How does book-entry system operate
Book-entry system has been in use in Finland since 1992. Different kinds of securities can be handled in the system; shares, cooperative shares, warrants, bonds with warrants, convertible bonds, bonds, other debt book-entries and foreign depository receipts. Also foreign book-entries can be handled in Finnish book-entry system with certain requirements.Company can decide whether book-entries issued by it will be incorporated in the book-entry system or not. A company that has issued a share which has been admitted to public trading must incorporate its shares in the book-entry system. Two hundred companies in Finland have incorporated their shares in the book-entry system.
Securities that will be incorporated in the book-entry system are transferred into electric form book-entries and they will be deposits on book-entry accounts. Owner of book-entries doesn´t have paper share certificate or suchlike written certificate, but book-entries he owns are registered on owner-specific book-entry account.
Shareholder, who is going to buy or is transferring his shares to book-entries must open book-entry account with account operator. Banks, brokerage companies and Finnish Central Securities Depository can operate as an account operator or its agent.
Information on book-entry accounts
Book-entry system consists of book-entry accounts and shareholder registers. On book-entry account there is registered information on owner of book-entries, book-entry type, number of book-entries and rights and restrictions that are focused on owner. This information is public when concerning company-specific owner data and it can be acquainted with in our customer service, Urho Kekkosen katu 5 C, Helsinki. Registers of debt book-entries, warrants and foreign book-entries are not public.
Service to security owners
Owners of securities are served by account operators or their agents which can be banks, brokerage companies and Finnish Central Securities Depository. Opening of book-entry account and commissions concerning book-entries are operated by account operators.
Finnish Central Securities Depository´s account operator Customer Account Services provides partly free book-entry account services to owners of book-entries. Any private person or community who needs book-entry account can open such account. Service provided to private investor is mainly free. Company or other community are charged by Finnish Central Securities Depository according to its price list.
Book-entry register
Euroclear Finland maintains book-entry register and system connected to it. All book-entry accounts that are opened with account operators are in this Central Register.
Account operators enter registrations and other subscriptions on their own accounts. Information comes across from account operator to Central Register. Each account operator is capable of updating only its own customers´ book-entry accounts.
Central Register doesn´t serve book-entry owners directly but it serves account operators, which for their part serve book-entry owners.
The right to operate as an account operator is given by Euroclear Finland.
Owner- and nominee registrated accounts
Book-entry account can be either owner registrated or nominee registrated.
Finnish private persons and communities must deposit their book-entries on owner registrated book-entry accounts. Ownership of Finnish shares on these accounts is registrated to issuer´s list of owners and is therefore public information.
If there are securities on the nominee registrated account, a custodian is registered in the list of owners instead of an owner. Book-entries owned by Finnish owner cannot be on nominee registrated account. There are rights that normally belong to the owner of securities that cannot be used in the case where securities are registrated on the nominee account.
