FINLAND Law and Practice Contributed by: Olli Kiuru, Mia Rintasalo and Essi Hietaoja, Waselius
10.8 Cryptocurrency Derivatives MiFID II does not provide a single overarch - ing definition of derivatives or financial instru - ments, but instead lists examples of contracts that qualify as financial instruments. These con - tracts derive their value from an underlying asset and can be settled either in cash or through the delivery of the underlying asset. ESMA has indi - cated that crypto-assets can act as underlying instruments for derivative financial instruments. ESMA has also stated that certain crypto-assets can themselves qualify as derivatives. Entities offering crypto-asset derivatives must determine whether their products fall within the definition of financial instruments and possibly comply with MiFID II’s regulatory framework. MiCAR expressly excludes crypto-assets that qualify as financial instruments. However, where the derivatives qualify as crypto-assets but not financial instruments, the entity offering such assets or services related to such assets is sub - ject to MiCAR’s regulatory framework. 10.9 Decentralised Finance (DeFi) The regulation of decentralised finance (DeFi) depends on the extent to which a service is genuinely decentralised. Under MiCAR, crypto- asset services that are provided in a completely decentralised manner and thus without an inter - mediary do not fall within the scope of regula - tion. However, MiCAR does not automatically exempt all DeFi platforms. If a party facilitates the trad - ing of crypto-assets in a manner that involves some form of control, governance or influence over the platform, regulators may view them as an intermediary. In such cases, they could be subject to the same regulatory requirements as centralised crypto-asset service providers. Therefore, simply operating under the label of
DeFi does not necessarily mean a service is outside the regulatory perimeter. The degree of decentralisation and the presence of any entity that exercises control or facilitates transactions will be key factors in determining whether and how regulation applies. 10.10Regulation of Funds As far as is known, there is no specific regulation on funds that invest in crypto-assets, including blockchain assets. Directive (EU) 2009/65/EC on the co-ordination of laws, regulations and administrative provi - sions relating to undertakings for collective investment in transferable securities (UCITS) has been implemented nationally in the Finnish Act on Common Funds (ACF, 213/2019). In accord - ance with the ACF, common fund activity shall refer to the raising of funds from the public for their joint investment and the investment thereof mainly in financial instruments, as well as the management of a common fund and the market - ing of units. As crypto-assets are not necessarily classified as financial instruments, it should be consid - ered that common funds may not, in principle, invest in blockchain assets. However, alterna - tive investment funds do not have such a strict categorisation and are able to invest quite freely. Therefore, alternative investment funds could, in theory, invest in blockchain assets, although the FIN-FSA has been somewhat reluctant towards such applications. 10.11Virtual Currencies Please refer to 10.3 Classification of Blockchain Assets .
241 CHAMBERS.COM
Powered by FlippingBook