Penalty payment 

In addition to a public warning, the FIN-FSA can impose a penalty payment on supervised entity, other legal or natural person operating in the financial markets.

Penalty payment to a supervised entity or other financial market participant

The imposition of a penalty payment presupposes that the person concerned has wilfully or negligently failed to comply with or violated in another manner than those referred to in chapter 51 of the Penal Code or chapter 8 of the Securities Markets Act (SMA) the following provisions:

  • chapter 1, section 2b of the Securities Markets Act (acquisition of own shares), or chapter 2 or 6 of the SMA or provisions issued on the basis thereof on the marketing, issuance, offering of securities and disclosure requirements, public tender offers or obligation to make a bid
  • provisions in chapter 5, section 12 of the SMA (abuse of insider information or price manipulation)
  • regulations issued by the FIN-FSA to implement the Market Abuse Directive of the European Commission (regulations on the content and manner of filing of the declaration referred to in chapter 5, section 4 of the SMA, procedure referred to in section 6 and section 7, subsection 2 as well as the content and manner of entering information in the register referred to in section 9, of the said chapter and act
  • regulations provided on implementation of the Prospectus Directive (2003/71/EC) of the European Commission.

Penalty payment to other persons

A penalty payment may be imposed on other persons who fail to comply with or violate, in another manner than one referred to in chapter 51 of the Penal Code, provisions of the Securities Markets Act or provisions based thereon, relating to

  • abuse of insider information or price manipulation,
  • disclosure of information with potential influence on the value of a security subject to public trade or corresponding trade in another member state of the EEA, or of a security which has been applied for acceptance to such trade,
  • disclosure of information with potential influence on the value of a security subject to multilateral trade on a broker’s list,
  • disclosure obligation related to the offering of securities or acceptance to public trade or corresponding trade in a member state of the EEA or 
  • public tender offers or mandatory bids.

A penalty payment may also be imposed for neglect or violation of regulations issued to implement the Prospectus Directive of the European Comission (2003/71/EC).

Provisions of section 42 of the Act on the Financial Supervisory Authority on securities also apply to standardised options and futures.

Preconditions of imposing a penalty payment

The imposition of a penalty payment presupposes that the relevant practice or neglect has been continuous, recurrent, methodical or otherwise so reproachable that a public reprimand alone cannot be considered sufficient and the act or failure on assessed on the whole does not warrant more severe measures.

A penalty payment cannot be imposed if the matter is subject to pre-trial investigation, consideration of charges or in court.

The amount of the penalty payment depends on the nature, extent and methodicalness, gain sought through the practice and the damages caused. The administrative fine payable by a legal person amounts to EUR 500–200,000, however up to a maximum of 10% of the sales of the legal person in the period before the payment was imposed. The administrative fine payable by a natural person amounts to EUR 100–10,000.

The penalty payment is payable to the State.

27 July 2009