This content is from: Local Insights


The Finnish Council of State recently published a bill regarding the further implementation of the EU Directive on undertakings for collective investment in transferable securities (UCITS; 85/611/EEC) in order to improve and maintain the international competitiveness of Finnish investment funds.

The amendments concern, among other things, the permitted investment activities of investment funds and restrictions on investment funds' ability to take out loans.

Under the bill, investment funds would also be entitled to invest in derivatives other than standardized derivatives (as defined in the Act on Trade with Standardized Options and Futures) and conclude, within certain limitations, repo agreements as well as securities lending agreements. Additionally, investment funds would be able to take out loans not exceeding an amount corresponding to one tenth of the assets of the investment fund.

The minimum capital requirement of an investment fund is Fmk10 million (US$2.1 million). Further, an investment fund must always have at least 50 shareholders, in the absence of an exemption granted on specific grounds by the Financial Supervision.

EEA investment funds would be allowed to market fund units to the public in Finland only to the extent that they are, under the laws of their home state, authorized to market such fund units within the EEA, that is, they are UCITS that fulfil the requirements of the Directive.

It is expected that the amendment to the Investment Fund Act would enter into force on August 1 1996.

It is, additionally, expected that a bill regarding the implementation of the BCCI Directive into Finnish legislation will be published this summer.

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