The Finnish Financial Supervisory Authority (FFSA) has adopted a strict policy with respect to delays in the obligation to notify the acquisition or disposal of major shareholdings and voting rights in Finnish listed companies.
According to the Finnish Securities Markets Act, implementing the EU Transparency Directive (2004/109/EC, as amended), shareholders in Finnish listed companies are obliged to notify the FFSA as well as the listed company of changes in shareholding and voting rights when the holding reaches, exceeds or falls below 5, 10, 15, 20, 25, 30, 50, 66,7 (i.e. 2/3) or 90 per cent of the voting rights or the numbers of shares held in the listed company. The disclosure obligation applies also to investment fund management companies and portfolio managers who may exercise voting rights on a discretionary basis with respect to shares held on behalf of the fund or client. Such holdings must be aggregated on a group level, unless a specific aggregation exemption has been obtained from the FFSA.
The disclosure must be made without undue delay and at the latest on the following business day from when the shareholder became aware or ought to have become aware of the change in the shareholding or voting rights. The disclosure provision is designed to ensure that shareholders have access to information on the ownership and policy structures of the listed company and any changes therein. Disclosures also provide the shareholders with information on, for example, the liquidity of the company’s stock and any changes therein. Failure to disclose changes in the shareholding or voting rights is subject to a public reprimand or administrative fines of up to EUR 100,000 for legal persons and EUR 10,000 for natural persons.
The FFSA has this year so far disclosed seven instances where the shareholding disclosure was unduly delayed. The delays in the shareholding disclosure ranged from 11 business days to 16 months. In the majority of the cases the FFSA imposed administrative fines between EUR 5,000 – 20,000. In two instances the FFSA issued public reprimands instead of fines.
In light of the recent practice of the FFSA, it is evident that the FFSA has tightened the supervision of shareholding disclosure notifications and interferes actively when delays occur.
For more information on shareholding disclosure, please contact