1. LEGAL ASPECTS OF FINANCE Lecture 3
Case 3
Matti Rudanko

2. Case 3: The “Kansallisanti” Case
Tasks:
see next slides

3. 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

4. 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).
Legal Aspects of Finance 3

5. 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

6. Possible 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

7. 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
Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017
on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/ECText with EEA relevance. (”Prospectus directive”)
Legal Aspects of Finance 3

8. 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

9. Regulation (cont.) National regulation :
Securities Markets Act ( / 746
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 ( /475)
Information crime relating to the securities markets
Lower level norms: FSA
Legal Aspects of Finance 3

10. Case 3: Slides 1 Slide sets: 8 and 8a: damages liabilities
9: IPO disclosure duties
14: some remarks on the case

11. 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