Perspectiva social de la pertinencia curricular

Revision of solvency regulation concerning private earnings-related pension schemes

In May, the Ministry of Social Affairs and Health set up a working group to examine the need for reform of solvency regulation concerning private sector earnings- related pension schemes. The mandate of the working group will expire on 31 March 2010.

The working group seeks to have regulation in place for pension providers’ investment operations that will enable increases in employment pension contributions to be kept as low as possible. The regulation should prevent excessive risk-taking by pension providers, but should not unnecessarily restrict risk-taking even in adverse conditions.

Work begun on comprehensive reform of securities markets legislation

In February, the Ministry of Finance set up a working group to prepare a comprehensive reform of securities

markets legislation. The working group’s mandate extends until the end of 2010. Underlying the reform are the numerous partial revisions made to securities markets legislation in recent years in connection with the implementation of EU Directives, which has blurred the clarity of legislation.

The aim of the reform is to ensure that securities markets legislation is clear, effective and understandable. The legislation should also promote the competitiveness of Finnish markets and should therefore avoid any competitiveness-hampering deviations from the regulation applied in EU countries of key importance to the operation of the markets. Another objective is that the legislation should ensure the availability and feasibility of investment services in circumstances where such services are being offered increasingly by non-Finnish providers. The legislation should also ensure the efficiency of securities markets supervision and the effectiveness of sanctions for procedures contrary to law. The working group has been assigned the task of drafting a proposal for a new Securities Markets Act and proposals for amending securities clearing, settlement and custody legislation. The working group is also commissioned to prepare proposals for legislative changes concerning the indirect holding of securities (multi-tiered custody of securities), provided, however, that the current direct holding system continues to remain in place as an alternative to the multi-tiered structure.

The working group is also mandated to assess the feasibility of the current regulatory hierarchy (Acts, Ministry of Finance decrees, FIN-FSA standards) and to explore the possibilities of increasing self-regulation on the securities markets. In addition, the working group is to

Direct holding model = Finnish securities held by „

Finnish investors are entered in the investors’ book-entry accounts with the Central Securities Depository (centralised register).

Multi-tiered model = A custodian (often a bank) „

keeps record of securities held by Finnish investors with the custodian’s own systems rather than the Central Securities Depository. As regards Finnish securities, multi-tiered „

custody is currently only accessible by foreign investors (nominee registration). For Finnish investors, multi-tiered custody is available for holdings in foreign securities.

examine the feasibility and effectiveness of the sanctions regime concerning non-compliance with securities markets legislation and defects in investor protection. The working group’s further work and timetables face a particular challenge arising from the ongoing numerous projects for regulatory change within the European Union as a consequence of the financial crisis. These are expected to lead to major amendments and updates to EU regulation in the near future.

The working group dealt separately with proposals for amending securities settlement legislation that related to the launch of central counterparty clearing services for trades done on NASDAQ OMX Helsinki Ltd (Helsinki Stock Exchange). The related Government bill was submitted to Parliament in October. The bill was passed on 10 December, and the Act entered into force in early February 2010. Under the new legislation, foreign clearing houses used by a Finnish marketplace need to obtain permission from the Ministry of Finance before they can start to clear trades done on said marketplace. FIN-FSA supervises the operations of foreign clearing houses in cooperation with their home-country supervisory authorities.

Long-term saving services may be provided by domestic and foreign deposit banks, investment firms and fund management companies

On 4 December, Parliament passed a bill that expands the options for saving for retirement. The resulting Act on long-term saving provides an opportunity for people to supplement their pension cover with a voluntary scheme as an alternative to pension insurance, starting from 2010. Savings contracts may be offered by deposit banks, investment firms and fund management

companies and by comparable foreign service providers operating in Finland. Deposits on long-term savings accounts are tax deductible on the same conditions as contributions made under voluntary, individual pension insurance schemes.

Service providers must notify FIN-FSA of their decision to start providing long-term saving services at least one month prior to the commencement of the service provision. The Act provides for a three-month transitional period. Although the Act entered into force on 1 January 2010, the relevant service provision may commence in April 2010 at the earliest. The Act authorises FIN-FSA to issue regulations for fulfilment of the obligation to notify FIN-FSA in advance of the commencement of service provision. FIN-FSA participated in drafting this legislation and made preparations for accepting advance

notifications of business start-ups for provision of long- term saving services. FIN-FSA also established the relevant needs related to this service provision, such as systems, disclosure requirements and the need to

Payment Services Directive to bring new supervised entities

The European Parliament and the Council adopted the Payment Services Directive on 13 November 2007. It is proposed that the Directive be transposed into Finnish law by two separate Acts: one on payment institutions and one on payment services. These are likely to enter into force in spring 2010.

The Directive is designed to provide a common framework for the provision of payment services within the EU. Provision of payment services will become subject to authorisation. The Directive also includes provisions on disclosure requirements and codes of conduct applicable to payment service providers. The changes will be reflected in FIN-FSA’s future regulation. The new code of conduct obligations in the Directive have significant implications for the operations of entities already under supervision. As such, the provision of payment services does not require that credit institutions apply for a separate new authorisation or for changes to presently valid authorisations.

New supervised entities will include almost all

companies providing payment services that are required to have payment institution authorisation after the entry into force of the relevant Act. The concept of payment services subject to authorisation is extensive, covering not only such traditional services as credit transfers and direct debits, but also money remittance and various payment services using technical devices (e.g. payment via mobile phone).

Planning begun on new set of regulations and guidelines

FIN-FSA’s current regulation is based on that of the former authorities: standards issued by the Financial Supervision Authority and regulations and guidelines issued by the Insurance Supervisory Authority. These remain in force by virtue of transitional provisions

contained in the FIN-FSA Act. These will be combined to constitute FIN-FSA’s new set of regulations and

guidelines.

FIN-FSA began the reform process by publishing a call for comments on the key aspects of the structure of its new set of regulations and guidelines. The round of comments ended in October, with 18 responses. Based on the feedback received, FIN-FSA will prepare a concrete proposal for the structure of the new set of regulations and guidelines. This will be separately distributed for comment in spring 2010. The final structure of the set of regulations and guidelines will be determined, on the basis of this round of comments, before summer 2010. Thereafter, work will begin on amending individual regulations and guidelines.