The Initial Public Offerings Law Review: Finland

Introduction

Since 2012, the Finnish initial public offering (IPO) market2 has been developing extremely well, following 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 Nasdaq also operates exchanges in the other Nordic countries: Sweden (in Stockholm), Denmark (in Copenhagen) and Iceland (in Reykjavik).

On 31 December 2020, the number of listed companies on the regulated markets of the above-mentioned Nordic exchanges totalled 606 (excluding 11 multiple listings), and the number of companies admitted to trading on the alternative marketplaces operated by Nasdaq in the Nordic region was 396.4

Company shares can be admitted to trading on either the main market (the Official List), which is a regulated market – as defined by EU legislation5 (and implemented in national legislation) – or admitted to trading on a multilateral trading facility, which is registered as the SME Growth Market6 Nasdaq First North Growth Market Finland (First North) and is aimed at growth companies.

As at 31 December 2020, there were 161 companies listed on Nasdaq Helsinki, of which 129 companies were listed on the Official List, and 32 companies were listed on First North (for both, parallel listings are excluded). In 2020, seven companies joined Nasdaq Helsinki. Four of these were listings on the Official List, and three were admitted to trading on First North.

One feature over the past few years has been the growing number of IPOs on First North, and the trend seems to have continued. There is also a long-established tradition in Finland of stock exchange trading, which dates back to 7 October 1912.

Governing rules

The applicable regulatory framework governing IPOs in Finland is based on EU regulations and the implementation of EU directives; 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 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

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 by 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.

First North

First North is designed for growth companies wishing to gain access to capital markets.7 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 for those companies and may 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 must 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. The admission requirements between the Nasdaq Nordic exchanges have been harmonised.

Official List

The specific requirements and preconditions for a company's shares to be admitted to trading on the Official List and the required contents of the listing application are regulated by the Nasdaq Nordic Main Market Rulebook for Issuers of Shares (the Main Market Rulebook).8 The application for admission to trading shall cover entire class of the shares. In accordance with the admission requirements of the Official List,9 the company must:

  1. be duly incorporated;
  2. pass a sanctions screening check;
  3. have historical information for at least the past three years;
  4. have ongoing business operations and sufficient operating history;
  5. have been profitable during the most recent fiscal year or sufficient working capital of the issuer available for at least 12 months after the first day of trading;
  6. have prepared at least one financial report for publication in accordance with the rules applicable to listed companies (although this information need not have been disseminated to the market);
  7. have a market value of the shares of at least €1 million;
  8. have shares issued in accordance with the applicable legislation;
  9. have freely negotiability shares;
  10. have sufficient demand and supply (liquidity) (i.e., 25 per cent of the shares within the same class are in public hands10 and the shares are held by at least 500 qualified shareholders,11 although if the number of qualified shareholders is less than 500 but more than 300, Nasdaq Helsinki may consider this requirement satisfied if the services of a liquidity provider are retained);12
  11. have adequate working procedures for the board of directors and the management;
  12. apply the applicable corporate governance code or recommendations;
  13. have in place adequate internal procedures, controls and systems for providing timely, reliable, accurate and up-to-date market information;
  14. have an information policy in place; and
  15. have at least one person available at all times who can communicate externally on behalf of the company.

In addition, the company must prepare and publish a prospectus in accordance with the EU Prospectus Regulation,13 approved by the competent authority.

A listed company must meet the admission requirements continuously while being listed; however, the following parts of the admission requirements only apply at the time of admission to trading:

  1. historical financial information of the issuer;
  2. profitability and working capital; and
  3. market value of the shares.

Listing must be applied for in writing, and the company preparing to apply for admission to trading must request Nasdaq Helsinki to initiate an admission process. The Main Market Rulebook includes a list of issues that the application must cover and practical matters that must be taken care of. 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.

Nasdaq Helsinki may approve the dual listing of a company that is admitted to trading on a regulated market and, on the basis of this, grant exemption from one or more of the general admission requirements, as well as the requirements regarding the administration of the company. Decisions on dual listings of companies are made by the managing director of Nasdaq Helsinki.14

Nasdaq Helsinki may, notwithstanding that all admission requirements are fulfilled, reject an application for admission to trading in exceptional cases where the exchange considers that the admission would be detrimental to Nasdaq Helsinki, the securities market or investor's 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 must 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 that trading in the instruments is of public interest.

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

  1. general requirements regarding the company and the shares must be fulfilled, namely free negotiability of the shares and shares entered into the book-entry system, cleared and settled in a manner acceptable to Nasdaq Helsinki;
  2. there must be sufficient supply and demand of the shares; that is, a 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 must be able to demonstrate ongoing business operations;
  4. if the company cannot demonstrate profitability, it must 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 must 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 must 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 must 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. The certified adviser provides support and guides the company through the application process; advises the company with regard to disclosures, communications and reporting duties; and ensures that the company initially and continuously complies with the First North Rules. The certified adviser must 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 International Financial Reporting Standards (IFRS) for accounting and financial reports and have at least one reviewed financial report (e.g., 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 Financial Supervisory Authority (FIN-FSA) has provisions and recommendations for companies contemplating an IPO.

Regarding listing on the Official List and with regard to admittance to trading on First North, the Main Market Rulebook and the First North Rules, respectively, are the main sources of 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 Corporate Governance Code of the Securities Market Association (the CG Code)23 must be complied with. The Insider Guidelines must 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 that is directly applicable in the EU Member States and that is 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 the contents of EU prospectuses. The Commission has also adopted two delegated acts to supplement the Regulation.25 The recommendations, guidelines, opinions and Q&As of the European Securities and Markets Authority (ESMA) are also valuable sources of information.

Further, the Transparency Directive26 and the Market Abuse Regulation (MAR)27 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 also arise 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 also apply to companies that have shares admitted to trading on First North.

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) – but may vary and have different milestones depending on the IPO structure.

The initial planning is typically started six to 12 months prior to the aimed first trading date. This phase includes preparation of a plan and schedule for the listing process, review of IPO-readiness and the investment case, general mapping of the targets, choosing the advisers, and preparation of the reports in accordance with the IFRS. The capital structure, valuation and equity story are 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. meetings with the FIN-FSA and Nasdaq Helsinki are arranged to present the company's business and financial status;
  2. due diligence reviews are carried out;
  3. company's shares are entered into the book-entry system, company's articles of association are amended (including but not limited to changing the company from a private limited liability company to a public limited liability company, removing the redemption or consent clauses and entering the company's shares into the book-entry system), and the composition of the board of directors is changed, if necessary;
  4. the prospectus, marketing materials, share sale or issue terms, or both, and conditions and placing, other applicable agreements, pilot fishing, roadshow and analyst presentations are drafted; and
  5. internal processes regarding governance, financial reporting, insider administration and investor relations are prepared, and the ticker symbol is reserved.

At a later stage of the actual listing process, typically one to three months prior to the listing, the prospectus and the 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.

In addition, the company may release information on its planned listing and be initially marketed. The final stage of the listing process also includes the company's board of directors' resolution on the listing, submission of the admission to trading application and publication of the prospectus, and share sale or issue terms, or both.

The application for admission to trading is handled and resolved by the listing committee of Nasdaq Helsinki. The company must, without undue delay, disclose the filing of an application with Nasdaq Helsinki. A company that has filed an application is considered equal to a listed company until the company shares have been listed, the company has disclosed information about the cancellation of a listing application, or Nasdaq Helsinki has rejected the application; therefore, the company must comply with the Main Market Rulebook applicable to listed companies.29

Further, the company must, at the time of filing its application for admission to trading 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 must also draft a disclosure policy to ensure the company's readiness for the communications required from a listed company. Besides the necessary steps arising out of the admission criteria and rules and regulations, investor communication may have a material significance to the success of the IPO; therefore, making the company publicly known in advance is crucial for a successful IPO. At the final stage of the listing process, investor and analyst meetings are arranged.

After the necessary steps regarding marketing and the share sale or issue terms, or both, have been completed, including price range setting, share subscriptions, determination of final offer price, allocation, market release issued by Nasdaq Helsinki and registration of the new shares, the company is ready to be listed and trading commences.

First North

The process in respect of the admittance of the shares to be traded on First North usually takes approximately three to six months in aggregate. The length of the process depends, among other things, on whether the company prepares an EU prospectus or the lighter company description in accordance with the First North Rules.

The following steps, among other things, are taken during the admittance process in addition to the marketing-related steps:

  1. the certified adviser and other advisers, such as a legal adviser, are appointed;
  2. the IPO structure is planned;
  3. the certified adviser contacts Nasdaq Helsinki on the schedule and plan, and the ticker symbol is reserved;
  4. due diligence reviews are carried out;
  5. the prospectus, marketing materials, share sale or issue terms, or both, and conditions and placing, other applicable agreements, pilot fishing, roadshow and analyst presentations are drafted;
  6. internal processes regarding governance, financial reporting, insider administration and investor relations are prepared;
  7. the company and the certified adviser finalise the application, investor sections of the company's website and company description (or prospectus where applicable);30
  8. the standard industrial classification application is filed with Nasdaq Helsinki;
  9. the certified adviser files the application, including the attachments, for admission to trading via the Nasdaq Listing Center;
  10. Nasdaq Helsinki handles the application;
  11. the company description (or prospectus) and the terms for the share sale or issue, or both, are published, and share subscriptions are completed; and
  12. the resolution of Nasdaq Helsinki takes place.

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

Key parties, stakeholders and documentation

In addition to the issuer, the key parties of a Finnish IPO generally comprise:

  1. underwriters;
  2. advisers, such as financial and legal advisers;
  3. Nasdaq Helsinki;
  4. the central securities depository (Euroclear Finland);
  5. the FIN-FSA, when applicable;
  6. accountants and auditor;
  7. the liquidity provider;
  8. the subscription venue;
  9. communications and investor relations consultants;
  10. old and new shareholders;
  11. personnel; and
  12. 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 or issue, or both, 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 the prospectus or company description and agreements entered into with service providers regarding the IPO process:

  1. resolutions regarding the appointment of advisers;
  2. resolutions on the listing that document:
    • the corporate governance and administrative measures of the company;
    • company presentations;
    • the listing application;
    • the prospectus or company description;
    • terms of the share sale or issue, or both; and
    • marketing and disclosure material; and
  3. shareholders' resolutions on authorising the board of directors regarding a share issue, changing the composition of the board of directors, if necessary, 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; and
    • entering the company's shares into the book-entry system.

The necessary processes must also be taken with Euroclear Finland and the Finnish Trade Register in respect of 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 to be in contact with Nasdaq Helsinki and FIN-FSA when applicable, in advance. Further, it is important to reserve time and resources to the process.

A company that has filed its application for admission to trading with Nasdaq Helsinki is subject to the applicable disclosure duty, which should be carefully taken into account. Also, between the time of publication of the prospectus or company description and completion of the listing, any new factor that may have a significant effect on the price of the company's shares must be added to the prospectus or company description.

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; however, if the prospectus is not drafted in one of the official languages of Finland, necessary translations of the summary of the prospectus into either Finnish or Swedish must be taken into account.

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. It is recommended to contact Nasdaq Helsinki in advance for guidance.

Post-IPO requirements

i General

Companies on the Official List and on First North must comply, inter alia, with stricter specific disclosure requirements and corporate governance obligations than non-listed companies. The purpose of this is mainly to ensure the prompt and non-discriminatory disclosure of information and the 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 must continuously comply with the admittance requirements; therefore, the reporting processes and risk management must be effectively arranged. among other things.

Nasdaq Helsinki continuously monitors issuers to ensure compliance with the rules issued by them. It 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 company, without delay, publishes inside information that directly concerns the respective company by publishing a stock exchange release or company announcement, whichever is applicable. The obligation of a company that has shares admitted to trading on the Official List 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 the conditions33 set out in the MAR are met. The decision to delay the disclosure must be notified to the FIN-FSA when the inside information is disclosed.

Further, pursuant to the MAR, the company must promptly make public 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 the financial statement release, half-yearly and other financial reports, annual financial statements and the 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 must 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 must also be simultaneously disclosed through Nasdaq Helsinki.34 Further, the company may publish, for example, forecast statements. The Main Market Rulebook includes criteria for such disclosures if they are made.

Companies that have securities 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, arising out of the MAR and 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, offerings of new shares, incentive programmes, changes in the management or certified adviser, and qualified auditor's reports.35

iii Notification of major holdings and proportions of voting rights

Rules and regulations regarding the notification of major holdings and proportions of voting rights (i.e., flagging) apply to companies on the Official List. A shareholder has an obligation to notify a company and the FIN-FSA of its holdings and proportion of voting rights (notification of major shareholding and 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 must, without undue delay, disclose the information in the notification of shareholding.

Flagging rules and regulations do not apply to companies that have shares 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. Its purpose is to harmonise the procedures of listed companies and to promote openness with regard to corporate governance and remuneration. The latest revised code entered into force on 1 January 2020.

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 must 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 inside information 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

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 are considering undertaking IPOs to expand their businesses, and First North has been living up to the expectations as companies' first step to the capital markets, despite its rather slow start after launching the market in 2007. Further, private equity firms have entered the IPO market and consider listing as an alternative to an exit.

Despite the covid-19 pandemic in 2020, there were seven IPOs in the Finnish market. The first half of 2021 has been active, and by 29 June 2020, seven companies have already been listed on the Official List, of which two companies have been transferred from First North. Further, seven companies have been admitted to trading on First North.

In June 2021, the first special purpose acquisition company was also listed on the Official List. The outlook for the second half of 2021 looks promising.

Footnotes

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

2 In this chapter, IPO refers to both the admittance 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, nor are the listing of shares in real estate investment funds or listing of shares in the acquisition companies into which special listing requirements are applied.

3 www.nasdaqomxnordic.com/about_us (last accessed: 15 June 2021).

4 Source: Nasdaq Helsinki.

5 Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the admission of securities to official stock exchange listing and on information to be published on those securities.

6 Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU.

7 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) (Section 1.1 of Nasdaq First North Nordic – Rulebook 1 September 2019). This chapter deals only with rules, regulations and practices in respect of First North in Finland.

8 Currently valid version of the Nasdaq Nordic Main Market Rulebook for Issuers of Shares is dated 1 February 2021): www.nasdaq.com/solutions/rules-regulations-helsinki. The Ministry of Finance in Finland confirms the Finnish language version of the rules of Nasdaq Helsinki Ltd and the currently valid Finnish language version of the Main Market Rulebook are in force as of 1 March 2021. The guidance texts are not part of the rules confirmed by the Ministry of Finance.

9 Nasdaq Nordic Main Market Rulebook for Issuers of Shares, Chapter 2.

10 'Public hands' meaning, in this context, a person who directly or indirectly owns less than 10 per cent of the shares or voting rights. All holdings by natural or legal persons that are closely affiliated or otherwise expected to employ concerted practices in respect of the company must be aggregated for the purpose of the calculation. All holdings of members of the board of directors and executive management of the company, as well as any closely affiliated legal entities, such as pension funds operated by the company itself, are not included. Holders of the shares who have committed not to divest their shares during a protracted period of time ('lock-up') are also not included.

11 'Qualified shareholders' meaning, in this context, shareholders individually owning shares with a value of at least €500.

12 If this condition is not met, Nasdaq Helsinki may, upon request, consider the requirement to be met if it is satisfied that the market will operate properly in view of the large number of shares. (Nasdaq Nordic Main Market Rulebook for Issuers of Shares, Chapter 2.13.3.)

13 The Prospectus Regulation (EU) 2017/1129 was published in the Official Journal of the European Union on 30 June 2017. Its provisions began to apply with full application from 21 July 2019. The Prospectus Regulation is a part of the capital markets union action plan. The 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 prospectus regime will ensure that appropriate rules cover the full life cycle of companies from start-up until maturity as frequent issuers on regulated markets.

14 Nasdaq Nordic Main Market Rulebook for Issuers of Shares, Chapter 2.2.1.

15 Ibid.

16 Currently valid version of the Nasdaq First North Growth Market – Rulebook is 1 September 2019: 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 1 September 2019, Chapter 2.3.1). In addition, pursuant to the First North Rules, supplement C – Finland, Section 2.3.1 in connection with direct listings of shares with a recent private placement, Nasdaq Helsinki also considers the conditions for sufficient supply and demand to be satisfied if the number of qualified shareholders (defined as for the Official List, see footnote 11) is at least 50, at least 20 per cent of the share class to be traded is held in public hands, the market capitalisation of the company has been estimated to be above €10 million as at the time of the first trading day, the company retains the service of the liquidity provider, and the number of qualified shareholders is, according to the company and the certified adviser, projected to reach more than 300 within three months of the first trading day.

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 SMA, Chapter 2, Section 7.

24 See footnote 13. See also the directives referenced in footnotes 5 and 6 above.

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 valid as of 1 January 2021 available at: www.nasdaq.com/solutions/rules-regulations-helsinki.

29 Nasdaq Nordic Main Market Rulebook for Issuers of Shares, Supplement B, Part C.

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 Nordic Main Market Rulebook for Issuers of Shares, Chapter 3.12.1.

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

36 See footnote 23 and Nasdaq Nordic Main Market Rulebook for Issuers of Shares, Chapter 2.15.1.

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

38 Nasdaq Nordic Main Market Rulebook for Issuers of Shares, Chapter 3.11.1 and Nasdaq First North Growth Market – Rulebook 1 September 2019, Rule 4.6.

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