Despite the uncertainty brought about by some significant geopolitical events in 2016, as well as a general global trend of low IPO activity in the capital markets, the number of listed companies in Helsinki’s main and growth markets continues to grow. While the international bond market has conversely seen contractions since 2013, the domestic (Nordic) bond issuance increased by about 11 per cent in 2016 from 2015. Nonetheless, bank-based debt capital remains the primary financing vehicle for companies in Finland. The role of Finland’s multilateral trading facility, First North Finland, has continued to reflect its purpose: attracting new listing candidates and issuers in order to act as a stepping-stone onto the main market.

i The markets

The Helsinki Stock Exchange is the main trading venue in Finland for stocks, bonds and derivative instruments. Since 2007, Nasdaq has controlled the various exchanges and regulated markets across the Nordic countries under the ‘Nasdaq Nordic’ moniker. Nasdaq Helsinki is the Nasdaq Nordic subsidiary located in Finland.

Nasdaq Helsinki has one official list, the Helsinki Stock Exchange, sometimes also called the ‘main market’, which is divided into three segments based on market capitalisation of the listed companies (Large, Mid and Small Cap). Additionally, a division of Nasdaq Nordic hosts the multilateral trading facility Nasdaq First North, which expanded into Nasdaq Helsinki as First North Finland and First North Bond Market Finland. As multilateral trading facilities, First North Finland, sometimes called the ‘growth market’, and First North Bond Market Finland do not have the legal status of an EU-regulated market (unlike the Helsinki Stock Exchange), and are subject to less onerous regulations compared to the Helsinki Stock Exchange.

Euroclear Finland Ltd (Euroclear Finland) provides clearing services and registration services for securities on Nasdaq Helsinki’s various trading platforms, and acts as the central securities depository (CSD) in Finland. All companies whose shares or other securities, both equity and debt, that are subject to public trading on Nasdaq Helsinki must register these securities with Euroclear Finland. Consequently, all holders of such securities must open a book-entry account with Euroclear Finland or an account operator (e.g., a stockbroker, credit institution or other organisation registered with Euroclear Finland), or instead register their shares through a nominee registration process to have their securities entered in such accounts. Nominees cannot exercise the rights of shareholders, but may receive dividends and participate in share issues. Euroclear Finland maintains company-specific shareholder registers for shareholders that have joined the book-entry securities system. In Finland, only a non-Finnish shareholder may appoint an account operator to act as a custodial nominee account holder on its behalf. Finnish persons or entities as of now may not hold equity securities in (omnibus) nominee-registered accounts.

Nasdaq Helsinki uses the INET Nordic trading system for trading in the equities market. Trading and clearing are carried out in euros, with the smallest possible price change (tick size) being €0.0001. Transactions are carried out on the second business day after the trade date (T+2), unless a longer period is otherwise agreed upon between parties.

Specifically with regard to the debt market, the high-yield (or non-investment grade) bond market for a Finnish corporate issuer is generally either (1) the European or international high-yield bond market; or (2) domestic or Nordic high-yield bond market. In Finland, the latter is significantly more active. Nonetheless, the total amount issued to European or international investors will be larger, based on documentation conforming with international standards, and typically governed by New York or English law.

ii Regulation in Finland

Finland has a civil law system that closely resembles the legal frameworks of other Nordic countries. The past few decades of European cooperation and integration have greatly affected Finnish legislation and, as such, moved the Finnish securities markets regulation in line with that of other EU capital markets. In addition, the EU’s European Securities and Markets Authority (ESMA) strives to promote supervisory convergence in the EU. National authorities, such as the Finnish Financial Supervisory Authority (FIN-FSA), must make every effort to comply with these ESMA guidelines (comply or explain principle), and in practice, FIN-FSA adopts ESMA guidelines as part of its regulations and guidelines applicable to Finnish regulated entities and market participants. Other governing bodies with securities oversight are the Cabinet of Finland (also called the Council of State), the Ministry of Finance of Finland, the Bank of Finland, the Finnish Securities Market Association (FSMA) and Nasdaq Helsinki itself.

Legislation and official regulation

The Securities Markets Act (746/2012, as amended) (SMA) is the primary regulation of the capital markets in Finland. The SMA, along with other regulations, governs the issuance and trading of securities, disclosure obligations and takeover bid conduct.

While the SMA is largely aligned with its respective EU regulation, there is certain national ‘gold-plating’ relating to, for example, prospectus rules when it comes to smaller offerings. Where an offering would fall below the €5 million minimum level of the EU Prospectus Directive (2003/71/EC, as amended by 2010/73/EU) (EUPD), the SMA still requires preparation of a ‘national prospectus’ for offerings above €2.5 million and below the said €5 million. The content and procedural filing requirements for such national prospectus nonetheless follow to a certain extent the requirements placed on a prospectus prepared pursuant to the EUPD, especially when compared to those EUPD prospectuses of small and medium-sized companies that benefit from a proportionate disclosure regime. While a national prospectus offering will not be admitted to trading on an EU regulated market, the national prospectus does allow offerors a less onerous path to offerings that do not meet the ‘general public’ exemptions of prospectus requirements, that is, offerings to either qualified investors or to no more than 150 other investors, such as in cases of employee or seed offerings. An offering below €5 million and entry into First North Finland may also be carried out without a national or EU prospectus if a separate ‘company description’ is drafted.

The Investment Services Act (747/2012, as amended) (ISA) is the central regulation that applies to companies whose principal business includes offering investments services, such as, for example, execution of orders on behalf of clients, underwriting or placing securities issues or arranging an issue, or portfolio management. The ISA mainly implements the Markets in Financial Instruments Directive (MiFID) in Finland. The ISA has detailed provisions on the business activities, financial security and risk management of investment firms, as well as on conduct of business and client relationships.

Other financial market regulation covers, among other topics, investment funds, and provision of the clearing and settlement and trading of financial instruments. The financial markets legislation is supplemented with lower level decrees of the Ministry of Finance, relating to, for example, prospectuses and takeover documents, or FIN-FSA’s regulations and guidelines, relating to, for example, offering and listing of securities. Related laws affecting financial markets also include the Companies Act (624/2006, as amended), the Auditing Act (1141/2015, as amended), and the Accounting Act (1336/1997, as amended).

Rules of the market places and self-regulation

In addition to legislative compliance, there is also significant self-regulation by different market participants and relevant associations.

Companies that are listed or that trade on a regulated market must also adhere to specific rules of Nasdaq Helsinki, the private company hosting the Helsinki Stock Exchange and First North regulated markets. The rules of the Helsinki Stock Exchange are confirmed by the Ministry of Finance. These rules include provisions on, inter alia, eligibility to be listed on the market, periodic reporting and insiders. The Helsinki Stock Exchange has a statutory supervisory duty to ensure compliance, importantly, with the SMA, as well as with the Rules of the Exchange in activities on the stock exchange.

Chapter 11 of the SMA also requires a listed company to directly or indirectly belong to an independent body established in Finland that broadly represents the business sector and provides recommendations on its own guidelines that it publishes to establish best practices and uniformity. These guidelines are complementary, and compliance with them is subject to the comply or explain principle. The largest of these independent bodies is FSMA, a cooperation organ established by Nasdaq Helsinki, Confederation of Finnish Industries EK and the Finland Chamber of Commerce in 2006.

FSMA publishes the Helsinki Takeover Code, most recently revised on 1 January 2014, which addresses practices related to actions of both bidder and target companies, as well as the management and shareholders of each, and affects all relevant parties involved in a public takeover bid. To aid companies to comply with the Helsinki Takeover Code, FSMA hosts the Takeover Board, which may issue recommendations providing direction for mergers and acquisitions.

FSMA also publishes the Finnish Corporate Governance Code, most recently revised on 1 October 2015. The Code aims to improve the transparency of corporate governance practices and principles of listed companies, and to advance more uniform corporate governance reporting. In replacing the prior 2010 Code, the 2015 Code was in response to the European Commission’s 2014 Recommendation regarding the quality of corporate governance reporting. FSMA has similarly set up the Market Practice Board, which may issue recommendations covering corporate governance practices and regulation.

FSMA also hosts the Advisory Board of Finnish Listed Companies that helps the lobbying efforts of listed companies, both nationally and internationally (particularly within the EU), and promotes discussion among listed companies. This board was established by the Confederation of Finnish Industries EK, a private organisation consisting of associations and member companies in the Finnish business community, and the Finland Chamber of Commerce.

iii Supervision of capital markets

FIN-FSA is the supervisory authority for Finland’s financial and insurance sectors. FIN-FSA operates in connection with the Bank of Finland but is independent in its decision-making. The entities supervised by FIN-FSA and the Bank of Finland include listed companies and other issuers, credit institutions, investment firms, fund management companies, insurance and pension companies, and other companies operating in the financial or insurance sectors, such as Nasdaq Helsinki.

FIN-FSA’s supervisory powers are for the most part laid out in the Act on the Financial Supervisory Authority (878/2008, as amended). FIN-FSA performs its supervisory tasks through, for example, the review of Finnish-listed companies’ disclosure obligations, prospectus filings and takeover bids. FIN-FSA also supervises conduct in financial markets, including investigations of suspected insider violations. The most relevant supervisory powers regarding the securities markets concern the right to obtain and inspect information, which includes, inter alia, the right to obtain information from the board of directors of a listed company notwithstanding any confidentiality provisions. In addition, regarding offerings, FIN-FSA has the power to postpone an offer in situations where FIN-FSA has reasonable grounds to suspect that the offering to the public violates the SMA or regulations issued under it, to prohibit the continuation or repetition of prohibited marketing, and to impose conditional fines. Nasdaq Helsinki supervises trading activities and adherence of its rules.

FIN-FSA or Nasdaq Helsinki may sanction non-compliance with applicable securities markets regulations. Sanctions may range from notices of non-compliance, or conditional or administrative fines or penalty payments, to removal of the securities from trading or registration cancellation of the non-compliant party (such as, a registered adviser of a listed company). If evident harm has been caused to investors, FIN-FSA may order the entity on which it has imposed the prohibition to amend or remedy its actions. For example, in an offering where the statutory information had not been provided in connection with its marketing, FIN-FSA prohibited the continuation of the marketing and required the offeror to provide its investors with the statutory information and the option to cancel previous commitments. Serious breaches of certain securities markets regulations are subject to criminal sanctions of fines or imprisonment.

iv Structure of the courts in Finland

The Finnish court system consists of three types of courts: general courts of law, administrative courts and special courts. Civil, criminal and petitionary matters are processed in the general courts of law, which include first instance local district courts, courts of appeal and finally the last resort Supreme Court. Minor disputes in the district courts may require leave for continued hearing to be heard in the courts of appeal. Leave must be granted for any case to be heard by the Supreme Court (approximately only 9 per cent of appeals are granted leave).

Administrative courts include the administrative courts of first instance and the last resort Supreme Administrative Court. Matters of administrative law, such as the activities of authorities (e.g., FIN-FSA) and administrative procedures are processed in these courts. There are also four special courts in which specific types of issues are processed.

The Finnish court procedure is centralised, ensuring that the judgment is based on facts presented to the court immediately before deciding the issue. There is also a preparatory session held before the actual trial. The litigation process is governed by certain other key principles such as the principle of oral hearings and the principle of immediacy, both of which provide for all statements and evidence to be presented to the same court and judges who would ultimately decide on the matter; the principle of transparency, which provides parties the right to receive information; and the principle of contradiction (audiatur et altera pars), which provides parties in trial the right to present their case in court.


i Developments affecting debt and equity offerings
Legislative and regulatory developments

As of 3 July 2016, the EU published the Market Abuse Regulation (MAR) and the Directive on Criminal Sanctions for Market Abuse (also called the Market Abuse Directive, CSMAD or MAD II). The MAD II complements the MAR by requiring EU Member States to introduce criminal offences of insider dealing and market manipulation, and to impose maximum criminal penalties for the most serious market abuse offences. Consequently, the MAR and the MAD II have pre-empted certain SMA provisions, as well as regulations and guidelines issued by FIN-FSA and rules of the Helsinki Stock Exchange. The MAR also extends the scope of EU market abuse regulation from regulated markets to multilateral trading facilities. The regulation presented minor changes to the prohibition of insider information abuse, and more substantial changes to the timing and possibility to delay insider information disclosure.

Since late 2015, the European Council has been having discussions and drafting a new EU prospectus Regulation (EUPR), which through a phased implementation, is planned to repeal and replace the existing EUPD. On 20 July 2017, the first part of EUPR entered into force, but most of the provisions will take effect in July 2019. The goal of the EUPR is to: (1) facilitate companies entering into the capital markets, reflected by specific ‘growth prospectus’ requirements for small and mid-cap companies (up to 499 employees) admitted to a growth market; (2) facilitate initial listings, reflected by reducing and focusing prospectus requirements and having a single access point, ESMA, for all EU prospectuses; and (3) facilitate additional issuances for listed companies, reflected by the use of simplified prospectuses for secondary issuances and separately the Universal Registration Document, the EU equivalent shelf-registration.

The EUPR does not require further implementation through SMA, but since the EUPR replaces the EUPD, existing SMA provisions based on the EUPD will need to be abolished. The Ministry of Finance has recently issued draft framework regulation for national prospectuses, in which the offerings’ maximum threshold will be raised from €5 million to €8 million.

Specific to debt regulation, as of September 2017, new Finnish legislation concerning bondholders’ agents entered into force. This came about because of the common practice of agents representing bondholders, as reflected by agent clauses in the below-mentioned template bond terms, through bondholders’ meetings, despite the lack of legislation and court practice. The purpose of the new legislation is to reassert the authority of the agent to act on behalf of the bondholders, as well as conform how agency actions are controlled to be in line with the common view that the agent is at least authorised to represent the investors. The legislation also ensures that bondholders’ agents will be authorised to, for example, sue, apply for the debtors’ bankruptcy and hold security on behalf of the bondholders. Some compliance requirements and information obligations have been imposed on bondholders’ agents to ensure their reliability. This development will likely increase investor protection and make high-yield bonds more attractive to both domestic and foreign investors in the future.

Equity market developments

Finland’s main and growth markets continue to grow in listings, market value and number of listed companies and come second only to Sweden in the Nasdaq Nordic markets.

From 2012 to 2016, the Helsinki Stock Exchange admitted two, five, two, five and six listings, respectively, and First North Finland admitted one, one, six, seven and five, respectively. As of end of October 2017, seven companies have already listed on the main market, and four companies on the growth market. First North Finland began to embody its growth role starting in 2016, when two companies transferred up to the Helsinki Stock Exchange, and continues to do so in 2017, with three companies having already transferred up to the main market as of end of October 2017.

The steady increase of listings is also reflected in the market value of the Helsinki Stock Exchange. As of end of October 2017, the Helsinki Stock Exchange’s market value was up 17.5 per cent from this same time last year, reflecting a continued increase in year-end market capitalisation over the years: 2016 (€208 billion), 2015 (€187 billion) and 2014 (€168 billion); although, however, still lower compared to 2007 (€252 billion). This market capitalisation has correlated to the number of listed companies on the Helsinki Stock Exchange (130, at the end of October 2017, and 123, 126 and 128, year-end numbers from 2014 to 2016, respectively).

In general, the Finnish capital markets have been in a relatively strong upswing since 2014. This trend may be explained by the continued, extremely low interest rates as a result of the 2008 financial crisis. This has led such companies to seek other financing options outside direct bank financing, and making equity investments and IPOs more attractive. Recent high market valuations have also increased interest in IPO transactions, making equity investments more attractive both from issuers’ and investors’ perspectives. This continued upswing is notable when taking into account last year’s events. The continued uncertainty in other European countries has seemed, however, to play in favour of the Nordic markets.

So far this year, it seems the Finnish capital markets are on track for another record year. The slowdown in US IPOs seems not to have yet reached the Nordic markets, perhaps owing to the relative stability of the Nordic markets compared to other EU markets or owing to the lack of extensive private equity, like in the US, which has supported companies growing without public capital. There is, in other words, an expectation of continued deal activity for the remainder of the year and the beginning of next year.

Debt market developments

The quite active IPO market during the past few years has conversely affected bond offerings. The main market has seen its annual bond listings significantly decrease from 168 in 2014, to 121 in 2015, and most recently, 63 listings in 2016. Notwithstanding, Finnish issuers issued bonds with an amount of approximately €15 billion in 2016, a domestic bond issuance increase by about 11 per cent from 2015. Moving forward, we are likely to see more fallen-angel corporate issuers entering the high-yield space, as they are likely to receive attractively light covenant packages, and Finnish pension fund investors, as they continue to see their own investor base expand.

The primary actors currently keeping the bond market afloat are, however, supranational or government investors. The European Central Bank has been encouraging borrowing through its bond-buying programme; however, we expect this to begin to decrease in 2018.Domestically, we have seen central government bond issuance increased by about 28 per cent in 2016, while both financial and non-financial corporations decrease their bond issuances. Notwithstanding, a recent trend has seen the refinancing of bank loans into secured loan and bond structures sharing the same security assets, which has highlighted the importance of intercreditor agreement terms.

The Finnish banking sector is in good shape and still actively providing financing despite the liquidity and capital requirements of Basel III and its implementing act in Europe and the CRD IV package that have increased the regulatory burden for banks and have made lending more challenging. Nonetheless, the Confederation of Finnish Industries EK, the same private business organisation noted earlier, has led work to develop and enhance the functionality of Finnish bond markets in cooperation with its members. This work resulted, for instance, in the introduction of template bond terms in 2014. These terms have been widely used and familiarised by the market players, making the bond issuance process less onerous. For the purposes of this type of bond issue, the main question from an issuer’s and investor’s perspective is whether the credit in question is strong enough (implied BB) to issue under investment grade documentation or whether the EK model documents will be required by the relevant investors.

ii Cases and dispute settlement

There is rather limited legal precedent to guide the interpretation of the Finnish securities markets legislation and actions of FIN-FSA in its supervisory tasks. However, in the past decade there have been a number of high-profile, white-collar securities fraud investigations and criminal procedures. Most of the cases in question were, however, extremely contentious, with very case-specific details and facts. In many of these cases, the first instance courts found the defendants guilty, but these decisions were reversed at the appellate levels.

iii Relevant tax and insolvency law
Relevant tax law

Recent changes in the Finnish tax regime are the result of the increasing competition for tax revenues and the economic downturn. The Finnish corporate tax rate is 20 per cent, which is below the EU and European average. Relevant Finland developments have also closely followed OECD’s project to tackle base erosion and profit shifting. Legislation restricting deductibility of interest expenses entered into force in 2014 to dampen tax planning by Finnish companies financed by intra-group loans from their foreign group companies. Additionally, the Finnish Tax Administration has become more aggressive in challenging existing corporate structures and intra-group loan arrangements. The concern over losing tax revenues has driven Finland to safeguard its tax base more diligently.

Former Finnish legislation allowed broad deductibility of interest expenses, which could be limited only by applying the transfer pricing regulation or the general provision for tax avoidance. The limitations restrict the deductibility of the net interest expense (the amount of all interest expenses exceeding all interest income) to 25 per cent of the company’s fiscal EBITDA. The current limitations are subject to certain safe haven clauses, and interest payments for third-party loans are not affected. However, third-party loans may be deemed intra-group loans in situations such as back-to-back arrangements or when a related party has secured a third-party loan with collateral. As a result of the implementation of EU Anti-Tax Avoidance Directive (2016/1164) on 12 July 2016, the interest limitations are likely to be extended to all loans (subject to certain statutory monetary limits). The interest limitation rules have to be considered when arranging financing structures of Finnish entities. The Ministry of Finance is currently preparing further legislative restrictions on deductibility of interest expenses

Dividends received by a Finnish company may be tax-exempt because of domestic tax law, EU law or tax treaty provisions. In general, dividends received by a Finnish unlisted company are tax-exempt if the dividend-distributing company is either an unlisted company or a listed company of which the dividend receiving company holds at least 10 per cent of share capital. Pursuant to the EU Parent Subsidiary Directive (2003/123/EC), these same principles apply if the dividend distributing company qualifies under the directive. Tax treaty states may also impact tax treatment of dividends.

Generally, tax treatment of dividends distributed by unlisted companies is significantly more favourable than the tax treatment of dividends distributed by listed companies. In addition, repatriation of funds from non-restricted equity capital of listed companies is taxed as dividend income. Repatriations of funds by foreign shareholders may also be subject to Finnish dividend withholding tax. These considerable differences in the tax treatment of dividends may have influenced companies’ willingness to go public.

Recently, the Finnish Supreme Administrative Court (FSAC) released certain capital markets-related tax decisions, which have concerned, for example:

  • a the reclassification of intra-group transaction;2
  • b the taxation of dividends received by a non-resident life insurance company;3
  • c the application of the new rules on deductibility of interest expenses and the scope of the general anti-avoidance rule as for interest deductions;4
  • d the taxation of management holding companies;5
  • e the reclassification of hybrid loans;6
  • f listed warrants;7
  • g the taxation of securities transactions conducted under the ISDA CSA;8 and
  • h the tax treatment of prospectus fees in corporate restructurings.9

The two precedents concerning the deductibility of interest payments on intra-group loans10 are particularly important. Both cases concerned a Finnish branch that had acquired shares via intra-group transactions from a non-resident group entity. In its decision, the FSAC determined whether the acquisition loan and the related interest payments could be attributed to the Finnish branch and deemed a deductible expense. In both cases, the deductibility of interest expense was denied. Following the decisions by the FSAC, the Finnish Tax Administration published its view that it will also take subsidiary structures under review based on this new case law. These precedents therefore might have further-reaching significance in the future. It is expected that the FSAC will issue a precedent on subsidiary structures in the near future.

Following the 2015 Finnish parliamentary election, the government agreed on a new tax policy. The government’s tax policy and measures taken accordingly have aimed to boost growth, entrepreneurship and employment. The previous broad tax base policy and measures to combat tax avoidance coupled with low or moderate tax rates has continued and will continue. Taxation of earned income has been lowered slightly in connection with a broad agreement on income policy reached by the Finnish central unions. Reducing taxation of labour is intended to support employment and economic growth, and to ensure increased purchasing power. The easing of taxation on labour will be funded, inter alia, by increasing excise duties, such as tobacco and waste tax. Recently, the government has initiated preparations for setting up a long-term road map for Finnish taxation in order to ensure predictability, competitiveness and consistency of the tax treatment of corporations and other taxpayers in Finland.

Relevant insolvency law

Relevant laws in insolvency are the Restructuring of Enterprises Act (47/93, as amended) and the Bankruptcy Act (120/2004, as amended), the latter of which the Finnish Ministry of Justice has launched a project to amend. The Ministry is currently hearing from different experts from various fields and interest groups to draft amendments to the Bankruptcy Act. There has been talk of possibly amending special provisions relating to bondholders and credit-swap instruments.

During the past year, several companies that have recently been listed are currently undergoing involuntary bankruptcy or restructuring proceedings. The case that has received by far the most press coverage has been the restructuring proceedings of Talvivaara Mining Company Plc, and its subsidiary Talvivaara Sotkamo Ltd. Talvivaara group’s insolvency proceedings which lasted a couple of years also included criminal proceedings relating to management liability and complex environmental proceedings. These proceedings were adjudicated in May 2016, subjecting certain executive officers to penalties in the form of fines and dismissing any prison sentences. In an attempt to revive Talvivaara, the state-owned company Terrafame Ltd acquired all assets relating to the mining operations in mid-2016.

Another notable and recent publicly traded company that resorted to formal insolvency proceedings is Componenta Plc, which in September 2016, together with its subsidiaries in Finland and Sweden, filed applications for the commencement of corporate restructuring proceedings. Its Dutch subsidiary had also filed for bankruptcy and was declared bankrupt during the same time. As of the end of August, the District Court of Helsinki has confirmed the restructuring programme for the Finnish parent and subsidiary, while the Swedish court has confirmed the restructuring of one of such subsidiaries, and declared two of such subsidiaries bankrupt.

The bankruptcy proceedings of Tiimari Plc that commenced in 2013 are still ongoing, while the restructuring programmes of Technotree Plc and Trainers’ House Plc were confirmed in September 2015 and November 2016, respectively. Takoma Plc and its subsidiaries began restructuring proceedings in 2014 but ultimately filed for bankruptcy in March 2017.

iv Market actors and rating agencies on Finland

Starting in early 2015, Euroclear Finland underwent a three-phase process of replacing its entire central securities depository infrastructure. Their new CSD system named Infinity replaced the fixed income platform in 2015 and the HEXClear equity transaction processing system in 2016. The final phase in 2017 shall make the Finnish market compliant with the European Central Bank’s TARGET2-Securities platform.

In the first half of 2016, Moody’s Investors Service and Fitch Ratings downgraded the long-term sovereign ratings for the Republic of Finland, mainly referring to moderate economic growth prospects. In the second half of the year S&P Global Ratings revised the outlook on its rating to stable from negative owing to a gradually recovering economy and improving public finances. The central government of Finland has solicited credit ratings from S&P, Moody’s and Fitch. For long-term debt, they were AA+, Aa1 and AA+, with a stable outlook, as of end of 2016, and as of end of August 2017, these have not changed.


The upcoming significant legislative changes affecting capital markets in Finland are as follows:

  • a The implementation in mid-2019 of the new Prospectus Regulation intended to repeal the EUPD will bring significant prospectus changes to SMA and lower level official regulation.
  • b The implementation of the amendment directive MiFID II (2014/65/EU) and its associated regulation MiFIR ((EU) No. 600/2014) are expected to enter into force on 3 January 2018.
  • c Relating to national capital markets regulation, the Ministry of Finance has been active in planning domestic regulations to improve the Finnish capital markets in light of the new Prospectus Regulation.

The upcoming significant legislative changes, from the EU and nationally, are principally intended to encourage capital market activity. Along with these changes, the Finnish government and other interested parties have set up a number of working groups, such as the Finnish Foundation for Share Promotion, to propose various reforms in the tax, general securities markets and listing regimes to further encourage the attractiveness of the Finnish listing platforms. For these reasons and its recent past performance, the Finnish capital markets’ outlook seems healthy and its upward trend should advance accordingly.

1 Juha Koponen is a partner, Ari Syrjäläinen is a counsel, Janni Hiltunen is a senior associate and Mark Falcon is an associate at Borenius Attorneys Ltd. The authors would like to thank partner Niina Nuottimäki, counsel Robert Peldán, partner Einari Karhu and associate Turo Lehtonen for their contribution to the bond, insolvency and tax sections, respectively, of this chapter.

2 FSAC; 2017:145.

3 FSAC:2016:77.

4 FSAC:2016:72, FSAC:2016:71 and FSAC:2015:11.

5 FSAC:2014:66.

6 FSAC:2014:119.

7 FSAC:2013:117.

8 FSAC:2012:112.

9 FSAC:2013:68.

10 FSAC:2016:71 and FSAC:2016:72.