Standard 5.3 Declarations of insider holdings and insider Regulations and guidelines
How to read a standard A standard is a collection of subject-specific regulations and guidelines which both obliges and guides supervised entities and other financial market participants, indicates the quality level expected by the supervisor, sets out the supervisor s key principles of good practice and provides justification for regulation. Each paragraph in a standard is furnished with a particular margin note: : A reference to a current legal or regulatory provision. Binding: A FIN-FSA regulation that is legally binding on supervised entities or other financial market participants, issued by the FIN-FSA by virtue of its regulatory power based in Finnish law. Recommendation: FIN-FSA recommendatory guidance to supervised entities or other financial market participants. Application guideline/example: A practical application guideline or example related to a norm, binding regulation or recommendation. A reference to a FIN-FSA standard or a particular point in the standard. See the attached example. Justifications: An explanation of the background, purpose and objectives of a regulation or standard. Sample standard only FIN-FSA standards may be accessed from www.fin-fsa.fi/eng
J. No. 4/120/2005 3 (45) TABLE OF CONTENTS 1 Application 6 2 Objectives and structure 8 3 International frame of reference and self-regulation in the field _ 9 4 Legal basis 10 5 Public insider register of issuers of shares 12 5.1 Persons subject to the declaration requirement 12 5.2 Related persons of a person subject to the declaration requirement 13 5.3 Securities and derivatives contracts subject to the disclosure requirement 14 5.4 Declarations to be made in the register on insider holdings 14 5.4.1 Basic declarations 14 5.4.2 Changes in basic declarations 15 5.4.3 Securities entered in the book-entry system 16 5.4.4 Termination of the declaration requirement 17 5.4.5 Exceptions to the declaration requirement 17 6 Public insider register of market participants 19 6.1 Persons subject to the declaration requirement 19 6.1.1 General 19 6.1.2 Branch office/subsidiary of a foreign credit institution, investment firm and fund management company in Finland 20
J. No. 4/120/2005 4 (45) 6.2 Related persons of a person subject to the declaration requirement 20 6.3 Securities and derivatives contracts subject to the disclosure requirement 21 6.4 Declarations to be made in the register on insider holdings 22 6.4.1 Basic declarations 22 6.4.2 Changes in basic declarations 22 6.4.3 Securities entered in the book-entry system 23 6.4.4 Termination of the declaration requirement 24 6.4.5 Exceptions to the declaration requirement 24 7 Public insider register of a management company 26 7.1 Persons subject to the declaration requirement 26 7.2 Related persons of a person subject to the declaration requirement 27 7.3 Securities and derivatives contracts subject to the disclosure requirement 27 7.4 Declarations to be made in the register on insider holdings 28 7.4.1 Basic declarations 28 7.4.2 Changes in basic declarations 28 7.4.3 Securities entered in the book-entry system 29 7.4.4 Termination of the declaration requirement 30 7.4.5 Exceptions to the declaration requirement 31 8 Obligations of the registrar 32 8.1 Registrars 32 8.2 Ensuring the reliability of the register 32 8.3 Register entries 33
J. No. 4/120/2005 5 (45) 8.4 The storage period and publicity of information 34 8.5 Place for public inspection of information 34 8.6 Special requirements concerning issuers of shares 35 8.6.1 Trading rules 35 8.6.2 Keeping information available for public inspection on the Internet 35 9 Company-specific insider register 36 9.2 Persons to be reported in the company-specific register of insider holdings 37 9.3 Sub 38 9.4 Information to be recorded in the company-specific register of insider holdings 38 9.5 Ensuring the reliability of the register 39 9.6 Storage period for information 40 10 Reporting to the Financial Supervision Authority 41 11 Definitions 42 12 Further details 44 13 Revision history of the standard 45
J. No. 4/120/2005 6 (45) 1 APPLICATION (1) Provisions on a public insider register contained in this standard are applicable to persons subject to the disclosure requirement and employed by Finnish issuers whose securities are subject to public trading, the Central Securities Depository, securities exchanges, option corporations, clearing parties, securities intermediaries 1, fund management companies as well as the above-mentioned corporations required to maintain public insider. Persons subject to the disclosure requirement are listed in sections 5.1, 6.1 and 7.1 of this standard and corporations required to maintain in section 8.1. (2) Provisions on a company-specific insider register contained in this standard are applicable to issuers of publicly traded securities and parties acting on behalf of or for an issuer. (3) Provisions on a public insider register (chapters 5 and 8) of the standard are also applicable to Finnish issuers who have issued a security that is subject to trading that corresponds to public trading in the European Economic Area, as well as persons subject to the disclosure requirement and employed by such issuers. Provisions on a company-specific insider register (chapter 9) of the standard are also applicable to Finnish issuers who have issued a share or other security that is subject to trading corresponding to public trading in the European Economic Area. 2 Provisions in chapter 5, 8 and 9 of this standard on an issuer of a security subject to public trading also apply to issuers and persons subject to the disclosure requirement referred to in this paragraph. 1 In this standard, a securities intermediary refers to an investment firm, a credit institution and management company offering investment services and a Finnish subsidiary or branch of a corresponding foreign corporation. 2 Public trading corresponds to trading in regulated markets as referred to Directive 2004/39/EC on markets in financial instruments.
J. No. 4/120/2005 7 (45) Valid from1.5.2008 (4) Provisions on a company-specific insider register contained in this standard do not apply to issuers of publicly traded securities whose home state as referred to in company law is an EEA member state other than Finland if they are required to maintain a company-specific insider register in accordance with the provisions of their home state. Correspondingly, provisions on a company-specific insider register contained in this standard do not apply to parties acting on behalf of or for such issuers. 3 (5) Securities trading by the management and personnel of a securities intermediary is also addressed in chapter 5.9 of Standard 1.3 on internal governance and organisation of activities of the Financial Supervision Authority's set of regulations. 3 CESR recommendation "Market Abuse Directive: Level 3 -second set of CESR guidance and information on the common operation of the Directive to the market, p.14-15.
J. No. 4/120/2005 8 (45) 2 OBJECTIVES AND STRUCTURE Issued on 16.8.2005 Valid from 1.9.2005 Issued on 16.8.2005 Valid from 1.9.2005 (1) The objectives of regulation concerning the publicity of ownership and the maintenance of a public insider register are to promote trust in the markets and market participants, to improve investors' access to market information and to prevent incidents of market abuse. This standard aims to establish clear rules for declarations of insider holdings, for maintenance of insider and for publication of information contained therein. (2) The objective of regulation on company-specific insider is to promote appropriate management of insider information within the company and to clarify issues related to the maintenance of the company-specific insider register. (3) Chapters 5 8 of the standard relate to the public insider register. These two chapters address the maintenance of the public insider register, the submitting of the declaration of insider holdings, the group of persons subject to the disclosure requirement and the information to be declared. (4) Chapter 9 of the standard addresses the maintenance of the non-public company-specific insider register and the information to be included therein.
J. No. 4/120/2005 9 (45) 3 INTERNATIONAL FRAME OF REFERENCE AND SELF-REGULATION IN THE FIELD (1) The following international recommendations and self-regulation have been recognised in the standard: Committee of European Securities Regulators (CESR) recommendation Market Abuse Directive Level 3 -second set of CESR guidance and information on the common operation of the Directive to the market (CESR/06-562b) NASDAQ OMX Helsinki Ltd's Guidelines for insiders Trading guidelines by the Finnish Association of Securities Dealers Trading guidelines by the Finnish Association of Mutual Funds
J. No. 4/120/2005 10 (45) 4 LEGAL BASIS (1) Domestic regulation on issuers is based on EU regulation. Declarations of insider holdings and the maintenance of a public insider register and company-specific insider register are provided for in the following EC directives: Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse) (32003L0006); OJ L 96, 12.4.2003, p. 16 25. Commission Directive 2004/72/EC implementing Directive 2003/6/EC of the European Parliament and of the Council as regards accepted market practices, the definition of inside information in relation to derivatives on commodities, the drawing up of lists of insiders, the notification of managers' transactions and the notification of suspicious transactions (32004L0072);OJ L 162, 30.4.2004, p. 70-75. Issued on 16.8.2005 Valid from 1.9.2005 (2) In domestic legislation, declarations of insider holdings and the maintenance of an insider register and company-specific insider register are provided for in chapters 1, 4 a, 5 and 10 of the Securities Markets Act (495/1989, hereinafter SMA) and sections 99 101 of the Mutual Funds Act (48/1999, hereinafter MFA). As regards a subsidiary or branch of a foreign investment firm or a credit institution or management company offering investment services, their obligation to disclose insider holdings and maintain a public insider register is provided for in the Act on the right of foreign investment firms to provide investment services in Finland (580/1996, sections 4c and 12), Act on Foreign Credit and Financial Institutions in Finland (1608/1993; sections 6d and 8a) as well as the Act on Foreign Fund Management Companies in Finland (225/2004, section 1). (3) The right of the Financial Supervision Authority to issue binding regulation on the subject is based on section 15, chapter 5 of the SMA, which provides that the Financial Supervision Authority may issue more specific regulations
J. No. 4/120/2005 11 (45) on the application of chapter 5 of the SMA together with the content and manner of making a declaration of insider holdings, the declaration procedure for securities entered into the book-entry system and the content of a company-specific insider register and the manner of recording information therein. As regards management companies, the right of the Financial Supervision Authority to issue more specific regulations on the content and manner of filing a declaration of insider holdings is based on section 101 of the MFA.
J. No. 4/120/2005 12 (45) 5 PUBLIC INSIDER REGISTER OF ISSUERS OF SHARES 5.1 Persons subject to the declaration requirement (1) When the shares of a Finnish issuer are subject to public trading, the ownership of its shares and certain other securities listed in section 5.3 is open to public scrutiny, where the owner of such securities works for the company as chairman of the board of directors or deputy chairman member of the board of directors or deputy member chairman of the supervisory board or deputy chairman member of the supervisory board or deputy member chief executive officer 4 or deputy CEO auditor or deputy auditor auditing firm employee with main responsibility for auditing the issuer other person belonging to top management who receives insider information on a regular basis and has authority to make decisions on the issuer's future development and organisation of its business 5 (2) Each issuer must determine the persons who comprise the other persons belonging to top management as referred to in the previous chapter. Such persons could include, for example, members of the senior management of the issuer, such as the members of the executive board and responsible persons in major business areas. Also the management of the issuer s subsidiaries may belong to this group. 4 A president and executive chairman may fulfil his declaration obligations on the basis of this section. 5 Chapter 5, section 3 of the SMA.
J. No. 4/120/2005 13 (45) 5.2 Related persons of a person subject to the declaration requirement Valid from1.5.2008 (3) Holdings of securities referred to in section 5.3 by related persons, corporations and foundations of a person subject to the declaration requirement are also public, with the exception of corporations where they have significant influence. 6 (4) Related persons refer to the persons, corporations and foundations referred to in chapter 5, section 3, subsection 1, points 3 and 4 of the SMA. (5) Related persons comprise the spouse of a person subject to the disclosure requirement (marital spouse and partner of a registered partnership referred to in the Act on registered partnerships (950/2001) persons under guardianship of a person subject to the disclosure requirement other family member who has lived in the same household with a person subject to the disclosure requirement at least for one year (relatives referred to in chapter 2 of the Code of Inheritance, such as children, grandchildren, parents, brothers and sisters) corporation or foundation, in which a person subject to the disclosure requirement has control, directly or indirectly, alone or together with 1) a spouse or a person under guardianship, whose beneficiary is subject to the disclosure requirement or other family member who has lived in the same household with a person subject to the disclosure requirement at least for one year (relatives referred to in chapter 2 of the Code of Inheritance) or 2) another person subject to the disclosure requirement or his family member (relatives referred to in chapter 2 of the Code of Inheritance corporation or foundation, in which the spouse, a person under guardianship or another family member who has lived in the same household with a person subject to the disclosure requirement at least for one year has sole control, directly or indirectly corporation or foundation, in which a person subject to the disclosure requirement, his spouse or a family member who has lived in the same household at least for a year has significant influence. 6 Chapter 5, section 3 of the SMA.
J. No. 4/120/2005 14 (45) 5.3 Securities and derivatives contracts subject to the disclosure requirement Application guideline/example Issued on 8 April 2008 (6) Holdings of publicly traded shares and securities carrying entitlement to such shares, as well as of securities carrying entitlement to such securities and securities whose value is determined on the basis of the said securities, are open to public scrutiny. Holdings of a derivatives contract whose underlying is a publicly traded share or a security carrying entitlement to a share, in accordance with the Companies Act, is also open to public scrutiny. 7 (7) The disclosure requirement applies to the following securities and derivatives contracts: Shares of a company subject to public trading shares subject to public trading in Finland and depository receipts carrying entitlement thereto subject to trading corresponding to public trading in another country Securities carrying entitlement to shares subject to public trading eg convertible bonds, warrants and subscription rights Securities carrying entitlement to securities referred to above in this paragraph, as well as other securities whose value is determined on the basis of securities referred to above eg a covered warrant and certificate whose underlying is the company's shares. Derivatives contracts whose underlying is a publicly traded share or a security carrying entitlement to a share in accordance with the Companies Act eg a derivatives contract subject to trading in derivatives exchanges and so-called OTC derivatives contract whose underlying is the company's shares. 5.4 Declarations to be made in the register on insider holdings 5.4.1 Basic declarations (8) A basic declaration is to be made by persons subject to the declaration requirement to the keeper of the register within fourteen (14) days after they 7 Chapter 5, section 3, subsection 1 of the SMA.
J. No. 4/120/2005 15 (45) have taken their position personal information information on their spouse 8 information on any person under guardianship of the person subject to the declaration requirement information on family members who have lived for at least one year in the same household with the person subject to the declaration requirement 9 entities in which the above-mentioned persons have significant influence or control and security holdings by the above-mentioned persons and controlled corporations. 10 Binding Issued on 22.9.2009 Valid from 1.10.2009 (9) Members of the board of directors and supervisory board, the chief executive officer and auditor are considered to have taken their position on the date when they were named to it. (10) With respect to persons working under an employment agreement, taking a position refers to the date when the person actually begins working in the position. (11) The information must be submitted to the registrar using forms provided by the Financial Supervision Authority, basic information (Form 1), security holdings (Form 2) and supplementary declaration (Form 3) or other forms of notice containing corresponding information. 5.4.2 Changes in basic declarations Binding Issued on 22.9.2009 Valid from 1.10.2009 (12) When any information contained in the basic declaration changes, the person subject to the declaration requirement must submit within seven (7) calendar days a declaration of changes to the registrar. 11 (13) The changed information must be submitted to the registrar using forms provided by the Financial Supervision Authority (basic information, security holdings, supplementary declaration) or other form of notice containing corresponding information. (14) The declaration requirement for minor children begins when they have been registered in the population register. In addition, the seven (7) calendar- 8 Marital spouse and partner in a registered partnership referred to in the Act on Registered Partnerships (950/2001). 9 Relatives referred to in chapter 2 of the Code of Inheritance, such as children, grandchildren, parents, brothers and sisters. 10 Chapter 5, section 4, subsection 1 of the SMA. 11 Chapter 5, section 4, subsection 2 of the SMA.
J. No. 4/120/2005 16 (45) day period concerning the declaration of insider holdings begins with the registration in the population register. (15) Declaration requirement concerning corporations where significant influence or control is held begins when the corporation is registered at the trade register or a corresponding register. (16) Changes in security holdings must be declared where the ownership of a person subject to the declaration requirement and/or their related persons has changed as a result of an acquisition or disposal against consideration in the amount of at least EUR 5,000. 12 (17) The sum is calculated on a company-specific basis (for example shares and derivatives based thereon are combined), and the holdings of the person subject to the declaration requirement are combined with holdings of their related persons. (18) Even if the combined amount of changes in ownership during a calendar year is less than EUR 5,000, the person subject to the declaration requirement must make an annual declaration by 31 January of the following calendar year, by means of a declaration of changes in holdings. 13 (19) The clearest practice may be that persons subject to the disclosure requirement report all changes in their security holdings to the insider register. (20) However, if changes are due to a securities issuer (for example, a bonus issue or a stock split), there is no need to file a declaration. 5.4.3 Securities entered in the book-entry system Issued on 22.9.2009 Valid from 1.10.2009 Issued on 22.9.2009 Valid from 1.10.2009 (21) The registrar may agree with the administrator of the SIRE system (Euroclear Finland Ltd) that the register on insider holdings is maintained in the SIRE system. 14 (35) In this case, a declaration does not have to be filed for those publicly traded securities registered in the book-entry system for which direct transfer of information on holdings and changes in holdings is effected from the bookentry system to the SIRE system. However, a separate declaration is always required for other securities and derivative contracts. 12 Chapter 5, section 4, subsection 2 of the SMA. 13 Chapter 5, section 4, subsection 3 of the SMA. 14 Chapter 5, section 6 of the SMA.
J. No. 4/120/2005 17 (45) Application Guideline Issued on 22.9.2009 Valid from 1.10.2009 (22) In the case of adopting central counterparty clearing, however, a supplementary declaration (Form 3) must be filed in the following situations: The same securities are purchased and sold in the course of one day. A separate declaration, specified by order, must be made to the SIRE system of purchase and sale of securities within the day, where the holdings of the person subject to the declaration requirement and/or closely related persons have changed by at least EUR 5,000 overall as a result of the purchase or sale. Application Guideline Issued on 22.9.2009 Valid from 1.10.2009 (23) Where an individual purchase or sale order issued by the person subject to the declaration requirement or closely related persons has been executed on the same day in several tranches, the declaration of insider holdings need not be supplemented in this respect. (24) If the registrar has not joined the SIRE system, persons subject to the disclosure requirement must always make a declaration of ownership even if the security has been entered in the book-entry system. 5.4.4 Termination of the declaration requirement (25) The declaration requirement is terminated on the date when the occupational obligations or other basis for the declaration requirement (for example, board membership) cease. Application example (26) The declaration requirement may be terminated temporarily, eg due to maternity leave, parental leave or other corresponding reason, if the person in question has no opportunity to access insider information while on leave. 5.4.5 Exceptions to the declaration requirement Valid from1.5.2008 (27) Persons subject to the disclosure requirement need not declare the following Finnish or corresponding foreign corporations as corporations where they have significant influence or control: the issuer s subsidiaries housing companies real estate companies non-profit corporations, such as sports and hobby clubs, student associations and trade unions trade associations, such as forest management, road maintenance and fishing associations. 15 15 Chapter 5, section 4, subsection 4 of the SMA.
J. No. 4/120/2005 18 (45) (28) One need not disclose subsidiaries of another issuer where the person subject to the disclosure obligation is a member of the board of directors as corporations in which they have significant influence. (29) The declaration must however be made if the corporation referred to above in paragraph 26, with the exception of issuer s subsidiary, engages regularly in security trading. 16 Valid from1.5.2008 (30) The auditor, deputy auditor or audit firm employee who bears the main responsibility for auditing a Finnish issuer subject to public trading need not declare as corporations in which he has significant influence those corporations where the said significant influence is based solely on his role as auditor. 17 (31) The auditor submits declarations on insider holdings to the registrar of the audited company but does not have to declare in his basic declaration or declaration of changes in holdings other registrars or corporations where he functions as auditor as corporations where he has significant influence. However, the auditor must declare those corporations in which he has significant influence on grounds other than auditing. 16 Chapter 5, section 4, subsection 4 of the SMA. 17 Chapter 5, section 4, subsection 5 of the SMA.
J. No. 4/120/2005 19 (45) 6 PUBLIC INSIDER REGISTER OF MARKET PARTICIPANTS 6.1 Persons subject to the declaration requirement 6.1.1 General (1) The ownership of shares and certain other securities listed in section 6.3 as subject to public trading is open to public scrutiny, where the owner of such securities is Central securities depository s, securities exchange s, or option corporations chairman of the board or deputy chairman member of the board of directors or deputy member chairman of the supervisory board or deputy chairman member of the supervisory board or deputy member chief executive officer or deputy CEO auditor or deputy auditor auditing firm employee with main responsibility for auditing the company other employee who regularly receives insider information due to position or tasks. Securities broker s or settlement party s chairman of the board or deputy chairman member of the board of directors or deputy member chairman of the supervisory board or deputy chairman member of the supervisory board or deputy member chief executive officer or deputy CEO auditor or deputy auditor
J. No. 4/120/2005 20 (45) auditing firm employee with main responsibility of auditing the company broker investment analyst other employee who regularly receives insider information due to position or tasks. 18 Application guideline/example (2) Each company must also determine the individuals who comprise the other employees referred to in the previous paragraph, who regularly receive insider information due to position or work-related tasks. Such other employees may include, for example, experts working in a corporate finance role at a securities intermediary. 6.1.2 Branch office/subsidiary of a foreign credit institution, investment firm and fund management company in Finland (3) As regards branch offices and subsidiaries of foreign investment firms, credit institutions providing investment services and fund management companies, the declaration requirement concerns the executive group or corresponding body responsible for practical decisions. (4) If no executive group or corresponding body has been established for the branch, the declaration requirement is applied in accordance with the section on securities intermediaries under section 6.1.1. (5) The declaration requirement always applies also to brokers, investment analysts and other employees of the branch who regularly receive insider information due to position or tasks, as well as the auditors responsible for auditing the branch. 6.2 Related persons of a person subject to the declaration requirement (6) Holdings of securities referred to in section 6.3 by persons, corporations and foundations related to a person subject to the declaration requirement are also open to public scrutiny. 19 (7) Related persons refer to the persons, corporations and foundations referred to in chapter 5, section 5a, subsection 1 of the SMA. 18 Chapter 5, section 5 of the SMA. 19 Chapter 5, section 5 of the SMA.
J. No. 4/120/2005 21 (45) (8) Related persons comprise persons under guardianship of a person subject to the disclosure requirement corporation or foundation in which a person subject to the disclosure requirement has control, directly or indirectly corporation or foundation in which a person under guardianship of a person subject to the disclosure requirement has control, directly or indirectly. 6.3 Securities and derivatives contracts subject to the disclosure requirement (9) Holdings of publicly traded shares and securities carrying entitlement to such shares, as well as of securities carrying entitlement to such securities and securities whose value is determined on the basis of said securities, are open to public scrutiny. 20 Holdings of derivatives contracts whose underlying is a publicly traded share or a security carrying entitlement to a share in accordance with the Companies Act are also open to public scrutiny. 21 (10) The disclosure requirement applies to the following securities and derivatives contracts: Shares subject to public trading shares subject to public trading in Finland and depository receipts subject to trading corresponding to public trading in another country Securities carrying entitlement to shares subject to public trading eg convertible bonds, warrants and subscription rights Securities carrying entitlement to securities referred to above in this paragraph, as well as other securities whose value is determined on the basis of securities referred to above eg covered warrants and certificates whose underlying is the share of a publicly traded company. Derivatives contracts whose underlying is a publicly traded share or a security carrying entitlement to a share in accordance with the Companies Act 20 Chapter 5, section 5 of the SMA. 21 Chapter 10, sections 1, 1a and 1b of the SMA.
J. No. 4/120/2005 22 (45) eg derivatives contracts subject to trading on derivatives exchanges and so-called OTC derivatives contracts whose underlying is a share. 6.4 Declarations to be made in the register on insider holdings 6.4.1 Basic declarations (11) A basic declaration containing the following information is to be made by persons subject to the declaration requirement to the registrar within fourteen (14) days after they have taken up their position: personal information information on any person under guardianship of the person subject to the declaration requirement corporations controlled by them or any person under their guardianship security holdings by the above-mentioned persons and controlled corporations (Declaration of holdings, Form 2). 22 (12) Members of the board of directors and supervisory board, the chief executive officer and auditor are considered to have taken their position on the date when they were selected to it. Recommendation Issued on 22.9.2009 Valid from 1.10.2009 (13) With respect to persons working under an employment agreement, taking a position refers to the date when the person actually begins working in the position. (14) The information must be submitted to the registrar by using forms provided by the Financial Supervision Authority, basic information (Form 1), security holdings (Form 2) and supplementary declaration (Form 3) or other forms of notice containing corresponding information. 23 6.4.2 Changes in basic declarations (15) When any information contained in the basic declaration changes, the person subject to the declaration requirement must submit within seven (7) calendar days a declaration of changes to the registrar. 24 22 Chapter 5, section 5a of the SMA. 23 The paragraph will be made binding when amendment to chapter 5, section 15 of the SMA has entered into force. Government bill has been made on the amendment of the Act, and its entry into force is expected on 1 September 2008. 24 Chapter 5, section 5a of the SMA.
J. No. 4/120/2005 23 (45) Recommendation Issued on 22.9.2009 Valid from 1.10.2009 (16) The changed information must be submitted to the registrar by using forms provided by the Financial Supervision Authority (basic information, security holdings, supplementary declaration) or other form of notice containing corresponding information. 25 (17) The declaration requirement for minor children begins when they are registered in the population register. In addition, the seven (7) calendar-day period for declaration of insider holdings begins at registration in the population register. (18) The declaration requirement for controlled corporations begins when the corporation is registered in the trade register or a corresponding register. (19) Changes in security holdings must be declared where ownership of a person subject to the declaration requirement and/or their related persons has changed as a result of an acquisition or disposal against consideration in the amount of at least EUR 5,000. 26 (20) The sum is calculated on a company-specific basis (for example shares and derivatives based thereon are combined), and holdings of the person subject to the declaration requirement are combined with holdings of the related persons. (21) The clearest practice may be that persons subject to the disclosure requirement report all changes in their security holdings to the insider register. (22) However, if changes are due to a securities issuer (for example, a bonus issue or a stock split), there is no need to file a declaration. 6.4.3 Securities entered in the book-entry system Issued on 22.9.2009 Valid from 1.10.2009 (23) The registrar may agree with the administrator of the SIRE system (Euroclear Finland Ltd) that the register on insider holdings is maintained in the SIRE system. 27 (24) In this case, a declaration does not have to be filed for those publicly traded securities registered in the book-entry system for which direct transfer of information on holdings and changes in holdings is effected from the bookentry system to the SIRE system. However, a separate declaration is always 25 The paragraph will be made binding when amendment to chapter 5, section 15 of the SMA has entered into force. Government bill has been made on the amendment of the Act, and its entry into force is expected on 1 September 2008. 26 Chapter 5, section 5a, subsection 2, point 1 of the SMA. 27 Chapter 5, section 6 of the SMA.
J. No. 4/120/2005 24 (45) required for other securities and derivative contracts. Application Guideline Issued on 22.9.2009 Valid from 1.10. 2009 (25) In the case of adopting central counterparty clearing, however, a supplementary declaration (Form 3) must be filed in the following situations: The same securities are purchased and sold in the course of one day. A separate declaration, specified by order, must be made to the SIRE system of purchase and sale of securities within the day, where the holdings of the person subject to the declaration requirement and/or closely related persons have changed by at least EUR 5,000 overall as a result of the purchase or sale. Application Guideline Issued on 22.9. 2009 Valid from 1.10. 2009 (26) Where an individual purchase or sale order issued by the person subject to the declaration requirement or closely related persons has been executed on the same day in several tranches, the declaration of insider holdings need not be supplemented in this respect. (27) If the registrar has not joined the SIRE system, persons subject to the disclosure requirement must always make a declaration of ownership even if the security has been entered in the book-entry system. 6.4.4 Termination of the declaration requirement Application example (28) The declaration requirement is terminated on the date when the occupational obligations or other basis for the declaration requirement (for example, board membership) cease. (29) The declaration requirement can be terminated temporarily, for example, due to maternity leave, parental leave or another corresponding reason if the person in question has no opportunity to access insider information while on leave. 6.4.5 Exceptions to the declaration requirement (30) Persons subject to the disclosure requirement need not declare the following Finnish or corresponding foreign corporations as controlled corporations: subsidiaries of an issuer subject to public trading housing companies real estate companies non-profit corporations, such as sports and hobby clubs, student
J. No. 4/120/2005 25 (45) associations and trade unions trade associations, such as forest management, road maintenance and fishing associations. 28 Application example (31) The declaration must however be made if the corporation referred to above in paragraph 28, with the exception of issuer s subsidiary, engages regularly in security trading. 29 (32) A member and deputy member of the supervisory board of a credit institution, deputy member of the board of directors, auditor, deputy auditor and the audit firm employee who bears main responsibility for auditing the credit institution is subject to the declaration requirement only if they receive insider information on a regular basis. 30 (33) The persons subject to the disclosure requirement in a credit institution are at least the chief executive officer (CEO) or deputy CEO, members of the board of directors, brokers, investment analysts and employees receiving insider information on a regular basis due to their position or work-related tasks. 28 Chapter 5, section 5a, subsection 3 of the SMA. 29 Chapter 5, section 5a, subsection 3 of the SMA. 30 Chapter 5, section 5, subsection 2 of the SMA.
J. No. 4/120/2005 26 (45) 7 PUBLIC INSIDER REGISTER OF A MANAGEMENT COMPANY 31 7.1 Persons subject to the declaration requirement (1) The ownership of mutual fund units managed by a management company, shares and certain other securities listed in section 7.3 subject to public trading is open to public scrutiny, where the owner of such securities is the management company's chairman of the board or deputy chairman member of the board of directors or deputy member selected by the AGM of the management company chief executive officer or deputy CEO auditor auditing firm employee with main responsibility for auditing the management company other person employed by, or working for or on behalf of the management company who has the opportunity to influence decisionmaking concerning investment of the assets of the mutual fund shareholder of the management company or a corresponding person referred to in chapter 2, section 9 of the Securities Markets Act. 32 (2) A person referred to above in paragraph 1 working for or on behalf of the management company with the opportunity to influence decision-making concerning investment of the assets of the mutual fund refers to a person living in Finland. 31 Management companies and persons subject to the disclosure requirement in them are subject, in addition to this chapter, to the provisions of chapter 6 of on securities intermediaries. 32 Section 99 of the MFA.
J. No. 4/120/2005 27 (45) 7.2 Related persons of a person subject to the declaration requirement (3) Holdings of securities referred to in section 7.3 by persons, corporations and foundations related to a person subject to the declaration requirement are also open to public scrutiny. 33 (4) Related persons refer to the persons, corporations and foundations referred to in section 99, subsection 1 of the MFA. (5) Related persons comprise persons under guardianship of a person subject to the disclosure requirement corporation or foundation in which a person subject to the disclosure requirement has control, directly or indirectly corporation or foundation in which a person under guardianship of a person subject to the disclosure requirement has control, directly or indirectly. 7.3 Securities and derivatives contracts subject to the disclosure requirement (6) The disclosure requirement applies to the following securities and derivatives contracts: Shares or securities carrying entitlement to a share in accordance with the Companies Act traded publicly in Finland. Contracts and obligations pertaining to the acquisition and disposal of the above-mentioned securities (for example, derivatives contracts and covered warrants). Units in mutual funds managed by the fund management company where the person is subject to the disclosure requirement. 34 (7) Shareholders in a management company or corresponding persons referred to in chapter 2, section 9 of the SMA are only obligated to disclose their mutual fund units in mutual funds managed by the fund management company in which they hold shares. 33 Section 99 of the MFA. 34 Section 99, subsection 2, paragraph 3 of the MFA.
J. No. 4/120/2005 28 (45) 7.4 Declarations to be made in the register on insider holdings 7.4.1 Basic declarations (8) A basic declaration containing the following information is to be made by persons subject to the declaration requirement to the registrar within fourteen (14) days after they have taken up their position: personal information information on any person under guardianship of the person subject to the declaration requirement corporations controlled by them or any person under their guardianship security holdings by the above-mentioned persons and controlled corporations (declaration of holdings, Form 2). 35 Binding Issued on 22.9.2009 Valid from 1.10.2009 (9) Members of the board of directors, the chief executive officer and auditor are considered to have taken their position on the date when they were named to it. (10) With respect to persons working under an employment agreement, taking a position refers to the date when the person actually begins working in the position. (11) The information must be submitted to the registrar using forms provided by the Financial Supervision Authority basic information, (Form 1), security holdings (Form 2) and supplementary declaration (Form 3) or other forms of notice containing corresponding information. 7.4.2 Changes in basic declarations (12) When any information contained in the basic declaration changes, the person subject to the declaration requirement must submit within seven (7) calendar days a declaration of changes to the registrar. 36 Binding Issued on 22.9.2009 Valid from 1.10.2009 (13) The changed information must be submitted to the registrar using forms provided by the Financial Supervision Authority (basic information, security holdings, supplementary declaration) or other forms of notice containing corresponding information. 35 Section 99, subsection 2 of the MFA. 36 Section 99 of the MFA.
J. No. 4/120/2005 29 (45) (14) The declaration requirement for minor children begins when they are registered in the population register. In addition, the seven (7) calendar-day period for the declaration of insider holdings begins at registration in the population register. (15) The declaration requirement for controlled corporations begins when the corporation is filed with the trade register or a corresponding register. (16) Changes in security holdings must be declared where ownership of a person subject to the declaration requirement and/or their related persons has changed as a result of an acquisition or disposal against consideration in the amount of at least EUR 5,000. 37 (17) The sum is calculated on a company-specific basis (for example shares and derivatives based thereon are combined), and holdings of the person subject to the declaration requirement are combined with holdings of their related persons. (18) Even if the combined amount of changes in ownership during a calendar year is less than EUR 5,000, the person subject to the declaration requirement must make an annual declaration by 31 January of the following calendar year by means of a declaration of changes in holdings. 38 (19) The clearest practice may be that persons subject to the disclosure requirement report all changes in their security holdings to the insider register. (20) However, if changes are due to a securities issuer (for example, a bonus issue or a stock split), there is no need to file a declaration. 7.4.3 Securities entered in the book-entry system (21) The registrar may agree with the administrator of the SIRE system (Euroclear Finland Ltd) that the register for insider holdings is maintained in the SIRE system. 39 Issued on 22.9.2009 Valid from 1.10.2009 (22) In this case, a declaration does not have to be filed for those publicly traded securities registered in the book-entry system for which direct transfer of information on holdings and changes in holdings is effected from the bookentry system to the SIRE system. However, a separate declaration is always required for other securities and derivative contracts. 37 Section 99, subsection 2, paragraph 3 of the MFA. 38 Section 99, subsection 4 of the MFA. 39 Section 99, subsection 6 of the MFA.
J. No. 4/120/2005 30 (45) Application Guideline Issued on 22.9.2009 Valid from 1.10. 2009 (23) In the case of adopting central counterparty clearing, however, a supplementary declaration (Form 3) must be filed in the following situations: The same securities are purchased and sold in the course of one day. A separate declaration, specified by order, must be made to the SIRE system of purchase and sale of securities within the day, where the holdings of the person subject to the declaration requirement and/or closely related persons have changed by at least EUR 5,000 overall as a result of the purchase or sale. Application Guideline Issued on 22.9.2009 Valid from 1.10.2009 (24) Where a separate purchase or sale order issued by the person subject to the declaration requirement or closely related persons has been executed on the same day in several tranches, the declaration of insider holdings need not be supplemented in this respect. (25) In practice, a separate declaration must be made for mutual fund units, since very few fund units have been entered in the book-entry system. However, the Financial Supervision Authority has no objection to taking information in the insider register on mutual fund units directly from the register of fund units, in which case there is no need to file separate declarations. However, in this case the registrar must ensure that all requirements laid down in the MFA and this standard on the maintenance of the insider register are fulfilled. (26) If the registrar has not joined the SIRE system, persons subject to the disclosure requirement must always make a declaration of ownership even if the security has been entered in the book-entry system. 7.4.4 Termination of the declaration requirement (27) The declaration requirement is terminated on the date when the occupational obligations or other basis for the declaration requirement (for example, board membership) cease. Application example (28) The declaration requirement can be terminated temporarily, for example, due to maternity leave, parental leave or other corresponding reason if the person in question has no opportunity to access insider information while on leave.
J. No. 4/120/2005 31 (45) 7.4.5 Exceptions to the declaration requirement (29) Persons subject to the disclosure requirement need not declare the following Finnish or corresponding foreign corporations as controlled corporations: subsidiaries of an issuer subject to public trading housing companies real estate companies non-profit corporations, such as sports and hobby clubs, student associations and trade unions trade associations, such as forest management, road maintenance and fishing associations. 40 (30) The declaration must however be made if the corporation referred to above in paragraph 27, with the exception of issuer s subsidiary, engages regularly in securities trading. 41 40 Section 99, subsection 5 of the MFA. 41 Section 99, subsection 5 of the MFA.
J. No. 4/120/2005 32 (45) 8 OBLIGATIONS OF THE REGISTRAR 8.1 Registrars Justifications (1) The registrar is an entity obligated to maintain a public insider register in accordance with the law. These entities are: Finnish issuers whose shares are subject to public trading securities exchanges option corporations clearing parties the Central Securities Depositary securities intermediaries management companies 8.2 Ensuring the reliability of the register (2) The registrar must ensure that the register on insider holdings is maintained in a reliable manner. 42 Valid from1.5.2008 (3) If an entity functioning as a registrar has made an internal decision on a more comprehensive disclosure requirement than the provisions of the SMA and MFA, the registrar must also ensure the reliability of the register in this respect. (4) Information provided by the person subject to the declaration requirement on forms adopted by the Financial Supervision Authority (appended to the standard) or other forms of notice containing corresponding information are to be entered in the register. 42 Chapter 5, section 7 of the SMA and section 100 of the MFA.
J. No. 4/120/2005 33 (45) (5) The registrar may use a procedure whereby the declaration is submitted, for example, via email, rather than on forms. (6) The upkeep of the register must be organised in a reliable manner ensuring that the information in the register cannot be amended or removed afterwards and that only those authorised to keep the register may post entries in it. 43 (7) The registrar must appoint a person responsible for the upkeep of the register who handles instructions concerning the register and the organisation of its maintenance and dissemination. 44 Recommendation Issued on 16.8.2005 Valid from 1.9.2005 (8) Persons subject to the declaration requirement should be provided sufficient instructions on making the declaration and the necessary forms. The registrar should, on request, give a person subject to the declaration requirement a copy of his own declaration. 8.3 Register entries (9) Declared information must be entered in the register without undue delay. 45 (10) The registrar must request the person subject to the declaration requirement to complete a deficient declaration. The recipient of the declaration must record in the declaration its date of reception. Recommendation Issued on 16.8.2005 Valid from 1.9.2005 (11) The administrator of the SIRE system (Euroclear Finland Ltd) and other place for public inspection should record the date of receipt in declarations received by them. Recommendation Issued on 16.8.2005 Valid from 1.9.2005 (12) The Financial Supervision Authority recommends that the registrar also keeps a record of delayed declarations of insider holdings. 43 Chapter 5, section 7, subsection 4 of the SMA. 44 Chapter 5, section 7 of the SMA and section 100 of the MFA. 45 Chapter 5, section 7, subsection 4 of the SMA.