The Ministry of Finance has set up an unofficial committee, the task of which is to draft a proposal regarding the application of the Finnish Securities Markets Act to share issues of private limited liability companies. Currently, there is no specific disclosure regulation concerning share issues of private limited liability companies. The general disclosure obligation of private limited liability companies is regulated in the Companies Act, the Consumer Protection Act and the Criminal Act.

The Finnish Companies Act divides limited companies into public limited liability companies and private limited liability companies. According to the Companies Act, only public limited liability companies may offer securities to the public and only such securities may be subject to public trading.

The proposed amendment of the Securities Markets Act would entrust the supervision of share issues of private limited liability companies with the Financial Supervision Authority. No governmental authority currently supervises the share issues of private limited liability companies in Finland.

The amendment would mean that the disclosure regulations of the Securities Market Act would apply to both private and public limited liability companies. Consequently private limited liability companies would also have to prepare and publish a detailed prospectus when issuing shares to the public. According to preliminary information on the proposal, companies would be exempt from this obligation if the share issue was directed only at private persons.

The committee will deliver its report by the end of March and, according to the available information, the amended Securities Markets Act will be implemented during 2001.

For further information on this topic please contact Ari-Pekka Saanio at Borenius & Kemppinen by telephone (+358 9 615 333) or by fax (+358 9 61 53 34 99) or by e-mail ([email protected]).

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