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

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

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

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

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

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) Legal Aspects of Finance 3

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 Legal Aspects of Finance 3

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 Legal Aspects of Finance 3

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 1o:Regular and Ongoing Disclosure Duties IFRS Slide sets (see also:) 1o:Regular and Ongoing Disclosure Duties IFRS Pro Forma Information 11: Ongoing Disclosure Duties 12: Information Crimes