The Advisory Board of Finnish Listed Companies has issued guidelines and document templates for the annual general meetings of listed companies.
The purpose of the guidelines is to standardise practices in the preparation of AGMs of Finnish listed companies and on the day of the AGM and to promote the smooth and efficient exercise of shareholder rights, while taking into account the requirements of efficiency and expeditiousness required by good AGM practice.
The purpose of the templates for the notice of the AGM and the minutes of the AGM is to consolidate and standardise the market practice for AGMs of listed companies. This improves shareholders’ access to information on AGMs, promotes the participation of both domestic and international shareholders in AGMs and increases shareholders’ understanding of how the agenda items listed in the notice of the meeting are reviewed and decided at the AGM.
The purpose of the Model clauses of the Articles of Association is to standardise market practice regarding the provisions of the Limited Liability Companies Act on remote and hybrid AGMs that entered into force in 2022. The purpose of the Abstain Vote Guidelines is to increase the understanding of international shareholders in particular about abstain voting and how abstain votes are processed at the AGMs of Finnish listed companies.
The guidelines and document templates do not in themselves guarantee that the AGM complies with the law, the articles of association and other applicable regulations. Each company is responsible for its AGM procedures and their compliance with the law, articles of association and other regulations.
Statutory regulation concerning AGMs is provided in the Limited Liability Companies Act, the Securities Markets Act and the Act on the Book-Entry Securities System, among others. In addition, the Corporate Governance Code gives recommendations on the AGMs of listed companies. The practices followed at an AGM are not comprehensively defined in the regulations, however, but are largely left to the discretion of the AGM and its chair.
The AGMs of listed companies differ based on the size of the company, number of shareholders, shareholder structure and nature of the company’s operations, among other factors. Although it is therefore justifiable that practices may differ from one company to another, the standardisation of practices is justified in certain areas.
The guidelines have been prepared by a working group consisting of representatives of listed companies, account operators, AGM service providers and individuals serving as chairs of AGMs.
The template notice of AGM takes into account the requirements of the Limited Liability Companies Act, the Securities Markets Act and the Corporate Governance Code for listed companies. To promote standardised practices, it is often advisable to follow the template notice of AGM also in the case of companies traded on First North Finland, where applicable.
The templates have been prepared separately for each AGM format permitted by the Finnish Limited Liability Companies Act:
For each format, consideration has also been given to the possibility for companies to offer shareholders additional means of participation before or during the AGM in accordance with the Limited Liability Companies Act Chapter 5, Section 16.4. With regard to the traditional AGM format, consideration has also been given to the option for companies to provide a webcast of the AGM without the possibility of remote voting during the AGM.
The template notice of Annual General Meeting has been prepared by a working group consisting of representatives of listed companies, account operators, AGM service providers and individuals serving as chairs of AGMs.
The template minutes take into account the requirements of the Limited Liability Companies Act and the Corporate Governance Code for listed companies, as well as standard instructions received for holders of nominee-registered shares. To promote standardised practices, it is often advisable to follow the template minutes of AGM also in the case of companies traded on First North Finland, where applicable.
The template minutes has been prepared for Annual General Meetings, but they can also be used at Extraordinary General Meetings, where applicable.
The template minutes of Annual General Meeting has been prepared by a working group consisting of representatives of listed companies, account operators, AGM service providers and individuals serving as chairs of AGMs.
On occasion, international investors may lack understanding of Finnish AGM practices, which may influence the actions of investors, companies and asset custodian banks when issuing and receiving voting instructions. For this purpose, guidelines have been prepared on the handling of abstain votes at AGMs. The guidelines have been prepared at the request of custodian banks, and their purpose is to guide the issuing of voting instructions for international shareholders in particular.
Article 19 of the Market Abuse Regulation (MAR) provides for the obligation to notify managers’ transactions. The issuer must inform its persons discharging managerial responsibilities of these obligations in writing. Issuers must also draw up a list of all persons discharging managerial responsibilities and persons closely associated with them. A person discharging managerial responsibilities must, in turn, inform persons closely associated with them in writing of their obligations arising from Article 19 of the MAR and keep a copy of this notification.
Guidance related to the Market Abuse Regulation is provided extensively on the website of the Finnish Financial Supervisory Authority FIN-FSA.
Guidance related to insider administration has been prepared by the MAR Working Group of the Advisory Board of Finnish Listed Companies. As part of its work, the working group has discussed the guidelines with FIN-FSA.
In the MAR, a person discharging managerial responsibilities means a person who is a member of the administrative, management or supervisory body of the issuer. A person discharging managerial responsibilities also means a senior executive who is not a member of the said bodies and who has regular access to inside information relating directly or indirectly to that entity and power to take managerial decisions affecting the future developments and business prospects of that entity.
Persons closely associated with persons discharging managerial responsibilities include, among others, legal persons, the managerial responsibilities of which are discharged by a person discharging managerial responsibilities within the issuer (also includes controlled companies).
Further information on the obligations of entities subject to a notification obligation and the reporting of transactions can be found on the FIN-FSA website.
The template decision to delay the disclosure of inside information has been prepared to help structure the processes for delaying the disclosure of inside information in listed companies and First North companies. Companies are responsible for deciding the extent to which they choose to justify a decision to delay disclosure. The assessment is also strongly influenced by prevailing circumstances at the time of the delay.
Other disclosure templates have been prepared to support listed companies and First North companies. In particular, the templates help mid cap and small cap listed companies and First North companies draw up and develop their internal practices in matters related to disclosure obligations. The templates are also intended to support listed and First North companies in practical disclosure situations and related internal processes.
Under to the MAR, the issuer must disclose inside information as soon as possible. However, the issuer has the option, on its own responsibility, to delay the public disclosure of inside information if all of the following conditions are met:
After the eventual disclosure of the inside information, FIN-FSA must be notified about the delay immediately. Instructions for filing the notification are available on the FIN-FSA website.
The template decision to delay the disclosure of inside information has been prepared by the MAR Working Group of the Advisory Board of Finnish Listed Companies. As part of its work, the working group has discussed the guidelines with FIN-FSA.
A written disclosure policy supports the consistency of information disclosed by listed companies and First North companies. The decision trees related to disclosure include factors that generally need to be taken into account when the company assesses an individual situation regarding the disclosure of inside information, such as issuing a profit warning or announcing a large order.
The template documents are related to the Finnish IPO development project. Nasdaq Helsinki Ltd published a report on the project in May 2014: Economic growth through IPOs – An efficient listing environment is key to growth and capital market competitiveness in Finland. In October 2016, Nasdaq Helsinki Ltd published a final report on the development project.
The template documents have been prepared by a working group of Nasdaq Helsinki, including representatives of listed companies, authorities, Nasdaq Helsinki and the Finnish Investor Relations Society.
Corporate bonds could offer financing options to more companies than at present. A key objective of the model terms and conditions for corporate bonds is to lower the threshold for smaller companies to enter the bond market to seek additional financing options. The model terms can be used to increase the efficiency of bond issues and to develop best market practices. The model terms and conditions have been prepared in English to facilitate the participation of international investors and parties.
In preparing the model terms and conditions, particular attention has been given to issuers entering the market that do not have a credit rating or which cannot otherwise be classified as investment grade issuers. The documents contain two sections: the technical model terms and conditions and the model clauses of the commercial terms. The template documents are in no way intended to standardise the terms of commercial bond issues.
The model terms and conditions were prepared in 2013 by a working group chaired by Riitta Salonen.
Members of the working group:
Jonathan Andersin and Matti Engelberg, Hannes Snellman Attorneys Ltd
Petri Avikainen, Asianajotoimisto White & Case Oy
Pasi Heinaro, Handelsbanken
Mikko Heinonen, Janne Lauha and Tero Tuomisto, Castrén & Snellman Attorneys Ltd
Jouni Järviluoma and Karim Tähtivuori, Skandinaviska Enskilda Banken
Tiia Kytönen, Juha Mustonen, Samu Slotte and Antti Vanne, Danske Bank
Esa Lager, Outokumpu
Janne Lanki, Anne Laukia and Timo Pietilä, OP-Pohjola
Karri Mäkitalo, Suomi Mutual
Sari Lounasmeri, Finnish Foundation for Share Promotion
Robin Nordblad, Dittmar & Indrenius Attorneys at Law
Kai Laitinen, Antti Saha and Tuomas Toivonen, Nordea
Erika Romberg and Christine Wahlsten, Swedbank
Sini Soini and Helena Viita, Roschier, Attorneys Ltd
Leif Söderström, Rettig
Ville Talasmäki, Sampo
Tommi Toivola and Hannu Ylänen, Confederation of Finnish Industries
The chair of the project’s steering group was Harri Pynnä from Fortum.
Other members of the steering group:
Kim Ignatius, Sanoma Corporation
Raimo Lind, Wärtsilä Corporation
Olli-Petteri Lehtinen, Nordea
Risto Murto, Varma
Timo Ritakallio, Ilmarinen
Lauri Rosendahl, Nasdaq Helsinki
Ville Talasmäki, Sampo plc