Lecture 9

• The Finnish Financial Supervisory Authority (FIN-FSA) oversees Finland's financial and insurance sectors.
• Banks, insurance, and pension companies are supervised by the parliamentary supervisory council.
• The objective is to safeguard stability and confidence, protect customers, investors, and insured benefits through regulation and supervision.
• The FIN-FSA supervises capital markets, banking, digitalization and analysis, insurance, and has a legal unit.

Capital markets supervision includes the following:

• Investment service providers.
• Fund management companies.
• Investment-based crowdfunding intermediaries.
• Securitization auditors.
• Stock exchange.
• The FIN-FSA checks information, disclosure, reporting, trading, and investigates market abuses.

Banking supervision applies to:

• Credit institutions.
• The FIN-FSA checks for capital adequacy, liquidity, risk management, and reporting.
• Digitalization and analysis applies to all FIN-FSA supervised entities.
• The FIN-FSA checks financial analysis, anti-money laundering measures, payment services, and IT supervision.

Insurance supervision deals with:

• Employee pension insurance providers.
• Pensions
• Unemployment funds.
• The FIN-FSA checks for protection of insured benefits, solvency, risk-taking, and stable operations.

Legal Unit:

• Administrative sanctions, regulations, and guidelines are prepared and the register maintained.
• European supervisory cooperation involves working with the EBS and other European supervisory authorities.
• Under the Single Supervisory Mechanism (SSM), the ECB holds the main responsibility for common banking supervision.
• National level supervisory authorities oversee banks according to the same principles and regulations, while the largest banks are still supervised by the ECB.
• The FIN-FSA monitors at the national level according to ECB regulations to ensure supervised entities are sound and conducts regular inspections.
• The number and size of funds in Finland has been growing.
• Consequently, the number of assets under management has been growing.

Fund Regulation

• Fund regulation is harmonized across Europe.
• The UCITS directive sets standards and requirements for UCITS managers and funds.
• A strong focus on investor protection and product regulation.
• UCITS funds are open ended as they are marketed to retail investors and open to daily subscriptions and redemptions.
• Alternative Investment Fund Directive (AIFMD) was introduced after the GFC to regulate hedge funds and other alternative funds.
• AIF: collective investment undertaking raising capital from a number of investors, with a view to invest in accordance with a defined investment policy
• Sustainable finance regulation requires SFDR to prevent greenwashing and increase transparency.
• Packaged Retail and Insurance-based Investment Products (PRIIPs) regulation: offered to retail investors.

Supervision in fund management includes:

• General supervision.
• Annual questionnaire.
• Thematic reviews.
• On-site inspections.
• Authorization and registration processes.
• Fund rules and their changes.
• Reporting.