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Finland Tightens Financial Inclusion and Compliance Regulations

The Finnish government has recently implemented a raft of legislation aimed at improving financial inclusion and compliance in the country’s securities markets. The new regulations, which came into effect on January 1, 2020, bring Finland into line with European Union directives and are designed to enhance consumer protection, prevent money laundering and terrorist financing, and promote fair business practices.

Key Legislation

The reforms focus on several key areas:

  • Securities Markets Act (746/2012): This act sets out new rules for trading in financial instruments, including the requirement for financial institutions to implement robust risk management systems and maintain accurate records of transactions.
  • Act on Detecting and Preventing Money Laundering and Terrorist Financing (444/2017): This law requires financial institutions to implement anti-money laundering measures and report suspicious transactions to the authorities. It also establishes a national register of suspicious transactions, which will be used to identify and track illicit activity.
  • Consumer Credit Regulations: Finland has implemented new regulations on consumer credit, including:
    • Act on Consumer Mortgage Brokers (852/2016): This law aims to improve transparency and fairness in the consumer credit market by requiring lenders to disclose interest rates and fees clearly.
    • Act on Registration of Certain Loan Providers and Credit Brokers (853/2016): This law requires lenders to register with the authorities, promoting accountability and transparency.
  • Payment Services Regulations: The government has introduced new rules for payment services, including:
    • Payment Services Act (290/2010): This law requires payment institutions to implement robust security measures and maintain accurate records of transactions.
    • Act on Agent of Bondholders (574/2017): This law establishes a national register of payment service providers, which will be used to track and monitor payments.

Penalties for Non-Compliance

The new regulations impose significant penalties for non-compliance, including:

  • Fines of up to €5 million
  • Imprisonment for up to 2 years

Timeline

The new regulations came into effect on January 1, 2020.