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Finland

The Helsinki Exchanges are to introduce amendments to the Rules of the Stock Exchange regarding the listing process, conditions for admission to listing and disclosure requirements.

The aim of these amendments is to enhance the quality of investor information and to ensure the Finnish equity capital markets are internationally competitive. The amendments concerning listing criteria and the listing process have been triggered by recent market developments, changes in Finnish securities market legislation and practical experiences. The amended stock exchange rules are subject to the approval of the Ministry of Finance before they become effective.

A new requirement has been added to the amended rules to the effect that a company's administration, result monitoring, risk management and disclosure compliance must be organized in an appropriate manner. The aim is to ensure that each listed company is able to produce reliable and adequate information about its financial status and the development of its business. A description of how these matters have been organized must be included in the listing application.

According to the amended stock exchange rules, a written statement by the adviser (lead manager) responsible for the listing process must be delivered to the Helsinki Exchanges. This statement must include a representation by the adviser confirming the company meets the listing requirements, is capable of operating as a listed company and that the information provided on the company and its future prospects is correct and adequate.

The amended Rules of the Stock Exchange also impose new shareholders' equity and share capital requirements. A company to be listed on the Main List must issue shareholders' equity of at least €4 million ($3.63 million) and share capital of at least €2 million. A company to be listed on the NM List must, according to the new requirements, have adequate operating capital. The NM prospectus must include a detailed description of the risks and company's business operations as well as a cash flow statement for the past 12 months. In addition, a statement by the company that there are sufficient assets at the company's disposal for the following 12 months must be included in the prospectus.

A Listing Committee will also be introduced and will decide on admission of new companies to the Main List, the I List and the NM List. At present the Board of Directors of the Helsinki Exchanges is responsible for making listing decisions. The Listing Committee will be subordinated to the Board of Directors. It will consist of five members, two of which will be representatives of commercial and industrial sectors and securities markets.

The amended stock exchange rules also include additional financial reporting requirements. These requirements are introduced to give investors more information and to help them assess listed companies. According to the new financial reporting requirements, a cash flow statement must be included in an interim report and a financial statement bulletin. The companies listed on the I List, the NM List and the Pre List – having less than three years operational history or a shareholders' equity of less than the share capital – must include in their financial statements or interim reports a reasoned statement on the adequacy of disposable assets available for the next 12-month period. The purpose of introducing the new reporting requirements is to encourage listed companies to disclose information as well as to provide more information on companies with less history and a higher risk profile.

Dimitrios Himonas

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