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, OPTIONER, FONDER, TERMINER, NYSE, NAS 

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RGET, SBI, INFORMATION, HANDEL, FÖRSÄKR 

, NYSE, NASDAQ, AMEX, CBOE, WWW.TELETRA 

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ÄKRINGAR, LISTING PROSPECTUS, AKTIER, OP 

OE, WWW.TELETRAD.SE, APRIL 2000 WWW.AKT 

NADEN & ANNUAL REPORT 1999 AKTIETORGET, 














Listing prospectus in connection with the listing on the 

O-list of OM Stockholm Exchange on 19 April 2000.

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design and production: kontrapunkt printing: ljunglöfs photos: renato tan & pressens bild

TeleTrade Financial Services 

– financial services on the Internet: 

This document is essentially a translation of the swedish language version. In the 

event of any discrepancies between this translation and the original swedish document, 

the latter shall be deemed correct. 

Listing prospectus in connection with the forthcoming listing on the OM Stockholm 

Exchange O-list and Annual Report for the 1999 financial year for TeleTrade Financial 

Services AB [publ]. 

general information concerning investment 

in teletrade financial services ab [publ] 

This prospectus has been produced in connection with the forthcoming listing of 

TeleTrade on the O-list of the OM Stockholm Exchange. This prospectus may not be 

distributed in any country where distribution requires further registration measures or 

any other actions which are not in compliance with Swedish law or which violate the 

applicable laws in that country. 

The information contained in this prospectus is based on information from TeleTrade 

and publicly available and published information unless a specific source is indicated. 

While Danske Securities considers that this prospectus provides a true and 

complete picture of TeleTrade, Danske Securities cannot be held responsible for the 

outcome of any investments made based on the information contained in this 

prospectus. An investment in TeleTrade entails a high risk factor. Readers are encouraged 

to carefully study all parts of the prospectus and to pay special attention to the 

risks that are mentioned. Prospective investors must base decisions on their own 

judgement of legal, tax, financial, or other issues. Investors should consult their professional 

advisor concerning the purchase, holding, or sale of shares or other similar 

securities in TeleTrade. 

This prospectus is covered by Swedish law and any disputes arising from its content 

will be decided exclusively in accordance with Swedish law and in a Swedish court. 

Approval from OM Stockholm Exchange does not guarantee that the facts presented in 

this prospectus are true or complete. 

TeleTrade in brief 2 

Background 4 

CEO’s Statement 6 

Operations 8 

Business Area Transactions 16 

Business Area Information 20 

Business Area Insurance 24 

Financial overview and key ratios 28 

The Market 30 

Risk factors 38 

Other information 40 

The TeleTrade share 42 

The Board of Directors, Management and Auditors 47 

Tax issues affecting shareholders 51 

Articles of Association 52 

Administration Report 1999 54 

Financial Statements 60 

Audit Report 70 

Auditor’s Statement 71 

other information and definitions 

The Company’s corporate identity number is 556249-1687. 

The Company is a limited liability company and its organisational form is regulated by the 

Swedish Companies Act [1975:1385]. 

The most recent Articles of Association were approved on 4 April 1999. 

In this prospectus, TeleTrade or “the Company” refers to TeleTrade Financial Services AB [publ]. 

In this prospectus, VCW refers to VCW Internet Service AB. 

TeleTrade e-Insurance refers to JP Försäkring AB. JP Försäkring AB is changing its name to 

TeleTrade e-Insurance AB. 

NetAnalys refers to NetAnalys Dubbelslash AB. 

Danske Securities is a division within Den Danske Bank. 

financial reports 

Interim report, January–March 2000 26 April 2000 

Interim report, January–June 2000 26 July 2000 

Interim report, January–September 2000 24 October 2000 

annual general meeting 

The Annual General Meeting for TeleTrade Financial Services AB [publ] will be held at 

4 p.m. on Wednesday, 12 April 2000 at the Royal Viking Hotel, Sal Nerthus, entrance from 

Centralplan, Vasagatan 1, Stockholm, Sweden. Registration will take place from 3 p.m. 

registration: 

Shareholders wishing to attend the Annual General Meeting shall both be registered in the 

shareholders’ register maintained by VPC AB [the Securities Register Centre] as at 31 March 

at the latest and notify their interest by mail to TeleTrade Financial Services AB, Box 140 77, 

S-167 14 Bromma, Sweden or by e-mail at bolagsstamma@teletrade.se no later than 5 p.m. 

on Monday 10 April. In this notification, shareholders shall supply their name, address, 

personal identity number, and registered shareholding. Shareholders whose shares are 

registered in the name of an authorised agent through a trust department of a bank or 

through another authorised depository must request temporary registration in the shareholders’ 

register of VPC in order to be entitled to participate in the Annual General Meeting, 

and must notify their authorised agent thereof in good time before 31 March 2000.

teletrade 

in brief 

”TeleTrade shall be regarded as the leading 

Internet player in those business areas in 

which the Group operates. Our services shall 

address both basic and advanced needs and 

shall be easily accessible and functional. 

Developments shall in all respects be guided 

by the needs of the customer.” 

business concept and operations 

TeleTrade’s business concept is to offer electronically distributed 

services, primarily financial services. These shall 

be characterised by a high level of customer benefit and 

shall provide customers with both added value and 

favourable terms and conditions. 

The TeleTrade Group’s operations are divided into three 

business areas: Transactions [securities trading], Information 

[financial information], and Insurance. The Transactions 

business area is operated by TeleTrade Solutions 

AB, Information by VCW Internet Services AB and the 

associated company NetAnalys Dubbelslash AB [49%], 

and Insurance by TeleTrade e-Insurance AB [80%]. 

The business area Insurance was added in March 2000 

in conjunction with the acquisition of JP Försäkring AB. 

goals 

TeleTrade Solutions shall be the largest independent 

Internet broker in the Nordic region. 

VCW shall be the largest vertical stock market information 

portal in the Nordic region. 

VCW’s share discussion service shall be one of the 

largest in Europe. 

The online newspaper Dagens Finans shall be the 

largest daily financial online newspaper in the Nordic 

region. 

1 idc, european online brokers revolution, march 2000 2 interview with stefan fölster, swedish research institute of trade [hui] 

3 irm, institute for advertising & media statistics, november 1999 

2 

Klas Danielsson, CEO 

TeleTrade e-Insurance shall be the largest insurance 

broker for private individuals in the Nordic region. 

the market 

The Internet and new technology are rapidly changing the 

conditions for players in the financial markets. Today’s 

customers have become an integrated part of the transaction 

and analysis process and have access to large quantities 

of information. Transactions can be performed rapidly 

and inexpensively and shares, options, and shares in 

mutual funds can be bought and sold over the Internet. 

TeleTrade Solutions offer customers different types of 

securities trading services via the Internet. The market 

for securities trading is undergoing extensive changes due 

to the breakthrough of the Internet. In February 2000, 

TeleTrade Solutions had a market share of 2.45 per cent 

of all share transactions on the Stockholm Stock 

Exchange. According to an analysis performed by the 

International Data Corporation [IDC], the market for 

Internet-based securities trading in Europe is expected to 

increase from approximately 4.4 million share accounts 

during the year 2000 to approximately 16.8 million 

accounts by 2003. 1 In Sweden, approximately 25 per cent 

of all share transactions are estimated to take place via 

the Internet. 2 

TeleTrade is active within the media via the financial 

portal VCW. VCW offers various types of advertising 

services through its portal for customers wishing to reach 

VCW’s target group comprising people with a keen 

interest in finance. During February 2000, the number 

of visits to the site reached 2.4 million, according to the 

survey institute SIFO. Among finance-related Internet 

services, only Dagens Industri’s Internet Service was larger. 

The Internet advertising market is growing rapidly. The 

Institute for Advertising and Media Statistics [IRM]

TeleTrade [sek thousands] 

Solutions 1999 1998 1997 

Turnover 22,385 4,258 188 

Profit/loss -12,572 -14,604 -2,717 

[sek thousands] 

VCW 1999 1998 1997 

Turnover 2,359 1,893 1,076 

Profit/loss -1,258 -3,675 -3,982 

TeleTrade [sek thousands] 

e-Insurance 1999 1998 1997 

Turnover 22,147 11,501 5,666 

Profit/loss 679 -1,359 -2,478 

TeleTrade Solutions showed a gradual and 

strong increase in turnover during 1999 

[see page 18]. During the latter part of Q4 

2000, a current breakeven was reached. 

This positive development has continued 

during the first part of 2000. 

VCW showed a steady turnover during the 

year. Costs were reduced in 1999 compared 

to 1998, which, together with 

increased sales, improved the result compared 

to 1998. During the initial part of 

2000, the Company’s sales force will be 

expanded in order to increase advertising 

income and sales. 

After several years of strong revenue 

growth, TeleTrade e-Insurance showed 

positive earnings in 1999 [see page 26]. 

This positive development has continued 

during the first part of 2000. 

forecasts that total investments in Internet advertising in Sweden, which in 1997 

amounted to sek 61 million and increased to sek 484 million during 1999, will reach 

sek 864 million during 2000. 3 

TeleTrade e-Insurance offers private individuals different insurance solutions for both 

non-life and life insurance policies. With around 30,000 customers, it is the largest 

insurance broker for private individuals in Sweden. In 1999, the market for non-life 

insurance for private individuals in Sweden amounted to sek 21 billion. 1 In Sweden, 

the traditional insurance broker sector had combined revenues exceeding sek 1.1 billion 

during 1999. 2 Insurance brokerage on the Internet is at a very early stage. 

organisation 

In March 2000, the Group had 90 employees. The employees are divided as follows: 

4 in the parent company, 40 in TeleTrade Solutions, 7 in VCW, 38 in TeleTrade 

e-Insurance, and 1 in other subsidiaries. The associated company NetAnalys had 4 

employees. Group management includes representatives for the three different business 

areas as well as other key employees. 

customers 

With the exception of the Insurance business area, the Group’s customers and visitors 

to the Internet sites currently comprise a relatively homogenous group wherein the 

typical customer is a male in early middle-age with an extensive interest in stocks and 

shares. The Insurance customer is a high-income household from a metropolitan area. 

The customer group is gradually broadening in terms of age, sex, and interest focus as 

mutual fund and insurance services are developed and marketed via the Internet. 

financial overview 

TeleTrade anticipates very strong growth in net sales during 2000 compared to 1999, 

even if the effects of the acquisition of JP Försäkring AB are disregarded. Considerable 

market investments, market establishments and continued development of services 

during the next two years will significantly affect the operating result. The operating 

risk is therefore very high. 

Key financial ratios as of 31 December 1999 

Pro-forma 3 1999 1999 

Operating income sek 46.8 million sek 24.6 million 

Operating profit/loss sek -19.4 million sek -18.3 million 

Equity/assets 34% 21% 

Total number of 

employees at year-end 61 27 

outlook 

The outlook for continued strong growth during 2000 is very good. The Group’s services 

are established and among the leading services in their respective areas. There is 

a high and growing interest among the general public in personal finance. Internet 

usage continues to grow, and is particularly strong within financial services and share 

trading. The Group’s continued expansion is based on significantly greater investments 

in development and marketing and on an anticipated continued high stock 

exchange turnover. VCW’s result is also dependent upon the advertising market and 

its acceptance of the Internet as a medium. Expansion in to the other Nordic markets 

for the business areas Transactions and Insurance is being planned during the year. 

1 swedish insurance federation 2 risk and insurance newsletter from försäkringsmäklarguiden 2000 [insurance brokers guide 2000] 

3 in preparing the pro-forma figures for 1999, teletrade e-insurance has been taken into account from 1 jan 1999, when teletrade 

e-insurance’s result was recalculated in connection with the company changing its accounting principle for revenue recognition as 

of 1 january 2000 [see page 30 for further details]. 

3

ackground 

The TeleTrade Financial Services AB [publ] 

Group was founded on 31 December 1998 when the then 

Venture Capital World i Göteborg AB [publ] acquired 

D&P Danielsson & Partners Financial Services AB, 

owner of the Internet broker TeleTrade, via a directed 

non-cash issue. A group focusing on financial information 

and transaction services was created with the Internet 

as its primary communication medium. 

After a public new share issue in 1997, the VCW share 

became listed on the “Göteborgslistan”. As of 9 February 

1999, the new group was unofficially listed under the 

name TeleTrade at Aragon Fondkomission AB. On 16 

December 1999, the share was listed on the New Market 

list in the OM Stockholm Exchange’s SAX system in 

order to increase possibilities for more liquid trading of 

the TeleTrade share. 

During 1999, a preferential rights issue, two directed 

issues, and the exercise of an option loan provided the 

Company with a total of sek 23.9 million after issue 

expenses. The purpose of these transactions was to financially 

strengthen TeleTrade as the market grew and developed. 

In January 2000, a new share issue directed at a 

limited group of institutional investors provided the 

Company with a total of sek 44.9 million after issue 

expenses. One reason for this issue was to increase the 

Internet broker TeleTrade Solutions’ restricted equity to 

4 

sek 45 million in order to be eligible for a permit from 

the Financial Supervisory Authority allowing the Company 

to manage customers’ funds held in securities 

accounts as operating capital. This authorisation was 

granted in March 2000, and considerably increases Tele- 

Trade’s earning potential since it provides the conditions 

necessary to offer customers competitive services, such as 

the pledging of shares. The pledging of shares and thereby 

the interest rate spread between deposits and lending 

is a considerable source of income in this line of business. 

An extraordinary general meeting held by TeleTrade on 

13 March approved the Board’s proposal for a non-cash 

issue of 653,000 shares in return for the acquisition of 80 

per cent of the shares in JP Försäkring AB. An agreement 

was also signed with JP Försäkring AB’s management 

concerning the acquisition of the remaining 20 per cent 

of shares. The decision of the extraordinary general meeting 

led to the formation of a business area, Insurance, 

in addition to the previous business areas Information 

[financial information] and Transactions [securities trading]. 

From May 1999 until the start of 2000, the TeleTrade 

share has developed favourably and liquidity has been 

relatively good. In order to further improve conditions 

for trading in the TeleTrade share, the Board of Directors 

resolved to apply for a listing of the share on the O-list

of the OM Stockholm Exchange. A listing on the OM Stockholm 

Exchange is deemed to provide numerous advantages for both the Company 

and its shareholders. 

A listing on the O-list increases the possibilities of obtaining a larger 

number of institutional shareholders as an O-listing better meets the 

applicable investment regulations for institutional investors. Increased 

institutional ownership contributes to greater interest from analysts and 

media covering the Company. The attention on TeleTrade should lead to 

better share liquidity and thereby to a more effective pricing. Each trading 

unit will comprise 500 shares. 

Assuming that TeleTrade’s application for a listing on the O-list is 

approved by the corporate committee of the OM Stockholm Exchange, 

the listing is estimated to take place around 17 April 2000, in conjunction 

with the share’s removal from the New Market list. TeleTrade shares are 

not the subject of a listing or application for a listing in any country 

other than Sweden. 

For other information, please refer to the details presented in this 

prospectus, which has been prepared in conjunction with the Company’s 

application for a listing on the O-list of the OM Stockholm Exchange. 

The Board of Directors of TeleTrade is responsible for the content of this 

prospectus. The Board hereby provides assurance that, to the best of their 

knowledge, the information herein agrees with actual circumstances and 

nothing of importance has been omitted that could affect the picture of 

TeleTrade that is presented in this prospectus. 

Stockholm, 27 March 2000 

The Board of Directors of TeleTrade Financial Services AB [publ] 

5

ceo’s statement 

We offer market leading services and we are 

growing rapidly. Our listing provides opportunities 

to participate in acquisitions/mergers. 

TeleTrade is a rapidly growing supplier of Internet-based 

financial services. Growth in the number of 

customers and users during 1999 was explosive and good 

growth has continued during the initial part of 2000. 

In less than two years, we have achieved a market share 

of approximately 2.5 per cent of the total transactions on 

the Stockholm Stock Exchange. In competition with 

established players, we have created Sweden’s largest 

dedicated stock exchange information service on the 

Internet, with one of the largest stock market discussion 

forums in Europe. We are now moving into two closely 

related areas that will most likely show strong growth in 

the near future. These are a complete online trading 

service for mutual funds, a kind of “mutual fund supermarket”, 

and a total online insurance service offering 

both non-life and life policies. As well as providing 

increased growth, these areas will spread risks. Trading in 

mutual funds will generate a steady flow of stock-based 

income in the long term while insurance brokerage is less 

sensitive to the general stock market climate than share 

trading. 

The growing interest in the stock market and personal 

finance shown by private individuals has brought about 

powerful growth in the search for relevant financial 

information during 1999. This has worked to VCW’s 

advantage, as they hold a unique position on the Internet, 

offering by far the largest stock market discussion 

6 

service in Sweden. For many of those interested in stocks 

and shares, visiting VCW in order to search for information 

concerning a particular share has become a must 

during the past year. During 1999, growth was up to 500 

per cent in terms of the number of visits, page exposures, 

users, and number of contributions to www.vcw.se. 

VCW is now well equipped for the possibilities that the 

growing Internet advertising market brings, not least in 

continuing to provide the TeleTrade Group with considerable 

value within marketing and sales. The Information 

business area was expanded during the autumn of 1999 

with a 50 per cent shareholding in NetAnalys. NetAnalys 

publishes the daily Internet newspaper Dagens Finans, 

which is unique by virtue of its interactive features and 

the fact that it is published in the afternoon before the 

stock exchange closes. The shareholding in NetAnalys is 

a part of our strategy to create added value for shareholders 

on the basis of our existing customers and visitors. 

During the latter part of 1999, we estimate that approximately 

25 per cent of total transactions on the Stockholm 

Stock Exchange were made via the Internet. We anticipate 

that growth will continue during the coming years 

until 70-80 per cent of share transactions on behalf of 

private individuals will take place over the Internet. We 

also believe that Internet-based trading in mutual funds 

will really begin to take off during 2000. 

The structural development within securities trading 

could prove very advantageous for an Internet broker 

such as TeleTrade Solutions. Extended opening hours, 

a proposal for tax-deferred transfers of mutual fund 

savings, stock exchange co-operations across borders 

and new market places such as the OM Stockholm 

Exchange’s recently announced JIWAY greatly increase 

the potential for TeleTrade Solutions. 

We have recently moved into a new business area, insurance. 

Online brokerage of non-life and life insurance

Growth in visits to VCW 

source: mmxi nordic/sifo interactive media 

The graph shows the growth in the number 

of visits to www.vcw.se between January 

1999 and February 2000. 

Percentage of total transactions on 

the Stockholm Stock Exchange 

represented by TeleTrade Solutions 

source: om stockholm exchange 

The graph shows growth in market share for 

the Internet broker TeleTrade Solutions as a 

percentage of total transactions on the Stockholm 

Stock Exchange between January 1999 

and February 2000. 

policies for private individuals is an undeveloped area where TeleTrade has good 

opportunities to act as an innovator and to become a market leader. TeleTrade e- 

Insurance is Sweden’s largest insurance broker for private individuals. Our Internet 

service is now being launched, thus greatly increasing our potential customer base. 

Extensive synergies in sales and marketing between the insurance service and Tele- 

Trade Solutions are expected. In order to create the optimum synergy effect, the 

insurance service will be integrated and offered via the same web site as the Internet 

broker, www.teletrade.se. We intend to create the market’s most complete 

Internet service with shares, options, futures, mutual funds and insurance policies 

on offer. 

We face many challenges in the year 2000. We must continue to develop and 

improve our services at a rapid rate. Information and trading systems must be 

continually developed and improved in order to live up to the high demands that 

customers place on accessibility and speed. Our high demands on accessibility and 

service are reflected in the strategy we presented in March 2000, entitled Plan 

100%. Plan 100% aims to ensure that TeleTrade Solutions’ trading system will 

offer 100 per cent accessibility during market opening hours by year-end 2000. 

Our powerful growth places high demands on the organisation. We must not forget 

that the customer always has centre stage. One of our most important qualitative 

goals during 2000 is to offer the best customer service without sacrificing our 

rate of growth. 

In tests, TeleTrade Solutions has been ranked the number one Internet broker on 

two occasions during 1999. Smart joint ventures – such as www.itaktier.idg.se, 

where TeleTrade Solutions and VCW together with IDG have created an Internet 

service focused on IT stock integrated with trading - provide good examples of 

TeleTrade’s strategy of smart business development. During 2000, TeleTrade Solutions 

aims to establish itself as a “Top of Mind” player. Consequently, we are 

expanding our marketing budget considerably, primarily during Q2 and Q3 2000, 

and will be seen both on TV and outdoor billboards. TeleTrade Solutions aims to 

become the largest independent Internet broker in the Nordic region. This can be 

achieved through both organic and structural growth. 

Our business areas are set for strong growth during 2000. By February 2000, the 

number of visits to VCW’s site had doubled compared with December 1999. 

The number of securities accounts at TeleTrade Solutions has continued to grow 

strongly. With the mutual fund supermarket and the new Insurance business area, 

we are entering new and interesting growth areas on the Internet. 

Income is expected to increase considerably during 2000 compared with 1999. 

A favourable development will enable possible positive earnings, despite the prioritising 

of high growth and expansion, the development and launch of new services, 

and extensive marketing activities. As a result of the Group’s powerful 

expansion, our capital base will need strengthening during the year. 

We have come a long way in our endeavour to become a comprehensive supplier 

of Internet-based financial services. We offer market leading services and we are 

growing rapidly. Our listing will provide us with opportunities to participate in 

structural deals. 

Klas Danielsson, CEO 

7

operations 

The Group’s Internet services create considerable 

synergy values within marketing, 

development and information distribution. 

the teletrade group 

The TeleTrade Group’s operations are divided into three 

business areas: Transactions [securities trading], Information 

[financial information], and Insurance. 

The Transactions business area operates in the whollyowned 

subsidiary TeleTrade Solutions AB. TeleTrade 

Solutions is an Internet broker and is a member of the 

OM Stockholm Exchange. During spring 2000, we plan 

to become members of the stock exchanges in Oslo, 

Copenhagen, and Helsinki. Our operations are conducted 

under the supervision of the Swedish Financial Supervisory 

Authority. TeleTrade Solutions offers a complete 

securities account service for online trading in shares, 

options, futures, and mutual funds. During spring 2000, 

TeleTrade Solutions will broaden its service content to 

include a “mutual fund supermarket” and the possibility 

to trade on several Nordic stock markets. In September 

1999, TeleTrade Solutions was named Sweden’s best 

Internet Stockbroker for 1999 by the publications 

Privata Affärer and Internetworld. 

The Information business area is operated by the whollyowned 

subsidiary VCW Internet Services AB and by 

NetAnalys Dubbelslash AB, in which the Group owns a 

49 per cent shareholding. The services offered include 

different types of financial information on the Internet 

sites www.vcw.se and www.netanalys.se. One of Europe’s 

8 

largest stock market discussion forums is located on 

www.vcw.se, and NetAnalys publishes a daily financial 

Internet newspaper, Dagens Finans. Currently, none of 

the services are pay-services and income is therefore 

dependent on media and advertising. www.vcw.se is one 

of Sweden’s largest financial web sites. Dagens Finans is 

to date Sweden’s only daily financial Internet newspaper. 

The Insurance business area is operated by the subsidiary 

and insurance broker TeleTrade e-Insurance. TeleTrade e- 

Insurance is Sweden’s largest private broker within nonlife 

and life insurance. Operations were started in 1995 

under the name JP Försäkring and the number of customers 

is approximately 30,000. The planned launch of 

an Internet-based insurance service should take place 

during the year, offering private individuals recommendations 

for improved insurance solutions based on their 

needs and preferences. TeleTrade e-Insurance will then 

take care of both cancelling old policies and arranging 

new policies. 

Within several areas, the Group’s customers and users 

belong to the same target group, which combined with 

the size and strength of the Group’s Internet services creates 

extensive cross-over opportunities and synergy values 

within marketing, development, and information distribution. 

business concept 

TeleTrade’s business concept is to offer electronically distributed 

services, primarily financial services. These shall 

be characterised by a high level of customer benefit and 

shall provide customers with both added value and 

favourable terms and conditions.

the teletrade group 

vision 

TeleTrade shall be regarded as the leading Internet player in those business 

areas in which the Group operates. Our services shall address both 

basic and advanced needs and shall be easily accessible and functional. 

Developments shall in all respects be guided by the needs of the customer. 

goals 

TeleTrade Solutions shall be the largest independent Internet broker in 

the Nordic region. 

VCW shall be the largest vertical stock market information portal in 

the Nordic region. 

VCW’s share discussion service shall be one of the largest in Europe. 

The online newspaper Dagens Finans shall be the largest daily financial 

online newspaper in the Nordic region. 

TeleTrade e-Insurance shall be the largest insurance broker for private 

individuals in the Nordic region. 

qualitative goals 

Our systems shall achieve 100 per cent accessibility. 

We shall offer the best customer service in the business. 

We shall have a very high proportion of satisfied customers and 

visitors. 

Our customers and visitors shall recommend us highly. 

The needs of the customer shall be central to our development. 

Our brokerage services shall be objective and shall take the customer’s 

needs into account. 

We shall be viewed as an attractive employer and personnel turnover 

shall be low. 

financial goals 

growth 

The Board of Directors has set a goal for continued strong growth in net 

sales during 2000. In 2000, the Group will prioritise turnover growth and 

customer growth. 

margin 

TeleTrade’s operating result and thereby its operating margin will be 

9

affected negatively over the next two years by the significant 

investment in growth. The Board of Directors has 

set a long-term goal for TeleTrade to achieve a profit 

margin of 20 per cent. 

cash and solidity 

TeleTrade’s operations are currently in an expansive 

phase. The operating risk is therefore very high. It is the 

Board’s goal that TeleTrade shall always have adequate 

net cash funds. As TeleTrade Solutions is a securities 

company, the nature of its operations means that traditional 

methods of measuring solidity are irrelevant. Due 

to its area of operations, the Group is covered by capital 

adequacy regulations. Captial adequacy shall not fall 

below 10 per cent. As a result of the Group’s powerful 

expansion, its capital base will need strengthening during 

the year. 

strategy 

The new economy requires new ways of working. The 

management and personnel of an Internet company 

operating in a competitive area must be very creative and 

actively seek out change and new possibilities. TeleTrade 

works in accordance with what is known as a “smart” 

working approach. This entails, among other things, the 

use of new approaches and non-traditional marketing, 

such as exchanging services and co-operating with other 

media and Internet service companies. In order to attain 

our quantitative and qualitative goals, we must base our 

strategy on the following main elements: 

Highly aggressive business development with short 

decision routes. 

Senior management shall possess high levels of expertise 

within relevant business areas. 

Smart marketing and sales with smart partners and 

owners. 

10 

Each individual business area and service shall be 

market leading and shall provide customers with 

added value. 

Synergy effects shall exist between all business areas 

so as to create increased shareholder value, based on 

existing customers and users. 

history 

TeleTrade Financial Services AB [publ], then named 

Venture Capital World i Göteborg AB [publ], began 

operations in the beginning of 1997, after issuing shares 

to the general public providing the Company with sek 12 

million. The share was unofficially listed on the “Göteborgslistan”. 

Operations primarily consisted of stock market related 

information provided on the Internet. Income came 

purely from advertising. During both 1997 and 1998, the 

Company’s work was characterised by the establishment 

and marketing of its Internet site. The Company’s strategy 

was to position itself in preparation for the breakthrough 

and development of Internet advertising. 

Through active development work and sensitivity to the 

wishes of investors, the Company’s web site soon became 

one of the most visited in the Nordic region by people 

with an interest in the stock market. The definitive 

breakthrough for Internet advertising, however, was yet 

to come. 

In November 1998, the boards of VCW and the Company 

then known as D&P, Danielsson & Partners Financial 

Services AB [D&P], decided to propose a merger of the 

two companies. A number of collaborative and synergy 

effects could be identified, not least since the companies 

shared the same target group.

In technical terms, the merger took the form of an acquisition when 

VCW directed an offer to D&P shareholders to acquire D&P stock in 

return for newly issued VCW shares. For each D&P share, 8.95 VCW 

shares were offered. Equivalent offers in the form of subscription warrants 

were directed to the holders of subscription warrants in D&P [the 

employees]. After the merger, approximately 30 per cent of VCW was 

owned by the previous owners and approximately 70 per cent by D&P’s 

previous owners. This ratio was based on the equity in VCW and D&P as 

reported on 31 October 1998. A group was established with its primary 

focus on financial services using the Internet as the primary communication 

medium. The parent company changed its name to TeleTrade Financial 

Services AB [publ] and operations were transferred to the subsidiaries 

TeleTrade Solutions AB and VCW Internet Services AB. 

In March 1999, the Company obtained a new, strong principal shareholder 

in the form of the world’s largest IT-media group, IDG International 

Data Group, through its Swedish subsidiary IDG International Data 

Group AB. The parent company of the IDG Group has its registered 

office in Boston, USA. Operations in the form of magazine publication 

and associated Internet services are conducted in over 70 countries. 

In November 1999 TeleTrade acquired 49 per cent of the capital and voting 

rights, in addition to subordinated loans with warrants entitling new 

subscriptions to 1 per cent of the capital and voting rights, in NetAnalys 

Dubbelslash AB. The acquisition was a step in the TeleTrade Group’s 

expansion within the Information business area. As a result of this acquisition, 

TeleTrade Solutions’ customers and VCW’s visitors can now obtain 

market comments and added value services within market analysis. 

NetAnalys publishes a number of analysis services as well as the online, 

daily financial newspaper Dagens Finans. 

In March 2000, TeleTrade acquired 80 per cent of JP Försäkring AB, 

which is currently changing its name to TeleTrade e-Insurance AB. An 

agreement has been signed by TeleTrade e-Insurance’s management concerning 

the acquisition of the remaining stock. The third business area, 

Insurance, provides the Group with additional synergy gains in the form 

11

teletrade’s legal structure in march 2000. during 2000, teletrade & associates intends to merge 

with the parent company. 

of a broader customer base and economies of scale for IT 

systems, development, sales, marketing, and administration. 

The acquisition also entails lower operational risks 

for the Group as insurance brokerage activities are not 

dependent on the stock market climate. TeleTrade e- 

Insurance is currently generating a surplus, which will to 

a larger extent be used to finance the development and 

launch of the insurance brokerage service on the Internet. 

The acquisition will not entail any changes in the 

operations of the parent company. Group management 

has been expanded with representatives from TeleTrade 

e-Insurance. 

TeleTrade e-Insurance’s existing management founded 

the company almost five years ago. The members of 

management have valuable contacts within the industry 

and extensive expertise in both non-life and life insurance 

brokerage for private individuals. 

organisation 

In terms of operations, TeleTrade’s three business areas 

currently comprise a Group with three subsidiaries and 

one associated company. In addition, there are a further 

four subsidiaries in Sweden and one in Norway. In 

March 2000, the Group had a total of 90 employees. The 

Head Office has recently relocated to new premises in 

Alviksstrand in Bromma, Stockholm, from where the 

parent company and the Internet broker TeleTrade Solutions 

are run. VCW operates out of Gothenburg, 

although certain sales personnel are located in Stockholm. 

The main part of TeleTrade e-Insurance’s operations 

are run from Stockholm, but not in the same 

12 

offices as the parent company. TeleTrade e-Insurance has 

a local branch office in Malmö and is now establishing a 

branch office in Gothenburg. 

TeleTrade’s management group comprises Klas Danielsson 

[President and CEO of TeleTrade Financial Services AB 

[publ], and President of TeleTrade Solutions], Mats 

Sjölin [Acting Vice President of TeleTrade Solutions], 

Anders Råge [CFO & Compliance Officer], Eva Feigin 

[Head of Administration], Juan Segura [Head of IT and 

Systems Development], Anders Karlsson [President of 

VCW], Thomas Irstam [President of TeleTrade e-Insurance], 

and Johan Zethreaus [Head of Internet, TeleTrade 

e-Insurance]. 

employees 

TeleTrade offers services to the general public in a rapidly 

changing market. Consequently, knowledge and servicemindness 

among employees is a key to success. 

TeleTrade’s role towards its customers requires extensive 

commitment from our employees. It is essential that 

TeleTrade both attracts and retains qualified personnel. 

TeleTrade currently has approximately 90 employees, a 

large percentage of which are graduates. During the initial 

part of 2000, around twenty new employees have 

been recruited, and more will be recruited throughout 

the year. It is important that TeleTrade continually incorporates 

new innovative services and builds up knowledge 

around these. A large part of the development of expertise 

takes place on an ongoing basis in conjunction with 

the development of new products. Of TeleTrade’s 90 

employees, 10 currently hold options in the Company.

Since operations have expanded strongly and the number of employees has 

increased, a new options scheme will be initiated in March/April 2000. The 

new options scheme will be open to all employees. 

customers 

TeleTrade’s target group encompasses the entire spectrum of investors in 

shares and mutual funds, as well as people wishing to take out insurance 

policies. Historically, TeleTrade has attracted customers with high demands 

accessibility and quality of service. These customers often trade in individual 

shares and are inclined to try new brokerage services with high service content 

- typical “early adopters”. In addition to this customer category, as Tele- 

Trade gradually broadens its service content, it is now gradually targeting the 

customer category comprising investors in mutual funds. The target group 

will be expanded further with the Insurance business area. 

TeleTrade Solutions’ average customer is a male, aged around 35, with a securities 

account balance of sek 150,000‒200,000. There are few female customers 

at present, but this is expected to increase after the launch of the 

expanded mutual funds service. Over 95 per cent of visitors to VCW’s site 

are men. The average age is 35 years. Average visitors have strong capital 

holdings, with 22 per cent controlling more than sek 1 million. In addition, 

the average visitor is an active investor, conducting at least one transaction a 

week. 

The typical VCW visitor uses VCW daily and states that s/he reads the commercial 

messages on the site. The most important media when searching for 

information on which to base a stock investment are business newspapers 

and VCW. 

TeleTrade e-Insurance’s customer base can be characterised as follows: 

Customers in metropolitan areas [Stockholm, Gothenburg and Malmö] 

More and larger objects insured than the average customer 

Aged 30‒55 years 

TeleTrade Solutions’ and VCW’s customers are very similar, which provides 

the Group with considerable advantages. The coming launch of TeleTrade 

Solutions’ “mutual fund supermarket”, enabling trading - including monthly 

savings plans - in the majority of the mutual funds currently available in 

Sweden will bring with it extensive synergies with the Internet-based Insurance 

service. 

it and development strategy 

TeleTrade’s senior management members have extensive experience from the 

financial markets. Previous positions as MD, head trader, trading manager, 

broker, Market Maker, and option trader, within various brokers and banks 

have provided knowledge and insight concerning the importance of systems 

and the operational dependence on them. This insight has resulted in Tele- 

Trade’s in-house development department of approximately 10 people. This 

department comprises an important part of continual system development. 

Expertise is also held within web development, design, and graphic work. 

13

TeleTrade’s development department creates great flexibility 

for rapid changes and the possibility to operate living 

and variable Internet sites. Broad expertise within the 

Group is also a prerequisite if TeleTrade is to be able to 

collaborate with other Internet sites in a cost-effective 

manner. The latest example of such collaboration is 

www.itaktier.idg.se, a site developed through co-operation 

between TeleTrade and IDG. TeleTrade’s aim is to 

maintain deep, broad IT expertise within the Group. 

When specialist expertise is needed during certain larger 

projects, external consultants are employed. 

To a large extent, TeleTrade Solutions bases its securities 

trading systems on the OM Stockholm Exchange’s different 

systems and services via its subsidiaries OM VPA 

Värdepappersadministration AB [VPA] and Research & 

Trade AB [RaT]. For back office functions and account 

management, TeleTrade Solutions co-operates with VPA, 

which was recently sold to JIWAY, which in turn is partly-owned 

by OM Stockholm Exchange. JIWAY is the 

recently announced European electronic stock exchange, 

with operations scheduled to begin in September 2000. 

For trading systems and system platforms interfaced with 

stock exchanges, TeleTrade Solutions co-operates with 

RaT, a leading development company within risk control 

and trading systems for stockbrokers and banks, both in 

Sweden and abroad. RaT has created system connections 

to a number of European electronic stock exchanges. 

TeleTrade Solutions’ collaboration strategy with RaT and 

VPA creates great opportunities for both market and 

geographic expansion. 

According to a strategy called Plan 100%, TeleTrade Solutions’ 

Internet broker service shall attain 100 per cent 

accessibility. Plan 100% was established in March 2000 

and stretches to year-end 2000. This strategy entails that 

no internal element at TeleTrade Solutions shall prevent a 

customer from gaining access to the trading site via the 

Internet, cellular handsets, or any other communication 

channel during market opening hours. This also entails 

that systems have the capacity to manage extreme increases 

in activity, such as during a stock market crash. 

14 

outlook 

The prospects for continued strong growth during 2000 

are very good. The Group’s services are established and 

market-leading in their respective areas. The general public’s 

interest in private finances is high. Use of the Internet 

continues to grow, especially with regards to financial 

services and share trading. 

The structural developments, such as extended exchange 

opening times, favour TeleTrade. One possible future 

development, tax-deferred transfers of mutual fund savings, 

and the OM Stockholm Exchange’s recently 

announced plans to start JIWAY, the new electronic 

European stock exchange, create very interesting business 

opportunities. TeleTrade’s systems are already adapted to 

JIWAY to a large extent. 

Many predict that the Internet advertising market will 

experience strong growth during 2000. This growth, 

together with a strengthened sales organisation, shall lead 

to VCW’s advertising income increasing more than market 

growth during 2000. The possibility of receiving 

Company stock in exchange for marketing services could 

create interesting opportunities for VCW. 

During the year, a number of different services will be 

launched. Nordic stock trading, a mutual fund supermarket 

and Internet-based insurance brokerage are a few 

of them. Extensive and comprehensive development 

work is continually conducted on the Group’s systems. 

Among other things, this will lead to extended functionality 

and improved accessibility. TeleTrade Solutions will 

implement a completely new trading system. During Q3 

2000, TeleTrade e-Insurance intends to launch an Internet-based 

insurance brokerage service integrated with the 

other services available at www.teletrade.se. 

Together, the Group’s services with the extensive synergies 

between the marketing and sales activities existing in 

the Group have the prerequisites to grow faster than both 

the market and the competition.

usiness area 

transactions 

”TeleTrade currently offers the most 

advanced comprehensive service among 

all Internet brokers.” 

teletrade solutions ab – 

the internet broker 

This business area consists of one company, TeleTrade 

Solutions AB, which was founded in April 1997. 

The Company is an Internet broker in that the major 

part of its operations are conducted over the Internet. It 

is a securities broker in that its activities are subject to 

authorisation and supervision by the Swedish Financial 

Supervisory Authority. Authorisation by the Financial 

Supervisory Authority was obtained in October 1997 and 

TeleTrade Solutions AB was awarded membership of the 

OM Stockholm Exchange in December of the same year. 

During Q1 2000, TeleTrade was approved as a member 

of stock exchanges in Copenhagen, Oslo, and Helsinki. 

These memberships are expected to enter into force 

before the end of the year. The Company offers a complete 

custody service for securities trading over the Internet, 

mainly to private customers. In addition, trading 

solutions for institutions are offered under the name 

TeleTrade Professional. 

In March 2000, about 40 people were employed by the 

Company. These employees work primarily with customer 

services, administration and development. 

Quoted in connection with TeleTrade Solutions being 

named ”Best Internet Broker in Sweden” in September 1999 

Following a new share issue in the beginning of 2000, 

TeleTrade Solutions has a share capital of sek 20 million 

and restricted equity of sek 45 million. It therefore meets 

16 

the criteria of the Financial Supervisory Authority for eligibility 

to act as a bank and traditional stockbroker by 

managing customers’ funds held in securities accounts as 

operating capital. The government deposit insurance 

covers customers’ deposited funds to an amount of sek 

250,000. Customers’ Swedish shareholdings are nominee 

registered with the VPC. 

services 

TeleTrade’s customers conduct their securities trading 

transactions primarily via the Internet. Via the Internet, 

customers have access to a large number of free information 

services such as share prices, account details, news 

and market comments. 

Trading services are offered via several different solutions. 

From the home page, customers can log in to either 

Basic or Classic, providing trading at a basic level or a 

more advanced level. The most sophisticated service 

offered is a trading application that the customer installs 

onto his or her own computer. For institutions and larger 

clients, TeleTrade also offers direct trading services using 

TeleTrade’s systems via a leased circuit connection under 

the name TeleTrade Professional. 

TeleTrade Solutions’ services includes standard information 

services such as share prices, graphs, account details, etc. 

TeleTrade Share Trading – complete equity trading on 

the Swedish market. All shares and warrants on the 

Stockholm Stock Exchange, the SBI-list, and unofficially 

listed shares. Equity trading on the American 

market. During the year, trading on the Norwegian, 

Danish, and Finnish markets will be added, as well as 

on the soon-to-be-launched European market place, 

JIWAY.

TeleTrade Solutions’ trading services 

Share trading in Sweden: OM Stockholm 

Exchange 

SBI 

Unofficial shares 

Lending against securities 

in accordance 

with standards set by 

the Swedish Bankers’ 

Association 

Share trading in Denmark: Planned start Q2 2000 

Share trading in Norway: Planned start Q2 2000 

Share trading in Finland: Planned start 

Q3-Q4 2000 

Share trading in the USA: NYSE 

NASDAQ 

AMEX 

Option trading in Sweden: OM, buying and 

writing 

Buying and selling 

futures 

Option trading in the USA: CBOE 

Buying options 

Futures trading in Sweden: OM 

TeleTrade Mobile: Trading and 

information via 

mobile phones 

Mutual fund trading 

in Sweden: Trading with 

mutual funds, will 

be extended to 

“mutual fund supermarket” 

in Q2 2000 

Free information services 

Share prices with 1 minute delay 

Option prices with 1 minute delay 

Futures prices with 1 minute delay 

Options school 

Mutual fund prices and graphs 

Trade confirmations on the Web 

Reuters news in real-time 

Charts and graphs 

Securities account information and balance 

TeleTrends, analyses and market comments 

Technical analysis 

TeleTrade Option Trading – complete option and futures trading on OM. 

Buying and writing of options and buying and selling of options online. 

TeleTrade Mutual Funds – trading in mutual fund shares in registered 

Swedish funds. This service will be expanded to include all Swedish mutual 

funds on the market, thereby forming a comprehensive “fund supermarket”. 

TeleTrade Mobile – trading in Swedish stocks via mobile phones. 

TeleTrends – analyses, news, and comments on the Swedish stock market. 

There is no charge for opening a securities account with TeleTrade, but 

customers are obliged to make a minimum deposit of sek 10,000 in cash 

and/or securities. 

business development 

Extensive business development aims to constantly develop and improve the 

quality of our services. Business develop will also contribute to lowering the 

marketing costs per customer. By functioning as a content provider for other 

Internet services, primarily with regard to share and option prices, TeleTrade 

increases the public’s awareness of the Company and its services. The web site 

www.itaktier.idg.se is one example of a major project where TeleTrade and 

IDG have jointly developed a complete information and trading service 

focused on IT shares. 

developments during 1999 and the beginning of 2000 

For the Internet broker TeleTrade Solutions AB, the year 1999 was characterised 

by very strong expansion and huge success. The number of customers 

has drastically increased. The number of accounts opened during the year 

increased from 3,500 to 18,000, which represents an increase of 414 per cent. 

During the same period, the number of active accounts increased by 700 per 

cent, from 1,000 to 8,000. 

The increase in customers has continued in the beginning of 2000. By the end 

of February 2000, around 25,000 customers had opened an account with Tele- 

Trade Solutions. Of these, around 11,000 can be regarded as active customers. 

In May 1999, TeleTrade Solutions was named as Sweden’s best Internet broker- 

17

Growth in commission income 


age site by Internetworld magazine. In September 1999, 

following the largest and most comprehensive test undertaken 

in Sweden to date, TeleTrade Solutions was named 

as the “Best Online Broker in Sweden” by the magazines 

Privata Affärer and Internetworld. The jury motivated 

their decision by saying that “TeleTrade currently offers 

the most advanced comprehensive service among all 

Internet brokers.” 

The extremely active stock market climate, combined 

with increased marketing efforts and the awards and distinctions 

earned, resulted in strong growth for TeleTrade 

Solutions during the autumn. There was a strong rise in 

the number of customers and transactions, as well as in 

market share and income. This strong growth put great 

pressure on the systems and the organisation. Starting 

late summer, work started to expand TeleTrade Solution’s 

systems. This work is still in progress. During Q1 2000, 

further extensive upgrades were performed. The number 

of employees in TeleTrade Solutions AB increased during 

1999 from 10 to 23. In February 2000, TeleTrade Solutions 

relocated to new, larger premises and around 20 

additional employees were recruited. As the organisation 

expands, customer service levels are being improved. The 

aim is to offer the best customer service in the industry 

before the end of the year. 

turnover and earnings 

Turnover for 1999 amounted to sek 22.4 million [sek 4.3 

million]. For 1999, the Company reports a loss of sek - 

12.6 million [sek -14.6 million]. During December 1999, 

the Company showed positive earnings. 

outlook 

The Company’s services are established and market leading 

in their respective areas. Public interest in private 

finances is high and rising. Internet usage continues to 

Number of transactions per day 

on the Stockholm Stock Exchange 


18 

Growth in number of accounts 

rise and is particularly high for financial services and 

equity trading. 

The Company’s operations showed strong growth in 

1999, partly due to market leading, high quality services, 

and partly due to market growth and other market factors. 

There is large potential for continued growth since a 

large number of market indicators point to this. These 

include: 

High stock exchange turnover. 

Increase in number of listed companies. 

Increase in international trading. 

Expanded electronic equity trading. 

Share ownership increasing among private investors. 

Increased interest in and awareness of personal 

finances. 

Online trading in mutual funds now offered in addition 

to shares and options. 

Greater Internet penetration. 

Trading via mobile phones, WAP, handsets, etc. 

The structural developments favour TeleTrade. Extended 

trading hours, the proposal for tax-deferred transfers of 

mutual fund savings, and the plans announced by OM 

Stockholm Exchange in February 2000 to launch JIWAY, 

the new electronic European stock exchange, create very 

interesting future prospects. TeleTrade Solutions’ systems 

are already largely adapted for JIWAY system solutions. 

During the year, the Company intends to launch a number 

of different services. The Company plans to launch a 

“mutual fund supermarket” before the summer, which 

will enable trading and monthly saving in most of the 

funds currently available on the market. Membership of 

the stock exchanges in Norway, Denmark and Finland 

and the subsequent launch of a pan-Nordic service are



represented by TeleTrade Solutions 


The graph shows growth in market share for 

the Internet broker TeleTrade Solutions as a 

percentage of total transactions on the Stockholm 

Stock Exchange between January 1999 

and February 2000. 



source: om stockholmsbörsen 

The graph shows the growth in market share 

as a percentage of total transactions on the 

Stockholm Stock Exchange between January 

1999 and February 2000 for the Internet brokers 

TeleTrade Solutions, Nordnet, and Avanza. 

expected to take place in 2000. When the new European electronic trading 

site JIWAY is launched in September 2000, the Company intends to 

be among the first of its members. 

As a result of the targeted new share issue carried out by the parent company 

in January 2000, consisting of 2 million shares and bringing in sek 

44.9 million after issue-related costs, TeleTrade Solutions was able to 

increase its restricted equity by sek 35 million. This enabled TeleTrade 

Solutions to submit an application to the Financial Supervisory Authority 

requesting an extended permit under the Securities Business Act [SFS 

1991:981]. The extended permit was granted in March 2000 and enables 

TeleTrade Solutions to manage customers’ funds held in securities 

accounts as operating capital. This in turn enables TeleTrade Solutions to 

be a more competitive market player and to offer customers’ better terms 

for borrowing using shares as collateral. This is expected to provide a considerable 

increase henceforth in net interest income/expenses, i.e. the 

spread between the deposit and lending rate. 

The Company aims to grow by at least 50 active securities accounts per 

trading day. This represents a minimum of 20,000 active customers by 

the end of December 2000, not taking into consideration geographic 

expansion in the Nordic region and other structural developments and 

expansion possibilities. TeleTrade Solutions’ goal is to become the largest 

independent Internet broker in the Nordic region. This is to be achieved 

through organic growth, acquisitions, mergers and/or partnerships and by 

broadening the range of services to include more financial services. 

19

usiness 

information 

The number of visits at VCW has increased 

from around 550,000 in February 1999 to 

around 2,400,000 in February 2000. 

vcw internet services ab – market 

information services and netanalys 

dubbelslash ab with dagens finans 

The business area includes both VCW Internet Services 

AB and NetAnalys Dubbelslash AB. VCW Internet Services 

AB is an Internet based media company whose 

income is generated in the form of advertisements in the 

form of banners, mini-banners, large advertisements, 

buttons and sponsor arrangements. In addition, the 

Company provides IR-related services such as its IPO 

service, live hearings, and other traffic increasing services 

in the form of links and automatic pop-up windows with 

a link to the Company’s home page. Market information 

services for people interested in the stock market are provided 

via VCW’s Internet portal, www.vcw.se. 

services 

VCW’s most widely used service is its discussion forum. 

This service is market leading with almost 10,000 registered 

contributors, and just as many unregistered users. 

The discussion forum is most widely used from 7 a.m. to 

12 p.m. Keen investors and those who need to monitor 

foreign markets with closing times after 10 p.m. Swedish 

time can discuss shares, indices, and market-related 

events round the clock. The keen interest in this service 

20 

is primarily due to the need by investors to obtain investment 

tips and to get a “feel” for the market. 

VCW’s visitors submit contributions using a signature, 

and will try to build up a credible reputation around 

their particular signature by submitting as relevant and 

interesting postings as possible. The desire to gain 

renown or to share advice that can strengthen one’s own 

position is one reason behind the steady increase in the 

number of contributors. 

In order to encourage interesting contributions, VCW 

rewards the best contributors by presenting their submissions 

in an attractive green colour. All submissions are 

searchable and follow a thread-system that connects 

questions and answers, making it easy to follow a discussion. 

During the time that the discussion page has existed, 

several of VCW’s contributors have become well 

known in other media, such as newsletters, business 

papers and different TV programmes. This acts as a further 

incentive for others to be equally good. Several editors 

monitor the submissions and an advanced filter system 

is used to prevent submissions with unsuitable language 

from being published.

Growth in visits to VCW 


The graph shows the growth in the number 

of visits to www.vcw.se between January 

1999 and February 2000. 

Average number of discussion submissions 

to www.vcw.se per trading day. 

source: om stockholms fondbörs 

The graph shows the average number of discussion 

submissions to www.vcw.se per trading 

day for the period January 1999 to February 

2000. 

The content on the discussion pages is created by VCW’s users. It is the contributors 

– and not VCW – who are responsible for the content of submissions. 

Readers are encouraged to critically analyse and review the information 

on the pages. VCW takes no responsibility for any measures or actions 

based on submissions or information provided on this web site which may 

lead, either directly or indirectly, to financial damage. VCW reserves the 

right – and indeed has a certain responsibility – to remove inappropriate text 

or content from the discussion pages. 

VCW also offers extensive share price information, charts, technical analysis, 

portfolio management and other relevant functions for investors. 

VCW offers a monitoring service, VCW Observer. This service works using 

push technology that sends dynamic information from all VCW services to 

the user’s e-mail addresses or mobile phone if so requested. For instance, a 

customer may want to receive a summary every 30 minutes via e-mail of all 

submissions containing the word “Volvo”. 

VCW Response is a relatively new service allowing users to direct questions 

to public companies. This service has gained a great deal of appreciation 

from VCW’s visitors and responding companies alike. 


During the year 2000, VCW’s content is to be further developed, as is its 

reliability and speed. User-friendliness is also to be increased in order to meet 

the needs of a growing number of users. Advertising formats will become 

fixed so that both advertisers and users know where to find the advertisements. 

At the same time, the number of advertisement slots for sale will 

increase. More high quality services will be added during the year. This is to 

ensure that the goals in terms of user-friendliness and customer benefit are 

reached and also the goal concerning traffic to the site. The overall objective 

is for all new development of services to take place in Linux/Unix in order to 

increase the synergies with TeleTrade’s development department. 

developments during 1999 

VCW has shown very strong growth in 1999. The number of visits, page 

exposures and individual users has risen strongly. This is due to the general 

higher level of interest in the stock market, but also to the considerable content 

expansion of VCW’s service. Efforts to further expand and improve content 

will continue during 2000. 

During 1999, VCW’s stock market discussion forum has attracted a great 

deal of media attention. The discussion service is by far the largest of its kind 

in Sweden and the number of daily contributions has shown explosive 

growth during the year from around 1,000 per trading day to around 5,000. 

This increase has continued into the beginning of 2000 with over 7,500 submissions 

recorded on a number of days in February. VCW is now one of the 

largest vertical portals in Sweden. For those truly interested in the market, 

VCW’s discussion service has become a well-established and essential source 

of information. 

21

Visits: Sites 1999 2000 

July Aug Sep Oct Nov Dec Jan Feb July–Feb % 

Affärsvärlden [AFV] 487,403 766,810 830,887 891,677 1,145,596 1,249,226 1,486,798 1,403,201 +188 

Dagens Industri [DI] 2,258,817 3,598,930 2,486,452 2,577,051 4,697,816 3,617,085 4,636,131 5,386,173 +138 

Finanstidningen [FTI] 252,343 380,030 387,588 412,459 555,238 539,973 663,308 703,991 +179 

Privata Affärer [PA] 516,546 671,848 791,287 812,706 1,161,923 1,214,435 1,500,188 1,518,405 +188 

VCW 424,685 624,067 684,326 774,326 1,077,372 1,248,027 1,645,931 2,405,274 +466 

Page views: Sites 

July Aug Sep Oct Nov Dec Jan Feb July–Feb % 

Affärsvärlden [AFV] 1,614,345 2,740,884 3,078,036 2,978,621 3,860,422 4,202,309 5,147,273 12,025,361 +645 

Dagens Industri [DI] 11,327,399 17,508,117 18,612,461 16,162,445 27,468,662 27,870,280 39,430,131 46,415,754 +310 

Finanstidningen [FTI] 1,956,591 3,128,884 2,382,485 1,499,067 2,204,620 2,113,204 2,468,540 2,790,740 +43 

Privata Affärer [PA] 2,284,584 3,360,399 5,904,908 4,578,907 6,099,678 5,664,063 6,797,767 8,455,299 +270 

VCW 2,172,721 3,126,781 4,000,385 4,455,315 6,262,060 7,166,684 9,754,637 15,730,062 +624 


[“Visits” refers to each instance that a person enters the home page within a 30 minute period. “Page exposure” refers to each “part” of 

the home page that the visitor passes through, e.g. when the visitor clicks on a connected heading or other link within the same web site]. 


Turnover for 1999 amounted to sek 2.4 million [sek 1.9 

million]. In 1999, the company made a loss of sek 

-1.3 million [sek -3.7 million]. VCW Internet Services 

AB has a cost-effective organisation. During the year, 

additional sales personnel will be recruited at an estimated 

cost of just over sek 600,000 per month after the 

summer and approximately sek 6 million for the full year 

2000. Personnel will also be recruited within the Events 

and PR&IR areas since VCW sees substantial potential 

in these areas. 

outlook 

In addition to being influenced by the general stock market 

climate, VCW’s development is dependent upon the 

advertising market and its acceptance of the Internet as a 

medium – as well as the level of awareness among listed 

companies of the potential of using the Internet as a PR 

and information channel. The general trend is very clear 

and companies are increasingly utilising their web sites as 

a means of fast, cheap and effective information. 

With its own sales and marketing organisation in combination 

with a strong reach to an attractive target group, 

VCW has a high potential to increase its income base 

during 2000. 

22 

Visits in February 2000 to 

finance-related sites. 


Number of page views at 

www.vcw.se per month. 


Individuals/visitors to www.vcw.se 

per month. 

source: vcw

netanalys dubbelslash ab 

NetAnalys provides the online financial daily Dagens Finans, as well as offering 

a number of different analysis services via www.netanalys.se. NetAnalys 

began its current operations in 1998 and launched Dagens Finans at the end 

of the summer of 1999. 

services and products 

NetAnalys’ online publication Dagens Finans is Sweden’s only financial daily 

on the Internet. Subscription is free and the newspaper is distributed every 

business day at 4 p.m. via the Internet and e-mail. The paper is unique in 

providing the next day’s news before the market closes. Dagens Finans is 

financed through advertising and creates a range of new opportunities for 

advertisers through its interactive format. The number of subscribers and 

readers was around 16,000 in March 2000. 

www.netanalys.se provides the latest market news throughout the day along 

with various types of technical stock analyses. 


The goal is for the online newspaper Dagens Finans to quickly become Sweden’s 

largest daily financial paper on the Net. This goal will be reached by 

ensuring that the reader feels that he/she is getting tomorrow’s news today 

and the paper will consequently be a valuable aid on which to base decisions 

before the market closes. New, interactive opportunities for advertisers will 

be continually developed so that the paper will be perceived as an interesting 

complement to other Net-based advertising. It will be possible to increase 

the number of readers rapidly and cost-efficiently by utilising the network of 

Internet users associated with the TeleTrade Group. 


For the split financial year 1 May 1999‒31 December 1999, turnover amounted 

to sek 2.0 million and the company reported a loss of sek 0.4 million. 

Only a small proportion of turnover is attributable to advertising revenues. 

No increase in turnover is expected during 2000, since efforts will be focused 

on increasing the quality of Dagens Finans and increasing its subscriber base. 

During the year, Dagens Finans is to be established among advertising agencies 

as an advertising medium in order to generate income for 2001. 

outlook 

Dagens Finans is still unique in its kind in as much that it brings the latest 

news to the reader throughout the day free of charge. Various publications 

and publishers offer different type of news on their web sites, but rarely news 

that can compete in interest and importance with the news that is published 

in the printed publications the following morning. The market for a free and 

up-to-date news source during normal trading hours should therefore be 

substantial. Dagens Finans should have significant potential to build up a 

large enough subscriber base during 2000 to bring in sizeable advertising 

revenues by the end of 2000. With a growing subscriber base, Dagens Finans 

will become an important marketing and sales channel for the Group’s other 

services. 

23

usiness area 

insurance 

No other broker, either traditional or Internetbased, 

has as many suppliers within private nonlife 

insurances as TeleTrade e-Insurance has. 

teletrade e-insurance ab – 

the insurance broker 

[jp försäkring ab is currently changing its name to teletrade 

e-insurance ab] 

TeleTrade e-Insurance’s business concept is to meet all 

the personal insurance needs of private individuals. 

The business area was formed in March 2000 in conjunction 

with the acquisition of JP Försäkring AB. Consequently, 

this business area has not been previously 

included in the Group accounts. 

TeleTrade e-Insurance builds up large customer bases 

within selected areas of private non-life insurance by 

applying a “right insurance at the right price” method. 

Together with sales of life, pension, and endowment 

insurance policies to the rapidly growing customer base, 

this gives a satisfactory contribution per customer. Tele- 

Trade e-Insurance has grown strongly since its start and 

is now Sweden’s largest insurance broker for private individuals. 

Since 1999, both earnings and cash flow have 

been positive. 

24 

The soon-to-be-launched Internet service is intended to 

further reinforce TeleTrade e-Insurance’s already strong 

position in the private market. Today, there is no other 

player in the Swedish market with the same extensive 

experience, contacts with insurance companies and the 

expertise required to create a unique market place with a 

full range of insurance policies for private individuals. 

The insurance brokerage is registered with the Financial 

Supervisory Authority and operates within the areas of 

private non-life insurance, life insurance, pensions and 

endowment insurance. The Company currently has 

offices in Stockholm and Malmö, and there are plans to 

open an office in Gothenburg. 

Private non-life insurance is sold through extensive telemarketing 

activities in combination with a sophisticated 

computer system, while other operations are performed 

using in-house brokers and franchisers. Operations in 

Malmö are primarily based around life insurance, pensions 

and endowment insurance. 

services 

Private non-life insurance brokerage at TeleTrade e-Insurance 

is already heavily IT-based. The current telemarketing 

activities will be supplemented with a content-rich 

and user-friendly Internet service during the year. Using 

the Internet, it is possible to establish operations outside 

of Sweden, primarily in the other Nordic countries. 

At present, the main distribution channels for private 

non-life insurance, life insurance, pensions and endowment 

insurance at TeleTrade e-Insurance are incoming

telephone calls and outgoing telemarketing calls. A telemarketing team 

works rotational shifts five evenings a week in order to register information 

about non-life insurance policies and to book visits with life insurance 

brokers. On average, insurance information on which offers are 

based is obtained from approximately 100-150 households each evening. 

On average, non-life insurance policies to a total amount of 

sek 125,000‒150,000 are arranged each day based on such offers. 

Telemarketing activities target selected areas in accordance with a defined 

strategy, i.e. areas with larger and more numerous insurance objects and 

with higher premiums. This means that the majority of customers contacted 

live within Greater Stockholm, although Gothenburg and Malmö 

are also targeted. Within non-life insurance, all contact is made via 

phone, e-mail, fax, or letter. Within life insurance, pensions and endowment 

insurance, contact is primarily made in person. 

Since TeleTrade e-Insurance focuses on insurance for private individuals, 

the Internet provides an enormous market. Today, the volume of premiums 

within private non-life insurance amounts to approximately sek 21 

billion, according to the Swedish Insurance Federation. This entire volume 

can be said to be open to competition every year, as private customers 

can change insurance company once a year. The same enormous 

market also exists for life insurance and pension insurance. During 1999, 

funds totalling sek 82 billion were invested in premiums, including sek 

45 billion in new policies. 

This means that a penetration of 1 per cent of the market would provide 

a volume of: 

sek 210 million in non-life insurance premiums. 

sek 450 million in new life and pension insurance premiums. 

In March 2000, 38 people were employed full-time. In addition, around 

80 work with telemarketing, including 10 employees based in Malmö. 

There are also four franchisers, of which one is in Malmö. TeleTrade e- 

Insurance has commission agreements with all insurance providers for 

mediated insurance policies and with ten or so of these providers, the 

Company also has running insurance book commissions. Commission 

agreements have been signed with all “significant” life insurance companies. 

In addition, there are exclusive agreements with interest organisations 

allowing members to be contacted. Such interest organisations 

include Aktiespararna [shares], Sportfiskarna [fishing], Resevaruhuset 

[travel], and Svenska Brukshundklubben [dogs]. Together, this represents 

a customer sales base comprising over 250,000 people. 

No other broker, either traditional or Net-based, has as many suppliers 

within private non-life insurance as TeleTrade e-Insurance does. This is of 

considerable importance, since the customer would otherwise not be 

given a proposal from an “objective market place”. This becomes even 

more apparent on the Internet if only a few insurance companies are affiliated 

to the broker. 

25

usiness development 

Over the years, TeleTrade e-Insurance has developed its 

own unique system for calculating premiums. For nonlife 

insurance, the system presents premiums from ten 

different insurance companies. This means that large 

flows of insurance policies can be offered and arranged in 

a simple manner. Experience from the development of 

this system and from the industry as a whole enhances 

and increases the possibilities for creating a unique Internet 

service. 

TeleTrade e-Insurance will further develop its relations 

with those interest organisations with which it has signed 

exclusive agreements. This will primarily be achieved 

with the aid of the Internet. There are current plans to 

integrate the home pages of these interest associations 

with TeleTrade e-Insurance’s Internet service. In this way, 

traffic to the Insurance broker service will be increased. 

The soon-to-be-launched Internet service will supplement 

existing activities, greatly increase the potential customer 

base and create synergy and crossover opportunities 

with the other services offered by the TeleTrade 

Group. The Internet service is expected to be launched 

during Q3 this year. 


Turnover increased in 1999 to sek 22.1 million [sek 11.5 

million]. For 1999, the company made a profit of sek 0.7 

million [sek -1.4 million]. Operations have shown considerable 

growth in recent years, with income growth of 

over 100 per cent per year. Growth has taken place within 

both non-life and life insurance, as well as pension 

insurance. 

The Company has applied a strict cash basis when 

accounting for income from commissions on non-life 

insurance and child and accident insurance, while 

26 

income from life insurance has been booked after the 

close of each transaction. This means that the major part 

of the cost for the non-life insurance book has been 

booked before it has begun generating income. To a certain 

extent, this also applies for life insurance brokerage 

where relatively large costs have been booked during the 

setting-up of operations. For 2000, the accounting principle 

will be changed so that income from non-life insurance 

will also be booked at the close of the transaction 

[see page 29]. 

outlook 

Growth in income and expenses Tele- 

Trade e-Insurance [sek thousands] 

Growth will continue to be strong. During 2000‒2001, 

small “satellite offices” will be opened in Gothenburg, 

Lund, and Höllviken, with each office maintained by 

3‒4 life insurance brokers. The Stockholm office will also 

expand its life insurance operations. Within non-life 

insurance, the traditional telemarketing activities will 

continue to create growth. The customer base within 

this area of company operations will be continually 

expanded. 

The greatest future growth will be created via the Internet 

service. It is intended that the majority of private 

non-life insurance, life insurance and pension insurance 

will be arranged via this service in a way that was not 

previously possible. 

TeleTrade e-Insurance sees extensive synergies between 

the life insurance services and the services offered by 

TeleTrade. Examples of such synergies include foreign 

endowment insurance, mutual fund insurance and 

mutual fund brokerage. These synergy effects will be 

extracted in the short-term through traditional operations, 

but mainly through the TeleTrade Group’s different 

Internet services. Extensive synergies also exist within 

marketing and sales between the different services offered 

by the TeleTrade Group.

financial overview 

and key ratios 

financial overview and key ratios 

The accounts, fund statements, and key ratios for 1997 

have not been included in this prospectus as operations 

during 1997 were very different from today’s. The Tele- 

Trade Group was formed on 12 December 1998. In 1997, 

only VCW ran operations of any size and with a slightly 

different focus. The result amounted to sek -18.3 million 

during 1999 as against sek -3.5 million during 1998. The 

Group’s liquid assets, as of 31 December 1999, amounted 

to sek 25.6 million, of which sek 5.6 million were frozen. 

The Group’s employees as of 31 December 1999 numbered 

27 as against 16 the previous year-end. As of 31 December 

1999, equity amounted to sek 18.6 million and was divided 

between 23,811,622 shares at sek 1 per share. Solidity 

amounted to 21 per cent. In January 2000, a directed new 

share issue of 2,000,000 shares to four institutional 

investors provided the Company with a total of sek 47 

million before issue expenses. In order to simplify future 

analyses of financial information, a pro-forma balance 

sheet and income statement as of 31 December 1999 have 

been prepared in conjunction with TeleTrade’s acquisition 

of JP Försäkring AB, which is changing its name to Tele- 

Trade e-Insurance AB. The Group’s pro-forma revenue for 

1999 amounted to sek 46.8 million. After the acquisition 

of JP Försäkring AB on 25 March 2000, the Group’s 

employees totalled 90. 

28 

During 1999, the Group’s revenue showed the following 

quarterly development: sek 3.0 million, sek 4.3 million, 

sek 5.4 million, and sek 11.9 million. TeleTrade Solutions’ 

operations accounted for the major part of the Group’s 

revenue. The stock exchange experienced strong development 

and turnover during Q4. This favoured TeleTrade, 

which even experienced a large inflow of customers within 

its trading and information business areas. 

TeleTrade Solutions opened 2,000 new securities accounts 

during Q1 1999. Development during the following quarters 

was 2,000, 3,000, 5,000 new accounts respectively. At 

year-end, TeleTrade Solutions had a total of approximately 

18,000 opened accounts, of which approximately 8,000 

are defined as active. Active account customers are those 

customers that have placed securities and/or money in 

their accounts in order to do business. 

During 1999, the Group’s result showed the following 

quarterly development: sek -5.2 million, sek -4.2 million, 

sek -4.7 million, and sek -4.1 million. At the end of Q4, 

operations reached a current breakeven. TeleTrade Solution’s 

rapid growth has debited the Group with extensive 

costs within systems, service development, and marketing. 

The Group shows no deferred tax liabilities in its accounts. 

The established fiscal unutilised deficit is equivalent to the 

profit for 1998 for each company, a total of approximately 

sek 24 million. In conjunction with the change in ownership 

on 31 December 1998, the deficit from previous years 

was lost. 

Cash flow analysis in brief [SEK thousands] 1999 

Cash flow from current operations -8,115 

Cash flow from investment activities -2,191 

Cash flow from financing activities 24,054 

Increase in liquid assets 13,748 

Liquid assets at beginning of year 11,879 

Liquid assets at end of year 25,627

pro-forma 1999 [SEK THOUSANDS] 

TeleTrade Group incl. JP Försäkring 

Pro-forma Income Statement 1999 

Commission income 44,667 

Commission expenses -2,538 

Interest income 4,984 

Interest expenses -3,604 

Net profit from financial transactions -118 

Other operating income 3,372 

Total operating income 46,763 

Total operating costs -66,084 

Profit before tax and minority interest -19,321 

Tax on profit for the year 17 

Minority interest -134 

Profit [loss] for the year -19,438 

Pro-forma Balance Sheet 31 December 1999 

Assets 

Lending to credit institutions 25,734 

Lending to the general public 41,381 

Participations in associated companies 980 

Intangible assets 17,938 

Tangible assets 4,154 

Other assets 17,088 

Prepaid expenses and accrued income 8,836 

Total assets 116,111 

Liabilities 

Liabilities to credit institutions 41,000 

Other liabilities 27,360 

Accrued expenses and pre-paid income 5,356 

Subordinated liabilities 2,095 

Total liabilities 75,811 

Minority equity 1,337 

Equity 38,963 

Total liabilities and equity 116,111 

comments 

The pro-forma accounts for 1999 have been prepared in 

order to present an income statement and balance sheet 

for 1999 as if JP Försäkring AB were a part of the Group for 

all of 1999. The pro-forma has been based on TeleTrade’s 

Group accounts as of 31 December 1999 and JP 

Försäkring’s annual report for the same period. The acquisition 

value of JP Försäkring AB amounts to sek 22.4 million, 

of which sek 0.4 million relates direct costs in conjunction 

with the share issue. The amount sek 22 million 

is based on the average share price during the last ten 

days before the in-kind agreement was signed 18 February 

2000. After allowing for minority equity, a goodwill item of 

sek 17.1 million is arrived at, which will be amortised over 

a ten-year period. The net profit for the year has therefore 

been charged with sek 1.7 million. Final establishment of 

the goodwill item will take into consideration the net profit 

attained during 2000 until the time of the acquisition. 

When preparing the pro-forma for 1999, the net profit for 

1999 for JP Försäkring has been adjusted because as of 1 

January 2000, the company changed accounting principles 

for income accounting. The change in accounting principles 

means that the Company no longer accounts for income 

from non-life insurance commissions on a cash basis but 

once the transaction deal has been closed. Over and 

above this, a cancellation provision has been included. 

The effect of the change in accounting principles on the 

result for 1999 is marginal. However, the change does 

mean that the adjusted capital brought forward as of 1 

January 1999 increases by sek 2.6 million. 

JP Försäkringar AB [sek thousands] 

Equity according to published annual report 4,129 

Effect of changed accounting principles 2,555 

Adjusted equity JP Försäkring AB 6,684 

Acquisition cost within 

Parent Company [sek thousands] 

Acquisition cost according to in-kind certificate 22,032 

Direct costs in conjunction with share issue 424 

Total acquisition cost 22,456 

Minority equity 1,337 

Goodwill 17,109 

group key ratios 

1999 pro-forma1 1999 1998 

Operating income, sek thousands 46,763 24,572 1,004 

Operating profit, sek thousands -19,438 -18,264 -3,531 

Profit margin, % neg neg neg 

Average number of shares _ 16,911,290 6,455,379 

Ditto after fully exercised options _ 20,769,145 8,362,916 

Earnings per share, sek _ -1,08 -0,55 

Ditto after fully exercised options _ -0,88 -0,42 

Equity per share, sek 1,59 0,78 1,28 

Share price as of 31 Dec. _ 32 _ 

P/E ratio as of 31 Dec. neg neg neg 

No. of outstanding shares at year-end 24,464,622 23,811,622 10,010,757 

Ditto after fully exercised options 28,715,457 28,062,457 13,475,832 

Total assets, sek thousands 116,111 90,783 46,605 

Equity, sek thousands 38,963 18,642 12,852 

Liquidity, % _ 126 133 

Solidity, % 34 21 28 

Capital base, sek thousands _ 20,117 12,708 

Capital cover ratio, % _ 16 41 

Debt/equity ratio, % _ 233 12 

Risk-bearing capital ratio, % 33 21 28 

Return on [total] capital employed neg neg neg 

Return on equity, % neg neg neg 

Investments in tangible assets _ 1,965 3,548 

Research and development expenditure _ 2,933 6,410 

Of which set up as assets _ 481 3,486 

Total number of employees at year-end 61 27 16 

1 When preparing the pro-forma for 1999, consideration was taken for JP Försäkring AB as of 1 January 1999, at which point JP Försäkring’s 

result was adjusted because as of 1 January 2000, the Company changed accounting principles for income accounting [see page 29 for 

more information]. 

Key ratio definitions 

Profit margin: Net profit as a percentage of the year’s invoicing. 

Earnings per share: Profit after tax divided by the average number of shares. 

Return on capital employed: Income before financial items plus financial costs as a percentage 

of the average capital employed. 

Capital employed: Total assets less non-interest-bearing liabilities including deferred tax liabilities. 

Return on equity: Net profit according to income statement as a percentage of the average 

adjusted equity. 

Liquidity: Current assets minus stock divided by current liabilities. 

Solidity: Equity including minority interests as a percentage of total assets. 

Capital base: The Group’s equity for companies within the Group requiring capital cover, i.e., 

TeleTrade Solutions. 

Capital cover ratio: The total capital base divided by the total weighted risk amount regarding 

capital demands for credit risks [see Other additional information page 68]. 

Debt/equity ratio: Interest-bearing liabilities divided by equity. 

Risk-bearing capital ratio: Sum of equity and deferred tax liabilities, including minority interests, 

divided by total assets. 

Sensitivity analysis 

TeleTrade Solutions’ earnings development is dependent on the stock market climate and stock 

exchange turnover. A downturn on the Stockholm Exchange in the form of falling share prices 

and/or transactions would lead to lower income. As the costs are relatively fixed in the short-term, 

fewer or more transactions from TeleTrade Solutions customers would bring about an almost 

equivalent change in the marginal change of the Company’s result. In March 2000, TeleTrade Solutions 

conducted approximately 4,500 transactions per day. Every transaction provides a gross 

income of approximately sek 90. A ten per cent change in the number of transactions is therefore 

equal to a change in gross income of approximately sek 40,000 per trading day or sek 840,000 

per month. 

VCW’s costs are very small in relation to the Group’s total costs. These costs are also relatively 

independent of operational developments. A change in the advertising market would therefore 

lead to a strongly positive effect on the result. In the event of a deteriorated advertisement market 

on the Internet, costs can be reduced in the short-term by cuts in personnel. 

TeleTrade e-Insurance’s earnings development is relatively insensitive to factors affecting the market. 

Property insurance operations are based, to a larger extent, on stock commissions. Life insurance 

operations are earnings based with Company sales personnel receiving commissions. 

29

the market 

The number of securities accounts is anticipated 

to rise from 4.4 million in 2000 to approximately 

16.8 million in 2003. 

the market 

introduction 

The Internet and new technology are rapidly changing the conditions for 

players on the financial markets. Customers have become an integrated 

part of the transaction and analysis process and today have access to a 

great deal of information, as well as the opportunity to perform transactions 

fast and inexpensively. Shares and shares in mutual funds are 

bought and sold via the Internet. 

Via the Internet, companies can offer private individuals and institutions 

the opportunity to invest capital in both listed and unlisted companies. 

Private individuals are gaining increasing access to different types of stock 

market news. Private individuals also have the opportunity to listen to 

analyst meetings and general shareholders’ meetings via the Internet. 

The result is a change in the stock market that provides private individuals 

with the same and equally rapid access to information that brokers 

and analysts have. The trend is towards Internet brokers becoming 

increasingly complete finance houses offering a wide range of financial 

services. Consequently, Internet brokers are becoming more like the traditional 

banks and stockbrokers. As well as offering securities trading via 

the Internet, players can offer customers other financial services, such as 

loans, insurance, financial advice and interest-bearing accounts. 

thr market for securities trading via the internet 

The securities trading market is undergoing extensive change due to the 

breakthrough of the Internet. According to the analysis company IDC, 

the market for Internet-based share trading in Europe is expected to 

increase from approximately 4.4 million securities accounts in 2000 to 

approximately 16.8 million by 2003. 1 It is estimated that approximately 

25 per cent of transactions is made via the Internet. 2 

1 idc, european online brokers revolution, march 2000 2 interview with stefan fölster, swedish research insttute 

of trade [hui] 

30

The European market for online 

securities trading, no. of securities 

accounts [millions] 

source: idc, european online 

brokers revolution, mars 2000 

Online equity trading in the Swedish market, number of customers 

market driving forces 

In TeleTrade’s opinion, the primary driving forces behind the strong 

development of securities trading via the Internet are the following: 

PC penetration 

Internet penetration 

Increased saving in shares and mutual funds 

pc penetration 

A basic prerequisite and powerful driving force for securities trading via 

the Internet and financial portals is computer access. Sweden is currently 

one of the most PC-dense countries in the world. According to the analysis 

company IT Research, 58 per cent of Swedish households have access 

to a PC at home. 1 This development can be partly explained by the 

advantageous tax regulations allowing companies to subsidise the purchase 

of home computers for employees. Purchases of PCs have been at a 

very high level in recent years. In 1999, 72 per cent of the Swedish population 

had access to a computer at home, at work or at school. 2 

internet penetration 

Consumer access to the Internet is an important driving force for the 

development of the market. The analysis company IDC estimates that 

the number of active Internet users in Europe will increase from approximately 

41 million in 1998 to 215 million by 2003. The Nordic region has 

the highest Internet penetration in Europe. 3 According to the same analysis, 

penetration in Sweden was 45 per cent at the end of 1999, compared 

with 21 per cent on average for Western Europe. The proportion of Internet 

users in Sweden has now passed 53 per cent, placing Sweden among 

the foremost Internet users in the world. 4 

1 it research 2 mediamätning i skandinavien mms ab 3 idc 4 mmxi nordic/sifo interactive media, february 2000 

31 

no. of customers no. of customers 

nov 1999 nov 1998 change, % 

TeleTrade 14,000 2,000 600% 

Aktiedirekt [Nordiska] 7,500 4,000 88% 

Aktiespar Online 22,000 10,500 110% 

Avanza 11,500 4,000 188% 

E*trade Not avaialble – – 

Handelsbanken 30,000 10,000 200% 

HQ.SENot avaialble – – 

Matteus Net 10,000 6,240 60% 

NetTrade [Föreningssparbanken] 27,000 8,000 238% 

Nordbanken – – – 

Nordnet 15,000 10,000 50% 

SEB 60,000* 40,000 50% 

Skandiabanken 15,000* 5,000 200% 

Totalt 212,000 97,740 113% 

* estimated value source: svensk fondstatistik, november 1999

number of active internet users 

in western europe 1998–2003 [millions] 

1998 1999 2000 2001 2002 2003 

Germany 10.3 16.0 21.8 28.0 32.9 36.7 

UK 8.9 13.1 16.9 20.6 23.0 24.4 

Sweden 2.5 3.6 4.5 5.2 5.7 5.9 

France 4.0 7.0 10.9 16.6 23.0 30.1 

Italy 3.1 5.3 7.9 10.9 13.2 15.3 

Western Europe 40.9 81.4 119.0 155.0 188.0 215.0 

source: idc 

increased savings in shares and mutual funds 

Two out of three Swedes over the age of 16 own shares, 

either directly or via mutual funds. This means that 5.6 

million Swedes are shareholders. These figures were 

shown in a survey commissioned by Aktiefrämjandet. 1 

The survey also shows a powerful increase during 1999, 

from 55 per cent owning shares in 1998 to 66 per cent in 

1999. The most common method of ownership was via a 

mutual fund and approximately 54 per cent of the adult 

population own shares in this way. The figure for 1998 

was 43 per cent. Over one in three Swedes, 36 per cent, 

own shares directly in listed companies. The figure for 

1998 was 30 per cent. 

The Swedish population saves a great deal in funds, and 

mutual funds are the most attractive savings form. 

According to statistics from Svensk Fondstatistik, in 1999 

the total volume of fund investments by Swedes 

increased by sek 294 billion in 1999, which represents a 

percentage increase of 52 per cent. 

Another factor affecting share trading via the Internet is 

the high stock exchange turnover. Turnover on the OM 

Stockholm Exchange has risen from approximately sek 

130 billion in 1990 to approximately sek 2,600 billion 

in 1999. 

market players 

In the market for securities trading via the Internet, there 

are three main types of player: 

Swedish Internet brokers 

Banks and stockbrokers 

Foreign Internet brokers 

The first Internet brokers in Sweden started their 

Swedish operations in 1995. Since then, the number of 

pure Internet brokers has increased to the current level of 

1 temo, december 1999 

32 

[%] 

Percentage of the population 

with Internet access in 1999 

source: idc 

Internet penetration in the Nordic region is the 

highest in the world. The Nordic region comprises 

a unique base for different types of Internet-based 

services, such as securities trading. 

approximately ten players that can be considered Tele- 

Trade’s competitors. SEB and Handelsbanken offer trading 

via the Internet without being a direct competitor to 

TeleTrade. 

TeleTrade’s direct competitors are: 

AktiesparOnline [Aktiespararnas RF] 

Avanza [Independent] 

Nordnet [Öhmans] 

HQ.SE [Hagströmer & Qviberg Fondkommission] 

E*Trade [American company listed on Nasdaq] 

Matteus.net [Matteus Fondkommission] 

AktieDirekt [Nordiska Fondkommission] 

NetTrade [Föreningssparbanken] 

Skandiabanken 

In Finland, there is a company called Eqonline that is the 

leading Internet broker in the Finnish market. In the 

other Nordic countries, we find NetFonds and Stocknet 

Aston Securities in Norway, while in Denmark there is 

Difko Børsmæglerselskab [dbs-online], which is soon to 

change its name to E*Trade Danmark. 

Other leading Internet brokers in Europe include Consors 

[Germany], DLJ Direct [UK] and Schwab Europe 

[UK]. European banks offering Internet trading primarily 

include Bank 24 [Deutsche bank] and Comdirect 

[Commerzbank], both active in Germany. The possibility 

of international players seeking to establish Nordic 

operations in the near future cannot be ruled out. 

the market for financial portals 

The Internet advertising market is growing rapidly. IRM 

forecasts that total investment in Internet advertising in 

Sweden, which amounted to sek 61 million in 1997 and 

sek 484 million in 1999, will amount to sek 864 million 

in 2000.

The Swedish market for Internet 

advertising [sek millions]. 

source: irm, institute for advertising and 

media statistics, november 1999 

IRM’s definition of Internet advertising 

includes banners and buttons [such as company 

logotypes that take the visitor to the 

company’s own web site] sponsorship, text 

advertisment, and all forms of catalogue 

advertisements, such as Yellow Pages. Catalogue 

advertisements refer to advertising 

space the customer has paid for. 

The table below presents the estimated total investment in Internet 

advertising in 1997 and 1998 and the forecast investment for 1999 and 

2000 for the Swedish market. 

market development 

There are several reasons why more and more companies choose to use 

the Internet as an advertising medium. Advertising via the Internet is a 

unique medium that provides good opportunities for reaching a specific 

target group with an especially designed and adapted message. This also 

makes it a unique medium for direct marketing towards end-customers. 

In addition, the Internet is accessible 24 hours a day enabling market 

communications to lead to a direct transaction. It also provides good 

opportunities for evaluating market investments. 

advertising space in exchange for company shares 

It is becoming more common for media companies to buy their way into 

newly started e-commerce companies by paying with advertising space. 

There are a number of examples of similar arrangements in the Swedish 

market. 

the growth of customised and personal portals 

Portals are become increasingly specialised as the competition for user 

attention increases. An example of this is that portals are launching new 

types of service combining personal and financial information on the 

same web page. Information from separate sources is combined on the 

same page: shareholdings, bank accounts, selected e-mail, travel bookings 

and other personally selected information. 

strategic alliances between different type of player 

New types of strategic alliances are emerging between different players in 

the financial market. We see them primarily among players with expertise 

in distribution, financial products and services, and technology where 

synergies already exist. The driving forces behind these alliances are that 

they can rapidly offer alternative distribution channels at a low cost, 

increase customer volumes, add new services and products and increase 

the number of distribution channels. 

joint advertising 

In order to maximally utilise the synergies between two different portals, 

co-operation is built up around advertising. Since the financial portals act 

as media companies, the portals can exchange advertising space and make 

joint offers in order to increase the flow of customers to both parties. 

Advertising costs are, therefore, almost non-existent, and the co-operation 

ensures that the financial portals and, for example, Internet brokers 

are visible in other media, such as newspapers, radio and perhaps TV, 

without the company’s marketing costs soaring unhindered. 

enhanced knowledge of the cutsomer base boosts sales 

Companies who advertise can boost their sales by having many demographic 

parameters regarding their users. If To optimise advertising activities, 

companies can target their campaigns at selected users. There are a 

number of opportunities for the portal involving the use of investor databases 

and other services that the companies currently offer or intend to 

33

0 

Trend in mutual fund savings 

1980–1999 [sek billions]. 

source: svensk fondstatistik ab, 

fund & bank newsletter 

launch in the near future; all the user has to do in return 

is to register certain demographic data. Customised 

arrangements are both simple and inexpensive to create. 

The database information will be of significant value in 

the future. Market surveys performed directly on the site 

for internal or external use are also simply and effectively 

undertaken using the software that the Company already 

has. 

stock exchanges are becoming 

electronic trading places 

The pace of developments is increasing and demands for 

up-to-date and easily available information are increasing 

in size and importance, not only among modern 

investors trading directly via the Internet, but also among 

those who trade via brokers. This trend is spreading 

among the population and new investors and traditional 

investors alike are being attracted to new media such as 

the Internet. With the aid of the Internet, trading in 

shares and other financial instruments has become fairer 

and more democratic, as all customers receive the same 

information quickly and inexpensively. 

As the old structure of a stock market comprised of 

national monopolies begins to disappear, a new, modern 

services sector is emerging in its place. As part of this 

process, the role of the stock exchange will change. Electronic 

trading is conquering the world and competition 

from virtual trading places is becoming tougher. Electronic 

trading places, or ECNs [Electronic Communication 

Networks], have shown strong growth during recent 

34 

Annual turnover on OM Stockholm 

Exchange [sek billions]. 

source: om stockholmsbörsen 

years. These electronic trading systems make it possible 

for investors to trade in shares outside of the traditional 

stock exchanges. 


VCW has few or no direct competitors in Sweden within 

its business concept. The only similar services are provided 

by very small players with private web sites that currently 

do not pose any threat to VCW’s dominant position. 

This favourable market position affects visitors in a 

positive sense since they always search for sites where 

most like-minded individuals are to be found. There are 

a number of players which focus on financial information, 

such as Dagens Industri’s stock market chat service, 

Privata Affärer, Finanstidningen and Yahoo Finance. 

the private insurance market 

introduction 

Two distinct trends are apparent within the Swedish 

insurance industry. One is Internet-based insurance 

brokerage by a number of new, and several traditional, 

players. The other is the growing market for insurance 

brokers. The products offered by the new players are 

primarily non-life insurance, pension insurance, insurance 

for young people and life insurance for private 

individuals. Modern technology provides insurance 

companies with low market-entry barriers and the means 

to quickly cover a large part of the market.

While insurance companies in Sweden are tending to cut down on 

staffing levels, the private insurance market for insurance brokers is growing. 

Insurance brokers act in accordance with customer requirements and 

put together policies that best fit the customer, which can lead to customers 

holding policies with several different companies. Insurance brokers 

are often paid from the premiums received by the insurance companies, 

which means free advice for customers. 

the swedish insurance market 

In 1999, the market for private non-life insurance in Sweden amounted to 

approximately sek 21 billion measured in volume of premiums. 1 Turnover 

for the insurance brokerage sector in Sweden exceeded sek 1.1 billion in 

1999. 2 The latter figure includes life insurance, pension insurance, corporate 

insurance, insurance on buildings and occupational pension insurance. 


The Swedish insurance market can be described as an oligopoly with 5‒6 

players controlling 90 per cent of the market. In recent years, a number 

of niche players, such as UAP, Allianz and Aktsam, have penetrated the 

Swedish market. JP Försäkring is unique in Sweden in terms of brokerage 

of non-life insurance for private individuals. The main competitors in 

this area are individual insurance companies such as Skandia, Trygg 

Hansa and Folksam. The number of competitors within life insurance, 

pension insurance and endowment insurance is somewhat larger. In addition, 

there are a number of newly started competitors on the Internet, 

including Goodguy, insplanet and Jahaya. 

In total, there are approximately 320 brokerage companies in Sweden. 

The largest of these is Max Matthiessen with sales exceeding sek 200 million. 

Max Matthiessen is a franchise organisation encompassing 40‒50 

companies. The next largest are Aon Sweden, with sales of sek 60 million, 

and Willis Corroon, with sales of sek 58 million. The number of 

registered brokers has increased from 860 to almost 940. 

driving forces in the insurance market 

As mentioned previously, the market for Private Non-life Insurance and 

the Life and Pension Insurance market are both extremely large, in Sweden 

and in the rest of Europe. Both of these markets show growth, mostly 

in the Life and Pension Insurance sector. 

Within the Private Non-Life Insurance market in Sweden, no brokers 

had existed until JP Försäkring began operations at the end of 1995. 

In large parts of Europe, however, the market does not show a similar 

picture. Quite the opposite is in fact true, as the brokerage market in 

most EU countries has been well developed for some time. The situation 

in Sweden can be explained by the fact that there were no insurance brokers 

until the beginning of the 1990s, when life insurance brokers and 

corporate insurance brokers began to operate. 

1 swedish insurance federation 2 försäkringsmäklarguiden 2000, risk and insurance newsletter 

35

driving forces govering the insurance market: 

sweden’s membership in the eu 

This has brought new players into the Swedish market together with new products and more 

differentiated pricing. 

niche companies 

Several new niche companies have entered the market, among them Aktsam, Alandia, Atlantica 

and Cox. This has also entailed new products and a different pricing schedule. 

differentiated products 

Within both markets, new companies have provided new products and terms. Older companies 

have thereby also had to update their products in a similar way. 

terms, price and cost structure 

The above points have meant that the markets have been exposed to competition in a completely 

different way than previously. There are really only three parameters that govern these 

insurance policies; Terms, Price and Cost. During the past 3-4 years, these parameters have 

been brought into focus in a completely new way. 

deteriorating social security system 

The social security system in Sweden is gradually deteriorating. Individuals are now forced to 

cover their own insurance needs to an increasing degree. This has meant that people are taking 

out personal insurance solutions in an entirely different way than previously. 

marked increase in the savings ratio 

During recent years, saving has increased considerably in Sweden, not least in the form of 

shares, mutual funds, fund insurance policies and other types of endowment policy. 

All of the above factors have contributed to making the Private Non-life Insurance and Life 

and Pension Insurance brokerage markets both extensive and interesting. This applies to traditional 

distribution channels, but mainly to the Internet, as this provides an excellent channel 

for presenting and comparing products and is easily accessed by consumers. 

36

Researcher provides new 

picture of share trading 

on the Internet. 

37 

Interview with Stefan Fölster, 

Senior lecturer at 

Handelns Utredningsinstitut. 

More and more people are investing in shares and an increasing number are doing so over the 

Internet. At present, one in four share transactions is made via the Internet. There are currently 

more shareholders than wage earners in Sweden. Most of these save in mutual funds, but the 

interest in direct share ownership is increasing and with it the need to perform transactions 

quickly, simply and with full control. 

Associate Professor Stefan Fölster at the Swedish Research Institute of Trade [HUI] is researching 

the New Economy, in which securities trading over the Internet is an important feature. With help 

from securities brokers and Internet brokers, HUI has revealed a new picture of the development 

of Internet trading. 

“Trading via the Net is more widespread in Sweden than in the USA, where 16 per cent of all 

share transactions are made via the Internet,” says Stefan Fölster. In Sweden, over 25 per cent of 

transactions are made via the Internet. 

The HUI report shows that 15 per cent of stockbroker commissions come from private individuals. 

The reason that the percentage of income is lower than the percentage of transactions made via 

the Internet is that private individuals often make a large number of small transactions. In most 

cases, transaction values do not exceed SEK 50,000. Day traders, who trade frequently during the 

day but who close positions at the end of every day, represent a growing proportion of the trading 

volume. HUI estimates that around one thousand people make a living as day traders. 

The largest customer group for the Internet brokers comprises private individuals who invest in 

shares and who surf the Internet in the evenings and who make their transactions via the Internet. 

“One interesting aspect is that the market has become very segmented between the institutional 

brokers and the Internet brokers, who are targeting a new customer group.” 

Traditional brokers have not yet experienced any appreciable competition. For the Internet brokers, 

the majority of the demand is from new customer segments. The larger investors are reluctant 

to use Internet brokers. There is concern, often based on rumour, that Net brokers would 

become overloaded in the event of a crisis, preventing people from selling their stock fast 

enough. Stefan Fölster agrees that there has been the odd example whereby Internet brokers 

have become overloaded, but says that these fears mostly apply to trading in the USA. 

It is only a question of time before the opposite is true. With electronic trading sites, there is no 

reason why Internet trading should be any slower than verbal trading. Especially for small-scale 

investors, who always land at the end of the queue at traditional brokers anyway when large 

investors sell off their stock. 

Does trading over the Internet involve more risk than going via a traditional broker? 

“No, not at all. Quite the opposite. When speaking to a broker, misunderstandings can easily 

occur and it is sometimes difficult to communicate clearly. The broker may also forget to pass on 

some information and it takes time before the broker can make the deal, by which time the price 

may have changed.” 

“On the Internet, there are no ambiguities. Transactions are made directly. The biggest risk is your 

Internet connection failing.” 

There are certain other obstacles to share trading. You are critical of the tax system, for example, 

which you say creates ”bubbles”. In what way? 

“The tax regulations are a problem. When a fund sells shares, no capital gains tax is charged. But 

when a private individual sells his shares, he has to pay tax on any profit he has made. For the 

stock exchange, this becomes a problem when a large number of individuals, for tax reasons, 

hold on to shares that they don’t really believe in. This creates bubbles that are bigger than they 

would otherwise be.” 

What will be the next stage in the market development? Which trends do you perceive? 

“Net brokers are becoming increasingly interesting to larger customers, while established brokers 

are starting to offer their services to smaller customers. This means that the markets will merge in 

a few years. This will lower prices and administration fees.” 

“People are also wanting to buy foreign shares, especially American shares, but this is still too 

expensive at present. We can now see how the markets are integrating with one another. In a few 

years time, buying shares in other countries will be just as easy and no more expensive than buying 

shares in Sweden. Consequently, the significance of Internet brokers is growing.”

isk factors 

TeleTrade Financial Services AB is influenced by 

a number of external factors whose effects on the Group’s 

result and financial position can be controlled to varying 

degrees. When assessing the future development of the 

Company, it is important to consider risk factors as well 

as potential for earnings growth. Those risk factors that 

are judged to be most significant to the future development 

of the Company are described below. For obvious 

reasons, it is not possible to describe all factors in detail, 

but rather an overall assessment must also include other 

information provided in this prospectus along with a 

general external environment analysis. 

limited operational history 

TeleTrade began operations in 1997 and can only provide, 

therefore, a limited history on which to base evaluations 

concerning future business development. The 

Company is currently undergoing a period of expansion 

and development. Information regarding TeleTrade must 

be considered in the light of the difficulties that companies 

in fast growing markets are exposed to. Such risks 

include a changing business strategy and the control of 

organic and acquisition based growth. 

credit risk 

TeleTrade issues credit against collateral in the form of 

market listed shares, primarily Swedish shares. Pledging 

take place within the framework of special credit institutions 

and individually determined collateral values. The 

collateral value does not exceed that recommended by 

the Swedish Bankers’ Association. The pledging ratio for 

Swedish shares currently varies between 0‒75 per cent of 

the current market value. In March 2000, TeleTrade 

38 

received an extended permit from the Financial Supervisory 

Authority to facilitate lending. However, TeleTrade 

is still dependent upon credit parameters from banks for 

financing credits to customers. 

financial risks 

TeleTrade’s liquidity and solidity are affected by payments 

and deliveries in the securities market. During certain 

periods that encompass critical dates, imbalances 

and delays can occur. The Company’s continued expansion 

and growth may be dependent on additional venture 

capital from shareholders and the stock market. In 

order to obtain such funds, the Company must live up to 

the market’s expectations. 

system risks 

TeleTrade Solutions’ operations are completely dependent 

on a functioning trading system with high accessibility. 

The other business areas are dependent on well-functioning 

Internet services. In the event of systems and 

Internet services not functioning satisfactorily, this could 

affect the current operational development and also 

entail increased risks associated with administration, 

legal issues and permits. 

operational risk 

Operational risks can be defined as the risk of losses arising 

due to unsuitable management of business flows or 

flaws in general routines and safety procedures. Operational 

risks occur in all areas of operations and cover 

everything from break-ins [and prevention methods] to 

unsatisfactory management information. Work to minimise 

operational risks involves continual improvement 

of routines and technical systems. 

legal and ethical risk 

Legal and ethical risks originate both from the comprehensive 

external regulations governing operations and 

from the external requirements that operations be conducted 

in such a manner that instils confidence in the 

Company. The primary instrument for managing these 

risks is, aside from the expertise of the personnel, the 

internal company regulations.

future capital requirements 

Due to the Group’s extensive expansion, the capital base will need to be 

strengthened during the year. The size and timing of future capital requirements 

are dependent upon a number of uncertain factors, such as the Company’s 

ability to generate profit. There are no guarantees that new capital can 

be acquired, nor that it can be acquired on terms favourable to shareholders. 

market growth 

TeleTrade operates in markets that are expected to be characterised by 

growth during the next few years. Slower market growth than anticipated 

can have a negative effect on TeleTrade’s sales and earnings trends. Developments 

in the international and Swedish economies, particularly within the 

Swedish business sector, are of considerable importance to TeleTrade’s operations. 

Market risk mainly concerns future drops in share prices. A lower level 

of activity on the stock market could lead to reduced interest in share trading 

over the Internet, which in turn could slow or negate the growth of Tele- 

Trade’s customer base. 

competition and development of services 

Competition within TeleTrade’s areas of operation may increase during the 

coming years. Other companies, which do not run competitive operations 

today, could establish themselves on the market as the market expands with 

new areas of application for TeleTrade. The services offered by TeleTrade are 

characterised by continual change as a result of technical developments, 

changing customer demands and other factors. TeleTrade’s future development 

is therefore dependent on its ability to adapt existing services, or to 

develop and introduce new services which meet customers’ new demands. In 

connection, competitors may introduce new services that make certain Tele- 

Trade services less attractive or superfluous. 

key people 

TeleTrade is currently at an early stage of its development and is dependent 

on a number of key people. There is no guarantee that TeleTrade will be able 

to retain or recruit individuals that will prove important to the development 

of the Company. However, via its options scheme, TeleTrade has managed to 

tie personnel and key people to the Company. To date, TeleTrade has been 

successful in attracting and retaining qualified employees. 

hardware and software suppliers 

TeleTrade co-operates with a number of hardware and software suppliers. 

When integrating and developing systems, a certain dependence on each 

individual supplier and partner arises. TeleTrade strives to reduce this risk by 

expanding internal development resources in order to conduct a larger part 

of development activities internally. 

political risks 

The political risks for the stockbroking industry, banks and Internet brokers 

are primarily related to tax issues linked to companies and securities. Future 

risks include, for example, the political risk that existing tax regulations relating 

to securities may be changed in a way that is disadvantageous to holders 

of securities and financial instruments. 

39

other information 

legal form of business entity 

TeleTrade Financial Services AB [publ], corporate identity 

number 556249-1687, is a limited liability company 

registered with the Swedish Patent and Registration 

Office as of 9 September 1984. 

TeleTrade Solutions, corporate identity number 556541- 

9057, is a wholly-owned subsidiary of TeleTrade. VCW 

Internet Services AB, corporate identity number 556541- 

8752, is also wholly-owned subsidiary of TeleTrade. Net- 

Analys Dubbelslash AB, corporate identity number 

556370-9228, is an associated company of TeleTrade 

[49%]. JP Försäkring AB, currently changing its name to 

TeleTrade e-Insurance AB, is a partly-owned subsidiary 

of TeleTrade [80%] with corporate identity number 

556517-0031. Instelligent AB, corporate identity number 

5557-7323, is a wholly-owned dormant subsidiary of JP 

Försäkring AB. TeleTrade eXtrade AB [currently changing 

its name to TeleTrade Technology AB] is a whollyowned 

subsidiary of TeleTrade with corporate identity 

number 556520-1703. TeleTrade Solutions A/S, corporate 

identity number 981023358, is a dormant wholly-owned 

subsidiary. TeleTrade & Associates AB is a wholly-owned 

subsidiary of TeleTrade. It is intended that the company 

will merge with the Parent Company in 2000. 

All companies [except TeleTrade Solutions A/S] within 

the Group are regulated by the Companies Act 

[1975:1385]. 

The Company’s Head Office is located at: 

Gustavslundsvägen 139, Box 14077, S-1667 14 Bromma, 

Sweden 

insurance situation 

TeleTrade judges the Company to be suitably insured for 

its operations. 

40 

pensions 

TeleTrade’s pension commitments towards its employees 

in Sweden are covered by premiums paid to external 

insurance institutions. 

agreements 

TeleTrade has a number of binding agreements in the 

form of development agreements, collaboration agreements 

and other agreements with both customers and 

suppliers. These agreements are of a customary nature. 

The termination of one or more of these agreements 

could have negative consequences on TeleTrade’s earnings 

and position. However, at the present time, TeleTrade 

has no reason to anticipate any significant changes in 

respect of customer or supplier relations in the foreseeable 

future. 

TeleTrade has entered into an agreement concerning the 

non-cash acquisition of an additional one per cent of the 

capital in NetAnalys Dubbelslash AB. This option is 

valid until 31 December 2010. 

agreement on the acquisition of 

jp försäkring ab 

On 18 February 2000, TeleTrade entered into an agreement 

with JP Bank AB [publ] concerning the acquisition 

of 80 per cent of the shares in JP Försäkring AB [“JP 

Försäkring”]. The business activities of JP Försäkring are 

described in more detail above. Payment for the shares in 

JP Försäkring comprised 653,000 newly issued Class B 

shares in TeleTrade. TeleTrade’s extraordinary general 

meeting held on 13 March 2000 voted to issue the shares 

and TeleTrade acquired the shares in JP Försäkring on 20 

March 2000. The agreement includes customary guarantees 

concerning the company’s accounts, assets and liabilities 

situation, tax situation, and permit issues in connection 

with the acquisition of JP Försäkring AB. 

On 18 February 2000, option agreements were also 

signed between TeleTrade and the other three owners of 

JP Försäkring, Thomas Gyllenmo, Johan Zethraeus and 

Thomas Irstam [“the Owners”]. The agreement entitles 

TeleTrade, during an agreed option period, to acquire the 

remaining shares in JP Försäkring. If the options are 

exercised, payment will comprise newly issued TeleTrade 

shares and a certain amount of cash compensation. The 

total number of shares that can be issued as a result of 

option agreements being exercised amounts to 900,000 

Class B shares. In conjunction with entering into the

above-mentioned option agreements, an agreement was also entered into TeleTrade and the 

Owners, which entitles the Owners to acquire TeleTrade’s shares in JP Försäkring if Tele- 

Trade does not exercise the options in accordance with the above. In such a case, the purchase 

price will be calculated in accordance with a formula provided in the option agreement 

and will be paid in cash. 

trademark protection 

TeleTrade protects its trademarks primarily through the company registrations, trademark 

establishment and domain name registration. TeleTrade, VCW and other names and 

descriptions used within the Group are registered as domain names in a number of markets. 

Company registrations have been filed in a number of markets in order to protect 

trademarks and register domains. 

disputes 

To the knowledge of the Board of TeleTrade, there are no ongoing or forthcoming legal or 

arbitration proceedings of significance to the Company. During the past twelve months, 

the Company has not experienced any disputes that can be expected to have any significant 

negative effect on the Company’s financial position or earnings. 

authorisation 

In accordance with the Securities Business Act [1991:981], TeleTrade Solutions has obtained 

authorisation from the Financial Supervisory Authority for the following: managing shares 

in securities funds, cross-border operations in other EEA countries, financial advice, acting 

as the receiver of funds with accounting responsibility, holding customers’ funds in 

accounts to facilitate securities operations, issuing secured customer credit for investment 

in financial instruments, and permission to pursue other related activities. JP Försäkring, 

currently changing its name to TeleTrade e-Insurance, has obtained the following licenses 

from the Financial Supervisory Authority in accordance with the Insurance Brokers Act 

[1982:713]: License to act as an insurance broker of life insurance and license to act as an 

advisor on insurance against loss or damage. 

related party transactions 

No board member, auditor or member of management has had any direct or indirect participation 

in a business transaction with the company that is or was of an unusual nature or 

based on unusual conditions during the current or previous year of operations. Nor has any 

such person during any other year of operations been involved in any such transactions 

that remain unsettled or unfinished. Moreover, no Group company has provided loans, 

guarantees or other personal guarantees to any of the named persons. 

remuneration to key management and auditors 

A fee of sek 398,760, including social security expenses, has been paid to the Board of 

Directors for the financial year 1999. Remuneration to the Chairman of the Board in 1999 

amounted to sek 133,000, including social security expenses. Salary and expenses paid to 

the President, including social security expenses, amounted to sek 1,056,048 in 1999. The 

period of notice for the President is 8 months. Remuneration to key management during 

1999 amounted to a total of sek 4,176,000. In 1999, costs for occupational pension insurance 

for members of management amounted to sek 461,000. These costs are in accordance 

with the pension policy that applies to all employees in the Group. The pension policy has 

been drawn up on the basis of the ITP scheme with regard to the cost level. No severance 

pay agreements exist for members of management. 

During 1999, audit fees amounted to a total of sek 477,000, of which sek 264,000 represented 

direct audit costs for TeleTrade Financial Services AB. 

41

the teletrade share 

the teletrade share 

Up to January 1999, the TeleTrade share was traded on Göteborgslistan, after 

which it was moved to Aragon Fondkommission and the “Aragon” list. From 

early spring 1999, the TeleTrade share has shown a strong price trend. The 

share price rose from just over sek 2 to sek 15 in December 1999. 

As turnover in the share also developed favourably, the Board of Directors 

decided to transfer trading to the New Market list in the OM Stockholm 

Exchange’s SAX system in order to improve liquidity in the share. This was 

also viewed as the first step towards an intended listing on the OM Stockholm 

Exchange’s O-list during Q2 2000. The favourable price trend was 

strengthened by the move to the New Market list and the share price closed 

at sek 32 at year-end 1999. During the beginning of 2000, the share price has 

dropped slightly. The highest share price noted to date is sek 45 and the lowest, 

sek 23. 

42

13 

TeleTrade 

Volume 

The graph shows the price trend for the TeleTrade share and the volume 

of shares sold during the period 13 October 1999 to 25 March 2000. 

20 27 Oct 11 18 25Nov 8 1522 Dec 13 20 2000 17 24 Feb 7 14 21 Mar 6 13 25 

share capital and ownership structure 

share capital 

TeleTrade’s share capital amounts to sek 26,464,622, representing 26,464,622 

Class B shares, with a nominal value of sek 1 per share, inclusive of the current 

new share issue of 653,000 shares in March 2000 in connection with the 

acquisition of JP Försäkring AB [80 per cent]. At the annual general meeting, 

all those with the right to vote may vote in accordance with each held share 

or share by representation without a limit on the number of votes. All shares 

provide equal participation in company assets and profits. On 1 January 1999, 

all Class A shares were re-stamped as Class B shares. 

Development of share capital since the company was formed in 1984 

increase in total no. increase in total share nominal value 

year event no. of shares of shares share capital, sek capital, sek per share, sek 

1984 Company formation 500 500 50,000 50,000 100.00 

1996 1:100 split 49,500 50,000 – 50,000 1.00 

1996 New share issue 50,000 100,000 50,000 100,000 1.00 

1997 New share issue 100,000 200,000 100,000 200,000 1.00 

1997 Bonus issue 6:1 1,200,000 1,400,000 1,200,000 1,400,000 1.00 

1997 New share issue 1,500,000 2,900,000 1,500,000 2,900,000 1.00 

1998 New share issue 1 

7,110,757 10,010,757 7,110,757 10,010,757 1.00 






2000 New share issue 2 

653,000 26,464,622 653,000 26,464,622 1.00 

1 The TeleTrade Financial Services AB Group was formed in December 1998. In conjunction with this, 7,110,757 shares were issued in kind. 

2 The ongoing issue of 653,000 shares in March 2000 in connection with the acquisition of JP Försäkring AB [80%]. 

43 

source: six 

36 

34 

32 

30 

28 

26 

24 

22 

20 

18 

16 

14 

12 

10 

8 

6 

700' 

600' 

500' 

400' 

300' 

200' 

100'

At the Annual General Meeting of TeleTrade held on 28 

April 1999, the Board was given the authority to, during 

the period up until the next annual general meeting, 

decide on one or more new share issues amounting to a 

maximum total of 3,000,000 new Class B shares, each 

with a nominal value of sek 1 one [1], which would entail 

a maximum increase of sek 3,000,000 in the Company’s 

share capital. 

With the support of this authorisation, the Board of 

TeleTrade has carried out directed new share issues on 

two occasions in order to strengthen the company’s 

capital base. 

In October 1999, a new issue of 1,000,000 shares was 

directed at Aragon Fondkommission AB. This issue provided 

the company with sek 5.5 million after issue 

expenses. This arrangement acted as a step towards a 

future collaboration whereby which TeleTrade intended 

to provide Aragon with a trading service that would 

enable the company to offer its customers securities 

trading via the Internet. Other potential areas for collaboration 

are mutual fund trading and new introductions. 

Joint ventures in these areas have not yet been commenced 

for various reasons. The new share issue was conditional 

upon approval by the Swedish Financial 

Supervisory Authority, and this approval was obtained. 

In January 2000, a new share issue of 2,000,000 shares 

was directed at a limited number of Swedish institutions 

and asset managers. The issue provided the company 

with sek 44.9 million after issue expenses. A considerable 

44 

amount of the issue capital has been used to increase 

TeleTrade Solutions’ equity from sek 10 million to sek 45 

million in order to obtain a license from the Financial 

Supervisory Authority to enable the company to manage 

customers’ funds held in securities accounts as operating 

capital, in the same way that banks and traditional stockbrokers 

do. This licence, which was obtained in March 

2000, increases the earnings potential of TeleTrade as it 

enables the company to offer customers extended services 

within areas such as the pledging of shares. The pledging 

of shares and thereby the interest rate spread between 

deposits and lending is a considerable source of income 

in the sector. 

number of shares number of number of shares proportion % 

per shareholder owners [thousands] 

1–1 000 5,456 1,889,327 7.1 

1,001–2,000 613 1,060,769 4.0 

2,001–10,000 499 2,356,720 8.9 

10,001–50,000 164 3,039,565 11.5 

50,001–100,000 17 1,267,354 4.8 

100,001– 28 16,850,887 63.7 

Total 6,777 26,464,622 100 

Share distribution in terms of shareholding size and number of shareholders. 

ownership structure1 TeleTrade has 6,777 shareholders. The principal shareholder 

is IDG International Data Group AB with 20.9 

per cent of the capital and votes. TeleTrade’s major shareholders 

as of 17 March 2000 according to information 

from VPC and including changes known to the Board are 

as follows:

shareholder 

proportion of capital 

1 

number of shares and votes, % 

IDG International Data Group AB 5,525,660 20.88 

Visionalis AB 2,686,944 10.15 

Cognition AB 2,188,800 8.27 

Maxus AB [Magnus Wahlbäck] 929,971 3.51 

Anders Hilmersson med bolag 804,822 3.04 

T-Bolaget AB 700,011 2.65 

Aragon Fondkommission AB 510,000 1.93 

Aragon Fonder 341,500 1.29 

Johnsson & Borsell 300,000 1.13 

Handelsbanken Kapitalförvaltning 267,040 1.01 

Other 12,209,874 46.14 

Total 26,464,622 100 

1 according to information from vpc as of 17 march 2000 and information known to the company thereafter. 

incentive scheme 

Before the new TeleTrade Group was 

formed on 31 December 1998, various 

option schemes existed within the then 

VCW and TeleTrade companies. TO2, 

TO3, and TO4 were transferred to the new 

group. When exercised, these option series 

entail a total dilution of 4,250,835 shares 

with the total number of shares rising to 

30,715,457. 

The extraordinary general meeting held on 

13 March 2000 decided in favour of offering 

subordinated loans comprising 

1,500,000 separable options for subscription 

by Group employees under market 

conditions. By the end of March 2000, the 

subscription offer had been sent to all fulltime 

employees. 

The options have a subscription price of 

sek 44 and are valid until 31 December 

2002. Exercising in full would entail a 

dilution of approximately 5 per cent of 

the number of shares after full dilution. 

45 

number of number of exercise 

programme options shares price sek 

TO2 115,000 1,415,650 4.06 

TO3 213,500 2,628,185 4.47 

TO4 1 

150,000 207,000 3.64 

TO5 2 

1,500,000 1,500,000 44.00 

Total 1,978,500 5,750,835 – 

1 not vpc registered 2 vpc registered intended 

dividend policy 

TeleTrade has not yet shown a profit and, 

therefore, no dividends have been paid out 

to the Company’s shareholders. As Tele- 

Trade is currently undergoing a phase of 

expansion and investment, any funds available 

for dividends remain within the 

Company for use in reinvestment activities 

deemed advantageous to the Company. 

Against the background of the extensive 

expansion that the Board anticipates for 

TeleTrade, a continued restrictive dividend 

policy is deemed advisable and appropriate 

for the coming years. 

shareholder agreements 

There are no shareholder agreements 

between the Company’s major shareholders.

Board of directors

engt marnfeldt 

Born 1943. Board member. 

Head Publisher and President of 

IDG International Data Group AB. 

Board member since 1999. 

Member of the boards of Projector AB, 

Comboloan AB, TeleTrade Solutions AB and 

NetAnalys Dubbelslash AB. 

Personal shareholding: 15,000 shares. 

anders hilmersson 


President of Scriptum Information AB. 


Member of the boards of TeleTrade Solutions 

AB and VCW Internet Services AB. 

Private shareholding and via company: 

804,822 shares. Options with subscription 

rights to 420,510 new shares. 

joakim engvall 

Born 1960. Board Member. 

President of Höghuset 239 AB. 


Member of the boards of 

Sagmeister Ensgaard & Partners AB, 

Niosvedet AB and TeleTrade Solutions AB. 

No shareholding in TeleTrade. 

magnus wahlbäck 

Born 1943. Chairman of the Board. 

Founder and President of Maxus Capital AB. 

Board member and Chairman of the Board 

since 1998. Chairman of the boards of Ticket 

Travel Group AB [publ], 21st Century Cybertravel 

Ltd., Internet 5 AB [publ], AtHome i 

Sverige AB, Kronan Cykel Svenska AB and 

TeleTrade Solutions AB. Board member and 

Chairman of the Board of Styrelsekollegiet. 

Member of the boards of Frontec AB and 

Stockholms Affärsresebyrå AB. Personal 

shareholding via company: 929,971 shares. 

klas danielsson 

Born 1963. Board member and President of 

TeleTrade Financial Services AB [publ] and 

TeleTrade Solutions AB. 

Board member since 1998. Member of the 

boards of TeleTrade Solutions AB, VCW Internet 

Services AB, NetAnalys Dubbelslash AB 

and JP Försäkring AB [which is in the process 

of changing its name to TeleTrade 

e-Insurance AB]. Personal shareholding: 


rights to 2,018,040 new shares. 

jan edholm 


President of Autoo AB. 


Member of the board of 

TeleTrade Solutions AB. 

Personal shareholding: Options with 

subscription rights to 26,281 new shares. 

47 

olle isberg 


President of Visionalis AB and 

H&B Advisors AB. 


Member of the boards of Capona AB, 

Telelogic AB, Epani AB, 

Netch Technologies AB, Teligent AB 

and TeleTrade Solutions AB. 

No shareholding in TeleTrade. 

petter wingstrand 


Vice President of T-Bolaget AB. 


Member of the boards of J. Lindeberg AB, 

Epani Systems AB, Millenium Media Group 

AB, Autoguide Europe AB, E! Entertainment 

AB, Television Scandinavia AB and TeleTrade 

Solutions AB. Shareholding in TeleTrade via 

company: 700,011 shares. 

board of directors

management 

and auditors 

anders karlsson 

Born 1970. President of VCW Internet Services 

AB. Employed since 1997. 

Background: Marketing Manager, 

Kontotjänst i Göteborg AB. Marketing 

Assistant and Project Manager, IHM Business 

School AB. Personal shareholding: 40,000 

shares. Options with subscription rights to 

157,691 new shares. 

juan segura 

Born 1973. Head of ITand Systems 

Development. Employed since 1998. 

Background: Consultant, Yask Systemutveckling 

AB. Personal shareholding: 

Options with subscription rights to 

183,973 new shares. 

klas danielsson 

Born 1963. President of TeleTrade Financial 

Services AB [publ] and TeleTrade Solutions 

AB. Founder of TeleTrade Solutions AB. 

Employed since 1997. 

Background: Market Maker and Chief Dealer, 

SBC Warburg Stockholm. 


Options with subscription rights to 

2,018,040 new shares. 

jessica gertun 

Born 1974. Head of Customer Relations. 



Options with subscription rights to 26,282 

new shares. 

anders råge 

Born 1957. CFO and Compliance Officer. 

Employed since 1999. Background: Money 

market dealer, Aragon Fondkommission AB; 

President of Aragon Holding AB; CFO, Aragon 

Fondkommission AB. Personal shareholding: 


rights to 78,846 new shares. 

48 

eva feigin 

Born 1962. Head of Administration. 


Background: Controller, Borgkronan AB. 

Personal shareholding via company: 12,000 

shares. Options with subscription rights to 

52,564 new shares.

johan zethraeus 

Born 1963. Head of Internet, TeleTrade 

e-Insurance. Founder of JP Försäkring AB, 

which is in the process of changing its name 

to TeleTrade e-Insurance AB. 


Background: Marketing Manager for Trygg 

Hansa’s Financial Insurance business area. 

Personal shareholding: Minority owner, 

6.66 per cent of TeleTrade e-Insurance. 

thomas irstam 

Born 1962. President of TeleTrade 



to TeleTrade e-Insurance AB. Employed since 

1995. Background: Head of Transport Insurance, 

Trygg Hansa. New Operations Manager, 

Hansa Industrial Insurance. 

Personal shareholding: Minority owner, 6.66 

per cent shareholding in TeleTrade 

e-Insurance. 

torbjörn östman 

Born 1964. Chief Dealer, TeleTrade 

Solutions AB. Employed since 1997. 

Background: Chief Dealer, Pulpex OM. 

Personal shareholding: Options with 

subscription rights to 341,664 new shares. 

thomas gyllenmo 

Born 1962. Vice Presidentof TeleTrade 



to TeleTrade e-Insurance AB. Employed since 

1995. Background: Different positions within 

Trygg Hansa, including District Manager, 

Controller, Underwriter and project manager 

for special projects, member of Group Management. 

Personal shareholding: Minority 

owner, 6.66 per cent shareholding in Tele- 

Trade e-Insurance. 

auditors 

eva wadman 

Born 1954. Authorised public accountant 

from KPMG Bohlins AB. Auditor for TeleTrade 

since 1999. 

Björn Stenson of Lindebergs Grant Thornton 

AB is the auditor for TeleTrade Solutions AB 

as appointed by the Financial Supervisory 

Authority. 

49 

mats sjölin 

Born 1964. Acting Vice President of TeleTrade 

Solutions AB. Employed since 1997. 

Background: Institutional broker, James 

Capel; Market Maker, Options, Aragon Fondkommission 

AB; Options broker, OM. 


Options with subscription rights to 711,703 

new shares. 

Shareholdings are per 17 March 2000, including 

changes which have come to the attention 

of the Board after this date, including 

shareholdings via family and companies.

tax issues 

The following is a short description of the primary taxation 

consequences for natural and legal persons domiciled 

in Sweden and that are applicable to TeleTrade 

shareholders. The description does not cover cases where 

the securities comprise current assets in business activities 

or are held by a partnership. The information is based on 

legislation current when this prospectus was made public. 

taxation on sales of shares 

natural persons 

Private individuals and estates of deceased persons that 

sell their TeleTrade shares are liable for tax on the entire 

capital gain under the income tax schedule capital. 

Capital gains tax is 30 per cent. Capital gains and capital 

losses can be calculated using either the average or standardised 

method. If the average method is applied, capital 

gain and loss is calculated as the difference between 

the selling price, after allowances for sales costs, and the 

fiscal acquisition value. The acquisition value of a share is 

the average acquisition value for all shares of the same 

type and class based on the actual acquisition costs with 

consideration for any changes in the holding. If the standardised 

method is applied, the acquisition value is set at 

20 per cent of the selling price after allowances for sales 

costs. 

If the sale of TeleTrade shares results in a capital loss, the 

entire loss can be considered for tax purposes. Capital 

losses are fully deductible from capital gains received 

from other listed shares or similar securities during the 

same year. Up to 70 per cent of surplus capital losses are 

deductible during the same year. A deficit attributable to 

income from capital reduces tax on income from 

employment and business activities, as well as property 

tax. A tax reduction equal to 30 per cent of the deficit up 

to sek 100,000 and 21 per cent for the remaining deficit 

is allowed. Deficits can not be carried forward to future 

fiscal years. 

legal persons 

Companies and other legal persons, with the exception 

of the estates of deceased persons, are taxed on the entire 

capital gain. Deductions for capital losses are allowed. 

For calculation of the acquisition value, see the above 

under Natural Persons. Tax is charged under the income 

tax schedule business activities and the tax rate is 28 per 

cent. Capital losses from the sale of shares held in capital 

investments may be deducted from the capital gains from 

shares and other securities during the same or a later year. 

Special tax regulations apply to investment companies, 

securities funds, and partnerships. 

51 

dividends and taxation 

In general, share dividends are liable for taxation. 

For natural persons and the estates of deceased persons, 

dividends are taxed under the income tax schedule capital. 

The tax rate is 30 per cent. For legal persons, with the 

exception of the estates of deceased persons, dividends are 

taxed under the income tax schedule business activities. 

The tax rate is 28 per cent. For limited companies and cooperatives, 

with the exception of investment companies, 

dividends on business dependent holdings are tax-free. 

coupon tax 

Foreign shareholders who receive dividends from Sweden 

are normally liable to pay coupon tax. The tax rate is 30 

per cent, but can generally be reduced through regulations 

in applicable agreements concerning the avoidance 

of double taxation. 

In Sweden, the VPC is responsible for the collection of 

coupon tax. If the shares are held by a nominee shareholder, 

the nominee is responsible for the tax deduction. 

wealth tax 

TeleTrade shares are not subject to wealth tax as they are 

listed on the OM Stockholm Exchange’s O-list. 

capital and transfer tax 

For capital and transfer tax, TeleTrade shares are entered 

at 30 per cent of the listed value. 

tax issues for 

shareholders

articles of 

association 

Articles of association for TeleTrade 

Financial Services AB [publ], 556249-1687 

business name 

The company’s business name is TeleTrade Financial 

Services AB [publ]. 

registered office 

The company’s registered office is in Stockholm. 

operations 

The object of the company’s operations is to carry out 

securities activities, provide financial information via the 

Internet, and run other related operations either directly 

or via wholly- or partly-owned subsidiaries. 

share capital 

The share capital may not be less than sek 11,900,000 or 

more than sek 47,600,000. Shares are issued in a Class A 

and a Class B. Each A share represents ten voting rights 

and each B share represents one voting right. 

A shares may be issued to a combined total of 320,000 

shares and B shares to a combined total of 47,280,000 

shares. Holders of A shares own the right to have such 

shares converted into B shares upon written application. 

the share 

One share is sek 1. 

preferential rights 

If the company decides to carry out a new cash share issue 

52 

of Class A and Class B shares, owners of Class A and 

Class B shares shall have preferential rights to subscribe to 

new shares of the same type in relation to the number of 

shares owned prior to the issue [primary preferential 

right]. Shares not subscribed to through primary preferential 

rights shall be offered to all shareholders for subscription 

[subsidiary preferential right]. If the shares thus 

offered do not cover subscriptions with subsidiary rights, 

the shares will be distributed between the subscribers in 

relation to the number of shares held prior to the issue, 

and any surplus shares that can not be distributed in this 

manner shall be distributed through a ballot. The statements 

above shall not restrict the possibility to decide on 

new cash share issues with a deviation from shareholders’ 

preferential rights. When increasing share capital through 

a bonus issue, new shares of each type shall be issued in 

relation to the number of shares of the same type already 

in existence. And on the occasion, old shares of a particular 

type shall provide the right to subscribe to new shares 

of the same type. The statements above shall not restrict 

the possibility, after the necessary changes to the Articles 

of Association, to issue shares of a new type via bonus 

issues. 

record day provision 

A shareholder who on the appointed record day is recorded 

in the share register or on the shareholders’ list in 

accordance with chapter 3, paragraph 12 of the Swedish 

Companies’ Act [1975:1385] shall be considered qualified 

to receive dividends and, on the occasion of bonus issues, 

new shares due to the said shareholder, as well as to exercise 

the shareholders’ preferential right to partake in new 

issues. 

the board of directors 

The Board shall be comprised of at least three but no more 

than ten board members. Board members shall be elected 

annually at the annual general meeting for a period extending 

to the end of the next annual general meeting.

556249-1687 

corporate identity 

numbder 

the auditors 

An auditor, with or without a deputy auditor, shall be appointed at the annual general 

meeting. 

invitations and notifications 

Invitations to the annual general meeting shall be published in the Swedish Official 

Gazette [Post- och Inrikestidningar] and one nation-wide newspaper, as well as on the 

company’s home page on the Internet. In order to participate in negotiations during the 

annual general meeting, a shareholder must be included in the extract from the share 

register showing the shareholder structure ten days prior to the meeting, and notify the 

company of their interest by 16.00 p.m. on the date specified in the invitation to the 

meeting. This day may not be a Sunday, any other public holiday, a Saturday, Midsummer 

Eve, Christmas Eve or New Year’s Eve, and may not be more than five business 

days before the meeting. Shareholders shall also notify the number of accompanying 

persons the shareholder intends to bring to the annual general meeting, as described in 

the previous paragraph. 

the annual general meeting 

The annual general meeting shall be held in Stockholm or Gothenburg. The annual general 

meeting shall be held annually within six months of the close of the financial year. 

The following items shall be included in the annual general meeting agenda. 

1. Election of the chairman of the annual general meeting. 

2. Establishment and approval of the voting list. 

3. Election of a person to take the minutes and two persons to verify the minutes. 

4. Establishment of the qualified convening of the meeting. 

5. Approval of the agenda. 

6. Presentation of the annual report, auditors’ report and, when applicable, 

the consolidated accounts and group auditors’ report. 

7. Decisions; 

a] to adopt the income statement and balance sheet and, when applicable, 

the consolidated income statement and consolidated balance sheet. 

b] to discharge the board and CEO from liability. 

c] to determine allocations of the company’s profit or loss in accordance with 

the adopted balance sheet. 

8. Determination of the number of board members and deputy board members. 

9. Determination of the number of auditors and deputy auditors. 

10. Establishment of remuneration for the board and auditors. 

11. Election of board members, deputy board members, auditors and deputy auditors. 

12. Other items to be covered by the meeting in accordance with the 

Swedish Companies’ Act. 

At the annual general meeting, each individual with voting rights may vote with the number 

of shares held and represented by that individual without limit on the number of votes. 

the chairman 

The chairman of the board or, in his/her absence, the individual appointed by the board, 

shall open the meeting and chair negotiations until the chairman has been elected. 

the financial year 

The financial year is the same as the calendar year. 

Adopted at the annual general meeting held on 28 April 1999. 

53

administration 

report 1999 

The Board of Directors and President of 

TeleTrade Financial Services AB [publ] 

hereby present the annual accounts for 

1999 for the Parent Company and the Group. 

group 

The TeleTrade Group was formed on 31 December 1998, 

and 1999 was thus the Group’s first year of operations. 

TeleTrade Financial Services AB has the following wholly-owned 

subsidiaries: TeleTrade Solutions AB, VCW 

Internet Services AB, TeleTrade eXtrade AB 

[currently changing its name to TeleTrade Technology 

AB], TeleTrade & Associates AB and TeleTrade Solutions 

A/S. The company has a 49 per cent shareholding in the 

associated company NetAnalys Dubbelslash AB with the 

possibility to acquire a further 1 per cent via an option 

agreement. 

On 18 February 2000, the company entered an agreement 

with JP Bank AB [publ] concerning the non-cash 

acquisition of JP Bank AB’s shareholding in JP 

Försäkring AB. In accordance with this agreement, 

JP Bank AB will sell its 80 per cent holding in JP 

Försäkring AB for a purchase sum of 653,000 newly 

issued shares in TeleTrade Financial Services AB. 

The non-cash issue, and thereby the acquisition, 

was approved by the extraordinary general meeting held 

on 13 March 1999. JP Bank AB then subscribed to the 

653,000 shares. At the same time, an agreement concerning 

the acquisition of the remaining shareholding in JP 

Försäkring AB was signed with the management of JP 

Försäkring AB. JP Försäkring AB is an insurance brokerage 

operating within non-life and life insurance for 

54 

private individuals. The company has approximately 

40 employees. Turnover and pre-tax profit for 1999 

amounted to sek 22 million and sek 0.7 million respectively. 

The TeleTrade Group’s strategy is to supplement 

its existing operations within financial services on the 

Internet with a Net-based insurance brokerage service. 

In combination with the Group’s existing services, the 

competitive advantages and synergy potential are judged 

to be considerable. 

At the beginning of the year, the TeleTrade Financial 

Services AB share was traded on Göteborgslistan. 

In February, trading was transferred to Aragon Fondkommission 

AB on the “Aragon” list. On 16 December, 

trading was then transferred to Nya Marknaden in the 

OM Stockholm Exchange’s electronic SAX system. 

The number of shareholders rose during the year from 

approximately 700 to 2,352. A listing on the OM 

Stockholm Exchange’s O-list is planned for April 2000. 

operations 

The object of the company’s operations is to carry out 

securities activities, provide financial information via the 

Internet, and run other related operations either directly 

or via wholly or partly-owned subsidiaries. 

operational development 

and significant events 

parent company and group 

For the parent company and group, 1999 was characterised 

by intensive efforts to secure and strengthen the 

level of confidence in the business among the stock 

market and shareholders, the capital market, authorities, 

business partners and stock exchanges. These efforts have 

proven successful. A number of new share issues were 

carried out during the year, good relations were estab-

lished with authorities and business partners, and the share price showed 

very a very favourable trend. 

In March 1999, IDG, International Data Group AB became the new principal 

shareholder via a directed new share issue. IDG is the world’s largest IT 

media group, based in Boston, USA. In Sweden, IDG publishes a large 

number of IT and computer magazines. IDG USA, via operations in IDG 

Ventures, has acted successfully as a venture capital company investing in 

Internet-related companies in the American market. At year-end, IDG 

owned approximately 23 per cent of the capital and votes in the parent company. 

After the directed new share issue carried out in January 2000, IDG’s 

holding now amounts to approximately 21 per cent of the capital and votes. 

In January 2000, a new share issue totalling 2 million shares was directed at a 

limited number of funds and asset managers. The issue price was sek 23.5. 

The issue brought in sek 47 million before issue expenses. 

the internet broker teletrade solutions, www.teletrade.se 

For the Internet broker TeleTrade Solutions, 1999 was characterised by very 

strong expansion and huge success. The number of customers has increased 

strongly. The number of securities accounts opened during the year has 

increased by 414 per cent from 3,500 to 18,000, and the number of active 

accounts by 700 per cent from 1,000 to 8,000. In May, TeleTrade Solutions 

was named Sweden’s best Internet broker web site by the magazine Internetworld. 

In September, following the largest and most comprehensive test 

undertaken in Sweden to date, TeleTrade Solutions was proclaimed the best 

Net broker in Sweden by the magazines Privata Affärer and Internetworld. 

The jury motivated their decision by saying, among other things, that “Tele- 

Trade is currently the most advanced comprehensive service offered by any 

Internet broker”. 

The extremely active stock market climate, combined with increased marketing 

efforts and the awards and distinctions earned, resulted in strong growth 

for TeleTrade Solutions during the autumn. There was a strong rise in the 

number of customers and transactions, as well as in market share and income. 

This strong growth put great pressure on the systems and the organisation. 

Starting late summer, work started to expand TeleTrade Solution’s systems. 

This work is still in progress. 

55

TeleTrade Solution’s market share of the total transactions 

on the Stockholm Stock Exchange increased from 

0.33 per cent in January 1999 to 1.78 per cent in December 

1999. Among Internet brokers, TeleTrade had the 

largest share of option trading. In December 1999, Tele- 

Trade had 13.09 per cent of OMX option trading [2nd 

overall largest player] and 1.48 per cent of share option 

trading. At the end of March 1999, the Financial Supervisory 

Authority provided notification that it had closed 

an investigation without taking any action. The investigation 

concerned a mistake made by the Company in 

connection with the management of customers’ assets 

and credit issued against pledged securities. The Company 

discovered the mistake when compiling the annual 

accounts for 1998 and immediately reported the matter 

to the Financial Supervisory Authority. 

the stock exchange information 

service vcw, www.vcw.se 

VCW has experienced very strong growth during 1999. 

The number of visitors, page exposures and individual 

users has increased significantly. This is the result of the 

increase in shares, but also the result of the considerable 

expansion of content in VCW services. Income for VCW 

has increased 25 per cent to sek 2,359,000 from sek 

1,893,000 in 1998. 

During the year, VCW’s share discussion service has 

gained a great deal of media attention. The discussion 

service is by far Sweden’s largest, and the number of daily 

contributions has increased explosively from about 1,000 

per business day to about 5,000 per business day. VCW 

is now one of the absolute largest vertical portals in 

Sweden. For those truly interested in shares, VCW’s 

discussion service has established itself as an essential 

source of information. 

56 

netanalys and the web publication dagens 

finans, www.netanalys.se 

As of 1 November, the parent company owns 49 per cent 

of the shares in NetAnalys Dubbelslash AB and has the 

possibility to acquire a further 1 per cent via options. 

During the summer, NetAnalys launched the daily web 

publication Dagens Finans. Dagens Finans is distributed 

via e-mail at 16.00 p.m. on each normal business day and 

is therefore received by subscribers a little over an hour 

before the stock exchange closes. This enables Dagens 

Finans to provide readers with valuable information on 

which to act before the stock exchange closes. 

Subscription via e-mail is free of charge and the publication 

is financed through advertising. A web publication 

distributed in PDF-format via e-mail opens many new 

doors for interactive advertising. Operations are being 

built up. The number of readers has increased considerably 

and at the close of the year totalled approximately 

10,000. 

the duties of the board 

The board sees its primary task as the optimal growth of 

the value of shareholder assets in TeleTrade shares. This 

shall obviously be done parallel to the application of various 

laws and regulations that apply to a company such as 

the TeleTrade group. 

We can note that the goal for growth in value during 

1999 has been reached far beyond our initial expectations. 

The actual growth in value reflects the extremely 

positive development experienced by the group’s business 

operations. In addition to high growth levels, the group’s 

services have been much used and appreciated and 

gained a great deal of positive media attention.

As of January 1999, new imperative regulations were introduced in the 

Swedish Companies’ Act that affect the board’s work method. We assess that 

TeleTrade’s board, in all essential matters, has already applied the principles 

now introduced. The board has established clear rules of procedure, instructions 

for the President, and reporting instructions. 

In addition, the board has a clear focus on working with goals, strategies and 

the following up of said goals and strategies without relinquishing control of 

the company’s administrative and other routines. 

Board work within TeleTrade is particularly active. This high level of activity 

reflects both the board members’ deep commitment and the rapid developments 

and changes that are taking place both in the market and within Tele- 

Trade. During 1999, 27 meetings within the parent company were recorded 

in the minutes. In practice, the board’s work within the parent company 

TeleTrade Financial Services AB and the subsidiary TeleTrade Solutions AB 

are primarily performed in symbiosis, as the President and board members 

are the same for both companies and relevant issues overlap to a large extent. 

The most important issues handled by the board are and have been: [1] 

ensuring that the company follows the very complicated framework of regulations 

within which it operates, [2] strategic planning including deciding 

which operational and geographical areas the group shall concentrate on, [3] 

the composition of an IT strategy including the selection of hardware and 

software solutions and the dimensioning of these, [4] ensuring that the 

group, despite its strong growth, can function well as an organisation and in 

its relations with customers, and [5] the financial expansion and structure of 

the group shall be balanced against its need for a secure financial base and 

the shareholders’ interest in optimising returns on invested capital. 

It is our ambition to work on different levels – business-wise, in board 

matters, and in decisions that can affect the shares’ technical conditions – 

in order to create the greatest possible value for TeleTrade’s now more than 

6,500 shareholders. We are convinced that the decisions made during 1999 

and the beginning of 2000 have created a good foundation for living up to 

this ambition. 


The group made a loss of sek 18,264,000 in 1999 [sek -3,531,000]. Turnover 

for 1999 amounted to sek 24,572,000 [sek 1,004,000]. 

The group was formed on 31 December 1998, which is why turnover 

and earnings for the group and the parent company are the same for 1998. 

The parent company made a loss of sek 4,669,000 in 1999. The company 

did not report turnover for 1999. 

57

liquidity and financing 

The group’s liquid assets amounted to sek 25,627,000 at 

the close of the year, of which sek 5,629,000 were frozen 

assets. Parent company liquid assets amounted to sek 

2,655,000 [sek 1,966,000]. 

personnel 

At year-end, the group had 27 employees. 

anticipated future developments 

The Group’s business areas showed strong growth in 

1999, partly due to market leading, high quality services, 

and partly due to market growth and other market factors. 

There is large potential for continued growth since a 

large number of market indicators since have pointed to, 

and indeed still point to, further growth. These include: 

High stock exchange turnover. 

Increase in number of listed companies. 

Increase in international trading. 

Expanded electronic equity trading. 

Share ownership increasing among private investors. 

Increased interest in and awareness of personal 

finances. 

Online trading in mutual funds now offered 

in addition to shares and options. 

Greater Internet penetration. 

Trading via mobile phones, WAP, handsets, etc. 

For 2000, the prospects for continued strong growth are 

consequently good. The Group’s services are established 

and market-leading in their respective areas. Interest in 

private finances is high among the general public and 

everyone seems to be taking an interest in the stock 

exchange. Use of the Internet continues to grow, especially 

with regards to financial services and share trading. 

The structural developments are more than ideal for the 

Group. Nothing could be better for business than 

extended trading hours and the proposal for tax-deferred 

transfers of mutual fund savings. The plans announced 

by OM Stockholm Exchange in February 2000 to launch 

JIWAY, the new electronic European stock exchange, create 

very interesting future prospects. TeleTrade Solutions’ 

systems are already largely adapted for JIWAY system 

solutions. 

Many predict that the Internet advertising market will 

experience strong growth during 2000. This growth, 

58 

together with a strengthened sales organisation, will lead 

to VCW’s advertising income increasing more than market 

growth during 2000. 

All of the Group’s customers and users will be offered a 

subscription to the Internet newspaper Dagens Finans. 

This means that Dagens Finans will have more than 

30,000 subscribers during the second half of 2000. This 

will provide a large enough readership to enable the sale 

of advertisement space in the newspaper to begin. 

During the year, a number of different services will be 

introduced by both VCW and TeleTrade Solutions. 

Before the summer, TeleTrade Solutions will launch a 

“mutual fund supermarket” before the summer, which 

will enable trading and monthly saving in most of the 

funds currently available on the market. Membership of 

the stock exchanges in Norway, Denmark and Finland 

and the subsequent launch of a pan-Nordic service are 

planned to take place before the summer. When the new 

global electronic trading site JIWAY is launched in 

September 2000, TeleTrade Solutions intends to be 

among the first of its members. 

As a result of the targeted new share issue carried out in 

January 2000, consisting of 2 million shares and bringing 

in sek 47 million after issue-related costs, TeleTrade Solutions 

submitted an application to the Financial Supervisory 

Authority for an extended permit under the Securities 

Business Act [SFS 1991:981]. The extended license 

will give TeleTrade Solutions the right to manage customers’ 

funds in securities accounts in their own operations. 

This in turn enables TeleTrade Solutions to be a 

more competitive market player and to offer customers’ 

better terms for borrowing using shares as collateral. This 

is expected to provide a considerable increase henceforth 

in net interest income/expenses. 

The Group’s result is a consequence of strong expansion 

and focus on growth. The Group’s continued expansion 

is based on significantly increased investments in development 

and marketing and on an anticipated high stock 

exchange turnover. An expansion into other Nordic markets 

is foreseen and a “mutual fund supermarket” will be 

launched before the summer. 

TeleTrade Solutions strives to grow by at least 50 active 

securities accounts per trading day. This represents a 

minimum of 20,000 active customers by the end of

December 2000, not taking into consideration geographic expansion in 

the Nordic region and other structural developments and expansion possibilities. 

TeleTrade Solutions’ goal is to become the largest independent 

Internet broker in the Nordic region. This is to be achieved through 

organic growth, acquisitions, mergers or partnerships and by broadening 

the range of services to include more financial services. 

proposed treatment of unappropriated earnings 

group 

The Group’s accumulated loss, according to the established consolidated 

balance sheet, amounts to sek -26,177,000. No allocations to restricted 

reserves are proposed. 

parent company 

Standing at the disposal of the Annual Meeting: 

Loss brought forward sek -8,056,814.34 

Net loss for the year sek -4,668,815.91 

sek -12,725,630.25 

The Board and President propose that the funds at the disposal of the 

Annual General Meeting be appropriated as follows: 

Carried forward to next year´s accounts sek -12,725,630.25 

With regard to the result for the Group and Parent Company during the 

financial year and the financial position of the Group and Parent Company 

at year-end, please refer to the income statements, balance sheets 

and notes that follow. 

59

financial statements 

Consolidated income statement 

and balance sheet 

consolidated income statement [sek thousands] 

Note 1999 1998 

Commission income 1 22,545 – 

Commission expenses 1 -2,538 – 

Interest income 2 4,907 124 

Interest expenses 2 -3,596 -83 

Net income from financial transactions 3 -118 -930 

Other operating income 3,372 1,893 

Total operating income 24,572 1,004 

General administrative expenses 

Depreciation and amortisation of tangible and 

4 -33,929 -3,571 

intangible fixed assets 5 -2,742 -964 

Other operating expenses -6,165 – 

Total operating expenses -42,836 -4,535 

Net profit/loss for the year -18,264 -3,531 

consolidated balance sheet [sek thousands] 

Assets Note 1999 1998 

Lending to credit institutions 25,627 11,879 

Lending to the general public 41,381 7,514 

Interest-bearing securities _ 992 

Shares and participations _ 197 

Participations in associated companies 6 980 _ 

Intangible assets 7 2,540 3,365 

Tangible assets 7 3,408 2,925 

Other assets 8 15,262 18,668 

Pre-paid expenses and accrued income 9 1,585 1,065 

Total assets 90,783 46,605 

liabilities [sek thousands] 

Note 1999 1998 

Liabilities to credit institutions 41,000 – 

Other liabilities 10 25,456 30,329 

Accrued expenses and pre-paid income 11 3,590 1,931 

Subordinated liabilities 12 2,095 1,493 

Total liabilities 72,141 33,753 

Accounts and cash flow analysis for 1997 have not been included since operations during 1997 varied 

considerably from those carried out today. The TeleTrade group was formed per 31 December 1998. 

VCW was the only business that existed in 1997 and it undertook only small operations with a somewhat 

different orientation. 

60

equity [sek thousands] Note 13 

Restricted equity 1999 1998 

Share capital 23,812 10,011 

Restricted reserves 21,007 10,754 

44,819 20,765 

Non-restricted equity 1999 1998 

Non-restricted reserves -7,913 -4,382 


-26,177 -7,913 

Total equity 18,642 12,852 

Total liabilities and equity 90,783 46,605 

Pledged assets and contingent liabilities 

Funds managed for customers 325,559 37,885 

Shares in securities accounts – 197 

Frozen funds 5,629 2,100 

[of which to the Group’s advantage] 5,629 2,100 

consolidated cash flow statement [sek thousands] 

Current operations 1999 1998 

Payments from customers 25,093 – 

Payments to suppliers and employees 

Cash flow from current operations 

-42,350 – 

before paid interest and income tax -17,257 – 

Interest received 4,907 _ 

Interest paid -3,501 – 

Increase in loans to the general public -33,866 – 

Increase in liabilities to credit institutions 41,000 – 

Increase in subordinated loans 602 – 

Cash flow from current operations -8,115 – 

Investment activities 1999 1998 

Acquisition of shares and other securities 209 – 

Acquisition of intangible and tangible fixed assets -2,400 – 

Cash flow from investment activities -2,191 – 

Financing activities 1999 1998 

New share issues 24,054 – 

Cash flow from financing activities 24,054 – 

Increase in liquid assets 13,748 – 

Liquid assets at start of year 11,879 – 

Liquid assets at end of year 25,627 – 

61

Parent company balance sheet and 

cash flow statement 

parent company income statement [sek thousands] 

Note 1999 1998 

Net sales – 1,893 

Total operating income – 1,893 

External expenses -2,055 -2,101 

Personnel costs 14 -2,521 -2,215 

Depreciation – -440 

Other operating expenses – – 

Operating profit/loss -4,576 -2,863 

Income from financial investments: 

Interest income and similar income items 29 738 

Interest expenses and similar expense items -122 -1,550 

Net financial income 15 -93 -812 


parent company balance sheet [sek thousands] 

Assets 

Fixed assets 

Financial fixed assets 

Note 1999 1998 

Participations in Group companies 16 64,884 8,450 

Participations in associated companies 6 980 – 

65,864 8,450 

Current assets 

Current receivables 

Receivables from Group companies – 1,103 

Other receivables – – 

Pre-paid expenses and accrued income 586 – 

586 1,103 

Short-term investments – 1,189 

Cash and bank balances 2,655 1,966 

Total assets 69,105 12,708 

Equity Note 17 1999 1998 

Restricted equity 

Share capital 23,812 10,011 

Share premium reserve 20,604 10,351 

Statutory reserve 403 403 

44,819 20,765 

Non-restricted equity 

Profit / loss brought forward -8,057 -4,382 

Net profit / loss for the year -4,669 -3,675 

-12,726 -8,057 

Total equity 32,093 12,708 

62

Parent company income 

statement and balance sheet 

liabilities [sek thousands] 

Long-term liabilities Note 1999 1998 

Subordinated loans 12 2,095 – 

2,095 – 

Current liabilities Note 1999 1998 

Accounts payable - trade 230 – 

Liabilities to Group companies 18 33,082 – 

Other liabilities 731 – 

Accrued expenses and pre-paid income 874 – 

34,917 – 

Total liabilities 37,012 – 

Total liabilities and equity 69,105 12,708 

Pledged assets and contingent liabilities 

Shares in securities accounts – 197 

parent company cash flow statement [sek thousands] 

Current operations 1999 1998 

Payments from customers _ 2,390 

Payments to suppliers and employees 

Cash flow from current operations 

-3,076 -5,621 

before paid interest and income tax -3,076 -3,231 

Interest received and other financial income 29 738 

Interest paid and other financial expenses -122 -1,550 

Cash flow from current operations -3,169 -4,043 

Investment activities 

Sale of equipment _ 60 

Cash flow from investment activities _ 60 

Financing activities 

Acquisition and sale of securities -980 4,188 

Shareholders’ contribution -22,500 _ 

Sale of investments 1,189 _ 

External financing 2,095 _ 

New share issues 24,054 _ 

Cash flow from financing activities 3,858 4,188 

Increase in liquid assets 689 205 

Liquid assets at start of year 1,966 1,761 

Liquid assets at end of year 2,655 1,966 

63

Accounting principles 

accounting principles 

Form of the annual report 

The consolidated income statement and balance sheet, together with the notes to the 

accounts, have been compiled in accordance with the Swedish Annual Accounts Act 

for Credit Institutions and Securities Companies. The Parent Company income 

statement and balance sheet have been compiled in accordance with the new Swedish 

Annual Accounts Act. In addition, the Financial Supervisory Authority’s regulations 

and general advice together with the Swedish Financial Accounting Standards Council’s 

recommendations have been heeded. 

Consolidated accounts 

The consolidated accounts comprise the Parent Company and subsidiaries where more 

than 50 per cent of the capital or votes is directly or indirectly owned. The consolidated 

accounts have been compiled in accordance with the Swedish Financial Accounting 

Standards Council's recommendations and acquisition accounting has been applied. 

Company acquisitions include the company’s result as from the time of acquisition. 

As of 1999 financial leasing is accounted for in accordance with the Swedish Financial 

Accounting Standards Council's recommendation. 

Depreciation and amortisation of tangible and intangible fixed assets 

The depreciation and amortisation of tangible and intangible fixed assets is based on 

the estimated lifetime. Intangible fixed assets [software products set up as assets], like 

tangible fixed assets, are amortised according to plan. 

Revenue recognition 

Business day accounting is applied in respect of commission income. Other income is 

reported in accordance with the accruals concept. 

64

note 1 

net commissions [sek thousands] 

Commission income 1999 1998 

Securities brokerage 22,545 – 

Commission expenses 

Securities brokerage -2,538 – 

Net commissions 20,007 – 

All income stems from the Swedish market. 

note 2 

net interest income [sek thousands] 

Interest income 1999 1998 

Lending to credit institutions 3,170 124 

Lending to the general public 1,737 – 

4,907 124 

Interest expenses 

Liabilities to credit institutions -900 -83 

Borrowing from the general public -2,481 _ 

Other -215 _ 

-3,596 -83 

Net interest income 1,311 41 


note 3 

net income from financial 

transactions [sek thousands] 

Realised income 1999 1998 

Shares and participations -296 -816 

Other financial instruments -263 – 

Unrealised changes in value 

Shares and participations 36 -114 

Other financial instruments – – 

Exchange rate fluctuations 405 – 

Total -118 -930 


65 

Notes to the accounts 

note 4 

general administrative 

expenses [sek thousands] 

Personnel costs 1999 1998 

Salaries and remuneration 7,879 1,719 

[of which the president and board] [1,537] [249] 

Social security fees 2,562 429 

Costs for pension premiums 546 9 

[of which the president and board] [163] [7] 

Other personnel costs 836 58 

11,823 2,215 

No profit-based remuneration has been provided. 

Other general 

administrative expenses 22,106 1,356 

Total general 

administrative expenses 33,929 3,571 

Auditors’ fees that were expensed during the fiscal year 1999 

amount to sek 477 thousand of which sek 264 thousand account 

for direct auditing expenses. 

Average number of employees 

during the year 1999 1998 

Total 21.0 _ 

Of which women 7.5 _ 

Of which men 13.5 _ 

No severance payment agreements concerning the president or 

board members exist within the Group. The mutual period of notice 

between the Group and the president is eight [8] months. 

note 5 

depreciation and amortisation of tangible 

and intangible fixed assets [sek thousands] 

1999 1998 

Costs set up as assets for 

the development of software products 1,306 307 

Equipment 1,436 657 

2,742 964 

note 6 

participations in associated 

companies [sek thousands] 

1999 1998 

Netanalys Dubbelslash AB 

Share 49% 980 – 

980 – 

Netanalys Dubbelslash AB, 556370-9228, Stockholm, was acquired 

in November 1999. The effects on the result and financial position in 

the year-end report when the accounts are compiled using the equity 

method are judged to be of minor importance. Accounting using 

theequity method will begin as of the year 2000.

Notes to the accounts, cont. 

note 7 

fixed assets [sek thousands] 

Intangible fixed assets 1999 1998 

Accumulated acquisition values 

Acquisition value at beginning of year 4,048 1,183 

New acquisitions 481 3,486 

Sales and scrapping _ -621 

4,529 4,048 

Accumulated amortisation according to plan 

At beginning of year -683 -576 

Sales and disposals 

Amortisation for the year 

_ 200 

according to plan -1,306 -307 

Planned residual value 

-1,989 -683 

at the end of the year 2,540 3,365 

Tangible fixed assets 

Accumulated acquisition values 

1999 1998 

Acquisition value brought forward 3,468 35 

New acquisitions 1,965 3,548 

Sales and scrapping -53 -115 

5,380 3,468 

Accumulated depreciation according to plan 

At beginning of year -543 -1 

Sales and scrapping 

Depreciation for the year 

7 115 

according to plan -1,436 -657 

Residual value at end of 

-1,972 -543 

year according to plan 3,408 2,925 

note 8 

other assets [sek thousands] 

1999 1998 

Funds in course of 

settlement – receivable 13,825 17,101 

VAT receivable 497 846 

Other 940 721 

15,262 18,668 

note 9 

pre-paid expenses and 

accrued income [sek thousands] 

1999 1998 

Pre-paid expenses 1,534 921 

Other accrued income 51 144 

1,585 1,065 

66 

note 10 

other liabilities [sek thousands] 

1999 1998 

Funds in course of 

settlement – payable 16,065 14,027 

Borrowing from the general public – 10,588 

Preliminary income tax interest 1,325 – 

Employee taxes 547 245 

VAT liability 203 – 

Other 7,316 5,469 

25,456 30,329 

note 11 

accrued expenses and 

pre-paid income [sek thousands] 

1999 1998 

Accrued expenses 3,574 – 

Pre-paid income 16 1,931 

3,590 1,931 

note 12 

subordinated loans [sek thousands] 

nom 

sek due day 

inte- 

rest 1999 1998 

Subordinated loan 1 250 31 Dec 2000 6% 250 250 



Subordinated loan IDG 1,000 31 Jan 2000 6% 1,000 – 

2,095 2,095 1,493 

note 13 

equity [sek thousands] 

share premium statutory 

1999 

total 

capital reserve reserve restr. eq. 

Bal. b/f 10,011 10,351 403 20,765 

New share issue 13,801 10,253 – 24,054 

Bal. c/f 23,812 20,604 403 44,819 

result result total 

b/f for year unrestr. eq. 

Bal. b/f -4,382 -3,675 -8,057 

Changed accounting principles – 144 144 

Profit/loss from last year -3,531 3,531 – 

Profit/loss for the year – -18,264 -18,264 

Bal. c/f -7,913 -18,264 -26,177 

All 23,811,622 shares are Series B with a nominal value of sek 1. 

Issue expenses reducing equity amount to sek 3,603 thousand.

note 14 

personnel costs [sek thousands] 

Personnel costs 1999 1998 

Salaries and remuneration 1,693 1,719 

[of which the president and board] [1,094] [249] 

Social security fees 560 429 

Costs for pension premiums 214 9 

[of which the president and board] [111] [7] 

Other personnel costs 54 58 

2,521 2,215 

No profit-based remuneration has been provided. 

No severance payment agreements concerning the president or 

board members exist. Mutual period of notice for the president is 

eight [8] months. 

Average number of employees 

in the Parent Company during the year 1999 1998 

Total 2.5 5.0 

Of which women 1.0 1.0 

Of which men 1.5 4.0 

note 15 

net financial income [sek thousands] 

Interest income and 

similar income items 1999 1998 

Interest income 29 124 

Profit from securities sales – 614 

29 738 

Interest expenses and 

similar expense items 1999 1998 

Interest expenses -122 -6 

Write-down of securities – -111 

Loss from sales of securities – -1,433 

-122 -1,550 

note 16 

participations in group 

companies [sek thousands] 

All Group companies are wholly owned 

TeleTrade & Associates AB, 556541-7408, Stockholm 

Number of shares Profit/loss Equity 1999 1998 

794 498 16 001 32,450 16,450 8,450 

TeleTrade Solutions AB, 556541-9057, Stockholm 


1 000 000 -12,572 18,435 48,328 – 

TeleTrade Solutions A/S, 981 023 358, Oslo 


1 000 – 106 106 – 

64,884 8,450 

67 

note 17 

equity [sek thousands] 

share premium statutory 

1999 

total 

capital reserve reserve restr. eq. 

Bal. b/f 10,011 10,351 403 20,765 

New share issue 13,801 10,253 – 24,054 

Bal. c/f 23 812 20,604 403 44,819 

result result total 

b/f for year unrestr. eq. 

Bal. b/f -4,382 -3,675 -8,057 

Result from last year -3,675 3,675 – 

Result for the year – -4,669 -4,669 

Bal. c/f -8,057 -4,669 -12,726 

All 23,811,622 shares are Class B with a nominal value of sek 1. 

Issue expenses reducing equity amount to sek 3,603 thousand. 

note 18 

liabilities to group companies 

1999 1998 

TeleTrade & Associates AB 31,322 _ 

TeleTrade Solutions AB 1,760 

33,082 

_

ecorded and actual values of items 

on-balance sheet and off-balance sheet 


All booked values are in accordance with actual values. 

Remaining duration 

on 3 mths 

requirement - 1 year >5 years total 

Lending 

- to credit institutions 20,927 600 4,100 25,627 

- to the general public 41,381 41,381 

Other assets 15,262 15,262 

Liabilities to credit institutions 41,000 41,000 

Other liabilities 25,456 25,456 

The group has no fixed interest assets or liabilities. 

Capital cover statement 

The group follows legislated capital cover regulations. 

The regulations require that at least 8 per cent of riskweighted 

investments with consideration for credit risks 

shall be covered by capital bases. Investments refer to 

both on-balance sheet items and off-balance sheet items. 

The capital base is comprised of shareholders’ equity. 

Below follows an analysis of the capital cover situation. 

Capital base 

The capital base includes the board’s proposals for 

untaxed reserve transfers and the appropriation of profits. 

Primary capital 20,117 

Supplementary capital – 

Total capital base 20,117 

68 

other additional information [sek thousands] 

Capital requirements for credit risks 

on-balance off-balance weighting risk-weighted 

sheet items sheet items ratio amount 

Group 

a 2,278 – 0% – 

b 53,333 325,559 20% 75,778 

c – – – – 

d 47,675 – 100% 47,675 

123,453 

The different groups primarily comprise the following: 

a Receivables from or guaranteed by governments/central banks 

within the OECD or Swedish municipalities. 

b Receivables from or guaranteed by municipalities, banks, certain 

financial institutes within the OECD, and current receivables from 

banks in general. 

c Receivables against security in the form of mortgage deeds for 

residential property. 

d Other receivables/assets. 

Capital cover ratio 1999 1998 

Total capital base 20,117 12,708 

Total weighted risk amount 123,453 30,689 

Total capital cover ratio, % 16,30% 41,41%

Stockholm den 27/3 2000 

magnus wahlbäck klas danielsson 

chairman of the board president 

bengt marnfeldt joakim engwall 

olle isberg anders hilmersson 

jan edholm petter wingstrand 

69

audit report 

We have audited the annual accounts, the consolidated 

accounts, the accounting records and the 

administration of the board of directors and the President 

of TeleTrade Financial Services AB [publ] for the 

year 1999. These accounts and the administration of the 

company are the responsibility of the board of directors 

and the President. Our responsibility is to express an 

opinion on the annual accounts, the consolidated 

accounts and the administration based on our audit. 

We conducted our audit in accordance with generally 

accepted auditing standards in Sweden. Those standards 

require that we plan and perform the audit to obtain reasonable 

assurance that the annual accounts and the consolidated 

accounts are free of material misstatement. An 

audit includes examining, on a test basis, evidence supporting 

the amounts and disclosures in the accounts. An 

audit also includes assessing the accounting principles 

used and their application by the board of directors and 

the President, as well as evaluating the overall presentation 

of information in the annual accounts and the consolidated 

accounts. As a basis for our opinion concerning 

discharge from liability, we examined significant decisions, 

actions taken and circumstances of the company in 

order to be able to determine the liability, if any, to the 

company of any board member or the President. We also 

examined whether any board member or the President 

has, in any other way, acted in contravention of the 

70 

Companies Act, the Annual Accounts Act or the Articles 

of Association. We believe that our audit provides a reasonable 

basis for our opinion set out below. 

The annual accounts and the consolidated accounts have 

been prepared in accordance with the Annual Accounts 

Act and, where relevant, the Annual Accounts Act for 

Credit Institutions and Securities Companies and thereby 

give a true and fair view of the company’s and the 

group’s financial position and results of operations in 

accordance with generally accepted accounting principles 

in Sweden. 

We recommend to the general meeting of shareholders 

that the income statements and balance sheets of the parent 

company and the group be adopted, that the loss of 

the parent company be dealt with in accordance with the 

proposal in the administration report and that the members 

of the board of directors and the President be discharged 

from liability for the financial year. 


KPMG Bohlins AB 

Eva Wadman 

Authorised public accountant

In our capacity of auditors at TeleTrade Financial Services AB [publ], 

we have audited this prospectus. The audit has been performed in accordance 

with the recommendations of the Swedish Institute of Authorised Public 

Accountants. 

The pro-forma accounts included in this prospectus have been compiled in 

accordance with the conditions stated on page 29. The accounts for 1997 have 

not been included in this prospectus. The latter accounts do not provide relevant 

information, as the group was formed on 31 December 1998. 

The annual reports for the company’s financial years 1998 and 1999 have been 

audited by KPMG Bohlins AB. The information in this prospectus has been 

collected from the annual reports and has been correctly reproduced. 


KPMG Bohlins AB 

Eva Wadman 

Authorised public accountant 

71 

auditor´s statement

Addresses 

teletrade financial services ab [publ] 

p.o. box 14077 

gustavslundsvägen 139 

s-167 14 bromma, sweden 

telephone +46 8 506 330 20 

www.teletrade.org 

teletrade solutions ab 

p.o. box 14077 

gustavslundsvägen 139 

s-167 14 bromma, sweden 

telephone +46 8 506 330 00 

e-mail info@teletrade.se 

www.teletrade.se 

vcw internet services ab 

norra hamngatan 36 

s-411 06 göteborg, sweden 

telephone +46 31 61 42 50 

www.vcw.se 

teletrade e-insurance ab 

[jp försäkringar ab is currently 

changing name to teletrade 

e-insurance ab] 

p.o. box 3187 

kungsgatan 33 

s-103 63 stockholm, sweden 

telephone +46 8 698 03 40 

fax +46 8 24 98 25

00010011100101001001010010010110010010010 

1000100011101011101011010111110101010001010 

0101010110100010101001010010101001011101010 

0TELETRADE·FINANCIAL·SERVICES·AB*199910 

010101000010101010000101010111111010100001 

01011011101010100010101000111001011101011101 

1100101010110010101010110110100100101110101 

00010011100101001001010010010110010010010 

1000100011101011101011010111110101010001010 

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1000100011101011101011010111110101010001010

FORMATION, HANDEL, FÖRSÄKRINGAR, AKTIER 

ASDAQ, AMEX, CBOE, WWW.TELETRADE.SE, WW 

TOCKHOLMSBÖRSEN, NYA MARKNADEN, AKTIET 

GAR, AKTIER, OPTIONER, FONDER, TERMINER 

E, WWW.AKTIETIPS.COM, WWW.VCW.SE, WWW.NE 

IETORGET, SBI, INFORMATION, HANDEL, FÖRS 

ONDER, TERMINER, NYSE, NASDAQ, AMEX, CB 














TOCKHOLMSBÖRSEN, NYA MARKNADEN, AKTIET

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