This content is from: Local Insights

Finland

On December 19 2001 the Finnish Association of Securities Dealers, the Finnish Association of Mutual Funds, the Financial Supervision Authority, the Finnish Shareholders' Association and the Finnish Bankers' Association agreed to set up a Securities Committee to settle disputes, issue recommendations and handle other issues concerning securities trading.

The purpose of the Securities Committee is to assist investors by giving advice in possible dispute situations and, by means of recommendations, to develop good market practices for the securities business. Before the introduction of the Securities Committee, the investors have only had the option to file a complaint with a competent district court. Court proceedings have often been considered too cumbersome and expensive for the purpose of settling securities trading disputes.

The Securities Committee will issue recommendations, which are not binding but are made public. The object of the recommendations is to find a solution to the relevant dispute or problem between an investor and a broker and, at a more general level, to promote and interpret good market practices in the securities trading industry. The recommendations will include an assessment of the relevant questions and actions of the parties. In addition, the Securities Committee will interpret the applicable rules and issue an estimate of the possible losses and damages of the investor.

The Securities Committee serves only private investors and does not act as an investment adviser. The proceedings in the Securities Committee can be commenced either by a single investor or one of the founding parties. Therefore, the Financial Supervision Authority will have a right to commence a proceeding, should it, on the basis of its supervisory actions, discover issues to be dealt with by the Securities Committee.

The Securities Committee will consist of one member from each of the Financial Supervision Authority and the Finnish Bankers' Association, one joint member from the Finnish Association of Securities Dealers and the Finnish Association of Mutual Funds and two members from the Finnish Shareholders' Association. An independent party will be appointed to act as chairman. The founders have committed themselves to contributing that their members (consisting of banks, investment funds and investment firms) will comply with the recommendations of the Securities Committee. The Committee will commence its activities during the spring.

Dimitrios Himonas

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