The Finnish government recently issued a Bill on proposed amendments to the Credit Institutions Act and the Act on Investment Firms. The proposal aims to increase the efficiency of the supervision of credit institutions and to improve the information given by credit institutions and investment firms on their financial status. Furthermore, the proposal aims to harmonize the Credit Institutions Act and the Act on Investment Firms with the Accounting Act, the Auditing Act and the Companies Act.
The information on the financial status of credit institutions and investment firms shall, according to the government Bill, be improved by allowing credit institutions and investment firms to enter securities qualifying as current assets in the books according to their market value. This reflects current international practice. In addition, all banks will be required to publish interim reports.
The supervision of credit institutions should be made more efficient by widening the scope of the supervision by the Finnish Financial Supervision. According to the proposal, holding companies which control credit institutions or investment firms would be supervised by the Financial Supervision. In addition, the Financial Supervision could issue binding instruction on the requirement concerning internal supervision and risk management.
Furthermore, the proposal aims to harmonize the legislation by amending those provisions of the Credit Institutions Act and the Act of Investment Firms that overlap with the corresponding provisions of the Accounting Act and the Auditing Act. Also, the proposal would harmonize the provisions of the Credit Institutions Act regulating capital investments that qualify as Tier 1 capital of credit institutions with the provisions of the amended Companies Act relating to capital loans.
The proposed amendments are intended to enter into force on January 1 1998.