Legislative Update

Amendments to Listing and Disclosure Rules

The Helsinki Exchange (HEX) has announced that it has prepared amendments to the stock exchange rules:

• regarding the listing process;
  
  
• conditions for admission to listing; and
  
  
• disclosure requirements.

These amendments are subject to the Ministry of Finance's approval. A new Listing Committee will replace the HEX board of directors in making decisions on the admission of new companies.

The amended listing requirements require that a company's administration, internal monitoring, risk management and disclosure compliance, as well as any related duties, be organized in an appropriate manner. The aim is that the company will be able to produce reliable and sufficient up-to-date information on its business and financial status to the investing public. The listing application shall include a description on how the company is organized and how it will manage these issues. Further, the lead manager acting as the arranger of the listing must submit an opinion or 'comfort letter' to the HEX stating that the company meets the conditions for admission to listing, is capable of conducting its business as a listed company, and that the information provided on the company and its future prospects is sufficient.

In addition, the financial reporting requirements will be supplemented and some changes will be made relating to the equity and operating capital requirements for companies with listed securities on some stock lists. The annual report and interim reports of an Investors List, New Market List or Pre-list company with less than three years operational history or whose shareholders' equity is less than the share capital, must contain a statement by the company on the adequacy of disposable assets available for the following 12 months. This new rule aims to make available more information on young and higher-risk companies' financial situation.

New Offering Regulations

Following the amendment of the Securities Markets Act, which brought private limited companies under the act's scope and facilitated organized professional trade with shares of private limited companies outside the official stock market, the Ministry of Finance is preparing two new decrees on the offering of securities. The first regulates the contents of a prospectus of a private limited company and the second relates to prospectuses regarding securities admitted to an official stock list. These decrees are expected to come into force during July 2002.

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 email ([email protected]).