HQ submits takeover proposal to Swedish watchdog

STOCKHOLM, Sept 3 (Reuters) - Swedish investment bank HQ Bank HQb.ST, whose licence was revoked at the weekend for breaking risk rules, said it has handed a takeover proposal to the financial watchdog.

HQ, looking to salvage all or parts of its business, said an application for a deal that would see the bank taken over by a new owner had been submitted on Thursday to the Financial Supervisory Authority (FSA), which must approve any agreement.

The FSA pulled HQ Bank's licence after finding a lack of oversight in its trading operation, saying the bank had taken such large risks it endangered its own survival. The prosecutor's office has opened a separate investigation.

HQ bank was put into liquidation on Monday, a decision which the bank has said it is appealing. Its liquidator, Bjorn Riese, has been seeking a buyer for the bank, which said it would provide more information later on Friday.

Business daily Dagens Industri, citing undisclosed sources, reported the proposed purchaser was private equity-owned Carnegie, itself taken over by the government during the financial crisis and then sold.

A Carnegie spokesman declined to comment on the report. Carnegie is owned by investment company Bure (BURE.ST) and private equity firm Altor. (Editing by Dan Lalor)