The provisions of the Finnish Securities Market Act of 1989 relating to the cross-border and branch operations of foreign clearing, settlement and depositary houses (CSDs) will be amended with effect from 1 January 2010.
Foreign CSDs who offer their services cross border into Finland or through a Finnish branch must file a licence application with the Finnish Ministry of Finance within 6 months. Moreover, foreign CSDs whose trades are regularly settled by Euroclear Finland and which trades may have an effect on the stability of the Finnish financial markets, must apply for status as a clearing party with Euroclear Finland. As a result of the new legislation, clearing and settlement activities, insofar as settlement takes place in Finland, would become subject to Finnish regulations, irrespective of the domicile of the clearing house. The proposed legislation would also in certain cases become applicable when both clearing and settlement take place outside of Finland, if part of the settlement process occurs in Finland by virtue of entries in the Finnish book-entry securities system. The aim of the reform is to increase supervision of the cross-border and branch operations of foreign CSDs in Finland in order to enhance reliability and stability.