Offering of securities and prospectuses
How is the offering of securities regulated?
The Securities Markets Act applies to offerings of securities regardless of whether the issuer is a public or private company or whether there is an intention to list the securities. The Securities Markets Act defines securities as being transferable, negotiable and issued to the public together with several other securities with similar rights.
The following general principles under the Securities Markets Act must always be complied with when offering securities:
- prohibition of procedures in violation of sound securities market practice
- prohibition against providing untruthful or misleading information
- provision of fair access to adequate information.
In addition, a prospectus must be published where the aggregate consideration in the offerings is more than EUR 8 million over a period of 12 months. Before launching an offering, the prospectus must be approved by the FIN-FSA, and it must be kept available to investors throughout the offer period.
There are, however, several exceptions to the obligation to prepare a prospectus.
An obligation to publish just a basic information document applies to offerings where the total consideration is at least EUR 1 million but does not exceed EUR 8 million within a 12-month period. The basic information document must be submitted to the FIN-FSA to address perustietoasiakirjat(at)finanssivalvonta.fi.
There is no obligation to prepare a prospectus if one of the following exemptions apply to the offer:
- the total consideration of the offerings within a 12-month period is under EUR 1,000,000
- the total consideration of the offerings within a 12-month period is at least EUR 1,000,000 but does not exceed EUR 8,000,000 (instead of a prospectus the offeror is obliged to publish a basic information document referred to in the Securities Market Act)
- the securities are offered exclusively to qualified investors
- the securities are offered to fewer than 150 investors
- the minimum investment or denomination per unit is at least EUR 100,000.
Even where no obligation to publish a prospectus arises in the context of offering securities, it will arise if listing on a regulated market, i.e. the stock exchange, is sought for the securities. There are also certain exceptions to this obligation.
There is no obligation to publish a prospectus when the aggregate consideration for securities offered over 12 months does not exceed EUR 8,000,000, admission is sought to have the securities subject to trading in Finland in a multilateral trading facility (Nasdaq First North Growth Market Finland) and a company description under the rules of the marketplace is kept available to investors. The information in the basic information document referred to in the Securities Markets Act must be incorporated into the company description, and the company description must be submitted to the FIN-FSA similarly to basic information documents.
Furthermore, in accordance with the Crowdfunding Act, a recipient of crowdfunding does not need to publish a prospectus when securities are offered in Finland through a crowdfunding intermediary for a total consideration of less than EUR 8,000,000 over 12 months and the recipient of the funding publishes the information required in the Crowdfunding Act.
The total amount of consideration of the offerings is calculated separately for shares and bonds, and it is not affected by the final outcome of subscriptions.
An offering to the public means communications seeking to provide shareholders or prospective investors information for making an investment decision.
The offering may take place in any format and through any communication channel, and it always seeks the sale or other transfer of securities against consideration from one holder to another. The consideration may be cash, securities or something else.
A prospectus may be published when it has been approved by the Financial Supervision Authority. Approval of a prospectus is applied for in writing from the FIN-FSA. The processing period of a prospectus is 20 working days when the securities of the company are being offered to the public for the first time or when a new company is being listed on the stock exchange. In other circumstances, the processing period of a prospectus is 10 working days. The date on which the application was filed is not included in the processing time. According to the Prospectus Regulation, a new 10-day inspection period may be calculated from the submission of each new prospectus draft.
We charge a processing fee for an approval decision in accordance with our price schedule.
The FIN-FSA must be provided with the following:
- Cross-reference list
- Any documents incorporated in the prospectus by reference, e.g. financial statements
- In prospectuses on share issues, justifications of the working capital statement
- Power of attorney, if an agent is employed who is not an attorney.
The application must indicate for what purpose the prospectus was prepared and which prospectus requirements were observed in preparing it. When applying lighter prospectus requirements (EU Growth prospectus, wholesale prospectus and the simplified disclosure regime for secondary issuances), the justifications for the application of these requirements must also be presented. In addition, other material issues concerning the offering and prospectus must be described, and if the intention is to notify the approved prospectus to another EEA state, this must be mentioned. If the FIN-FSA's permission regarding, for example, the language of the prospectus is sought, the justifications must be provided in the application. The application must also indicate who functions as the contact person during the inspection period, and who should be the recipient of the approval decision and invoice of the inspection.
We request that the prospectus and cross-reference lists are submitted at least in a word format. If the prospectus subject to the application is considerably similar to another prospectus already approved by the FIN-FSA, we also request a redline (track changes) version against the previously approved prospectus.
The cross-reference list must indicate which parts of the prospectus provide which information under the content requirements (e.g. Annexes of the Prospectus Regulation). The cross-reference list should be provided in as much detail as possible, taking all sub-items of the content requirements into account. To facilitate the prospectus inspection, we recommend the use of the format of the reference list models shown below. Where some of the information items required in the cross-reference list does not exist or some requirement does not apply, this should be mentioned, and the justifications for omitting an item should be given when necessary.
Models of the most frequently used cross-reference lists (registration document and securities note):
- Annex 1 and 11 (so-called full prospectus) and summary (model template upcoming)
- Annex 3 and 12 (secondary issuances) (model template upcoming)
- Annex 6 and 14 (retail debt securities) (model template upcoming)
- Annex 7 and 15 (wholesale debt securities) (model template upcoming)
- Annex 8 and 16 (secondary issuances of debt securities) (model template upcoming)
The application and appendices may be submitted to us either
- by email to kirjaamo(at)finanssivalvonta.fi, we recommend encrypted email or
- by mail to Finanssivalvonta, P.O. Box 103, FI-00101 Helsinki.
An application is considered to have arrived on the day when it was received at the FIN-FSA Registry during its opening hours (weekdays until 4 p.m. and Maundy Thursday and New Year’s Eve until 1:30 p.m.). An application arriving later than that is considered to have arrived on the next working day. The inspection period is calculated from the working day following the date of arrival.
- Please contact us before filing an application so that any questions and the need for arranging a prospectus meeting can be assessed. Companies preparing for an initial public offering typically introduce themselves to the FIN-FSA before filing a prospectus application.
- If the prospectus concerns listing on a stock exchange, please contact IFRS Supervision within the FIN-FSA for a review of the IFRS financial statements.
- If the prospectus concerns a merger, demerger or another corporate transaction, presents pro forma financial information or involves other special characteristics, such as a need to diverge from the language requirements for a prospectus, we request that you contact the FIN-FSA well in advance before filing an application.
- If a prospectus is submitted to us for approval with material deficiencies, we will request the applicant to supplement the deficient application. In this case, the deadline for approving the prospectus does not begin until the prospectus has been supplemented with the missing information.
- We provide comments on the prospectus primarily in writing on a separate comment form. We submit these comments in encrypted email to the person indicated in the application. There are usually several rounds of comments.
- Any changes made to the prospectus after filing a prospectus application must be made visibly, for example with the track changes function.
- The comment forms are submitted to the personnel processing the application and the FIN-FSA Registry, completed with the company's answers. At the same time, a new version of the prospectus is submitted, both clean and redline version (compared always to the most recent version submitted to us). We recommend the use of the Bank of Finland's encrypted email.
- Where an initial public offering is concerned or the company offers its securities for the first time, we also request the marketing material concerning the offering for comments during the inspection period. In addition, we request that you send any investment analyses and IPO-due diligence reports for information purposes.
- Please submit the final prospectus both in a pdf and word format. The author of the prospectus must ensure that hyperlinks to documents referred to function properly.
- We will submit the decision concerning the approval by email to the contact person.
- The issuer must submit the approved prospectus and any documents incorporated therein by reference to the public register of prospectuses maintained by us. Please see the instructions here.
More information on procedures related to a prospectus inspection
- Commission Delegated Regulation (EU) 2019/980 as regards the format, content, scrutiny and approval of the prospectus
Requirements for the contents and publication of prospectuses are harmonised across the European Economic Area. These requirements are set out in Prospectus Regulation (EU) 1129/2017 and Commission Delegated Regulations provided thereunder.
With the prospectus approved by the FIN-FSA, the securities can be offered to the public or application can be made for their admission to trading on a regulated market in any EEA state by requesting the FIN-FSA to give notification of the prospectus in another EEA state (notification).
The requirements of the basic information document in accordance with the Securities Market Act are set out in the relevant decree of the Ministry of Finance.
More information on the requirements for the content and structure of a prospectus or a basic information document:
- Regulation (EU) 2017/1129 of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market (amendments up to 16 February 2021)
- Commission Delegated Regulation (EU) 2019/980 as regards the format, content, scrutiny and approval of the prospectus (amendments up to 4 June 2020)
- Commission Delegated Regulation (EU) 2019/979 with regard to regulatory technical standards on key financial information in the summary of a prospectus, the publication and classification of prospectuses, advertisements for securities, supplements to a prospectus, and the notification portal (amendments up to 4 June 2020)
- Commission Delegated Regulation (EU) 2021/528 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council as regards the minimum information content of the document to be published for a prospectus exemption in connection with a takeover by means of an exchange offer, a merger or a division
- Decree of the Ministry of Finance on the content of the basic information document referred to in chapter 3, section 2 of the Securities Market Act (only in Finnish and Swedish)
Recommendations, guidelines and interpretations concerning prospectuses:
- ESMA Guidelines on disclosure requirements under the Prospectus Regulation (pdf)
- ESMA Guidelines on risk factors under the Prospectus Regulation (pdf)
- ESMA recommendations on the implementation of Commission Prospectus Regulation (EC) No 809/2004, paragraphs 128-145, Specialist issuers (pdf)
- ESMA Guidelines on Alternative Performance Measures (pdf)
- Questions and answers on prospectuses by the European Securities and Markets Authority (ESMA) (pdf)
- Regulations and guidelines 9/2019 Presentation of information in prospectuses coming under the Prospectus Regulation
- Marketing of securities:
• Securities Markets Act (chapter 1, section 2–3 and chapter 3, section 3) and
• Regulations and guidelines 15/2013 Marketing of financial services and financial instruments (only in Finnish or Swedish)
A prospectus may be published when it has been approved by the FIN-FSA. It must be published and kept available to investors in an electronic format on the issuer's website. It must be published with its text and format identical to the approved original version. Any documents incorporated in the prospectus by reference are part of the prospectus and must be published in the same manner as the prospectus.
Once approved, the prospectus shall be made available to the public at a reasonable time in advance of, and at the latest at the beginning of, the offer to the public or the admission to trading of the securities involved. In the case of an initial offer to the public of a class of shares that is admitted to trading on a regulated market for the first time, the prospectus shall be made available to the public at least six working days before the end of the offer. All prospectuses approved shall remain publicly available in electronic form for at least 10 years after their publication.
A prospectus will be valid until the closing of the offer or until the securities have been admitted to trading on a regulated market, but for no longer than 12 months after approval of the prospectus.
If an error is found in the information contained in the prospectus during its validity, or other such information arises which may have material importance for investors, the prospectus must be supplemented without undue delay. In the context of a supplementation of a prospectus, the investors as a rule receive the right to cancel their investment decision. The cancellation period is two banking days from the publication of the supplement. The supplement must state the right of cancellation a description of the cancellation procedure and the time period when investors can use their right of cancellation.
A supplement must be approved by the FIN-FSA before publication. The maximum processing period for a supplement is 5 working days from the submission of the application. A supplement must be published in the same manner as the prospectus.
More information on the date and manner of publication of a prospectus and on supplementation
- Regulation (EU) 2017/1129 of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market (Article 21)
- Commission Delegated Regulation (EU) 2019/979 with regard to regulatory technical standards on key financial information in the summary of a prospectus, the publication and classification of prospectuses, advertisements for securities, supplements to a prospectus, and the notification portal