Amendments to the Finnish Securities Markets Act and a new Corporate Governance Code for listed companies in Finland

3.12.2008

Amendments to the Securities Markets Act

The rules of the Securities Markets Act concerning the duties of security issuers to publish information have been amended as of 1 September 2008. After the amendment the issuers are obligated to publish information on the corporate governance system applied by the issuer. The aforementioned information shall be included in the annual report of the issuer or it shall be published as a separate disquisition which shall be referred to in the annual report.

The new rules of the Securities Markets Act will probably not cause any significant changes in the reporting practices of the issuers since they have already published corporate governance disquisitions based on the self-regulation rules of the securities markets. The amendment has come into force on 1 September 2008 and the issuers are obligated to comply with the new rules from the first financial year starting after the aforementioned date.

New Corporate Governance Code for listed companies

The Finnish Securities Market Association has published a new Corporate Governance Code for companies listed in Helsinki Stock Exchange. The new Code replaces the Corporate Governance guidelines published by the Securities Market Association in 2003 starting from 1 January 2009. However, a few recommendations in the Code include different transitional periods. The purpose of the new Code is to update the self-regulation of the Finnish securities markets to correspond with the Limited Liability Companies Act of 2006 and the development of the market as well as to clarify the practices of issuers in publishing market information.

The use of internet and other means of electronic communication are emphasized in the new Code. A uniform way of publishing information on the issuers’ internet pages makes acquiring information on the issuers easier. The purpose of the new recommendations concerning the means of electronic communication is to make the activities of investors as well as shareholders more effortless.

The Code also sets up new requirements for listed companies. Among other things the recommendations concerning the information to be published on the remuneration and bonus schemes of the management have been changed in the new Code. The new Code requires the remuneration and bonus schemes to be made public more openly and transparently.

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