I INTRODUCTION

Since 2012, the Finnish initial public offering (IPO) market2 has been developing extremely well, following what was approximately five years of stagnation.

The Helsinki Stock Exchange is operated by Nasdaq Helsinki, a company belonging to the US corporation Nasdaq, which is a global provider of trading, clearing, exchange technology, listing, information and public company services.3 In addition to Nasdaq Helsinki, Nasdaq also operates exchanges in the other Nordic countries: Sweden (in Stockholm), Denmark (in Copenhagen) and Iceland (in Reykjavik). On 31 December 2019, the number of listed companies on the regulated markets of the above-mentioned Nordic exchanges totalled 609 (excluding 10 multiple listings), and the number of companies admitted to trading on the alternative marketplaces operated by Nasdaq in the Nordic region was 362.4

Nasdaq Helsinki companies can be listed on either the main market (the Official List), which is a regulated market – as defined by EU legislation (and implemented in national legislation) – or admitted to trading on a multilateral trading facility, Nasdaq First North Growth Market Finland (First North), aimed at growth companies.

As at 31 December 2019, there were 157 companies listed on Nasdaq Helsinki, of which 126 companies were listed on the Official List and 31 companies were listed on First North (for both, parallel listings are excluded). In 2019, seven companies joined Nasdaq Helsinki. Two of these were listings on the Official List and five were admitted to trading on First North.

One feature during the past few years has been the growing amount of IPOs on First North.

There is a long-established tradition in Finland of stock exchange trading, which dates back to 7 October 1912.

II GOVERNING RULES

The applicable regulatory framework governing IPOs in Finland is based on EU regulations and the implementation of EU directives and therefore the legal environment for listing and trading of securities is to a large extent harmonised with the EU legislation. The principal national statute, the Finnish Securities Markets Act (746/2012) (SMA), as amended, governs, inter alia, the offering of securities, disclosure obligations on the securities markets, takeover bids, prevention of market abuse and supervision of the securities market. In addition to national and EU legislation, there are authority-based regulations as well as rules issued by Nasdaq Helsinki.

i Main stock exchanges

As noted above, Nasdaq Helsinki operates both the Official List, which is the regulated market, and the alternative marketplace, First North, which is a multilateral trading facility as defined in the Markets in Financial Instruments Directive (2014/65/EU).

Official List

The Official List is suited for companies that are mature and can adhere to the highest standards for reporting, transparency and accountability. The Official List is further divided into the segments of large cap, mid cap and small cap based on the companies' market cap, even though such division has no impact on listing criteria or rules applicable to the companies.5

First North

First North is designed for growth companies wishing to gain access to capital markets. As the applicable rules are less extensive than for the Official List, First North provides companies with room to focus on the development of their businesses. First North may be the first step into the financial market and could be used as a springboard to the Official List in the future. First North Premier is a segment within First North, designed for growth companies making a conscious decision to comply with higher disclosure and accounting standards than those applied to regular First North companies.

ii Overview of listing requirements

Applicable listing requirements depend on whether a company aims to have its securities listed on the Official List or admitted to trading on First North. Issuers whose shares are to be listed on the Official List have to comply with high statutory standards that are largely harmonised throughout the European Union and reflected in the listing criteria, whereas First North is merely regulated pursuant to the rules of Nasdaq Helsinki, which are less burdensome than those applied to the Official List.6

Official List

General listing requirements have been harmonised between the Nasdaq Nordic exchanges. The specific requirements and preconditions for a company's shares to be listed on the Official List and the required contents of the application for the listing are regulated by the Nasdaq Helsinki Ltd Rules of the Exchange (the Rules of the Exchange).7

A listed company must meet the listing requirements continuously while being listed. However, there are certain requirements that are only applied when the company is admitted to the Official List.8

The general listing requirements of the Official List9 can be summarised as follows:

  1. general requirements regarding the company and the shares:
    • a public limited liability company form;10
    • legal competence;
    • free negotiability of the shares;
    • shares entered into the book-entry system; and
    • all issued shares of the class must be listed;
  2. annual financial statements published for the past three years and have a sufficient operational history;
  3. annual financial statements prepared in accordance with International Financial Reporting Standards (IFRS);
  4. documented earnings capacity or sufficient working capital for 12 months, available after the first day of listing;
  5. sufficient shares within the same class in the possession of the public (at least 25 per cent unless otherwise accepted by Nasdaq Helsinki), namely free float,11 and a sufficient number of shareholders;
  6. sufficient supply of and demand for the shares existing to facilitate a reliable price formation;
  7. expected aggregate market value of the shares of at least €1 million;
  8. information about how the company complies with the corporate governance code recommendations issued in its home state; and
  9. administration required for a listed company covering the requirements:
    • the composition of the board of directors must sufficiently reflect the competence and experience required;
    • the management must have sufficient competence and experience; and
    • the company must establish and maintain adequate procedures, controls and systems to enable it to provide the market with timely, reliable, accurate and up-to-date information.

In addition, the company shall prepare and publish a listing prospectus according to the SMA and EU Prospectus Regulation12 approved by the Finnish Financial Supervisory Authority (FIN-FSA).

Listing shall be applied for in writing. The Rules of the Exchange include a list of issues that the application must include and practical matters that must be taken care of.13 A company is also required to enter into a written agreement with Nasdaq Helsinki on trading its shares on the Official List and, in the agreement, undertake to comply with the rules and guidelines of Nasdaq Helsinki.

When seeking a dual listing on the Official List, the company must satisfy Nasdaq Helsinki that there will be sufficient liquidity to facilitate orderly trading and an efficient price formation process. Nasdaq Helsinki will normally recognise the listing requirements of another (in Nasdaq Helsinki's opinion) well-recognised regulated market or equivalent trading venue, if the company is subject to listing on such a market. Nasdaq Helsinki may approve the dual listing of a company with a listing with the maintainer of a regulated market and, on the basis of this, grant exemption from one or more of the general listing requirements as well as the requirements regarding the administration of the company referred to in the Rules of the Exchange. Companies with a listing on a regulated market, or equivalent, which is run by Nasdaq, Deutsche Börse, the London Stock Exchange, the New York Stock Exchange, Euronext, Oslo Børs, Hong Kong Exchanges and Clearing, the Australian Securities Exchange, the Singapore Exchange or the Toronto Stock Exchange, may be granted exemptions from the Rules of the Exchange. Decisions on dual listings of such companies shall be made by the managing director of Nasdaq Helsinki. Usually, it is required that the company has been admitted to trading for at least 12 months on that particular market.14

Nasdaq Helsinki may, in cases where all listing requirements are fulfilled, refuse an application for listing if it considers that the listing would be detrimental for the financial markets or investor interests.15

First North

The shares of a company may be added for trading to First North subject to approval of a written application. The application shall cover all shares of the same class. The requirements for admitting shares to be traded on First North are significantly less onerous than the requirements set out for the Official List. Pursuant to the Nasdaq First North Growth Market – Rulebook (the First North Rules),16 the shares may be traded on First North when Nasdaq Helsinki finds that they meet First North's requirements and where it finds that trading in the instruments is of public interest.

The listing requirements of First North17 can be summarised as follows:

  1. general requirements regarding the company and the shares: free negotiability of the shares, shares entered into the book-entry system, and cleared and settled in a manner acceptable to Nasdaq Helsinki;
  2. sufficient supply and demand of the shares shall exist: sufficient number of shareholders holding shares with a value of at least €500 and at least 10 per cent of the share class to be traded is held by the general public;18
  3. the company shall be able to demonstrate ongoing business operations;
  4. if the company cannot demonstrate profitability, it shall have sufficient working capital for 12 months, available after the first day of trading;
  5. the board of directors and the management of the company shall have appropriate qualifications and sufficient competence to govern and manage the company and, comply with the obligations of being admitted to trading on First North; and
  6. the company shall possess the organisation and staff required to comply with the requirements regarding disclosure of information to the market as set forth in the First North Rules.

Instead of an EU prospectus as required for listings on the Official List, the companies to be admitted to trading on the First North market shall prepare a 'company description' unless the issue of shares is such that an EU prospectus is required. The obligation to publish an EU prospectus applies to the admittance of shares on First North where the total consideration for the offer of shares in the European Union is a minimum of €8 million calculated over 12 months. The requirements for the company description are provided in the First North Rules and are less extensive than requirements for an EU prospectus.19

Companies that join First North are required to engage a certified adviser in connection with the approval process. A certified adviser shall provide support and guide the company through the application process, advise the company with regard to disclosures, communications and reporting duties, and also ensure that the company initially and continuously complies with the First North Rules. The certified adviser shall also report any rule violations to Nasdaq Helsinki. To act as a certified adviser, the adviser must sign an agreement with Nasdaq Helsinki.20

Should the company decide to comply with the stricter disclosure requirements and IFRS standards, the company may apply for the separate First North Premier segment.

The additional requirements for the Premier segment are that the company must:

  1. apply the IFRS for accounting and financial reports, and have at least one reviewed financial report (for example a quarterly report or a semi-annual report) prepared in accordance with the IFRS;
  2. on a continuous basis, distribute at least 25 per cent of the shares in the share class to be traded held in public hands;
  3. on a continuous basis, have a market value of at least €10 million; and
  4. apply the local corporate governance code in the country where it is incorporated.21

iii Overview of law and regulations

In Finland, the applicable national legislation for IPOs is primarily set out in the SMA22 and the Act on Trading in Financial Instruments (1070/2017, as amended). In addition, the regulation of the FIN-FSA gives provisions and recommendations for companies contemplating an IPO. With regard to listing on the Official List, the Rules of the Exchange, and with regard to admittance to trading on First North, the First North Rules are the main source of the exchange-based regulation. Further, regarding listing on the Official List (and to a certain extent the First North Premier segment), other rules such as the Insider Guidelines of Nasdaq Helsinki and the Finnish Corporate Governance Code of the Finnish Securities Market Association (the CG Code)23 shall be complied with. The Insider Guidelines shall also be complied with in regard to First North.

In addition to the national rules and regulations referred to above, there are several EU regulations that include legislation directly applicable in the Member States of the European Union and that are relevant for an IPO on a regulated market anywhere in the European Union. The most important EU regulations regarding IPOs are the provisions of the EU Prospectus Regulation,24 which govern the obligation to publish a prospectus and exemptions thereto, and contents of EU prospectuses. The Prospectus Regulation replaced the previous Prospectus Directive 2003/71/EC. The Commission also adopted two delegated acts to supplement the Regulation.25 The European Securities and Markets Authority's (ESMA) recommendations, guidelines, opinions and Q&As are also valuable sources of information.

Further, the Transparency Directive26 and Market Abuse Regulation27 (MAR) govern the post-IPO transparency principles and protections against market abuse, and include obligations regarding publication of inside information and managers' transactions. On a national level, these obligations arise also from the SMA and the Regulation of the Ministry of Finance on the Ongoing Disclosure Obligation of an Issuer of a Security (20 December 2012/1020). In addition, the provisions by the ESMA and the FIN-FSA, the applicable rules of Nasdaq Helsinki, the Guidelines for Insiders28 and the CG Code recommendations for the post-IPO stage are relevant. The MAR and Guidelines for Insiders are also applied to companies whose shares are admitted to trading on First North.

III THE OFFERING PROCESS

i General overview of the IPO process

Steps and timing

Official List

The listing process (including planning and preparing) takes approximately six months to one year. However, the process may be faster, depending on, for example, how the company has prepared its corporate governance or internal processes, and whether the company has already been reporting annual financial statements in accordance with IFRS. The process may be divided into different phases: the preparation phase, the actual listing process and the post-IPO phase (i.e., when the company is a listed company).

The initial planning is typically started six to 12 months prior to the listing. This phase includes general mapping of the targets, choosing the advisers, entering company shares into the book-entry system, making amendments to the company's articles of association (including but not limited to changing the company from a private limited liability company to a public limited liability company) and preparing reports in accordance with the IFRS. The equity story is also prepared.

The actual listing process typically begins three to six months prior to the listing. During this phase, the company prepares for the listing with its advisers through the following:

  1. a plan and schedule for the listing process is prepared;
  2. meetings with the FIN-FSA and Nasdaq Helsinki are arranged to present the company's business and financial status;
  3. due diligence reviews are carried out;
  4. the prospectus, marketing material, and share sale and/or issue terms and conditions are drafted; and
  5. internal processes regarding governance, financial reporting, insider administration and investor relations are prepared, and the ticker symbol is reserved.

At the latter stage of the actual listing process, typically one to three months prior to the listing, the prospectus and terms and conditions of the share sale or issue are finalised and approved by the FIN-FSA, the company gives a presentation to the listing committee of Nasdaq Helsinki and, to finalise the listing application, the company takes part in the training sessions arranged by Nasdaq Helsinki. Also, the company may release information on its planned listing and be initially marketed.

The final stage of the listing process, which typically takes place within last four months prior to the listing, includes the company's board of directors' resolution on the listing, submission of the listing application and publication of the prospectus and share sale and/or issue terms. The listing application is handled and resolved by the listing committee of Nasdaq Helsinki. The company shall, without undue delay, disclose the filing of a listing application with Nasdaq Helsinki. A company that has filed a listing application is considered equal to a listed company until the company share has been listed, the company has disclosed information about the cancellation of a listing application or Nasdaq Helsinki has rejected the listing application, and therefore such a company shall comply with the Rules of the Exchange applicable to listed companies.29

Further, the company shall, at the time of filing its application for listing at the latest, have a website where the information made public in accordance with the disclosure duties and information relating to the corporate governance shall be available. In principle, the company shall also draft a communication policy to ensure the company's readiness for the communications required from a listed company. Besides the necessary steps arising out of the listing criteria and rules and regulations, investor communication may have a material significance to the success of the listing; therefore, making the company publicly known in advance is crucial for a successful listing. At the final stage of the listing process, the investor and analyst meetings are arranged.

After the necessary steps with regard to marketing and share sale or issue have been completed, including the market release issued by Nasdaq Helsinki, the company is ready to be listed and trading commences.

First North

The process as regards the admittance of the shares to be traded on First North usually takes approximately one to three months in the aggregate. The length of the process depends, inter alia, on whether the company prepares an EU prospectus (as mentioned above) or the lighter company description in accordance with the First North Rules.

The following steps are to be taken during the admittance process:

  1. appointment of the certified adviser and other advisers, such as a legal adviser;
  2. the certified adviser contacts Nasdaq Helsinki on the schedule and plan, and the ticker symbol is reserved;
  3. the company and the certified adviser finalise the application, investor sections of the company's website and company description (or prospectus where applicable);30
  4. the standard industrial classification application is filed with Nasdaq Helsinki;
  5. the certified adviser files the application, including the attachments, for admission to trading via the Nasdaq Listing Center;
  6. Nasdaq Helsinki handles the application;
  7. the company description (or prospectus) and the terms for the share sale or issue are published; and
  8. the resolution of Nasdaq Helsinki takes place.

After these steps and the share subscriptions and registrations (where applicable) are completed, the company's shares may begin being traded on First North.

Key parties, stakeholders and documentation

The key parties of a Finnish IPO generally consist of (in addition to the issuer itself and the underwriter or underwriters):

  1. advisers, such as financial and legal advisers;
  2. Nasdaq Helsinki;
  3. the central securities depository (Euroclear Finland);
  4. the FIN-FSA, when applicable;
  5. accountants;
  6. the liquidity provider;
  7. the subscription venue;
  8. communications and investor-relations consultants;
  9. old and new shareholders;
  10. personnel; and
  11. the media.

The legal adviser counsels the company on the legal aspects of the IPO, inter alia, by conducting legal due diligence of the company, assisting in the preparation of the prospectus and terms for the share sale and/or issue, negotiating the underwriting documentation and assisting in preparing the company to meet the listing criteria, the company's internal documentation, and processes regarding governance, disclosure and insider administration.

The required documentation for an IPO process includes, in addition to prospectus or company description and agreements entered into with service providers, inter alia:

  1. resolutions regarding the appointment of advisers;
  2. approval of the final agreements regarding the IPO process;
  3. resolutions on the listing, documenting:
    • the corporate governance and administrative measures of the company;
    • company presentations;
    • the listing application;
    • the prospectus or company description;
    • terms of the share sale and/or issue; and
    • marketing and disclosure material; and
  4. shareholders' resolutions on authorising the board of directors regarding a share issue and the amendments to the articles of association, where necessary, regarding:
    • changing the company's legal form from a private company into a public limited liability company;
    • removing the redemption or consent clauses;
    • entering the company's shares into the book-entry system; and
    • changing the composition of the board of directors, where necessary.

The necessary processes shall also be taken with Euroclear Finland and Finnish Trade Register with respect to the new shares issued in the share issue.

ii Pitfalls and considerations

It is important to carefully plan the listing and listing process with a detailed timetable, and be in contact with Nasdaq Helsinki in advance.

Further, a company that has filed its listing application on the Official List with Nasdaq Helsinki is subject to the disclosure duty applicable to the listed companies, which should be carefully taken into account. Also, between the time of publication of the prospectus and completion of the listing, any new factor that may have a significant effect on the price of the company's shares needs to be added to the prospectus. Such supplement shall be approved by the FIN-FSA and disclosed to the market.

iii Considerations for foreign issuers

In Finland, the same listing requirements for the Official List apply for foreign issuers as they do for domestic issuers, and that applies also to the financial information relied upon and presented in a prospectus by a foreign issuer. According to the ESMA, the generally accepted accounting principles of the United States, Canada and Japan are sufficiently comparable, and may usually be used if IFRS-formatted annual financial statements are not available.

For companies seeking dual listing on Nasdaq Helsinki and that are already listed on the regulated market or an equivalent, a special process can be applied. See Section II.ii. For the prospectus review and approval, the EU Prospectus Regulation defines the securities regulator of the Member State of incorporation of the issuer to be the competent authority. For preparation of the prospectus, the passporting regime under the Prospectus Regulation may be applied and thus use of a single EU prospectus.

With regard to the Finnish book-entry system and registration of foreign shares that need to be taken into account in the IPO process for foreign issuers, if a company contemplating the IPO is Swedish, an established link exists in Euroclear Finland with regard to the registration of the foreign shares. However, if the company's domicile is anywhere other than Finland or Sweden, the possibility of listing or admitting the shares to be traded on Nasdaq Helsinki depends on the chosen technical measure to be used with regard to registration of the foreign shares, as long as there is no direct link established between Euroclear Finland and the security depository of the domicile country of the foreign issuer. The possibilities include, for example, use of the holding company structure or use of Finnish depositary receipts. In addition, it is recommended to contact Nasdaq Helsinki in advance for guidance.

IV POST-IPO REQUIREMENTS

i General

Listed companies and companies whose shares have been admitted to trading on First North shall comply, inter alia, with stricter specific disclosure requirements and corporate governance obligations than for non-listed companies. The purpose of this is mainly to ensure the prompt and non-discriminatory disclosure of information and protection of investors. Companies must also arrange, for example, insider administration, investor communication (including areas other than disclosure through stock exchange releases) and corporate responsibility reporting. As mentioned above in connection with the listing requirements, the companies shall continuously comply with the listing requirements and, therefore, for example, the reporting processes and risk management shall be effectively arranged.

Nasdaq Helsinki continuously monitors issuers to ensure compliance with the rules issued by them. Nasdaq Helsinki also monitors certified advisers of First North to ensure they fulfil their obligations according to the First North Rules.

ii Disclosure obligations

The disclosure obligations on the Official List are divided into two categories: the disclosure obligation of inside information, and other disclosure requirements covering periodic disclosure requirements and other disclosure requirements.

The disclosure obligation of inside information requires that the listed company, without delay, publishes insider information that directly concerns the respective company by publishing a stock exchange release. The obligation of a listed company to publicly disclose inside information is regulated by the MAR, including its implementing measures31 and relevant guidelines of the ESMA.32 A company may, on its own responsibility, delay disclosure of inside information to the public provided that all of the conditions33 set out in the MAR are met. The decision to delay the disclosure shall be notified to the FIN-FSA when the inside information is disclosed. Further, pursuant to the MAR, the listed company shall make public promptly the transactions by persons discharging managerial responsibilities and the persons closely associated with them on their own account. Regarding insider issues, Nasdaq Helsinki has also issued insider guidelines, which must be complied with.

The periodic and other disclosure obligations refer, in practice, to disclosure regarding companies' regular financial reporting, such as financial statement release, half-yearly and other financial reports, annual financial statements and management report, the auditor's report, and a report on the administrative and control systems. Further, notices to general meetings; issues of financial instruments; changes in the board of directors, or management and auditors; share-based incentive programmes; closely related transactions; the company calendar; and substantial changes to the operations of the company, shall be disclosed.

If Nasdaq Helsinki considers that special circumstances exist that result in substantial uncertainty regarding the company or the pricing of the traded financial instruments, and that additional information is required for Nasdaq Helsinki to be able to provide fair and orderly trading in the company's financial instruments, it can require the company to disclose the necessary information. Also, if the company is parallel-listed and discloses any significant information owing to rules or other disclosure requirements of another regulated market or trading venue, this information shall also be simultaneously disclosed through Nasdaq Helsinki.34 Further, the company may publish, for example, forecast statements. The Rules of the Stock Exchange include criteria for such disclosures if they are made.

Companies whose securities are traded on First North must also comply with the disclosure obligations. These obligations arise out of the First North Rules and are less burdensome than the rules with regard to the companies on the Official List. Disclosure requirements of insider issues on First North are, however, similar to the rules of the Official List. Other disclosure obligations include, for example, annual financial reports and statement releases and half-yearly reports, transactions with closely related parties, general meetings, offering of new shares, incentive programmes, changes in the management or certified adviser, and qualified auditor's reports.35

iii Flagging

Flagging rules and regulations are applied to the companies on the Official List. A shareholder shall have an obligation to notify a company and the FIN-FSA of its holdings and proportion of voting rights (notification of major shareholding, flagging), when the proportion reaches, exceeds or falls below 5, 10, 15, 20, 25, 30, 50 or 90 per cent, or two-thirds of the voting rights or the number of shares of the company. Upon receipt of the notification of a shareholding, the company shall, without undue delay, disclose the information in the notification of shareholding.

Flagging rules and regulations are not applied to the companies whose shares are admitted to trading on First North.

iv Corporate governance and responsibility reporting

All issuers of shares that are traded on the Official List must comply with the CG Code (or an equivalent corporate governance code applied in the home state).36 The CG Code is a collection of recommendations on good corporate governance. The recommendations of the CG Code supplement the obligations set forth in the legislation. The objective of the CG Code is to maintain and promote the high quality and international comparability of corporate governance practices applied by Finnish listed companies. The purpose of the CG Code is to harmonise the procedures of listed companies, and to promote openness with regard to corporate governance and remuneration. The new revised code entered into force on 1 January 2020.

In addition, if the company listed on the Official List is a large undertaking whose average number of employees during the financial year has exceeded 500, it must include in its management report a statement of non-financial information.37 The statement shall include, as a minimum, information regarding how the reporting company handles environmental matters, social and employee-related matters, respect for human rights, and anti-corruption and bribery matters.

v Insider matters

For a company that wishes to be listed on the Official List or traded on First North, it is critical that it has effective and reliable insider administration covering internal policies, and processes for maintaining insider lists, disclosure of insider issues and transactions conducted by persons discharging managerial responsibilities and closely associated with them.

vi Websites

Companies on the Official List and First North must have their own website on which information disclosed by the company on the basis of the disclosure obligations imposed on companies must be available for at least five years.38

V OUTLOOK AND CONCLUSION

The Finnish IPO market has experienced a boom in recent years, following a prolonged period in the 2000s when it was practically silent. Today, small and medium-sized companies consider undertaking IPOs to expand their businesses, and First North has been living up to the expectations to be companies' first step to the capital markets despite its rather slow start after launching the market in 2007. Further, private equity firms have now entered the IPO market and consider listing as an alternative to an exit.

The year 2019 was less active, with seven listings compared to 13 new companies listed in 2018. Pursuant to the expectations of Nasdaq Helsinki, 2020 is expected to be similar to 2019; however, as at 24 January 2020 two companies have already announced their intention to apply for listing in 2020.


Footnotes

1 Salla Tuominen is a partner at DLA Piper Finland Attorneys Ltd.

2 In this chapter, IPO refers to both the listings of the shares on the regulated market and admitting the shares to trading on the alternative marketplace or multilateral trading facility. Listings of securities other than shares are not discussed in this chapter. Further, the listing of shares in real estate investment funds or listing of shares in the acquisition companies into which special listing requirements are applied are not discussed in this chapter.

3 http://www.nasdaqomxnordic.com/about_us (last accessed 27 January 2020).

4 Source: Nasdaq Helsinki.

5 Nasdaq Helsinki Ltd 'Rules of the Exchange' 4 June 2019 (Unofficial translation version 17 May 2019), Chapter 2.2.1.2.

6 First North is a registered SME growth market in accordance with the Directive on Markets in Financial Instruments (2014/65/EU) as implemented in national legislation and operated by Nasdaq Helsinki Ltd (Nasdaq First North Growth Market Finland), Nasdaq Stockholm AB (Nasdaq First North Growth Market Stockholm), Nasdaq Copenhagen A/S (Nasdaq First North Growth Market Denmark), and Nasdaq Iceland hf (Nasdaq First North Growth Market Iceland) (Nasdaq First North Nordic – Rulebook 1 September 2019). This chapter deals only with rules, regulations and practices with respect to First North in Finland.

7 Currently valid version of the Rules of the Exchange is: Nasdaq Helsinki Ltd 'Rules of the Exchange' 4 June 2019 (Unofficial translation version 17 May 2019)' available at https://www.nasdaq.com/solutions/rules-regulations-helsinki.

8 These requirements are explicitly noted in the Nasdaq Helsinki Ltd 'Rules of the Exchange' 4 June 2019 (Unofficial translation version 17 May 2019) in Chapter 2.2.1.3.

9 Nasdaq Helsinki Ltd 'Rules of the Exchange' 4 June 2019 (Unofficial translation version 17 May 2019), Chapter 2.2.3.

10 SMA Chapter 2 Section 7.

11 Where necessary, the company may be required to have a liquidity provider for the shares to ensure the reliable price formation.

12 Commission Regulation (EC) No. 809/2004 of 29 April 2004 implementing the Prospectus Directive and the new Prospectus Regulation (1129/2017) as well as Commission Delegated Regulation (EU) 2019/980 and (EU) 2019/979. See also footnote 24.

13 Nasdaq Helsinki Ltd 'Rules of the Exchange' 4 June 2019 (Unofficial translation version 17 May 2019), Chapter 2.2.2.2.

14 Nasdaq Helsinki Ltd 'Rules of the Exchange' 4 June 2019 (Unofficial translation version 17 May 2019), Chapters 2.2.7.3 and 2.2.7.4.

15 Nasdaq Helsinki Ltd 'Rules of the Exchange' 4 June 2019 (Unofficial translation version 17 May 2019), Chapter 2.2.3.14.

16 Currently valid version of the Nasdaq First North Growth Market – Rulebook is 1 September 2019 available at: https://www.nasdaq.com/solutions/rules-regulations-first-north-mtf-rules.

17 Nasdaq First North Growth Market – Rulebook 1 September 2019, Rule 2.3.

18 As a general rule, the issuer should normally have at least 300 shareholders. If the issuer has fewer than 300 but more than 100 shareholders, Nasdaq Helsinki may consider the requirement satisfied if the company retains the services of a liquidity provider, First North Nordic – Rulebook 1September 2019, Chapter 2.3.1.

19 Nasdaq First North Growth Market – Rulebook 1 September 2019, Rule 3.

20 Nasdaq First North Growth Market – Rulebook 1 September 2019, Rules 2.3.6 and 5.

21 Nasdaq First North Growth Market – Rulebook 1 September 2019, Rule 2.1 of Appendix F.

22 See Section II.

24 The new Prospectus Regulation (1129/2017) was published in the Official Journal of the EU on 30 June 2017. Its provisions began to apply with full application from 21 July 2019. The new Prospectus Regulation is a part of the capital markets union action plan. The new rules are aimed at simplifying administrative obligations related to the publication of prospectuses but in a manner that still ensures that investors are well informed. The new prospectus regime shall ensure that appropriate rules cover the full life cycle of companies from start-up until maturity as frequent issuers on regulated markets.

25 Commission Delegated Regulation (EU) 2019/980 of 14 March 2019 and Commission Delegated Regulation (EU) 2019/979 of 14 March 2019.

26 Directive 2004/109/EC of the European Parliament and of the Council as amended by Directive 2013/50/EU of the European Parliament and of the Council of 22 October 2013.

27 Commission Regulation (EU) No. 596/2014.

28 Guidelines for Insiders are available here: https://www.nasdaq.com/solutions/rules-regulations-helsinki.

29 Nasdaq Helsinki Ltd 'Rules of the Exchange' 4 June 2019 (Unofficial translation version 17 May 2019), Chapter 2.2.2.1.

30 The approval process for the prospectus is handled by the FIN-FSA through a separate process.

31 Commission Implementing Regulation (EU) 2016/1055.

32 ESMA, MAR Guidelines, Delay in the disclosure of inside information, 20/10/2016 | ESMA/2016/1478 EN.

33 Article 17.4 of MAR and ESMA, MAR Guidelines, Delay in the disclosure of inside information, 20/10/2016 | ESMA/2016/1478 EN.

34 Nasdaq Helsinki Ltd 'Rules of the Exchange' 4 June 2019 (Unofficial translation version 17 May 2019), Chapter 2.3.3.9.

35 Nasdaq First North Growth Market – Rulebook 1 September 2019, Rule 4.

36 Nasdaq Helsinki Ltd 'Rules of the Exchange' 4 June 2019 (Unofficial translation version 17 May 2019), Chapter 2.2.5.

37 Accounting Act (1336/1997, as amended) Chapter 3a, Sections 1 and 2.

38 Nasdaq Helsinki Ltd 'Rules of the Exchange' 4 June 2019 (Unofficial translation version 17 May 2019), Chapter 2.3.1.3 and Nasdaq First North Growth Market – Rulebook 1 September 2019, Rule 4.6.