepares, for approval by the Annual General Meeting and the Board of Directors, a proposal for compensation principles applicable to certain senior officers as well as a proposal for compensation of the President and the Head of Group Internal Audit. The Compensation and Human Resources Committee decides on issues concerning compensation of the Deputy Group Chief Executive and of other members of the Group Executive Committee according to the principles established by the Annual General Meeting. The Compensation and Human Resources Committee also prepares proposals regarding incentive programs and pension plans and monitors the pension commitment of the Group. This Committee furthermore discusses personnel matters of strategic importance, such as succession planning for strategically important positions and other management supply issues.

 

 

The President is responsible for the day-to-day management of the Group in accordance with the guidelines and established policies and instructions of the Board of Directors. The Board regulates the Group's activities and decides how the Group's divisions, including the non-Swedish activities carried out within branches and subsidiaries, shall be governed and organised. On 9th November, 2005, Lars H. Thunell retired as the President and Chief Executive Officer and on 10th November, 2005 Annika Falkengren took over these roles.

 

The President is the chairman of three different committees organised to focus on different areas; Group Executive Committee for business issues, Group Credit Committee for credit issues and the Asset and Liability Committee for capital and risk issues.

 

 

In order to protect the Group's interests, the President consults with the Group Executive Committee ("GEC") and its IT-Committee on matters of major importance or importance as to principles. The current members of the GEC and the IT-Committee are as follows:

 

 

 

Name		Position, Other Assignments and Background
Annika Falkengren		President and Group Chief Executive
		Other assignments: Director Securitas, Mentor Foundation and Ruter Dam.
		Background: She started as an SEB trainee in 1987 and worked at Trading & Capital Markets 1988-2000. She was appointed Global Head of Fixed Income in 1995, Global Head of Trading in 1997, Head of Merchant Banking in 2000 and Head SEB Merchant Banking division and Executive Vice President of SEB in 2001.
Per-Arne Blomquist		Executive Vice President, Chief Financial Officer since 1 October 2006
		Background:He joined SEB in 2001 as Head of Group Finance. Previously, between 1997-2000, he was with Telia. He started his career at Alfa Laval where he worked for eight years.
Fredrik Boheman	Executive Vice President, CEO of SEB AG since 2005 and Head of SEB Asset Management since 1 October 2006.
	Other assignments: Director Teleopti
	Background: He started as an SEB trainee in 1985. After two years at SEB's representative office in Sao Paulo and thereafter developing SEB's business in Latin America, Eastern Europe and Middle East he was appointed General Manager of SEB's Hong Kong branch. In 1998 he was appointed Global Head of Corporate Clients and in 1999 Global Head of Trade & Project Finance. He was appointed Head of Merchant Banking Germany in 2002 and CEO of SEB AG as well as Executive Vice President of SEB in 2005.
Magnus Carlsson		Executive Vice President, Head of SEB Merchant Banking since February 2005.
		Background: He started his career at Bank of Nova Scotia in 1980, holding several leading positions in London. In 1993 he joined SEB as Senior Client Relationship Manager and Head of shipping. He was appointed Head of Project & Structured Finance in 1996, Head of Corporate Banking in 1999, later on Deputy Head of Merchant Banking and Head of the SEB Merchant Banking division and Executive Vice President of SEB in 2005.
Mats Kjær		Executive Vice President, Head of Eastern European Banking since 2004.
		Background: He worked as a branch and area manager within SEB's retail operations since 1971. Appointed Head of Region Eastern Sweden in 1993, Head of Region South Sweden in 1995, Head of SEB's holding company in the Baltic countries in 1998, Head of the Eastern European Banking division and Executive Vice President of SEB in 2004.
Hans Larsson		Head of Group Staff since 1 October 2006
		Background: He started his career at SEB within Trading & Capital Markets within Merchant Banking in 1984as an analyst and economist. Between 1986 and 2002 he held various positions within Trading & Capital Markets  including Head of Debt Capital Markets1994-2002. In 2002 he was appointed Head of Client Relations Management in Sweden and as its Global Deputy Head. In 2005 he was appointed Head of CEO Office and Head of Business Development.
Bo Magnusson	Executive Vice President, Head of Nordic Retail & Private Banking since 2005.
	Other assignments: Director Nordic Central Securities Depositary and Swedish Bankers' Association.
	Background: He started his career at SEB's currencies and capital markets entity in 1982, holding several leading positions as Head of Accounting and Controller within both Valuata & Finans, SEB Group Finance and Enskilda Securities thereafter. He was appointed Chief Financial Officer of SEB Merchant Banking in 1998, as well as Head of Staff Functions in 2000, Global Head of Cash Management & Securities Services in 2003 and Deputy Head of SEB Merchant Banking in 2005.
Anders Mossberg		Executive Vice President, Head of SEB Trygg Liv since 1997.
		Other assignments: Director Sveriges Försäkringsför bund
		Background: After five years at SEB he was appointed Head of the Bank's life insurance operations in 1990. Executive Vice President of SEB in 1998 and Head of Asset Management & Life division in 2000. He started his career at Skandia Försäkring AB in 1981.
Nils-Fredrik Nyblæus		Executive Vice President, Senior Advisor to the CEO since 1 October 2006.
		Other assignments: Chairman Danderyds Sjukhus AB. Director Swedish Financial Accounting Standards Council.
		Background: Joined SEB in 2004 as Head of Group Staff and IT and as Chief Financial Officer since January 2005. Previously with FöreningsSparbanken since 1991, where he was Deputy Group Chief Executive since 2000 and CFO since 1998 after having held several leading positions within the bank. Other previous positions held include Group Controller within Alfa-Laval Group, USA and Netherlands, and Treasurer of Lesjöfors AB.

 

 

The GEC held 28 meetings during 2005 and 23 meetings in the first nine months of 2006.

 

 

The Group Credit Committee ("GCC") is, next to the Risk and Capital Committee of the Board, the highest credit-granting body of the Group. The GCC is responsible for reviewing the credit-granting rules on a regular basis and for proposing relevant amendments to these rules to the Risk and Capital Committee of the Board.

 

 

The Asset and Liability Committee ("ALCO") is the Group-wide body responsible for the long and short term financial stability of the Group. ALCO determines the structure and governance of the Bank's balance sheet, co-ordinates risk, capital and liquidity matters and allocates capital and risk mandates or limits. In addition, ALCO submits proposals to the Board in relation to the overall financial goals of the Group and Group-wide risk policy.

 

 

The Management Advisory Group ("MAG") is a forum for information exchange at Group level, which consists of senior officers representing the whole Group. The members of the MAG are appointed by the President, after consultations with the GEC.

 

 

The internal audit function of the Group is an independent function that reports directly to the Board, which evaluates whether or not the internal control is satisfactory and efficient, that external and internal reporting is satisfactory and that the Group's activities are conducted in accordance with the instructions of the Board of Directors and the President. The Head of Group Internal Audit reports regularly to the Audit and Compliance Committee of the Board and to the President and the GEC.

 

The purpose of the Group's compliance activities is to ensure that all the Group's various licensed operations are conducted in accordance with applicable external and internal rules. The task of the Group Compliance Officer is to assist the Board and the President in relation to compliance matters and to coordinate the administration of these matters within the Group. The Group Compliance Officer reports regularly to the Audit and Compliance Committee of the Board and to the President and the GEC about major events within compliance concerning the whole Group.

 

The Group's risk control functions monitor the risks of the Group, primarily credit risk, market risk, operational risk and liquidity risk. The Group's risk control function is organised within Group Credits. The Head of Group Risk Control is appointed by the President and reports directly and regularly to Group ALCO and the Risk and Capital Committee of the Board.

 

 

As at the date hereof, the directors, deputy directors and members of the Board of Directors are as follows:

 

 

 

Name	Position
Marcus Wallenberg*(7)(8)(9)	Chairman of the Board. Chairman SAAB and Deputy Chairman, Ericsson and Saab. Acting Chairman ICC. Director, AstraZeneca Plc, Knut, and Alice WallenbergFoundation and Stora Enso.
Jacob Wallenberg*	Deputy Chairman of the Board. Chairman, Investor AB. Deputy Chairman, Atlas Copco and SAS. Director, ABB, the Knut and Alice Wallenberg Foundation and the Nobel Foundation, Stockholm School of Economics and W Capital Management.
Gösta Wiking*(2)	Deputy Chairman of the Board. Chairman, Angiogenetics. Director, XCounter.
Penny Hughes*(5)	Director, Vodafone, Reuters, Bridgepoint Capital (Advisory Board), and GAP Inc.
Urban Jansson*(1)	Chairman, Siemens AB and Tylö. Deputy Chairman Ahlstrom Corp and Plantasjen A/S. Director, Addtech, Clas Ohlson, Eniro, Ferd A/S, HMS and Stockholm Stock Exchange Listing Committee.
Tuve Johannesson*(10)	Chairman, Ecolean International A/S and Findus AB. Director, Swedish Match and Cardo.
Dr Hans-Joachim Körber*	President and Group Chief Executive of Metro AG. Director, Bertelsmann AG and Loyalty Partner GmBH.
Carl Wilhelm Ros*(4)	Director Anders Wilhelmsen & Co AS, Bonnier, Camfil AB, INGKA (Ikea) Holding and Profilgruppen.
Annika Falkengren(3)	President and Group Chief Executive. Director, Securitas, Ruter Dam and the Mentor Foundation.
Jesper Ovesen*(3)	Chief Financial Officer of Lego Holding A/S. Director FLSmidth & Co A/S and Merlin Entertainments Group Luxembourg S.a.r.l.

 

 

Name	Position
Directors appointed by the employees:
Ulf Jensen(*)	Chairman, Financial Sector Union of Sweden SEB Group. Director Financial Sector Union of Sweden.
Göran Lilja	Vice Chairman, Financial Sector Union of Sweden SEB Group.
Deputy Directors appointed by the employees:
Göran Arrius(*)	Chairman, Association of University Graduates at SEB and JUSEK's Section for Bank and Insurance.
Magdalena Olofsson(*).	Director, Financial Sector Union of Sweden SEB Group. Vice Chairman Regional Club Stockholm & Ost of the same union. Director Financial Sector Union of Sweden.

 

 

(1)   Chairman of Risk and Capital Committee of Board of Directors.

(2)   Chairman of Audit and Compliance Committee of Board of Directors.

(3)   Member of Risk and Capital Committee of Board of Directors.

(4)   Member of Audit and Compliance Committee of Board of Directors.

(5)   Chairman of Compensation and Human Resources Committee of the Board of Directors.

(6)   Deputy Chairman of each of Risk and Capital Committee, Audit and Compliance Committee and Compensation and Human Resources Committee.

(7)   Deputy Chairman of Audit and Compliance Committee of the Board of Directors.

(8)   Deputy Chairman of Risk and Capital Committee of Board of Directors.

(9)   Deputy Chairman of Compensation and HR Committee of the Board of Directors.

(10) Member of Compensation and HR Committee of the Board of Directors.

*      Non-executive member.

None of the persons described in this "Management" section of the Information Memorandum has any actual or potential conflict of interest between his or her duties to the Bank and his or her private interests and/or other duties.

 

The business address of each of the above is Skandinaviska Enskilda Banken, Kungsträdgaårdsgatan 8, SE-106 40 Stockholm, Sweden.

 

 

 

 

The information set out below is subject to any change in or reinterpretation of the rules, regulations and procedures of DTC, Euroclear, Clearstream, Luxembourg (together, the "Clearing Systems") currently in effect. Investors wishing to use the facilities of any of the Clearing Systems are advised to confirm the continued applicability of the rules, regulations and procedures of the relevant Clearing System. None of the Bank, the Fiscal Agent or any other agent party to the Fiscal Agency Agreement will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Instruments held through the facilities of any Clearing System or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

 

 

DTC is a limited purpose trust company organised under the laws of the State of New York, a member of the United States Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to Section 17A of the Exchange Act. DTC was created to hold securities among its participants and to facilitate the clearance and settlement of securities transactions among participants in such securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movements of security certificates. Participants include securities brokers and dealers, banks, trust companies and certain other organisations. DTC is owned by a number of its participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Indirect access to DTC is available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC participant either directly or indirectly.

 

DTC will take any action permitted to be taken by the holder of a beneficial interest in a Registered Global Instrument (including, without limitation, the presentation of a Registered Global Instrument for exchange as described above) only at the direction of one or more participants to whose account with DTC interests in such Registered Global Instrument are credited and only in respect of such portion of the aggregate nominal amount of Instruments in respect of which such participant or participants has or have given such direction. If an Event of Default under the Instruments occurs, DTC will exchange the Registered Global Instruments for definitive Registered Instruments, legended as appropriate, which it will distribute to the relevant participants.

 

 

Clearstream, Luxembourg and Euroclear each hold securities for participating organisations and facilitate the clearance and settlement of securities transactions between their respective participants through electronic book-entry changes in accounts of such participants. Clearstream, Luxembourg and Euroclear provide to their respective participants, among other things, services for safekeeping, administration, clearance and settlement of internationally-traded securities and securities lending and borrowing. Clearstream, Luxembourg and Euroclear participants are financial institutions throughout the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organisations. Indirect access to Clearstream, Luxembourg or Euroclear is also available to others, such as banks, brokers, dealers and trust companies which clear through or maintain a custodial relationship with Clearstream, Luxembourg or Euroclear participants, either directly or indirectly.

 

Payments with respect to book-entry interests in the Global Instruments held indirectly through Clearstream, Luxembourg or Euroclear will be credited to the cash accounts of Clearstream, Luxembourg or Euroclear participants in accordance with the relevant system's rules and procedures.

 

 

The Bank may make application to DTC for acceptance in its book-entry settlement system of any Tranche of Instruments represented by a Regulation S Global Instrument and/or a Rule 144A Global Instrument, respectively.

 

The custodian with whom any Registered Global Instruments are deposited (the "Custodian") and DTC will electronically record the nominal amount of the Instruments represented by such Registered Global Instruments held within the DTC system. Prior to expiry of the Distribution Compliance Period applicable to any Tranche of Instruments, investors may hold their interests in a Regulation S Global Instrument only through Clearstream, Luxembourg or Euroclear. Clearstream, Luxembourg and Euroclear will hold interests in the Regulation S Global Instrument on behalf of their accountholders through customers' securities accounts in Clearstream, Luxembourg's or Euroclear's respective names on the books of their respective depositaries, which in turn will hold interests in the Regulation S Global Instruments in customers' securities accounts in the depositaries' names on the books of DTC. Investors may hold their interests in a Rule 144A Global Instrument or in a Regulation S Global Instrument (only after the expiry of the Distribution Compliance Period) directly through DTC if they are participants in such system, or indirectly through organisations which are participants in such system. Payments of principal and interest in respect of Registered Global Instruments registered in the name of DTC's nominee will be to or to the order of its nominee as the registered holder of such Registered Global Instrument. The Bank expects that the nominee will, upon receipt of any such payment, immediately credit DTC participants' accounts with any such payments denominated in the U.S. dollars in amounts proportionate to their respective beneficial interests in the principal amount of the relevant Registered Global Instrument as shown on the records of DTC or the nominee. In the case of any such payments which are denominated otherwise than in U.S. dollars payment of such amounts will be made to the Exchange Agent on behalf of the nominee who will make payment of all or part of the amount to the beneficial holders of interests in such Registered Global Instrument directly, in the currency in which such payment was made and/or cause all or part of such payment to be converted into U.S. dollars and credited to the relevant participant's DTC account as aforesaid, in accordance with instructions received from DTC. The Bank also expects that payments by DTC participants to owners of beneficial interest in any Registered Global Instrument held through such DTC participants will be governed by standing instruments and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such DTC participants. Neither the Bank nor any agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of ownership interests in the Registered Global Instruments or for maintaining, supervising or reviewing any records relating to such ownership interests.

 

 

Transfers of interests in Registered Global Instruments within DTC, Euroclear and Clearstream, Luxembourg will be in accordance with the usual rules and operating procedures of the relevant system. The laws in some states in the United States require that certain persons take physical delivery of securities in definitive form. Consequently, the ability to transfer a beneficial interest in a Registered Global Instrument to such persons may require that such interests be exchanged for Instruments in definitive form. Because DTC can only act on behalf of participants in DTC, who in turn act on behalf of indirect participants, the ability of a person having an interest in a Registered Global Instrument to pledge such interest to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interest may require that such interests be exchanged for Definitive Registered Instruments. The ability of the holder of a beneficial interest in any Registered Instrument represented by the Registered Global Instruments to resell, pledge or otherwise transfer such interest may also be impaired if the proposed transferee of such interest is not eligible to hold the same through a participant or indirect participant in DTC.

 

 

Bearer Instruments held outside the United States may be held in book-entry form through Clearstream, Luxembourg or Euroclear. Clearstream, Luxembourg and Euroclear will operate with respect to the Instruments in accordance with customary Euromarket practice.

 

 

 

As a result of the following restrictions, purchasers of Instruments in the United States are advised to consult legal counsel prior to making any offer, resale, pledge or transfer of such Instruments.

 

Each prospective purchaser of Legended Instruments, by accepting delivery of this Information Memorandum, will be deemed to have represented and agreed as follows:

 

(1)   Such offeree acknowledges that this Information Memorandum is personal to such offeree and does not constitute an offer to any other person or to the public generally to subscribe for or otherwise acquire Instruments. Distribution of this Information Memorandum, or disclosure of any of its contents to any person other than such offeree and those persons, if any, retained to advise such offeree with respect thereto is unauthorised, and any disclosure of any of its contents, without the prior written consent of the Bank, is prohibited.

 

(2)   Such offeree agrees to make no photocopies of this Information Memorandum or any documents referred to herein. Each purchaser of an interest in an Instrument offered and sold in reliance on Rule 144A (a "Rule 144A Instrument") will be deemed to have represented and agreed as follows (terms used in this paragraph that are not defined herein will have the meaning given to them in Rule 144A or in Regulation S, as the case may be):

(a)   The purchaser (i) is a QIB, (ii) is aware that the sale to it is being made in reliance on Rule 144A and (iii) is acquiring Instruments for its own account or for the account of a QIB;

(b)   The purchaser understands that such Rule 144A Instrument is being offered only in a transaction not involving any public offering in the United States within the meaning of the Securities Act, such Rule 144A Instrument has not been and will not be registered under the Securities Act or any other applicable securities law and may not be offered, sold or otherwise transferred unless registered pursuant to or exempt from registration under the Securities Act or any other applicable securities law; and that (i) if in the future the purchaser decides to offer, resell, pledge or otherwise transfer such Rule 144A Instrument, such Rule 144A Instrument may be offered, sold, pledged or otherwise transferred only (A) to a person who the seller reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A, (B) in an offshore transaction in accordance with Regulation S or (C) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available) and in each of such cases in accordance with any applicable securities laws of any state of the United States or any other jurisdiction and that (ii) the purchaser will, and each subsequent holder of the Rule 144A Instrument is required to, notify any purchaser of such Rule 144A Instrument from it of the resale restrictions referred to in (i) above and that (iii) no representation can be made as to the availability of the exemption provided by Rule 144A under the Securities Act for resale of Instruments.

(c)   Each Rule 144A Instrument will bear a legend to the following effect, in addition to such other legends as may be necessary or appropriate, unless the Bank determines otherwise in compliance with applicable law:

 

THIS INSTRUMENT (OR ITS PREDECESSOR) HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER, AND WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER, THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS INSTRUMENT IS HEREBY NOTIFIED THAT THE SELLER OF THIS INSTRUMENT MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS INSTRUMENT BY ITS ACCEPTANCE HEREOF REPRESENTS AND AGREES FOR THE BENEFIT OF THE BANK AND THE DEALERS THAT (A) THIS INSTRUMENT MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF SUCH RULE 144A, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) AND IN EACH OF SUCH CASES IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION, AND THAT (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS INSTRUMENT FROM IT OF THE TRANSFER RESTRICTIONS REFERRED TO IN (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF THIS INSTRUMENT.

 

 

 

 

Under Swedish law as presently in effect, payments of any principal or interest to the holder of any Instrument will not be subject to Swedish income tax, provided that such holder is not resident in Sweden and the Instruments are not attributable to a permanent establishment in Sweden of such holder.  A person is resident in Sweden if he (i) is domiciled in Sweden; or (ii) has his habitual abode in Sweden; or (iii) used to be domiciled in Sweden and, having moved abroad, continues to have an essential connection with Sweden (for example, is engaged in trade or business in Sweden).  Companies, including mutual funds, registered in Sweden are resident in Sweden for tax purposes.

 

 

 

Instruments may be sold from time to time by the Bank to Skandinaviska Enskilda Banken AB (publ) (the "Dealers") or to any other person. The arrangements under which Instruments may from time to time be agreed to be sold by the Bank to, and purchased by the Dealers are set out in a Dealership Agreement (the "Dealership Agreement" which expression shall include any amendments or supplements thereto) dated 18 October, 2006 and made between the Bank and the Dealers. Any such agreement will inter alia make provision for the form and terms and conditions of the relevant Instruments, the price at which such Instruments will be purchased by the Dealers and the commissions or other agreed deductibles (if any) payable or allowable by the Bank in respect of such purchase. The Dealership Agreement makes provision for the resignation or termination of existing Dealers and the appointment of additional or other Dealers.

 

 

Instruments have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons except in accordance with Regulation S or in certain transactions exempt from the registration requirements of the Securities Act, including Rule 144A. Terms used in the preceding sentence have the meaning given to them by Regulation S under the Securities Act. Instruments in bearer form are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to U.S. persons, except in certain transactions permitted by U.S. tax regulations. Terms used in the preceding sentence have the meanings given to them by the United States Internal Revenue Code of 1986, as amended, and regulations thereunder.

 

Each Dealer has agreed or will agree that, except as permitted by the Dealership Agreement, it has not offered, sold or delivered and will not offer, sell or deliver Instruments of any identifiable tranche, (i) as part of their distribution at any time or (ii) otherwise until forty days after the later of the date of issue of the relevant Instruments and completion of the distribution of such tranche, as certified to the Fiscal Agent or the Bank by such Dealer (or in the case of a sale of an identifiable tranche of instruments to or through more than one Dealer by each of such Dealers as to Instruments of such tranche purchased by or through it, in which case the Fiscal Agent or the Bank shall notify each such Dealer when all such Dealers have so certified) within the United States or to or for the account or benefit of U.S. persons, and it will have sent to each Dealer to which it sells Instruments during the Distribution Compliance Period relating thereto a confirmation or other notice setting forth the restrictions on offers and sales of the Instruments within the United States or to or for the account or benefit of U.S. persons.

 

Accordingly, neither the Dealers, their affiliates (if any) nor any persons acting on their behalf have engaged or will engage in any directed selling efforts with respect to the Instruments and the Dealers, their affiliates (if any) and any person acting on their behalf have complied with the offering restrictions of Regulation S.

 

In addition, until forty days after the commencement of the offering of Instruments comprising any Series, any offer or sale of Instruments of such Series within the United States by a Dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with an applicable exemption from registration under the Securities Act.

 

Notwithstanding the foregoing, Dealers nominated by the Bank may arrange for the offer and sale of Registered Instruments in the United States pursuant to Rule 144A under the Securities Act. Each purchaser of such Instruments is hereby notified that the offer and sale of such Instruments may be made in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A.

 

In addition, certain Instruments in respect of which any payment is determined by reference to an index or formula, or to changes in prices of securities or commodities, or certain other Instruments will be subject to such additional U.S. selling restrictions as the Bank and the relevant Dealers may agree, as indicated in the relevant Final Terms. Each Dealer has agreed that it will offer, sell and deliver such Instruments only in compliance with such additional U.S. selling restrictions.

 

 

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree, that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the "Relevant Implementation Date") it has not made and will not make an offer of Instruments to the public in that Relevant Member State except that it may, with effect from and including the Relevant Implementation Date, make an offer of Instruments to the public in that Relevant Member State:

 

(a)   in (or in Germany, where the offer starts within) the period beginning on the date of publication of a prospectus in relation to those Instruments which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive and ending on the date which is 12 months after the date of such publication;

 

(b)   at any time to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

 

(c)   at any time to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or

 

(d)   at any time in any other circumstances which do not require the publication by the Bank of a prospectus pursuant to Article 3 of the Prospectus Directive.

 

For the purposes of this provision, the expression an "offer of Instruments to the public" in relation to any Instruments in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Instruments to be offered so as to enable an investor to decide to purchase or subscribe the Instruments, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

 

 

In relation to each Tranche of Instruments, each Dealer has represented, warranted and undertaken to the Bank and each other relevant Dealer (if any) that:

 

(1)   Financial Promotion: it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any Instruments in circumstances in which Section 21(1) of the FSMA would not, if it was not an authorised institution, apply to the Bank; and

 

(2)   General compliance: it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Instruments in, from or otherwise involving the United Kingdom.

 

 

The Instruments have not been and will not be registered under the Securities and Exchange Law of Japan and, accordingly, each Dealer has undertaken that it will not offer or sell any Instruments directly or indirectly, in Japan or to, or for the benefit of, any Japanese Person or to others for re-offering or resale, directly or indirectly, in Japan or to any Japanese Person except under circumstances which will result in compliance with all applicable laws, regulations and guidelines promulgated by the relevant Japanese governmental and regulatory authorities and in effect at the relevant time. For the purposes of this paragraph, "Japanese Person" shall mean any person resident in Japan, including any corporation or other entity organised under the laws of Japan. No Instruments denominated in Japanese Yen shall be sold without the specific approval of the Japanese Ministry of Finance, except for Instruments which are already permitted by the Japanese Ministry of Finance.

 

 

With the exception of the approval by the UK Listing Authority of this Information Memorandum as a base prospectus issued in compliance with the Prospectus Directive and the relevant implementing measures in the United Kingdom, and other than with respect to the listing of the Instruments on the relevant stock exchange, listing authority and/or quotation system, no action has been or will be taken in any country or jurisdiction by the Bank or the Dealers that would permit a public offering of Instruments, or possession or distribution of any offering material in relation thereto, in any country or jurisdiction where action for that purpose is required. Persons into whose hands the Information Memorandum or any Final Terms comes are required by the Bank and the Dealers to comply with all applicable laws and regulations in each country or jurisdiction in or from which they purchase, offer, sell or deliver Instruments or have in their possession or distribute such offering material, in all cases at their own expense.

 

The Dealership Agreement provides that the Dealers shall not be bound by any of the restrictions relating to any specific jurisdiction (set out above) to the extent that such restrictions shall, as a result of change(s) or change(s) in official interpretation, after the date hereof, in applicable laws and regulations, no longer be applicable but without prejudice to the obligations of the Dealers described in the preceding paragraph.

 

Selling restrictions may be supplemented or modified with the agreement of the Bank. Any such supplement or modification will be set out in the applicable Final Terms (in the case of a supplement or modification relevant only to particular Instruments) or (in any other case) in a supplement to this document.

 

 GENERAL INFORMATION

 

1.   It is expected that each issue of Instruments which is to be admitted to the Official List of the UK Listing Authority and to trading on the London Stock Exchange's Gilt Edged and Fixed Interest Market and to be admitted to the Official List will be admitted separately as and when issued, subject only to the issue of a Global Instrument initially representing the relevant Instruments.

 

2.   The establishment of the Programme was authorised by a resolution of the Board of Directors of the Bank at a meeting held on 20 June, 2006.

 

3.   Neither the Bank nor any other member of the SEB Group is or has been involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Bank is aware) in the 12 months preceding the date of this document which may have or have in such period had a significant effect on the financial position or profitability of the Bank or the SEB Group.

 

4.  Since 30th June, 2006, the last day of the financial period in respect of which the most recent unaudited interim financial statements of the Bank have been published, there has been no significant change in the financial or trading position of the Bank or the SEB Group nor, since 31st December, 2005, has there been any material adverse change in the prospects of the Bank or the SEB Group.

 

5.  For the financial year ended 31st December, 2004 the financial statements have been prepared in accordance with generally accepted accounting principles in Sweden and for the financial year ended 31st December 2005 the financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"). The consolidated and non-consolidated financial statements of the Bank for the years ended 31st December 2004 and 31st December 2005 have been audited by PricewaterhouseCoopers AB in accordance with generally accepted auditing standards in Sweden and unqualified opinions have been reported thereon. The Independent Auditors of the Bank have no material interest in the Bank.

 

6.   For the financial years ended 31st December, 2004 and 31st December, 2005 the Bank's Independent Auditors appointed by its shareholders at the relevant annual general meeting were PricewaterhouseCoopers AB. PricewaterhouseCoopers AB is associated with Försäkringsföreningen Auktoriserade Revisor (FAR) and Svenska Revisorsamfundet SRS in Sweden, the institutes for the Accounting Profession in Sweden.

 

7.   For the period of fourteen days after the date of this Information Memorandum and throughout the life of the Programme, copies and, where appropriate, English translations of the following documents may be inspected during normal business hours at the specified office of the Fiscal Agent and Principal Registrar and from the principal office of the Bank, namely:

 

(a)  the Articles of Association of the Bank, together with an English translation thereof;

 

(b)  a copy of this Information Memorandum;

 

(c)  the Dealership Agreement;

(d)  the Fiscal Agency Agreement;

 

(e)  the Deed of Covenant;

 

(f)   the Deed Poll;

 

(g)  the audited non-consolidated financial statements (in English) of the Bank and the consolidated audited financial statements (in English) of the Group for the years ended 31st December, 2004 and 31st December, 2005, in each case together with the audit reports prepared in connection therewith, and any interim unaudited consolidated financial statements (in English) published subsequently to the date hereof;

 

(h)  any future/Information Memoranda, prospectuses, offering circulars and supplements (including Final Terms) and any other documents or information incorporated herein or therein by reference; and

 

(i)   in the case of any issue of Instruments admitted to trading on the Gilt Edged and Fixed Interest Market subscribed pursuant to a subscription agreement, the subscription agreement (or equivalent document).

 

8.   The Instruments have been accepted for clearance through Euroclear and Clearstream, Luxembourg. The appropriate common code, International Securities Identification Number in relation to the Instruments of each Series and any other clearing system as shall have accepted the relevant Instruments for clearance will be contained in the

Final Terms relating thereto.

 

In addition, the Bank may make an application with respect to each Series of Instruments in registered form for such Instruments to be accepted for trading in book-entry form by DTC. All payment of principal and interest with respect to Instruments denominated in any currency other than U.S. Dollars and registered in the name of the nominee for DTC will be converted in U.S. Dollars unless the relevant participants in DTC elect to receive such payment of principal or interest in that other currency. Acceptance of each Series of Instruments for trading through DTC will be confirmed in the Final Terms relating thereto. Application will be made for trading of Instruments to be issued under the Programme in PORTAL. The applicable Final Terms shall specify any other clearing system as shall have accepted the relevant Instruments for clearance together with any further appropriate information. If the Put Option is specified in the applicable Final Terms as being applicable to a Series of Instruments, whilst such Instruments are in global form the Put Option shall be exercisable through the clearance system through which such Instruments shall then be clearing.

 

The address of Euroclear is 1 Boulevard du Roi Albert II, B-1210 Brussels, Belgium, the address of Clearstream, Luxembourg is 42 Avenue JF Kennedy, L-1855 Luxembourg and the address of DTC is 55 Water Street, 25th Floor, New York, NY 10041-0099, United States.

 

9.   Save in respect of payments to individuals or to the estates of deceased individuals who or which are fiscally resident in Sweden, all amounts payable by the Bank in respect of the Instruments and the Deed of Covenant will be made free and clear of and without withholding or deduction for or on account of any taxes or duties of whatever nature imposed or levied by or on behalf of the Kingdom of Sweden or any political subdivision thereof or agency therein or thereof having power to tax.

 

10. Under EC Council Directive 2003/48/EC on the taxation of savings income, Member States are required, from 1st July, 2005, to provide to the tax authorities of another Member State details of payments of interest (or similar income) paid by a person within its jurisdiction to, or collected by such a person for, an individual resident in that other Member State. However, for a transitional period, Belgium, Luxembourg and Austria are instead required (unless during that period they elect otherwise) to operate a withholding system in relation to such payments (the ending of such transitional period being dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries). A number of non-EU countries and territories including Switzerland have agreed to adopt similar measures (a withholding system in the case of Switzerland) with effect from the same date.

 

11.  The price and amount of Instruments to be issued under the Programme will be determined by the Bank and the relevant Dealer at the time of issue in accordance with prevailing market conditions.

 

12.  The Bank does not intend to provide any post-issuance information in relation to any issues of Instruments.

 

 

REGISTERED AND PRINCIPAL OFFICE OF THE BANK   Skandinaviska Enskilda Banken AB (publ) Kungsträdgårdsgatan 8 SE-106 40 Stockholm
INDEPENDENT AUDITORS
PricewaterhouseCoopers Torsgatan 21 SE-113 97 Stockholm
DEALERS
	SEB Merchant Banking, Skandinaviska Enskilda Banken AB (publ) 2 Cannon Street London EC4M 6XX
FISCAL AGENT AND PRINCIPAL REGISTRAR
Citibank, N.A. 21st Floor, Citigroup Centre Canada Square, Canary Wharf London E14 5LB
		ALTERNATIVE REGISTRAR Citigroup Global Markets Deutschland AG & Co. KGaA Reuterweg 16 60323 Frankfurt am Main Germany   PAYING AGENTS Citibank, N.A. 21st Floor, Citigroup Centre Canada Square, Canary Wharf London E14 5LB   Citigroup Global Markets Deutschland AG & Co. KGaA Reuterweg 16 60323 Frankfurt am Main Germany   LEGAL ADVISERS   To the Bank as to Swedish law Jan Dahlén Skandinaviska Enskilda Banken AB (publ) Kungsträdgårdsgatan 8 SE-106 40 Stockholm To the Bank and the Dealer as to English law Allen & Overy LLP One New Change London EC4M 9QQ