Financial regulation

Generally

Securities Markets Act (746/2012, Arvopaperimarkkinalaki)

Unfair Business Practices Act (1061/1978, Laki sopimattomasta menettelystä elinkeinotoiminnassa)

Act on Trading in Financial Instruments (1070/2017, Laki kaupankäynnistä rahoitusvälineillä)

Act on Security Accounts (750/2012, Laki arvopaperitileistä)

Act on Detecting and Preventing Money Laundering and Terrorist Financing (444/2017, Laki rahanpesun ja terrorismin rahoittamisen estämisestä ja selvittämisestä)

The Act on Finnish Financial Supervisory Authority (878/2008, Laki Finanssivalvonnasta)

Consumer credit

Act on Consumer Mortgage Brokers (852/2016, Laki asunto-omaisuuteen liittyvien kuluttajaluottojen välittäjistä)

Consumer Protection Act (38/1978, Kuluttajansuojalaki)

Act on Registration of Certain Loan Providers and Credit Brokers (853/2016, Laki eräiden luotonantajien ja luotonvälittäjien rekisteröinnistä)

Credit institutions

Act on Credit Institutions (610/2014, Laki luottolaitostoiminnasta)

Payment Services Act (290/2010, Maksupalvelulaki)

Act on Payment Institutions (297/2010, Maksulaitoslaki)

Act on Foreign Payment Institutions’ Actions in Finland (298/2010, Laki ulkomaisen maksulaitoksen toiminnasta Suomessa)

Act of Registration of Entities Undertaking Debt Collection (411/2018, Laki perintätoiminnan harjoittajien rekisteröinnistä)

Act on Agent of Bondholders (574/2017, Laki joukkolainanhaltijoiden edustajasta)

Corporations

Limited Liability Companies Act (624/2006, Osakeyhtiölaki)

Partnerships Act (389/1988, Laki avoimesta yhtiöstä ja kommandiittiyhtiöstä)

Funds, platforms and investing

Act on Crowd Funding (734/2016, Joukkorahoituslaki)

Act on Investment Services (747/2012, Sijoituspalvelulaki)

Act on Alternative Fund Managers (162/2014, Laki vaihtoehtorahastojen hoitajista)

Act on Mutual Funds (213/2019, Sijoitusrahastolaki)

Other key market legislation

Bank Recovery and Resolution Directive (2014/59/EU), implemented by the Act on Resolution of Credit Institutions and Investment Firms and by the Act on the Financial Stability Authority

Markets in Financial Instruments Directive (2004/39/EC), implemented by several national acts, mainly however, by the Act on Investment Services and by the Securities Markets Act

Capital Requirements Regulation (Regulation (EU) 575/2013) (capital requirements)

European Market Infrastructure Regulation (Regulation (EU) 648/2012) (derivatives)

Market Abuse Regulation (Regulation (EU) 596/2014) (market abuse)

Generally

A person must not carry on a regulated activity in Finland unless authorized or exempt.

A financial activity requires regulatory authorization when it is identified as a specified activity in relation to a specified investment, it is carried on by way of business in Finland and it does not fall within any of the available exemptions.

The operations of a credit institution, investment firm, fund management company, alternative investment fund manager, custodian or insurance company can only be pursued by entities that have been granted authorization by the Finnish Financial Supervisory Authority (FIN-FSA). Virtual currency providers must be registered in the register of virtual currency providers maintained by the Financial Supervisory Authority (FIN-FSA).

Authorizations are regulated in the Credit Institutions Act, Investment Firms Act, Alternative investment fund manager Act, Mutual Funds Act, Insurance Companies Act and Act on Virtual Currency Providers. However, some of these acts include provisions which include conditions which also apply when the operations are not regarded as authorized business.

Consumer credit

Consumer credit activities are regulated activities. These activities can only be offered by firms that have been authorized by the FIN-FSA or equivalent authority in another EEA member state or registered as loan providers in accordance with the Act on Registration of Certain Loan Providers and Credit Brokers. The Consumer Protection Act applies to provision of consumer credit. In addition, the Act on Residential Property Consumer Credit Intermediaries regulates providing residential property consumer credit to consumers.

Consumer is defined in the Consumer Protection Act as a natural person who acquires consumer goods and services primarily for a use other than his or her business or trade (elinkeinotoiminnassaan).

Authorizations are regulated in the Credit Institutions Act, Investment Services Act, Alternative Investment Fund Manager Act, Mutual Funds Act, Insurance Companies Act and Act on Virtual Currency Providers. However, some of these acts include provisions which include conditions which also apply when the operations are not regarded as authorized business.

Finland does not operate any foreign currency controls.

Where money is transferred from non-EU member states, imports of foreign currency may need to be declared to customs, but there is no legal restriction on moving money in and out of the country.

There may be anti-money laundering (in accordance with EU Directives No. 2015/849/EU and No. 2015/847) and tax considerations to take into account.

Rules

According to applicable Finnish Financial Supervisory Authority (FIN-FSA) guidelines, marketing of financial services and instruments means all actions and operations aiming to promote the selling of financial services and instruments. Financial services include all services provided by the various regulated and authorized financial services providers and financial instruments include all instruments provided by the same service providers.

The rules governing marketing and offering of various financial services and instruments are not found in a single piece of legislation but are scattered into service provider and/or financial instrument specific legislation (for more information, see Law and regulation). The objective of the rules is to promote the clarity and high quality of customer and investor information on products and services offered and to ensure appropriate code of conduct of service providers.

The FIN-FSA has issued regulations and guidelines on marketing financial services and instruments as well as regulations and guidelines on codes of conduct when offering financial services and instruments that apply to all service providers and instruments. As a general rule, the rules and guidelines apply both to domestic service providers, such as deposit banks, credit institutions, payment institutions, investment firms, fund management companies, managers of alternative investment funds and insurance companies, and to Finnish branches of EEA-authorized service providers as well as EEA-authorized service providers providing cross-border services in Finland.

In addition to the service provider and instrument specific legislation, the Unfair Business Practices Act includes general requirements on marketing and conducting business in Finland and the Consumer Protection Act regulates financial promotions directed to consumers. These apply also to providers of virtual currencies. The requirements aim to ensure that, among other things, a company’s marketing is in accordance with good and acceptable practices, no improper procedures are undertaken and sufficient information is given to consumers prior to entering into a contract.

Exemptions

The applicable marketing and offering of financial services and products rules differ depending on the type of the customer. Marketing and offering to consumers and non-professional (private) clients is more strictly regulated than the same towards professional clients and eligible counterparties, which may be exempted from certain requirements.

As regards securities offering, offering securities to the public is more regulated than private placements. According to the Securities Market Act, offering securities to the public means a communication to persons presenting or intended to present sufficient information on the terms of the offer and the security offered, so as to enable to decide to purchase or subscribe to the security.

The Finnish rules are generally applicable also to Finnish branches of EEA-authorized service providers as well as EEA-authorized service providers providing cross-border services in Finland, but there are certain exemptions. For example, the FIN-FSA marketing guidelines do not apply to EEA-authorized service providers providing cross-border investment services in Finland.

Generally

The most common type of legal entity is a limited liability company regulated by the Limited Liability Companies Act. A limited liability company is a body corporate with separate legal personality and which limits the liability of its members. A limited liability company can be either private or public depending on whether or not the shares are offered to the public.

The liability of a company's shareholders is limited by shares (i.e. to the invested share capital), in which case they are liable to pay for their shares but not the company's debts. However, if the shareholders have given separate guarantees for the company’s obligations they are also liable for the amount guaranteed if the company does not fulfil the guaranteed obligation.

In addition, many Finnish Banks (usually credit institutions) are established as cooperatives (osuuskunta). Cooperatives are owned by their members and are thus similar to limited liability companies.

In addition, limited partnerships can undertake investment activities. Limited partnerships are formed by a private agreement, which is signed by all of the partners.

Funds

Investment funds can take the form of limited partnership when they are classified as alternative investment funds. Mutual funds and special mutual funds are defined as a pool of acquired assets and they are not legal persons. They are managed by fund management companies, who manage the funds in their own name but on behalf and for the benefit of the fund.

Yes, provided however, that if the company conducts any authorized activities it must be authorized in another EEA country.

A company can conduct lending or investment business in Finland through a branch but this does not create a separate legal entity. The foreign trader must submit a start-up notification concerning its branch to the Finnish Patent and Registration Office before the branch commences its operations. If the business to be conducted and the services to be provided are regulated activities (i.e. it is a branch to a credit institution, insurance company, investment company or management company) then the Finnish Financial Supervisory Authority (FIN-FSA) must also be notified.

If the trader is from a country outside the EEA, it will also need a permit from the Finnish Patent and Registration Office, as well as the FIN-FSA for the establishment of the branch.