• FIN GVT's presentation to FIN PRL on proposals to amend the Securities Markets Act.

Proposal

• Finnish Securities Market Association requested Ministry of Finance extend regulation on takeover bids in Chapter 11 of Securities Markets Act (SMA (FIN)) to MTFs.
• In addition there is a need to assess Chapter 11, S. 5 of SMA (FIN) on acting alone.
• As this may lead to a conflict with obligations under other financial market regulation in a situation where financial institution groups are obliged to act in the interest of the client, and to identify, prevent and manage potential conflicts of interest.
• In practice, parent undertaking cannot influence investment decisions of its subsidiary.
• Such persons should not be considered acting alone in a takeover bid situation either.
• Request of the Securities Market Association has not included a proposal to extend the flagging regulation of Ch 9 SMA (FIN) to an MTF in addition to a regulated market.
• However, during the preparatory work it has been considered that the flagging regime is a key element of market transparency and ability to detect a potential takeover bid.
• It is therefore proposed to extend flagging provisions of Ch 9 of SMA (FIN)L to MTFs.

Amendments

• Securities Markets Act will be extended so rules on takeover bids/flags include MTFs.
• Ch 11 § 5 amended regarding problem of single dealing caused by control relationship.