Implementation Of MiFID In Finland

General

The Directive on Markets in Financial Instruments (2004/39/EC) (the "MiFID") is expected to be implemented in Finland by amending securities legislation, the main laws being the Finnish Investment Firms Act (the "IFA") and the Finnish Securities Market Act (the "SMA"). In addition, the Finnish Financial Supervision Authority (the "FFSA") is expected to issue rules and regulations specifying the general requirements. The below overview is based on a Government Bill, according to which the new legislation is intended to enter into force on 1 November 2007.

The objective of the MiFID is to integrate the European financial markets by removing obstacles on the provision of investment services and by harmonizing the regulation concerning market places. The MiFID is intended to improve the supply of investment services across the European Economic Area by virtue of a home member state authorization. It is also intended that investment firms could offer their services on equal terms within the entire EU.

The most significant of the contemplated amendments relates to multilateral trading and the scope of investment services subject to license. In the future, the provision of investment advisory services and organizing multilateral trading are also proposed to require authorization.

Some Special Characteristics Of The Implementation In Finland

Asset transfer tax. Under the current Finnish Asset Transfer Tax Act no tax shall be paid when securities are publicly traded on the Helsinki Stock Exchange. Conversely, transfer tax of 1.6% would currently be payable when trading securities in public trading organized by securities brokers or in other trading professionally arranged by securities brokers or by the Helsinki Stock Exchange. However, in connection with the implementation of the MiFID it is intended that the scope of the above transfer tax exemption be expanded to also cover securities traded in multilateral trading systems, and that the requirement that the sale and purchase must take place in public trading be removed. Absent these amendments, one of the key aims of the MiFID, namely to increase competition between different ways of trading, would not be met.

Exemptions and optional exemption from the scope of application of the MiFID. The new IFA is proposed to include exemptions from the scope of application mainly equivalent to those mentioned in Article 2 of the MiFID, however, subject to certain Finnish particularities...