FINLAND Law and Practice Contributed by: Maria Lehtimäki, Niklas Thibblin and Timo Lehtimäki, Waselius
4.14 Other Principal Laws and Regulations
is a Finnish entity, the legal entity is generally formed as a limited liability company, although it has been suggested in literature that a limited partnership might also be suitable. In Finland, the Companies Act does not specifically cater for special purpose entities, but it is in principle possible to include provisions in the SPE’s arti - cles of association regarding its purpose and, for example, winding-up. Limited recourse and non-petition provisions may also be included in the articles, but their enforceability is limited. 4.11 Activities Avoided by SPEs or Other Securitisation Entities Where the SPE is established in Finland, it should avoid activities that would trigger licensing or registration requirements – for example, taking deposits or other repayable funds or originating new loans. Penalties for conducting activities without an appropriate licence or registration include prohibition of activities and administra - tive fines imposed by the relevant supervisory authority, usually the FIN-FSA. The SPE must also avoid any activities outside the activities specifically needed to carry out its role under the securitisation transaction, as such activities will typically breach the terms of the securitisa - tion transaction documents and jeopardise its bankruptcy remoteness. 4.12 Participation of Government- Sponsored Entities Historically, Finnish government and municipal - ity-sponsored entities have actively participated in the securitisation market, but there has been no notable market activity by publicly sponsored entities since the mid-2000s. 4.13 Entities Investing in Securitisation Investors in Finnish securitisation transactions are typically large European institutions or their affiliates.
The Finnish Promissory Notes Act (622/1947, as amended) contains provisions that regulate, for example, transfer perfection requirements and the underlying debtor’s right to make payments or set off their receivables. Many of these pro - visions apply regardless of whether or not the seller is a bank or other financial institution, but some of the rules are different for banks and other financial institutions compared to non- financial originators. 5. Synthetic Securitisation 5.1 Synthetic Securitisation Regulation and Structure Synthetic securitisation is permitted under the EU Securitisation Regulation, which sets out the rules for such securitisations. There is no Finnish regulation or regulatory guidance that would inform or limit the structures used in syn - thetic securitisations. In the handful of synthetic transactions involving Finland that have been executed, the structures have been shaped by the commercial needs of the transaction parties, and for example, tax considerations. 6. Structurally Embedded Laws of General Application 6.1 Insolvency Laws If the originator becomes insolvent and is placed in insolvency proceedings, all transactions it concluded before the insolvency proceedings are reviewed carefully by the insolvency officer for any weaknesses that would enable the insol- vency officer to demand the return of assets to the insolvency estate.
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