The ministry of finance is preparing a government Bill containing proposed amendments to the Act on Investment Funds. The aim is for the Bill to be ratified and become effective by the end of this year.
The amended Act will contain a number of significant changes including amendments dealing with the marketing of collective investment funds other than UCITS in Finland (ie investment funds registered in other than European Economic Area states and investment funds registered in European Economic Area states not falling under the definition in the Council Directive 85/611/EEC on investment funds).
Under the existing Act, the marketing of a non-UCITS collective investment fund in Finland is subject to a permission from the Council of State, in practice the ministry of finance. The preparatory works of this regulation suggest a restrictive attitude towards marketing of non-UCITS funds licensed in a tax haven.
Formally, the permission of the Council of State would require that two months before the start of marketing both the Council of State and the Financial Supervision are notified and furnished with detailed documentation on the fund for approval of the marketing of the fund.
The interpretation of the Act does not, in general, allow any private placement exemptions from the permission requirements, even if the fund is marketed to a limited number of institutional or otherwise sophisticated investors in Finland.
The proposed amendments would, however, ease the permission requirements in that non-UCITS funds would not require permission from the Council of State when marketing their units to a limited number of professional investors, the availability of the exemption to be determined by the Financial Supervision on a case by case basis. Where the target group of the non-UCITS fund meets the exemption requirements on the number and sophistication of investors, a non-UCITS fund could be marketed subject to same requirements as those applying to a UCITS fund, ie notification to the Financial Supervision.