FINLAND Law and Practice Contributed by: Olli Kiuru, Jere Lehtimäki and Essi Hietaoja, Waselius
8. Insurtech 8.1 Underwriting Processes
6.8 Market Integrity Principles As financial markets have become increasingly global, giving rise to new trading platforms and technologies, the EU has aimed to strengthen its market abuse regime. The Act on Trading in Financial Instruments sets out the basic principles and requirements for using the central securities depository and the central counterparty, aiming to ensure that the co-operation does not endanger trading integrity. There are no fin - tech-specific principles on market integrity or market abuse. 7. High-Frequency and Algorithmic Trading 7.1 Creation and Usage Regulations Algorithmic trading is regulated under Chapter 7a of the ISA, and there is no distinction between asset classes. In principle, there is no regulation according to which market makers should be licensed or otherwise regis - ter as market makers in Finland. However, if a market maker begins to trade on its own account, it becomes subject to provisions under the ISA and should be licensed as an investment firm. The provisions of the ISA do not apply if the market maker trades on its own account as an ancillary activity. 7.3 Regulatory Distinction Between Funds and Dealers Algorithmic trading is regulated under Chapter 7a of the ISA, according to which the provisions on algorith - mic trading apply to all trading parties. Trading parties are defined as investment service providers or other persons authorised by a stock exchange or a multilat - eral trading operator to trade on the trading platform in question. Chapter 7a of the ISA does not contain any distinction between funds and dealers. 7.4 Regulation of Programmers and Programming As far as is known, no regulation is imposed upon programmers and programming at present. 7.2 Requirement To Be Licensed or Registered as a Market Maker When Functioning in a Principal Capacity
Industry participants must comply with the general principles of insurance regulation and good insurance practice in their underwriting processes. For instance, pursuant to general principles of risk selection in insurance drawn up by FFI, no group of people may be placed in an unequal or inferior position due to their gender, race, ethnicity, religion, convictions, disability, age or sexual orientation. There are, however, accept - able reasons for treating different groups of people in a different manner. 8.2 Treatment of Different Types of Insurance In Finland, insurance providers are generally regulated under the Insurance Companies Act (521/2008), which provides the legal framework for the operation of life and non-life insurance companies. The Insurance Contracts Act (543/1994) and the Act on Insurance Distribution (234/2018) also apply. However, life insur - ance companies are subject to further regulation, as specified in the aforementioned legislation, in relation to their investments, with which they have to comply. There is also separate legislation in place for transport insurance and workers’ compensation. In significant contrast to the general approach at the EU level, non-life insurance companies are also fully subject to anti-money laundering legislation in Fin - land, so have to comply with all the requirements set out in the Finnish AML regime as obliged entities. There is no specific regulation regarding regtech com - panies; the decisive factor in respect of regulation is the services that they provide. 9.2 Contractual Terms to Ensure Performance and Accuracy The Digital Operational Resilience Act (EU) 2022/2554 (DORA) became applicable in Finland as of 17 Janu - ary 2025. It applies broadly to different kinds of ICT arrangements within the financial industry. Among other things, DORA regulates the key contractual pro - 9. Regtech 9.1 Regulation of Regtech Providers
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