A Finnish service provider may engage in activities falling within the scope of its authorisation in a foreign country either by establishing a branch or proving services across the border. Commencement of activities requires either an authorisation or notification procedure depending on whether the activity is conducted in another EEA member state or outside the EEA.
Operation in EEA member states
Based on the so-called single licence principle, a credit institution, management company, investment firm or insurance company authorised in one EEA member state may engage in activities within the scope of its authorisation in the entire EEA area either by establishing a branch or providing its services across the border.
If a service provider authorised in Finland intends to establish a branch in another EEA member state, it must notify the Financial Supervisory Authority (FIN-FSA) with the appended notification forms. The FIN-FSA notifies the authority of the future host country within three (3) months, appending the additional information required of the regulatory authority by the Directive. As regards management companies, the relevant deadline is two (2) months. Operation may only be commenced once a response has been received from the authority of the host country or two (2) months have passed since the host authority received the notification.
Cross-border provision of services
If a service provider authorised in Finland intends to provide services across the border to another EEA member state, it must notify the Financial Supervisory Authority (FIN-FSA) with the appended notification form. FIN-FSA files a notification with the authority of the future host country within one (1) month. Operation may be begun immediately after FIN-FSA has made this notification.
Operation outside EEA
If a Finnish credit institution, management company or investment firm establishes a branch outside the EEA member states, it needs a permission granted by FIN-FSA. Insurance companies (primary insurance operations) must file a notification to that effect with FIN-FSA.
Granting a permission requires that supervision of the branch is effective and covers all operating units. Establishing a branch may not endanger the operation of the credit institution, investment firm or management company, either. The insurance company must have adequate solvency and appropriate governance, and its management as well as primary agent must meet statutory requirements.
The standard Authorisations and notifications by FIN-FSA’s predecessor, the Financial Supervision Authority, contains more detailed information on the prerequisites for granting authorisations to supervised financial sector entities. The Ministry of Finance decree on reports to be attached to an application for authorisation in turn lists the information to be attached to an application for authorisation for a branch in a country outside the EEA. Chapter 3, section 2 of the Insurance Companies’ Act lists the attachments necessary in the notification.
Cross-border provision of services
A Finnish credit institution, investment firm or management company is allowed provide services across the border outside the EEA without having to establish a branch. In this case, FIN-FSA must be notified in advance what services are intended to be provided as well as where and how. The supervised entity must explore the requirements to the operation set by the host country.