Finnish Supreme Administrative Court Clarifies the Boundary Between AIF Marketing and Investment Services

Authors: Jari Tukiainen, Antti Järvikare, and Kia Tarvainen Read time: 4 min

On 17 June 2026, the Finnish Supreme Administrative Court (KHO) issued a significant ruling (KHO:2026:46) on the regulatory boundary between marketing alternative investment funds (AIFs) and providing regulated investment services under the Finnish Investment Services Act (ISA, Fin: sijoituspalvelulaki, 747/2012). The case, which centred on Ermitage Partners Oy, sets an important precedent for fund distributors, placement agents, and others operating in the Finnish alternative fund market.

The Case: A Placement Agent, a Prohibition, and a Regulatory Grey Zone

Ermitage Partners Oy operated as an intermediary connecting investors with managers of EEA-domiciled AIFs. The company organised investor meetings, assisted with fund documentation and subscription processes, and received fees from fund managers upon successful investments. The Finnish Financial Supervisory Authority (FIN-FSA) concluded that this activity constituted the “reception and transmission of orders” under chapter 1, section 15(1) of the ISA, a regulated investment service requiring a licence, and prohibited the company from continuing the activity.

Both the FIN-FSA and, on appeal, the Helsinki Administrative Court agreed that the company had provided regulated investment services without the required authorisation. Ermitage appealed to the KHO.

Marketing AIFs Is Not the Same as Transmitting Orders

The KHO reversed both decisions. Its reasoning rested on two principal points.

First, drawing on the Court of Justice of the EU’s judgments in Khorassani (C-678/15) and Fondee (C-695/22), the KHO confirmed that the concept of “reception and transmission of orders” in the ISA, which implements MiFID II, refers specifically to the reception and transmission of buy or sell orders for financial instruments. MiFID II fully harmonises this concept, and it cannot be interpreted more broadly than EU law allows.

Second, the KHO held that the marketing concept under the Act on Alternative Investment Fund Managers (AIFML, Fin: laki vaihtoehtorahastojen hoitajista, 162/2014) is broader than the ISA’s concept of reception and transmission of orders. Under the AIFML, marketing is defined as the direct or indirect offering or targeting of fund units or shares to investors, on the initiative of or on behalf of the fund manager, a concept broad enough to cover activities that do not involve receiving or transmitting buy or sell orders at all. Accordingly, marketing AIFs alone does not automatically constitute the provision of a regulated investment service under the ISA.

The KHO also found that the FIN-FSA’s prohibition decision did not sufficiently explain which specific aspects of Ermitage’s conduct constituted reception and transmission of orders, as opposed to mere AIF marketing. On the grounds it had invoked, the FIN-FSA therefore had no basis to prohibit the activity under the ISA. The KHO expressly left open whether a prohibition could have been justified on different grounds. The FIN-FSA was ordered to reimburse EUR 70,000 of Ermitage’s legal costs, plus interest.

What This Means for Fund Distributors, Regulated Firms, and the FIN-FSA

This ruling carries practical significance for several categories of market participants:

Fund distributors and placement agents operating without an ISA licence should carefully review whether their activities involve receiving and transmitting buy or sell orders, not just marketing fund units. If their role is limited to presenting funds to investors, facilitating contact with managers, or supporting the subscription process without handling orders, the KHO’s reasoning suggests that ISA authorisation may not be required on that basis alone.

Regulated firms should nonetheless be aware that this ruling does not create a blanket safe harbour. The line between permissible marketing assistance and regulated order reception remains fact specific. Activities that cross into receiving and transmitting investor subscriptions as orders may still require an ISA licence, and the regulatory perimeter under the AIFML remains in place.

FIN-FSA enforcement practice will need to reflect the KHO’s requirement for precise, activity-specific reasoning when issuing prohibition decisions. Blanket characterisations of AIF marketing as investment services under the ISA will not withstand judicial scrutiny.

A Clearer Boundary, but the Details Still Matter

KHO:2026:46 is a welcome clarification of a regulatory boundary that has generated significant uncertainty in the Finnish alternative fund market. By anchoring the ISA’s “reception and transmission of orders” concept firmly in MiFID II and EU case law, the KHO has confirmed that AIF marketing and investment services are not automatically interchangeable and that regulatory prohibitions must be grounded in specific conduct, not broad characterisations.