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The Finnish Investment Funds Act has been amended with effect from April 8 2004 to implement the two recent amendments to the Ucits Directive (2001/107/EC and 2001/108/EC). The amended Act has widened the scope of operations allowed for fund management companies to include certain types of investment services, such as portfolio management and investment advice. The assets of the fund may now be more freely invested in different types of instruments, such as derivatives. Under the new Act, a simplified fund prospectus is required to be prepared for each managed investment fund as of October 1 2004.

As regards non-Ucits funds, the amendments mean a significant liberalization of the Finnish regime, and the marketing in Finland of non-Finnish non-Ucits funds will become considerably easier. Previously, to avoid registration requirements in Finland, the Articles of Association or bylaws of a non-Ucits fund were required to contain a specific reference saying that units in the fund may be marketed or sold in Finland to professional investors only. In practice, this requirement often led to difficulties in determining what constituted the Articles of Association or bylaws of each fund as well as the exact wording of a stipulation that was sufficient to meet the requirement. Under the amended legislation, this stipulation is no longer required and the registration requirement may be avoided by simply limiting the marketing of the non-Ucits fund in Finland to professional investors, as defined in the Act.

Furthermore, it is expected that the procedure of registering Ucits and non-Ucits funds in Finland will become more time and cost-effective, because under the amended Act the Finnish Financial Supervision Authority (FSA) has discretion as to the language of the documentation to be filed. Previously, a substantial part of the fund documentation had to be translated into Finnish or Swedish. In cases where the FSA is satisfied that the marketing will target mainly professional investors, it is expected that the translation requirements can be avoided.

Tarja Wist and Nina Rosenlew

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