Main / Press releases and speeches / Press releases / Provisions on Foreign Clearing Houses to be Included in the Secu..
The Government proposes an amendment to the Securities Markets Act to include provisions on foreign clearing houses.
Foreign clearing organisations would have to apply for an authorisation to operate in a branch office or across borders
without establishing a branch. Authorisations would be granted on the basis of information supplied by the clearing
house and the authorities of the home country to the Ministry of Finance. Additionally, a memorandum of understanding
on supervision would be signed between the home country and the Finnish Financial Supervisory
Authority.
Based on the proposal, foreign clearing organisations would be required to become a settlement counterparty with a
Finnish clearing house. This obligation would also apply to clearing corporations and other foreign entities whose
obligations deriving from securities are regularly executed in Finland and whose activities are significant for the
financial markets.
The Finnish Financial Supervisory Authority would supervise the activities of the clearing houses in Finland and
would be entitled to issue public reprimands and warnings where necessary. The Ministry of Finance, in turn, could
restrict or prohibit a clearing organisation from operating in Finland or withdraw its authorisation. Foreign clearing
houses would have to pay a fixed supervision fee.
A foreign clearing house is defined here as an organisation that stock exchanges and the organisers of multilateral
trading use to define or execute obligations deriving from securities transactions.
The purpose of the regulation is to facilitate the supervision of foreign clearing house activities and to foster
investors? confidence in the financial markets. Moreover, the aim is to make sure the financial markets can be kept
stable in an increasingly international environment that is constantly changing. The proposal also promotes competition
among clearing houses in the Finnish securities markets.
Amendments are proposed to the Securities Markets Act, the Act on the Financial Supervisory Authority and the Act on
the Supervision Fees of the Financial Supervisory Authority. The President of the Republic will hand the proposals to
Parliament in 9 October. The legislation would enter into force at the beginning of 2010.
Inquiries:
Ms Armi Taipale, Financial Adviser, tel. 358 9 160 34896.
Ministry of Finance P.O BOX 28 FIN-00023 GOVERNMENT Tel. +358 9 160 01 E-mail: valtiovarainministerio@vm.fi
