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Finland

IPOs under scrutiny by the Finnish financial supervision

The Financial Supervision, the authority supervising the securities market in Finland, has resolved to initiate investigations concerning the share allocations in connection with all initial public offerings which have taken place on the Helsinki Stock Exchange during the first half-year period of 1999.

The decision to investigate initial public offerings is a consequence of the large number of complaints filed with the Financial Supervision about the allocation of shares in connection with the privatization and initial public offering of the state-owned telecommunications company Sonera Group. In November 1998, the state sold approximately 22% of the shares in Sonera Group to Finnish and foreign investors.

For the purpose of its investigations the Financial Supervision intends to review the allocation principles as well as non-public documentation relating to the book-building process. The Financial Supervision is legally entitled to obtain all the documents and records relating to a supervised entity or its customers for inspection.

Pursuant to the Finnish Securities Market Act, an investment firm has a general obligation to treat its clients equally in connection with public offerings of securities and otherwise when providing investment services. The Financial Supervision guidelines in force as of January 1 1999 regarding the application of the Securities Market Act provide that all investors be given equal possibilities to participate in a public offering. Further, the prospectus must, according to such guidelines, contain sufficient information on the allocation of securities between, inter alia, institutional investors and retail investors.

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