LEGAL ASPECTS
OF FINANCE
Lecture 3
Case 3
Matti Rudanko
Case 3: The
“Kansallisanti”
Case
•
Tasks:
• see next slides
Possible Tasks and Questions 1
Give a report on the provisions on the
various disclosure duties to be applied on
securities markets according to Finnish
provisions in legislation, lower official
norms and self-regulation. Please account
for the applicable sanctions, too.
Legal Aspects of Finance 3
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Possible Tasks and Questions 2
With respect to this case, try to solve the question
of damages liability of the issuer on the basis of
traditional damages law. Give a report especially on
the application of traditional prerequisites of
damages liability (existence of damages, problems
of causation, and negligence). Please consider also
the applicability of the invalidity of an agreement to
this case.
Legal Aspects of Finance 3
4
Possible Tasks and Questions 3
Consider the use of economic theories
such as Efficient Capital Markets
Hypothesis and Market Fraud Theory as a
tool for improving the applicability of the
damages sanction on securities markets.
Try their application to this case.
Legal Aspects of Finance 3
5
Topics and Issues
Disclosure Duties in
an IPO
• Prospectus
• Other Rules of
Marketing
Securities to the
Public
Legal Liabilities for
Disclosure Failures
• Liability for
Damages in
Securities Markets
• Is Invalidity of
Contracts Possible
for Disclosure
Failures?
Legal Aspects of Finance 3
6
EU Regulation
Directive 2014/65/EU of the European Parliament and of the Council
of 15 May 2014
• on markets in financial instruments and amending Directive
2002/92/EC and Directive 2011/61/EU (MiFID II)
Directive 2001/34/EC of the European Parliament and of the Council
of 28 May 2001
• on the admission of securities to official stock exchange
listing and on information to be published on those
securities
Directive 2003/71/EC of the European Parliament and of the Council
of 4 November 2003
• on the prospectus to be published when securities are offered to the public
or admitted to trading and amending Directive 2001/34/EC (”Prospectus
directive”)
Legal Aspects of Finance 3
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Regulation (cont.)
COMMISSION REGULATION (EC) NO 809/2004 OF 29 APRIL 2004
IMPLEMENTING DIRECTIVE 2003/71/EC OF THE EUROPEAN
PARLIAMENT AND OF THE COUNCIL AS REGARDS
• information contained in prospectuses as well as the format,
incorporation by reference and publication of such prospectuses
and dissemination of advertisements
• ”Europassport” for issuers
CESR’S (SEE SLIDE SET 4: 2 – 3) RECOMMENDATIONS FOR THE
CONSISTENT IMPLEMENTATION OF THE EUROPEAN
COMMISSION’S REGULATION ON PROSPECTUSES N:O 809/2004
(CESR /05-054B)
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Regulation (cont.)
National regulation :
• Securities Markets Act (14.12.2012 / 746
http://www.finlex.fi/fi/laki/kaannokset/2012/en20120746.pdf
• Repeals: Former SMA (495/1989)
• Ch. 3 – 4 (prospectus), 6 – 9 on disclosure duties
• Marketing and issuance of securities, duty of disclosure (SMA ch. 1
sect. 2 – 4)
• The Penal Code, Ch. 51, Section 5 (1.4.1999/475)
- Information crime relating to the securities markets
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Regulation (National, cont.)
Ministry of Finance decrees 452/2005, 479/2006, 818/07 and
940/2007
FSA interpretation 3/2005 on the prospectus under the
Prospectus Directive in issue program
FSA standard 5.2a on Securities offerings and listing
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Case 3: Slides 1
Slide sets:
- 8 and 8a: damages liabilities
- 9: IPO disclosure duties
- 14: some remarks on the case
Case 3: Slides 2
Slide sets (see also:)
1o:Regular and Ongoing Disclosure Duties
IFRS
Pro Forma Information
11: Ongoing Disclosure Duties
12: Information Crimes