Services in FinlandIssuance in the book-entry systemCorporate actionsMost common corporate actionsYield paymentIdentification of foreign shareholdersShareholder informationGeneral MeetingsInsider registersTariffServices in Sweden
Most common corporate actions
Private placementNew shares are issued in derogation from shareholders’ pre-emptive rights, for instance due to a corporate acquisition or initial public offering. The issuance increases the number of shares and possibly also the share capital. The timing of registration of the increase and also the number of subscribers must be taken into account when planning the schedule. The company sends Euroclear Finland information on the forthcoming issue on the basic information form. Euroclear Finland updates the number of shares issued when the increase has been registered. After this updating, the shares can be recorded in subscribers’ book-entry accounts. If there are restrictions relating to shares to be subscribed in the issue, they must be discussed with Euroclear Finland before execution of the issue.
If the number of subscribers is small, the company can handle the entry of registrations in subscribers’ book-entry accounts through applications for registration. For a large numbers of subscribers, it is recommended to use the services offered by a bank or a brokerage firm. An initial public offering always requires the appointment of a lead manager.
Shares in a company held by that company can be issued in a private placement.
Split
A company may need to change the number of its shares, which can be done by splitting the shares. The company agrees with the Trade Register the timing for registering the split and notifies Euroclear Finland at latest one week before the registration. Euroclear Finland and account operators execute the split in shareholders’ book-entry accounts on the registration date of the split.
Name change and changes of other basic data
A shareholders’ meeting decides on a change of company name. The name change may also affect the name of each share series and often the trading ID. The company shall agree the registration of the name change with the Trade Register and notify the new basic data to Euroclear Finland at the latest a week before registration. The name of the company and share series are changed in the book-entry system on the registration date. The trading ID is changed when the new ID comes into force in the Helsinki Stock Exchange trading system.
Other changes such as a change in the company’s address and contact person can be notified by a free form letter or by fax to +358 20 770 6654.
Bonus issue
In a bonus issue, the company’s shareholders receive without payment either new shares or shares in the company held by the company. The shares in a bonus issue are automatically recorded in shareholders’ book-entry accounts on the record date. The record date is the settlement period for a stock exchange trade after the bonus issue decision was taken by a meeting of shareholders or the board of directors. In a bonus issue, the new shares to be issued must be registered in the Trade Register on the record date.
The shares are issued proportionally. Depending on the bonus issue ratio, for instance 6:1, some shareholders may have unused subscription rights. On behalf of the respective shareholders, the company shall handle the sale of the shares from unused subscription rights arising from fractional entitlements due to the number of shares in an individual book-entry account on the record date not being divisible by the subscription ratio. The money from such sales shall be paid to the holders of the unused subscription rights in the same way as a dividend payment.
Share issue against payment
In a share issue against payment, a shareholder has the right to subscribe for new shares that the company has issued or for a proportion of the company’s shares held by the company corresponding to the shareholding. On the record date, which is the settlement period for a stock exchange trade after the share issue decision was taken by a meeting of shareholders or the board of directors, the subscription rights are entered in the shareholders’ book-entry accounts in proportion to their previous shareholdings. The record date determines the right to participate in the share issue. The subscription rights can used to subscribe for shares during the subscription period in accordance with the terms of the issue. Subscription rights can be traded on the stock exchange. Trading in subscription right starts at the beginning of the subscription period and ends before the subscription period ends. If new shares are subscribed in a share issue, they are recorded in a book-entry account as a share class of its own. The new shares are integrated with the ordinary share series when they have been registered in the Trade Register.
A share issue requires the designation of a subscription location.
Acquisition of own shares
A shareholders’ meeting decides or authorizes the board to directors to decide to acquire shares in the company. The shares can be acquired through stock exchange trades or through an offer to purchase the same proportion of each shareholder’s shareholding. Shares in the company held by the company do not confer entitlement to dividend, nor the right to vote at a shareholders’ meeting. Shares in the company held by the company can be transferred further or cancelled.
Redeeming of own shares
A shareholders’ meeting decides or authorizes the board to directors to decide to redeem shares in the company. The Articles of Association of the company may state that the company has the right or obligation to acquire or redeem the company’s own shares. The company may redeem its own shares in return for payment or otherwise. The company decides the date for execution of the action (record date).
Cancellation of shares/option rights
A company can decided to cancel shares in the company that it owns. The cancellation of shares requires an entry in the Trade Register. When the cancellation has been entered in the Trade Register, the company removes the cancelled shares to the company’s technical issuer account at Euroclear Finland. Euroclear Finland removes the cancelled shares from the book-entry system and updates the number of issued shares to correspond to the number of shares registered in the Trade Register.
A company can cancel redeemed options rights of employees who have resigned. The process is the same as for cancellation of shares.
Reverse Split
Public limited companies may need to reduce the number of issued shares. This can be done by a reverse split. There must be a strong financial reason for the reverse split. A reverse split decision cannot be made if according to the shareholders’ register this would lead to redemption of all the shares owned by more than one in every hundred shareholders.
Increase in reserve funds
A shareholders’ meeting decides or authorizes the board to directors to decide to increase reserve funds. The company’s share capital is increased through the increase in reserve funds. The increase in reserve funds does not affect the number of shares or their nominal value.
Merger/demerger
A company can merge with another company or companies can merge with each other to form a new company. A new company may be created in the book-entry system through a merger, which requires sending an issuer application to Euroclear Finland. The merging companies are withdrawn from the book-entry system on the registration date of the merger. The merger may take place in return for payment or book-entry securities. Depending on the ratio of the book-entry securities to be given in exchange, some shareholders may be paid some money in addition to the book-entry securities they receive.
In a tripartite merger, the merger payment may be paid by a party other than the accepting company.
The merger ratio and the number of shareholders significantly affect execution of a merger. Actions relating to a merger and the costs involved should be discussed with Euroclear Finland before the merger is announced.
In a demerger, a company is wholly or partially demerged into more than one company. A demerger is the opposite process to a merger.
Redemption of minority shares
Under the Companies’ Act, the redemption procedure can be instigated when one shareholder holds more than 90% of all the company’s shares and votes. Minority shares are transferred to the redeemer when a court of arbitration has confirmed the redeemer’s right to the minority shares and security has been pledged for payment of the redemption price. An interim book-entry type is recorded in the book-entry accounts of minority shareholders that shows the entitlement to the redemption price. The interim book-entry type is removed from the book-entry accounts when the redemption price has been paid with interest.
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