A government bill on amending the Finnish Act on the Book-Entry Securities System, prepared by the ministry of finance, was given to parliament in September. The bill pays particular attention to the international relations established between securities depositories and to the handling of foreign securities in the Finnish book-entry securities system. In addition, the provisions governing the entering of foreign securities into the Finnish book-entry securities system have been specified in the bill.
The bill also proposes measures required for the conversion of bonds issued in Finnish markka into euros. Detailed instructions on the conversion procedure will, however, be included in the rules of the securities depository confirmed by the ministry of finance. The aggregate amount of the bonds to be converted is about Fmk210 billion (US$42.5 billion).
Under the bill, the provisions contained in the Act governing the ability of the Financial Supervision (the supervising authority for banking and capital markets in Finland) to receive information on nominee registered securities will also be specified. At present, several authorities question the function of nominee registration on the grounds that it leads to the misuse of the book-entry securities system for the purposes of tax evasion, money laundering and misuse of insider information. Although there is no evidence on misuse, doubts are believed to weaken confidence in the capital markets. To avoid doubts, amendments to the relevant provisions, imposing certain additional information obligations on custodians of nominee registered securities, have been proposed to become effective on January 1 1999 with the start of stage three of Emu.