The contents of investment services and related ancillary services are defined in law. An investment service means, for example:
- reception and transmission of orders in relation to financial instruments and their execution on behalf of customers
- investment advice, ie issuance of a personal recommendation to the customer for a transaction concerning a certain financial instrument
- portfolio management, ie management of financial instruments under an agreement made with the customer in which decision-making power regarding investment is in full or in part conferred on the service provider.
An ancillary service means, for example:
- safekeeping and administration of financial instruments
- granting of credit in connection with investment service
- foreign exchange services connected to the provision of investment services.
Provision of investment services requires authorisation
Investment services can only be provided by authorised credit institutions, authorised investment firms and fund management companies authorised to provide portfolio management and investment advice. Investment services can also be provided through tied agents. In addition, the provision of investment services is allowed to, for example, corresponding foreign service providers operating in the European Economic Area (EEA) that have a branch in Finland or have notified FIN-FSA of their service provision in Finland.
FIN-FSA supervises the operations and conduct of business rules of investment service providers. Moreover, FIN-FSA monitors those participating in financial markets and intervenes in the activities of firms operating without due authorisation.
Conduct of business rules are laid down in law
The operations of firms providing investment services are regulated by law. In customer relationships, for example, it is necessary to comply with the provisions of the Securities Markets Act concerning, among others,
- client categorisation
- good practice in securities trading and in the provision of investment services
- contracts on investment service
- the requirements to provide information to clients
- the obligation to obtain information
- the handling and careful execution of orders
- the safekeeping of clients assets.
For more information on conduct of business rules to be complied with in the provision of investment services, see Procedures in the provision of investment services, in the menu on the left.
30 January 2013