Qualitative capacities 

Organiser resposible for checking qualitative capacities

In the rationale for the Securities Markets Act (Government Bill 184/2001) it is stated that the organiser of an issue should pay appropriate attention to the reliability of the monitoring and reporting systems of companies applying for listing. The issue organiser responsible for the listing must see to it that the company applying for listing is capable of handling the reporting and disclosure obligation of a listed company. The organiser must have a systematic procedure for carrying out the necessary check-up.

The check-up carried out, observations made and any remedial action undertaken must be duly documented, as FIN-FSA may request a summary of the check-up from the issue organiser in connection with the prospectus process or at a later date.

Key aspects to be checked include timeliness, reliability and quality of financial reports issued by the company, due monitoring of reports, the realistic nature and robustness of forecasts and attention paid to the disclosure obligation in the management's working methods, resource allocation and internal guidance.

FIN-FSA finds it important that particular consideration be given to the first IFRS financial statements issued for the prospectus required for listing and that enough time be reserved for their issuance. When the IFRS are applied for the first time, questions related to financial reporting often surface, to which the company, in complying with Finnish accounting conventions, has not had to take a stand.

29 June 2009