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   Coronavirus Pandemic and Financial Market Regulation: Where Are We Now?

   A great deal of attention has also been focused on the stability of the financial system. In exchange for looser regulations, banks have followed recommendations to refrain from or delay the payment of dividends. The supervisory powers of the authorities have also been expanded. One concrete example of this is a temporary tightening of the reporting threshold for short positions of listed shares from 0.2% to 0.1%. This tighter reporting requirement has currently been extended to mid-September. Authorities have also sought to lighten the administrative burden of companies. For example, non-essential reporting periods have been extended. The European Securities and Markets Authority has recommended allowing the publication of financial statements and interim reports to be delayed beyond statutory time limits, and a corresponding amendment is in the works for the Finnish Limited Liability Companies Act. Issuers Playing a Waiting Game States and public actors have been on the bond markets gathering debt capital to finance their response to the pandemic and recovery measures. Companies have also gotten back in on this market. Now the focus is shifting to regulation of offering securities—above all to the brand-new prospectus regulation. In particular, new provisions have made it easier for small and mid-sized companies and companies that are already listed to raise funds. Indeed, we have already seen the first rights issues. However, one speed bump could be the poor first-half results and uncertain prospects of some listed companies caused by the emergency. Companies have to issue a working capital statement in prospectuses, in other words, they have to assess whether their assets are sufficient for the next twelve months, including in the worst-case scenario. This could prove challenging in the prevailing market conditions. Lessons of the Financial Crisis? In the aftermath of the financial crisis, financial regulation geared up for the next crisis. Regulatory developments focused on strengthening banks and their operations as well as on reinforcing market infrastructure and central securities depositories. However, the old adage that generals always prepare to fight the last war still holds true. On the other hand, the focal point of the coronavirus crisis is not in the financial system itself—at least not yet. Looking to the Future In the financial sector as elsewhere, a great deal now depends on how long the crisis will last and when the economy will pick up again. The measures that have been taken so far have been focused on supervised institutions, such as banks, and on ensuring the continuity of their operations. If the situation were to escalate to a full-blown financial market crisis, the Emergency Powers Act would provide the authorities in Finland with extensive authority to regulate the markets. Some of the more powerful tools available would be an obligation to call in overseas payment instruments, regulation of interest and restrictions on withdrawing deposits. Fortunately, this does not seem likely, particularly given that the government recently ceased applying the Emergency Powers Act. At the moment, it looks like the only concrete regulatory action will be a temporary 10% interest rate cap on consumer credit. It is interesting to note that the Emergency Powers Act is currently undergoing reform, particularly with respect to the financial markets. The lessons of the pandemic will no doubt now be applied to this reform work.

   Published: 24.6.2020

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   The Energy Sector Transformation Will Stop for No Pandemic

   Energy projects continue to interest many financiers, investors and buyers despite the current crisis. This is very good news, as the continuity of financing is important in any transformation. Responsibility goals are a cornerstone of sustainable business. Customer demand for low-emission and energy-efficient services and products is continually increasing. Energy touches every level of society, and energy sector companies can have a global impact through responsible business practices. Alongside customer expectations, international regulation is also speeding this transformation. The European Commission published its proposal for climate legislation in March. This legislation would set a binding target for the EU to achieve carbon neutrality by 2050. However, energy sector actors cannot afford to wait for regulation and political decisions – it is vital to move forward with transforming their businesses today. If anything, the coronavirus looks set to increase the speed of change: EU decisionmakers have already mentioned accelerating the Green Deal investment programme. Global energy sector projects and transactions call for international operating models and contractual practices. They provide certainty to the implementation of investments and, thus, play a role in moving the global economy into a more sustainable future.

   Published: 1.6.2020

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   FIDIC Contract Forms Gaining Popularity in Finland

   The FIDIC contract forms remain relatively unknown to the larger public in Finland, but due to the increasingly international nature of business – and especially of large construction projects – more and more Finnish companies are coming across them. A Comprehensive Suite of Contracts for Complex Construction Projects The FIDIC suite of contracts contains various contract forms that are designed for different responsibility and risk sharing constellations between the Employer, i.e. the customer, and the Contractor. The different contract forms are often referred to by their colour – the most renowned being the Red, Yellow and Silver Books. Red Book is intended for building and engineering works designed by the Employer while the Yellow Book provides conditions for construction works where the design is carried out by the Contractor. The Silver Book in turn is an EPC/Turnkey contract. It is suitable for use on process and energy industry projects as well as private-infrastructure projects, where the Contractor takes on full responsibility for both the design and execution of the project. FIDIC Gaining Ground in Complex Projects on the Finnish Market Although the Finnish YSE 1998 General Conditions for Building Contracts are used in the vast majority of construction projects in Finland, they are often far too simple for complex and demanding projects, as they offer very limited tools, for example, for taking over and acceptance procedures. In recent years we have noticed that the FIDIC contract forms – especially the Yellow and Silver Books – have started to get traction amongst Finnish companies in more demanding projects, such as power plants. However, the FIDIC contract forms are far from the only alternative to the YSE 1998 general conditions in Finland. Many Finnish companies use their own contract models that have been developed over years or even decades to suit their special needs. Furthermore, Orgalime contract forms are popular especially within the energy industry, while the Swedish SSG Delivery Contract remains the go-to option for many operators in the forest industry. The increasing interest towards the FIDIC contract forms on the Finnish market stems from their good and well-established reputation internationally. The FIDIC contract forms are recognised for offering a clear distinction of liabilities and balanced risk sharing, and they have been used successfully for a wide range of international construction projects. Selecting a well-known and flexible FIDIC contract form as the basis for negotiations may facilitate the contract negotiations and consequently lower the contracting expenses considerably, as the parties know what they are signing up to when they enter into a FIDIC contract. Another important benefit of using the well tried and internationally respected FIDIC contract forms is that they offer better bankability especially when seeking project financing outside of Finland. It is easier for foreign financing institutions to accept FIDIC contract forms that are known to them than to have a company’s own contract template or national conditions, such as YSE 1998, as the basis for negotiations. New FIDIC Suite Adds Detail to Reduce Disputes The previous FIDIC 1999 suite was updated at the end of 2017. The overall goal of the new 2017 suite was to increase clarity and certainty by tacking issues that had been raised with the earlier 1999 suite. To achieve this, the 2017 suite is more prescriptive than its predecessor and put special focus on the issues that have caused disagreements between the parties during the almost 20-year reign of the 1999 suite. For example, the 2017 suite is more detailed on the requirements for notices and other communications. It also introduced more detailed provisions for quality management and verification of the Contractor’s contractual compliance. This added level of detail results in the new 2017 contract forms being longer and heavier in terms of requirements than the 1999 suite. The increased level of detail is supposed to make the new 2017 suite more user-friendly and less open to interpretation, and consequently less prone to disputes. On the other hand, this also makes the FIDIC 2017 suite quite a lot heavier for users to follow and manage and might make them a less appealing option for more straightforward projects. Revamped Claim Procedure The 2017 update did not only add detail, however, it also introduces important changes to some of the key provisions such as the claim procedure. For example, the 2017 suite sets strict time limits and content requirements for the Employer’s claims, where the 1999 suite had none. Another novelty of the 2017 suite is an advance warning mechanism under which both parties and the Engineer are required to flag potential issues that could turn out to be a claim. However, this early warning mechanism has already been criticised for lacking any sanctions for failure to abide by it as well as for failing to set clear requirements for early warning registers or meetings. The new 2017 suite also puts greater emphasis to alternative dispute resolution by increasing the role of Dispute Avoidance and Adjudication Boards. Adoption of New Terms Has Been Slow Although over two years have already passed since the publication of the 2017 suite, we have not yet seen them being applied in practice in Finland or elsewhere. This is no real surprise, as change is always somewhat slow with new contract forms – it is often easier and more comfortable to use terms that are already familiar to the parties than take a leap to the unknow with new forms (some parts of the world have yet to adopt even the 1999 forms and are still applying the previous forms from 1987). Many are waiting for someone else to take the first dive into the 2017 suite before getting their own feet wet. One good place to start getting to know the FIDIC forms is the FIDIC Golden Principles publication from 2019, which does a good job of laying out key principles and underlying logic of the FIDIC forms. We expect that it will take a few more years before we get any actual experience of the new 2017 suite and are able to assess whether the changes made to the 1999 suite add any genuine value. It will be interesting to see if and when the new 2017 replaces its predecessor as the go-to contract form in large construction projects.

   Published: 25.5.2020

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   Prosperity and Climate Action through Green Mortgages

   Energy Efficient Living Rewarded with Lower Interest The goal of the Energy Efficient Mortgages Action Plan (EeMAP) funded by the EU is to develop a green mortgage for the European markets in order to encourage energy efficiency. The idea is that people who purchase an energy efficient home would be rewarded, for example, with a lower interest rate. The same incentive would be available for renovations to improve energy efficiency. The participants in the EeMAP initiative have also set out to prove two things. They want to show that taking the energy efficiency of homes into account in mortgages creates a more sustainable future and that banks benefit when their customers invest in energy efficiency. The banks’ credit risk is lower, because the customer saves money on lower electricity bills, and energy efficiency increases the value of the home. As green mortgages are a novel product, it is difficult to gauge how popular they will become. There is no shortage of interest however: according to a recent survey conducted by Finance Finland , nearly 60% of respondents would be willing to renovate their home to make it more energy efficient in exchange for a lower interest margin on their mortgage. From Good Credit Practices to Sustainable Credit Practices? Finnish law requires that lenders comply with good credit practices. Banks must treat their customers in a socially responsible way and take into account their customers’ interests. Good credit practices have not traditionally obligated banks to assess the environmental impacts of lending, but what if a more environmentally sound approach also added to the customer’s prosperity? As an example, let’s imagine a customer who buys a house that meets the criteria for a green mortgage. If the goals of the EeMAP initiative are achieved, a green mortgage would increase the customer’s wealth more than an ordinary mortgage. In that case, it would be in the customer’s interest for the bank to offer a green mortgage on its own initiative. The bank, for its part, would be encouraged to grant a green mortgage by the promise of better returns. Financially, everyone would win. Fostering financial benefit and the customer’s interest would also create an external benefit in the form of the improved energy efficiency of financed homes. A more sustainable service offering could also be an asset to the bank when trying to attract new customers. Young people in particular are increasingly seeking to use their financial decisions to combat climate change and promote sustainable solutions in society. Remaining passive and relying on unsustainable processes will backfire sooner or later. On the mortgage markets of the future, prosperity and impact will go hand in hand. By bringing these together, banks can create both financial and environmental benefits.

   Published: 18.5.2020

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   General Meetings in Empty Halls

   Remote Participation or Proxy Participation – Or Both Under the temporary act, listed companies can organise their general meetings solely through remote participation in such a way that ‘shareholders can exercise their rights in the general meeting in the manner provided for in chapter 5(16)(2) of the Limited Liability Companies Act only by post, telecommunication link or other technological means’. It seems most likely that this kind of remote participation will be organised through advance voting in which the votes are collected either through an online service or an advance voting form. If so, it is worth paying particular attention to the clarity of the voting form and the instructions for advance voting. A second exceptional alternative offered by the temporary act is for shareholders to exercise their rights at the general meeting solely through a proxy representative. In this alternative, shareholders are always entitled to pick their own proxies, and the company cannot obligate shareholders to use a proxy appointed by the company. This means that the number of people present at the meeting cannot be entirely controlled. In many of the cases where the new alternatives provided by the temporary act will be used, it is likely that the more common option will be remote participation or a combination of the two alternatives so that proxy representative are only allowed to participate remotely. Shareholder Rights Must be Secured in Advance Using the new alternatives provided by the temporary act requires that shareholders are able to exercise their rights to ask questions and make proposals before the meeting. After publishing the notice convening the general meeting, shareholders must be given a few days to make counterproposals. Counterproposals must be put to a vote if the shareholder making the counterproposal holds more than one one-hundredth of the shares in the company. A separate deadline must be set for submitting other counterproposals and shareholder questions. Other counterproposals, shareholder questions and the management’s responses to questions must be published prior to the end of advance voting or the general meeting. It is worth noting that in all items where there is only one proposed resolution, the voting options must be yes or no. This also applies to the election of the board of directors and other similar resolutions that normally cannot be opposed without submitting a counterproposal. This being the case, it is important that companies make sure that at least the key proposals have sufficient support amongst the shareholders prior to the meeting. If not, the company risks winding up in a situation in which no resolution is made and a new general meeting may have to be convened. In addition to listed companies, many of the options provided by the temporary act are also available to First North companies, i.e. companies who have issued shares that are traded on a multilateral trading facility. Traditional General Meetings Also Possible The above new forms of general meeting have already been used by many companies. Processing counterproposals and advance questions does, of course, cause a fair amount of work for the company, but a great deal of work is saved due to not having to take precautionary measures at the meeting venue to avoid infection. Despite the temporary act, it is still possible for listed companies and First North companies to organise ‘traditional’ general meetings. As mentioned above, this does require that arrangements be made to account for the coronavirus situation. In addition to the special arrangements it makes available to listed companies and First North companies, the temporary act also allows companies to postpone their general meetings to the end of September, regardless of the deadlines set by the Limited Liability Companies Act or their articles of association. The temporary act also extends the deadline for completing financial statements to the end of June.

   Published: 14.5.2020

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   Finnish Competition and Consumer Authority’s Powers Expanded – National Implementation of ECN+ Directive Moves Forward

   In Finland, some of the requirements of the ECN+ directive were already incorporated into the new Competition Act, which entered into force on 17 June 2019. The Ministry of Economic Affairs and Employment set a committee to complete the implementation of the directive. At the end of April, the committee published its report in which the committee proposes amendments to several of the Competition Act’s provisions as well as the addition of new provisions. The most significant amendments proposed relate to fines, structural remedies and closer cooperation among national competition authorities. Amendments to Imposition of Fines The committee proposed that the Competition Act be amended so that the FCCA could in future also propose fines and periodic penalty payments for procedural violations, such as, breaking a seal during an authority inspection. According to the proposal, a procedural violation could lead to a maximum fine of one per cent of the global turnover of the company that committed the violation. The ECN+ directive does not obligate Member States to review their fining policy with respect to fines imposed due to competition restrictions. In Finland, however, the committee was given the opportunity to also assess the predictability of the level of fines. The committee proposed adding more detailed provisions to the Competition Act concerning the assessment of the level of fines. According to the proposal, the standard that the FCCA would use to assess the level of a fine for a competition restriction would, for the most part, correspond to the Commission’s fining guidelines. The standard would not, however be binding on the courts, which would maintain discretion in determining the amount of a fine. Trade associations and their members need to take particular note that the ECN+ directive has significantly increased the severity of the consequences they face, as fines will in future be determined on the basis of the aggregate turnover of their member companies, and their members will ultimately be liable to pay the fines. Read more about the impact of the ECN+ directive on trade associations . New Structural Remedies to Intervene in Competition Restrictions In addition to amendments to fines, the committee report also includes a proposal for using structural remedies to end a competition restriction. Structural remedies mean, for example, imposing an obligation to divest an ownership stake in a competitor or dispose of a business unit. The purpose of structural remedies is to maintain or reinstate competitive circumstances on a market. The report recognises that structural remedies are heavy and often irreversible, and as a result proposes that they could only be put into effect after a decision has become final. Closer Cooperation between Competition Authorities The committee report also proposes provisions that would enable closer cooperation between national competition authorities in the EU. The report proposes, for example, that an entirely new chapter be added to the Competition Act to ensure the notification of documents and the enforcement of sanctions on behalf of other national competition authorities across Members State borders. Minority Opinions on Fines, Inspections and Interim Measures Two minority opinions were published concerning the report. The Finnish Bar Association’s minority opinion criticises the provisions concerning fines for procedural violations as well as the standard for determining fines for competition restrictions. It also highlighted insufficient court oversight of FCCA inspections. The Confederation of Finnish Industries and Suomen Yrittäjät submitted a joint minority opinion, which criticises, among other things, the fines imposed on associations of undertakings and the regulation of interim measures and also highlighted the need for effective advance competition advice. Progress of Drafting The national implementation of the directive must be completed by 4 February 2021. The goal of the Ministry of Economic Affairs and Employment is to publish the government bill concerning the amendments during mid-September. Stakeholder groups will have the opportunity to give statements on the bill before then.   Sari Hiltunen, Hanna Perikangas and Joona Havunen

   Published: 14.5.2020

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   Temporary Flexibility of State Aid Rules

   Temporary Framework in Place until the End of 2020 The Commission adopted the Temporary Framework on 19 March to enable Member States to more flexibly support companies. The Framework is based on Article 107(3)(b) TFEU, which allows aid ‘ to remedy a serious disturbance in the economy of a Member State ’. The Framework provides for the following forms of aid: Aid is only available to companies facing financial difficulties due to the coronavirus outbreak. The Temporary Framework does not permit aid to companies that were facing difficulties on or before 31 December 2019. The Commission has expanded the Temporary Framework twice. The goal of the first expansion, which entered into force on 3 April 2020, was to further facilitate coronavirus related research, development and production, and to protect jobs. The expansion permits aid in the following circumstances: The latest expansion to the Temporary Framework entered into force on 8 May. Under the second expansion, Member States will be able to provide companies recapitalisations and subordinated debt provided that certain requirements are met. Recapitalisation aid is only to be offered as a last resort if no other appropriate solution is available. In order to minimise negative impacts on the single market, the amendment also provides for conditions for grating recapitalisation aid, for remuneration of the state and on the governance of the company receiving aid. The Temporary Framework will remain in force at least until the end of 2020. With respect to recapitalisation measures, it will remain in force until the end of June 2021. Authorities granting state aid should keep in mind that aid granted on the basis of the Temporary Framework must also be notified to the Commission, and adopting such aid is subject to the Commission’s approval. The Commission has also highlighted environmental and digitalisation goals. In its latest communication, the Commission states that large companies that are granted recapitalisation aid or subordinated debt are required to report on the use of aid received and compliance with their responsibilities linked to the green and digital transformation. Member States Entitled to Compensate Damage Suffered Due to the Outbreak In addition to the Temporary Framework, the exemptions provided for in Article 107 TFEU continue to be applicable. For example, Article 107(2)(b) TFEU, which permits aid to make good the damage caused by natural disasters or exceptional occurrences, could be applied in the current circumstances. It is important to keep in mind that Member States can also make use of other relief measures that are not within the scope of state aid rules. These include general wage subsidies and general relief of taxes and social security contributions. The Commission has to date approved an estimated EUR 1.9 trillion in state aid. With respect to Finland, the Commission has approved four aid schemes: a EUR 2 billion aid scheme to support the Finnish economy, a EUR 3 billion scheme to support companies impacted by the outbreak and two aid schemes to support the agriculture and fishery sectors. Where to Apply for State Aid? In Finland, companies can apply for aid to, for example: The European Investment Bank has also announced a financial response with which it is seeking to mitigate the financial damage to SMEs and mid-caps in partnership with EU Member States and national banks.

   Published: 13.5.2020

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   EU Increases Tax Regulation– New DAC6 Reporting Obligation for Cross-Border Transactions

   With this in mind, countries have begun monitoring tax streams more carefully over the past few years. This has also led to quite fast-paced regulatory measures in the EU and to an ever-expanding exchange of information between member states. DAC6 Introduces New Reporting Obligation A new reporting obligation relating to tax streams was introduced for Finnish Companies at the start of 2020, when the Act on Reporting Tax Arrangements entered into force. The act is based on the EU Directive on cross-border tax arrangements, called DAC6 . Under the new act, a company’s planned or implemented cross-border arrangements that could involve characteristics of tax avoidance must be reported to the Finnish Tax Administration or other EU member state tax authority. Dispersed Reporting Obligation The reporting obligation applies to service providers participating in the arrangement as advisors, such as investment banks, audit firms and attorneys. Numerous parties may have to report the same arrangement in multiple states. Each party subject to the obligation must ensure that all of the information required by the act is reported. The company itself may in certain circumstances have the reporting obligation. This is the case when the arrangement does not involve a service provider that has a reporting obligation, or the service provider has been exempted from the obligation. For example, legal professional privilege generally prevents attorneys from reporting arrangements. Failing to comply with the reporting obligation could lead to a penalty payment. The amount of the penalty varies from country to country: in Finland, it is at most 15,000 euros, but in Poland for example, it can reach several million euros. IPR Licencing and Intra-Group Transfers in Focus Not all cross-border arrangements need to be reported; there are certain hallmarks (provided for in sections 12–22 of the act) that arrangements have to meet to require reporting. In some cases, the hallmarks for reporting expressly mention that the main purpose of the arrangement is to obtain a tax benefit. Companies should pay particular attention to the transfer (such as sale or licensing) of immaterial goods that are difficult to value and to the transfer of intra-group operations, risks or assets. These common business arrangements can easily trigger the reporting obligation even if their main purpose is not to gain a tax benefit. The Finnish Tax Administration is currently working on extensive reporting guidelines, which should be ready in April. Partially Retroactive Reporting Obligation – Does Your Company Already Have Arrangements to Report? The first reports must be filed on arrangements that start on or after 1 July 2020. Arrangement have to be disclosed within 30 days of when: The act also requires that certain already implemented arrangements be reported. Arrangements implemented between 25 June 2018 and 30 June 2020 must be reported to the Finnish Tax Administration no later than on 31 August 2020. It is important that companies and their advisors begin identifying retroactively reportable arrangements immediately.

   Published: 7.5.2020

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   Will the Coronavirus Put Globalisation into Reverse?

   At the start of the crisis, the European Commission recommended that Member States screen foreign direct investments (FDI) in companies in critical sectors to make sure they remain in European hands. The Commission called upon Member States ‘to make full use’ of existing national FDI screening mechanisms. For those Member States that currently do not have one, the Commission recommended setting up ‘a full-fledged screening mechanism’. In October, the EU will adopt a union-level screening mechanism for foreign investments impacting the security of Member States. This mechanism will give Member States and the Commission the ability to intervene in investments in critical sectors even after then have already taken place. New screening will bring transactions into focus that were previously overlooked. As EU countries begin looking at foreign investments in, for example, biotech and healthcare technology companies more closely from a national security perspective, many SMEs and even start-ups could be caught in the net. This is a major change, as to date, strategic screening has mostly only been a concern in the case of major acquisitions.  The monitoring of transactions is also intensifying due to DAC6. The Finnish legislation based on DAC6 entered into force in Finland at the start of the year. DAC6 seeks to prevent tax avoidance in cross-border transactions by imposing a new reporting obligation and improving information exchange between tax authorities. The business world will no doubt adapt to these regulations with time, but it would be a good idea to dedicate a little more t ime and resources to cross-border transactions this year.

   Published: 7.5.2020

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    Proposal for Tax Reform of Personnel Offerings – More Alternatives for Unlisted Companies

    PROBLEMS IN CURRENT LEGISLATION Under current legislation, share issues based on an employment relationship are exempt from income tax. This rule applies equally to listed and unlisted companies. However, using a subscription price that is less than the fair value leads to the difference between the fair value at the time of subscription and the subscription price being subject to income tax. A discount of up to ten per cent is tax exempt if the benefit is available to a majority of the personnel. The problem is that, in practice, it can sometimes be difficult to determine the fair value of a share in an unlisted company, and the tax consequences of an incorrect valuation can be severe for employees who have subscribed for shares. Hence, often one of the main goals when planning personnel share offerings is to avoid at all costs a situation where a large part of the personnel would subscribe for non-liquid shares and end up having to pay a significant amount of income tax as a result. KEY POINTS OF THE PROPOSED REFORM The proposed reform would be a major improvement to the current situation. A personnel share offering by an unlisted company would no longer give rise to income tax consequences as long the subscription price is not less than the mathematical share value of the company being the employer, calculated based on the employer company’s latest adopted financial statements and adjusted based on, e.g. dividends and returns of invested non-restricted equity. In other words, the requirement of use of interpretative fair market value would be abandoned. The new model includes numerous restrictions for tax exemption. In our understanding, the key restrictions in practice are that the benefit would still have to be available to the majority of the personnel, and that shares could not be issued to persons who alone or together with their family members own over ten per cent of the employer company. Furthermore, shares could only be issued to by the employee’s actual employer company which conducts business activities, and not by the group parent company holding shares in the employer company, for example. The amount of a tax-efficient subscription benefit could be tied, for example, to the salary level of employees. According to the draft proposal, a subscription benefit based on position would be deemed to be available for the majority of personnel only to a limited extent. OUR ANALYSIS If enacted, the legislative proposal would be an excellent addition to the remuneration and retention toolbox available to unlisted companies. From the perspective of employer companies, the proposal would make it possible to create stronger retention and ownership interest amongst personnel in a tax-efficient way. The new model could be beneficial, for example, to a late-stage start-up whose business is based on the expertise of key persons, which has a light balance sheet structure and which is looking to take a decisive leap into the next growth stage. The new model could also be attractive to a company that provides expert services, has a light cost structure compared to its turnover and is dependent on retaining key persons at its service. If enacted, the proposal would not be without pitfalls, however. These would include restrictions relating to the way of calculation of the majority of personnel as well as the fact that, as proposed, the new rules would only apply to shares issued by the actual employer company. It would be desirable that the final act would be expanded to also cover issuance of shares to personnel by companies in the same group as the employer company — strictly limiting the new rules to the employer company could prove challenging in practice when designing overall remuneration arrangements.

    Published: 5.5.2020