Our point of view

Nordic Market Newsletter 4/2012

16 May 2012


Proposed new acts to implement the EU regulation on short-selling

The European Parliament’s and the European council’s regulation on short-selling and certain aspects of credit swaps (the Regulation on Short-selling) is to be applied on November 1st 2012. The different Nordic Governments has or will propose implementing acts. 


New Act on Monitoring of Foreigners’ Corporate Acquisitions in Finland

The Finnish Parliament has accepted the new Act on the Monitoring of Foreigners’ Corporate Acquisitions in Finland. The Act shall enter into force on 1 June 2012.

The purpose of the Act is to monitor and, if a vital national interest so requires, to restrict the transfer of influence to foreigners as well as to foreign corporations and foundations in the companies which are subject to monitoring. A vital national interest means securing the national defense or safeguarding public policy and public security when there is an actual and adequate serious danger threatening the fundamental interests of the society. The term “corporate acquisition” in this context refers to situations where the foreign owner gains control of at least one tenth of the votes conferred by the shares of a limited liability company, or an influence corresponding thereto, in a monitored subject.

Acquisitions related to the defense sector and the dual-use goods sector shall always require a confirmation from the authority by virtue of an application. By dual-use goods are meant goods which can be used also for military purposes in addition to civil use. Companies in the civil sector are subject to monitoring if they are critical in respect of securing the vital operations of the society. Acquisitions related to the civil sector shall be subject to a declaration. In respect of the defense sector the monitoring concerns all foreign owners, whereas in the civil sector the monitoring applies only to those foreign owners which are domiciled outside the EU or EFTA.

The Ministry of Employment and the Economy is the competent authority under the Act. However, if the acquisition may endanger a vital national interest, the competent authority to handle the confirmation is the Council of State Plenary Session. The Ministry shall always be the first instance to handle all confirmation applications before their possible handling in the Council of State Plenary Session.

The new Act is based on a positive attitude towards corporate acquisitions of and ownership in Finnish corporations by foreigners. The new Act shall not limit the incorporation of companies in Finland. 


The government commission of inquiry on faster payments (SOU 2012:11) has submitted its report

The commission proposes actions aimed at speeding up payments in goods and service transactions. The suggested actions originate from an EU directive and include the following proposals:

  • A new kind of compensation, separate from penalty interest rate, amounting to SEK 450.
  • The time between invoice date and date of payment cannot be more than 60 days unless expressly agreed by the supplier.
  • A contract term that denies the supplier the right to penalty interest will be invalid.
  • A general increase in collection fees.

The above proposals are recommended to take effect on 1 March 2013.

New prospectus legislation

On 19 April 2012, the government delivered a government bill to the parliament, regarding amendments in the prospectus legislation. The legislation is proposed to enter into force 1 July 2012, and aims to reduce the administrative costs for companies, and enhance the legal security for the investors. The proposed amendments include an increased threshold for the obligation to publish a prospectus prior to an offer to the public, a new definition of ‘qualified investors’, a standardization of the prospectus' summaries, lower information requirements for certain companies, and a shorter time limit for the right to withdraw an acceptance after a supplement to the prospectus is published.

Revised Takeover Rules on certain trading platforms

The Swedish Corporate Governance Board has finalised a revised version of the takeover rules for the multi trading facilities NASDAQ OMX First North, Nordic MTF and AktieTorget. The takeover rules for these trading platforms are, to a large extent, identical to the takeover rules on regulated markets and will enter into force 1 July 2012. The proposed amendments include an obligation to declare, in the bid announcement, if offeror is given a purely financial exposure corresponding to possession of shares in the offeree company, a requirement for the board of directors to approve bonus program offered to the employees in the offeree company, rules stating that the offeror is not obliged to extend the acceptance period in order for terms of the offer to be fulfilled, and a clarification that pre-, side- and post-acquisitions do not apply on group-internal transactions or subscription for shares in new rights issues to existing shareholders.

The Swedish Securities Council

The Swedish Securities Council has issued three statements concerning exemption from the mandatory bid requirement.


Contract Law

International Sale of Goods

The Danish Parliament has decided to withdraw the Danish declaration not to be bound by part II of the United Nations Convention on Contracts for the International Sale of Goods (“CISG”), the so-called article 92-declaration. As a consequence of the withdrawal the Danish Contracts Act will no longer govern the formation of internal contracts regarding the sale of goods unless the contracting parties have agreed so. Instead, as a default rule, the conclusion of contracts will be governed by CISG. The implementation of CISG part II is generally considered an advantage to Danish businesses as it will be easier to predict which set of rules governs the formation of a contract at hand.

Similar article 92-declarations were made by the other Nordic countries (Sweden, Finland and Norway) when the CISG was ratified in 1989. However the withdrawal of the declarations by these countries has also been initiated and CISG part II is expected to come into force in the Nordic countries simultaneously.

The Nordic countries have chosen to uphold their CISG article 94-declaration which means that CISG does not apply to contracts between businesses placed in different Nordic countries.

Due to the notice periods for withdrawal of declarations under CISG, it is expected that CISG part II will not come into force in Denmark until late 2012 or in 2013.


Danish Tax BILL restricting use of tax losses and measures to enhance transfer pricing adjustments

On 25 April 2012 the Danish government introduced a bill on the amendment of a number of tax laws, including the Danish Act on Corporate Taxation and the Individual Income Tax Act. Some of the most important suggested amendments are shortly described below.

- Limitation on a Company’s access to offset losses
A limitation is proposed on a company’s possibility to offset losses allowed for carry forward in positive income. According to the bill, a loss of DKK 7.5 million (2010 figures being adjusted annually) can always be offset against positive income, and the remaining loss can at most reduce the remaining income by 60 pct. It will still be possible to carry forward losses indefinitely (no carry back is possible).
The amendment is to become effective as from income year 2013.

- Transfer Pricing Adjustments
The general penalty rules on insufficient transfer pricing documentation are also proposed tightened. The penalty can be calculated on different objective criteria and on the potential tax advantage. A fixed penalty of DKK 250,000 is introduced (basic amount) plus 10 pct. of the increased income for failure to submit documentation or if the submitted transfer pricing documentation was insufficient.

Another important proposal is that as an extra control measure, the tax authorities should be allowed to request a special auditor’s statement concerning transfer pricing documentation in relation to unprofitable companies. It is a condition for the tax authorities’ request that the company had controlled transactions with low-tax countries or the company’s annual reports have shown average operating losses for the previous 4 years measured at EBIT level.


Consultation on changes to the Bond Rules and the ABM Rules etc.

Oslo Børs has invited interested parties to submit views on proposed changes to the Bond Rules and the ABM Rules, and on a proposal for a recommendation on transactions by borrowers in their own bonds.

Consultation on changes to the Share Issuer Rules for Oslo Børs and Oslo Axess

Oslo Børs has invited interested parties to submit views on proposed changes to the Issuer Rules for shares that are listed on Oslo Børs or Oslo Axess or that are the subject of an application for admission to listing (Listing Rules and Continuing Obligations). A separate consultation exercise is being carried out for proposed changes to the Bond Rules and the ABM Rules.

  • In Statement 2012:11 (Josab), an exemption from the mandatory bid obligation was granted. The obligation could be triggered by a large shareholder for his subscription of his pro-rata share in a rights issue in Josab International, if other shareholders would not subscribe for their pro-rata shares.
  • In Statement 2012:12 (Tigran Technologies), Tigran Technologies planned an issue of shares, were a shareholder would honour his underwriting guarantee and exercise his subscription option. The requested exemption from the mandatory bid obligation was granted, subject to (i) the shareholders, prior to the shareholders' meeting, being informed about the size of the capital and voting that the shareholder would receive through the issue, and (ii) a minimum of two third of the shareholders supporting the resolution to issue new shares.
  • In Statement 2012:13 (Kopy Goldfields), a new share issue was planned in Kopy Goldfields. In connection with the share issue, Eldorado Gold requested an exemption from the mandatory bid obligation was granted on the basis that the share holder undertook to purchase half of all shares not subscribed in the issue, which resembled an underwriting guarantee. The exemption was granted subject to (i) the shareholders, prior to the shareholders' meeting, being informed about the size of the capital and voting that the shareholder would receive through the issue, and (ii) a minimum of two third of the shareholders supporting the resolution to issue new shares.