Waselius & Wist Navigation
  • Our team
  • In Focus
    • Recent Work
    • News
    • Legal Updates
    • Publications
    • Rankings
    • Blog
    • Newsletter
  • About Us
    • Corporate Social Responsibility
  • Expertise
    • Banking and Finance
    • Capital Markets
    • Corporate and Commercial
    • Corporate governance and Investigations
    • Data Protection
    • Dispute Resolution
    • Employment and Incentives
    • Energy and Natural Resources
    • EU and Competition
    • Financial Regulatory and Compliance
    • Insurance
    • Intellectual Property and Technology
    • Marketing
    • Mergers and Acquisitions
    • Private Equity
    • Real Estate
    • Restructuring and Insolvency
    • Tax and Structuring
  • Careers
    • Lawyers
    • Law students
    • Support staff
    • Open Positions
    • Contact
  • Contact
  • Our team
  • In Focus
    • Recent Work
    • News
    • Legal Updates
    • Publications
    • Rankings
    • Blog
    • Newsletter
  • About Us
    • Corporate Social Responsibility
  • Expertise
    • Banking and Finance
    • Capital Markets
    • Corporate and Commercial
    • Corporate governance and Investigations
    • Data Protection
    • Dispute Resolution
    • Employment and Incentives
    • Energy and Natural Resources
    • EU and Competition
    • Financial Regulatory and Compliance
    • Insurance
    • Intellectual Property and Technology
    • Marketing
    • Mergers and Acquisitions
    • Private Equity
    • Real Estate
    • Restructuring and Insolvency
    • Tax and Structuring
  • Careers
    • Lawyers
    • Law students
    • Support staff
    • Open Positions
    • Contact
  • Contact
In Focus
Home In Focus Quarterly Financial Sector Newsletter Q4/2022

Legal Updates27.01.2023

Quarterly Financial Sector Newsletter Q4/2022

We understand that it may be difficult to stay up-to-date with the boundless financial news flow. We have therefore compiled an update on the season’s key highlights and regulative changes in the financial sector, which we hope will help you stay on track.

Below you will find key highlights on a more general level and down below more detailed highlights concerning different types of licensed companies operating in the financial sector.

Anti-Money Laundering and KYC


Changes to Government Proposal on amending Act on Preventing Money Laundering and Terrorist Financing and Act on the Financial Supervisory Authority

The new provisions specify the provisions on complying with sanction regulations in relation to know your customer. Administrative penalties could be imposed in cases of failures and breaches. Finland has so far failed to comply with recommendations of the Financial Action Task Force.

More information is available here: https://vm.fi/hanke?tunnus=VM163:00/2022 


EU agrees on eighth and ninth packages of sanctions against Russia

New EU import bans worth €7 billion aimed to deprive the Kremlin’s military and industrial complex of key components and technologies. Additional economic measures against Russian energy and mining sector introduced, aimed to prevent Russia’s access to drones. Nearly 200 individuals added to the list of persons subject to freezing of assets.

More information is available here: https://ec.europa.eu/commission/presscorner/detail/en/ip_22_5989 and https://ec.europa.eu/commission/presscorner/detail/en/ip_22_7652


The Ministry of Finance conducted a survey on the PEP registry project

The purpose of the project is to draft a memorandum in relation to establishing a national register for politically exposed persons. Further, the intention is to assess and describe the current state of retrieving information on the PEP status of customers and their beneficial owners as required under the AML legislation.

More information is available here: https://www.finanssivalvonta.fi/tiedotteet-ja-julkaisut/valvottavatiedotteet/2022/valtiovarainministerion-kysely-pep-rekisterihankkeesta-rahanpesulain-mukaisille-ilmoitusvelvollisille–vastausaikaa-11.12.-asti/


Council agrees its position on a strengthened rulebook with regard to anti-money laundering

An EU-wide maximum limit of €10 000 is set for cash payments. Member states will have the option to impose a lower maximum limit.

The new rules will be extended to the entire crypto asset sector, obliging all crypto-asset service providers (CASPs) to conduct due diligence on their customers. Third-party financing intermediaries, persons trading in precious metals, precious stones and cultural goods, will also be subject to the obligations of the regulation, as will jewelers, horologists and goldsmiths.

Third countries that are blacklisted or greylisted by the FATF will from now on also be listed by the EU.

Read more here: https://www.consilium.europa.eu/en/press/press-releases/2022/12/07/anti-money-laundering-council-agrees-its-position-on-a-strengthened-rulebook/


EBA published guidelines on remote customer onboarding and draft Guidelines to tackle de-risking

 Credit and financial institutions should follow the steps in the Guidelines to tackle de-risking to ensure safe and effective remote customer onboarding practices.

The European Banking Authority (EBA) also launched a public consultation on new Guidelines on the effective management of money laundering and terrorist financing (ML/TF) risks when providing access to financial services.

Read more here: https://www.eba.europa.eu/sites/default/documents/files/document_library/Publications/Consultations/2023/Consultation on effective management of ML-TF risks when providing access to financial services %28EBA-CP-2022-13%29/1044816/Consultation paper on amending risk factor GLs and GLs on access to financial services.pdf

and here: https://www.eba.europa.eu/eba-publishes-guidelines-remote-customer-onboarding


The FIN-FSA published updated workbooks and instructions for the RA data collection

The updated RA data collection application and workbooks are available for download in the Jakelu Distribution Service. Some changes have been made to the collected data and the list of service providers who are obliged to report. E.g. Account Information Service Providers (AISP) are obliged to report as of 1 January 2023.

The reference date of data collected is 31 December 2022. The reporting deadline is 28 February 2023. A zero report should be submitted even if there have been no activities in 2022 or if there are no customers subject to customer due diligence.

Read more here: https://www.finanssivalvonta.fi/tiedotteet-ja-julkaisut/raportointitiedotteet/2022/raportointitiedote_34_2022/


FIN-FSA: Important to find a balance between risk management and ensuring equal economic conditions in AML practices

 The number of rejected customer applications and terminations issued by banks to legal entities has significantly increased from 2019 to 2021, according to the FIN-FSA. Some risks continue to be associated with banking activities and the FIN-FSA does not expect that all risks are eliminated. The FIN-FSA reminds banks to comply with equality legislation and urges them to assess the effects of their actions in light of financial inclusion.

Read more here: In anti-money laundering practices, it is important to strike a balance between managing risks and ensuring a level financial playing field – 2022 – www.finanssivalvonta.fi

ESG and Sustainable Finance


The Council has given final green light to corporate sustainability reporting directive (CSRD)

All large companies and companies listed on regulated markets will soon be required to report on how their business model affects their sustainability, and how climate change, human rights issues, and other external sustainability factors are accounted for in their activities.

Read the news here: https://www.consilium.europa.eu/en/press/press-releases/2022/11/28/council-gives-final-green-light-to-corporate-sustainability-reporting-directive/

Other relevant changes


The capital position of the financial sector:
Gloomier outlook for the operating environment highlights the importance of solvency, risk management, and internal control

The profitability outlook for the Finnish financial sector is weakened by weak economic growth, high inflation and energy prices, and rising interest rates. These factors have increased the risk of significant investment and credit losses.

Read more here: https://www.finanssivalvonta.fi/tiedotteet-ja-julkaisut/lehdistotiedotteet/2022/finanssisektorin-vakavaraisuus-30.9.2022-toimintaympariston-synkentyneet-nakymat-korostavat-vakavaraisuuden-riskienhallinnan-ja-sisaisen-valvonnan-merkitysta/


Government proposal to improve the reliability of the Trade Register

 Services of the Finnish Trade Register are proposed to be made mainly electronic by 2026. Companies will be liable to pay a fee if they neglect to submit necessary information to the register. Limited liability companies and cooperatives would be obligated to review their registered information annually. Private traders would no longer be obligated to register.

The Government Proposal is available here:

https://www.eduskunta.fi/FI/vaski/KasittelytiedotValtiopaivaasia/Sivut/HE_244+2022.aspx


Representative actions possible from June 2023 onwards

A representative action can be taken in matters of consumer sales, data protection, financial services, transport, and electronic communications. Consumers can seek compensation or call to prohibit a trader’s activities compensation that have infringed their rights.

More information can be found here: https://oikeusministerio.fi/-/edustajakanteen-nostaminen-mahdollista-kesakuusta-alkaen


Reform of debt and corporate restructuring

The reform would allow small and medium sized undertakings (SMEs) to have access to an affordable restructuring process in an earlier stage, which would strengthen their operating conditions. Debt restructuring would become more accessible by making the conditions less stringent. Better opportunities for the debtor to organise their contractual liabilities are also proposed.

More information can be found here: https://oikeusministerio.fi/-/velkajarjestelyn-ja-yrityssaneerauksen-uudistus-parantaa-velallisten-paasya-uuteen-alkuun


The Digital Services Act and Digital Markets Act entered into force

 The Digital Services Act (DSA) regulates the obligations of digital services that act as intermediaries in their role of connecting consumers with goods, services, and content. This includes online marketplaces amongst others. The DSA will give better protection to users and fundamental rights online. It provides a single, uniform framework for online platforms across the EU aimed to bring transparency and accountability.

The EU Digital Markets Act (DMA) regulates the unfair practices of companies that act as gatekeepers in the online platform economy to ensure fair and open digital markets.

Read more here: https://ec.europa.eu/commission/presscorner/detail/en/QANDA_20_2348

https://ec.europa.eu/commission/presscorner/detail/en/IP_22_6423


DPO: The retention period of payment default entries shortened to one month

As of December 2022, payment default entries are removed one month after a company receives information of payment. The shortening of the retention period applies to both personal credit data and business credit data.

Read more here: https://tietosuoja.fi/-/maksuhairiomerkintojen-sailytysaika-lyhenee-joulukuussa-muista-huolehtia-maksamistietojen-ajantasaisuudesta


Government Proposition: Risk of litigation costs to be reduced

The Government proposes amendments to legislation on reimbursement of litigation costs in disputes. The proposal allows more room for courts to moderate and fix the legal costs a losing party is ordered to compensate the winning party. The Ministry of Justice is also investigating the possibility of an expedited trial process in smaller disputes.

Read more here: Oikeudenkäyntikuluriskiä halutaan pienentää – Oikeusministeriö (oikeusministerio.fi)

News by Sector


Funds and Fund Management

Parliament’s reply to Government proposal HE 69/2022 (on amending the Act on Common Funds and the Act on Alternative Investment Funds Managers)

Common funds are no longer exempted from the regulation to draw up key information documents (KIDs) for retail investors regarding packaged retail and insurance-based investment products (PRIIP) as of 1 January 2023.

Read more here: https://vm.fi/paatos?decisionId=0900908f807f319c


The FIN-FSA imposes administrative fine on Eisler Capital (UK) Ltd for a delay in short selling notifications intended for public disclosure

The company failed to notify the FIN-FSA of the changes in net short positions on two occasions. The obligation to notify net short positions is based on the EU Short Selling Regulation, the objectives of which include enhancing market transparency and promoting supervisory authorities’ and market participants’ access to information.

Read more here: https://www.finanssivalvonta.fi/tiedotteet-ja-julkaisut/lehdistotiedotteet/2022/eisler-capital-uk-ltdlle-rikemaksu-julkistettavaksi-tarkoitettujen-lyhyeksimyynti-ilmoitusten-viivastymisesta/

 

Investment Firms

ESMA announces strategic priorities for the next five years and Annual Work Programme for 2023

The main elements of the strategy include fostering effective markets and financial stability, strengthening supervision of EU financial markets, enhancing protection of retail investors, enabling sustainable finance, and facilitating technological innovation and effective use of data.

Read more here:

https://www.esma.europa.eu/sites/default/files/library/esma71-99-2022_esma_announces_strategic_priorities_for_the_next_five_years_press_release.pdf

 

Insurance Companies

Council agrees position on establishing a framework for the recovery and resolution of insurance and reinsurance undertakings (IRRD)

The IRRD, as part of comprehensive review package of Solvency II rules, would introduce a harmonised regime at European level for resolving insurers, require member states to set up insurance resolution authorities, ensure a level-playing field across member states and safeguard policy holders’ interests and minimise the impact on the economy.

More information can be found here: https://www.consilium.europa.eu/en/press/press-releases/2022/12/20/council-agrees-position-on-establishing-a-framework-for-the-recovery-and-resolution-of-insurance-and-reinsurance-undertakings-irrd/


EIOPA published annual report on sanctions under the Insurance Distribution Directive in 2021

EIOPA published its third annual report on administrative sanctions and other measures imposed during 2021 by national competent authorities (NCAs) under the Insurance Distribution Directive (IDD). As in earlier reporting periods, the vast majority (over 70%) of sanctions in 2021 were for breaches of the professional and organisational requirements in Article 10 of IDD.

More information can be found here: https://www.eiopa.europa.eu/sites/default/files/publications/reports/annual_report_idd_sanctions_2021.pdf


EIOPA’s dashboard identifies European natural catastrophe insurance protection gap

 The first European dashboard depicts the insurance protection gap for natural catastrophes. The aim of the dashboard is to present the drivers of a climate-related insurance protection gap in order to identify measures that will help in decreasing society’s losses in the event of natural catastrophes. In the past a quarter of the total losses caused by extreme weather and climate-related events across Europe were not insured. The dashboard enables evidence-based decision-making on measures to improve society’s resilience against natural catastrophes. It should also help to increase the awareness of the protection gap and promote a science-based approach to protection gap management and policy making.

Read more here: https://www.eiopa.europa.eu/media/news/eiopas-dashboard-identifies-european-natural-catastrophe-insurance-protection-gap


EIOPA publishes supervisory statement on inflation

The statement supports consistent Solvency II calculations by raising awareness of the main impacts of higher inflation that (re)insurance undertakings should consider. It focuses on the impact of inflation on technical provisions, on investments, on solvency capital requirements and other elements.

Read more here: https://www.eiopa.europa.eu/media/news/eiopa-publishes-supervisory-statement-inflation

 

Credit and Payment Institutions

Amendments to the Consumer Protection Act

The Government bill (currently under deliberation by Parliament) proposes to decrease the interest limit on consumer credits to the reference rate under section 12 of the Interest Act, plus 15 percentage points. The interest limit would be subject to a maximum cap of 20 percent if the reference rate of the Interest Act rises to more than 5 percentage points. The amendments also concern curbing improper marketing of credit by clarifying the provision on good lending practice.

Read more here: https://oikeusministerio.fi/paatos?decisionId=0900908f807e4df4


The debtor’s protected portion and the number of payment-free months will be increased

The Finnish foreclosure legislation will be amended in 2023, as the protected portion of the debtor’s property will be increased to the level of guarantee pension. Also, the number of payment-free months will be increased. The amendments will affect the creditors’ possibilities to receive payment in foreclosure. Some creditors may receive their payments in a slower schedule, or possibly not at all. Increase in credit risk will likely lead to tightened credit issuance, collateral requirements, and increases in credit prices.

Read more here: Velallisen suojaosuus nousee ja vapaakuukaudet lisääntyvät ensi vuonna – Oikeusministeriö (oikeusministerio.fi)


Implementation of Council Directive (EU) 2020/284 introduces certain requirements for payment service providers

Payment institutions, including Finnish branches of foreign payment institutions, will be obliged to notify the Finnish Tax Administration of certain cross-border payments. The changes are proposed to enter into force on 1 January 2024 and notification obligation to apply as of 30 April 2024.

See more here:

https://www.eduskunta.fi/FI/vaski/KasittelytiedotValtiopaivaasia/Sivut/HE_317+2022.aspx

 

For more information

Olli Kiuru

Partner

Share:
Image

Contact info

Eteläesplanadi 24 A
00130 Helsinki, Finland

+358 9 668 9520
+358 9 668 95 222
ww@ww.fi

Quick links

  • Our Team
  • In Focus
  • About Us
  • Expertise
  • Careers

E-invoicing

E-address: 003710525214
Operator: Apix Messaging Oy
Service ID: 003723327487


BUSINESS ID 1052521-4
VAT ID FI10525214

Legal notice
Privacy notice
General Terms and Conditions

© 2023 Waselius & Wist

This website uses cookies to compile statistical data on the use of our website in order to enable us to evaluate and improve our site. OK Decline Cookie Policy
Manage Cookies

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are as essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT