The Age of Common Sense

Diverse life experience is an increasingly important asset when preparing global transactions, says Anders Carlberg, Managing Partner of Dittmar & Indrenius.

Don’t do anything stupid. Even though something is legally allowed, it is not necessarily wise. This advice given by a seasoned lawyer years ago was strongly imprinted on Anders Carlberg’s mind. Carlberg, Managing Partner at Dittmar & Indrenius, asserts that common sense is becoming an important asset in international business. “Decisions need to be backed up by views that stem not only from a solid legal background but also from diverse life experience. Ethical perspectives are playing an increasingly important role. Lawyers executing cross-border transactions must know what corporate social responsibility means in different cultures.”

The tough times that started with the financial crisis have increased political and business-related tension in almost all Western countries. Politicians, authorities and civil organisations would rather tighten the operational leash of major corporations than give them more freedom. The pressure related to tax planning is only one example of this.

The majority of Finnish companies has done a good job in predicting tax risks, some have identified risks but probably relied on maintaining the status quo, but some hit the mine field at full speed. “It is an obvious fact that overly aggressive tax planning is not ethically sustainable, even when it is within the limits of the law”, Carlberg says. “Recommendations based solely on the legal perspective are not sufficient in these cases. Our clients need insightful advice on what is in the company’s best interest over time. Structures that are planned today will be tested in, say 10 years, and the prevailing moral standards will have changed. We need to look beyond the apparent facts and address issues that haven’t occurred to the client.”

“Ethical perspectives are playing an increasingly important role. Lawyers executing cross-border transactions must know what corporate social responsibility means in different cultures.”

Pursuit of sustainable solutions

During a moment of silence, Carlberg looks out of the high window. The sturdy Tilia trees in the Esplanade park represent the same generation as the law firm run by Carlberg.

Dittmar & Indrenius has been serving customers in Helsinki since 1899. Times have changed, but many principles have remained steadfast and true. One of these principles is the pursuit of sustainable solutions. “Traditionally, lawyers concentrate on identifying risks and frightening the client”, Carlberg says. “Instead lawyers should try to find innovative solutions that open up undiscovered opportunities.”

Dittmar & Indrenius’ business has grown faster than the industry average during the 2010s. Carlberg and his colleagues have been particularly successful in handling difficult international transactions. The newest case is the Nokia–Alcatel-Lucent combination.

“Traditionally lawyers concentrate on identifying risks. Instead lawyers should try to find innovative solutions that open up undiscovered opportunities.”

Behind the scenes of Alcatel-Lucent deal

Nokia, Alcatel-Lucent and their respective counsels did their utmost to keep the combination secret. The risk of a premature leak to the media was high, since the preparations required extensive investigations in both parties’ home countries, as well as in their primary market regions. “All parties wanted to publish the combination in a controlled manner. Nevertheless, I was surprised that we actually succeeded in that”, says Carlberg. “The project was successful because Nokia and Alcatel-Lucent had an exceptionally good dialogue and because all preparations were made very carefully both in terms of authority relations and communications.”

Dittmar & Indrenius has served as Alcatel-Lucent’s legal counsel with regard to the preparations and execution of the combination in Finland. The team comprised 10–15 lawyers, depending on the situation. Due to the complexity and importance of the transaction, partners assumed an exceptionally large role. Carlberg says that the combination was prepared very thoroughly and for a long time. “I’m not at liberty to comment on the duration of the process, but I can tell you that it was more than a couple of days.”

Cross-border mergers have proven to be difficult due to such factors as cultural differences. Success stories are few. Carlberg believes that Nokia and Alcatel-Lucent will succeed with their joint effort. ”Nokia’s President and CEO Rajeev Suri has prior experience from the intersection of Nokia’s and Siemens’ network operations. I believe that it was a great lesson learned for him and that Nokia has its feet on the ground. Both Nokia and Alcatel-Lucent have been through a lot, and they hardly have any overlapping products or services.”

According to Carlberg, one of the key questions in the combination of the two giants was deal security. Alcatel-Lucent needed precise information on such matters as the powers of a Finnish company’s Board of Directors. For example, in the United States, company Boards have much more authority to agree than their Finnish counterparts. In Finland, the Annual General Meeting has the final say.

Further big questions dealt with taxation, labour law, intellectual property rights, disclosure obligation, and the specifics of corporate cultures. “Knowledge of the corporate culture is extremely valuable in these situations”, Carlberg says. Carlberg believes that the firm’s strong role as Alcatel-Lucent’s legal counsel will generate interest among potential Finnish clients. “We have extensive experience and accumulated insight into foreign parties’ ways of thinking. This expertise will surely benefit also our Finnish clients.”

Finland is an interesting target for buyers

In the past, business transactions between Finland and Sweden have been very common. Now, Carlberg believes that the wave of cross-border transactions in which a Finnish company joins forces with a European, American or Asian partner will continue or even increase in Scandinavia and Finland. Foreign buyers are interested in innovative and efficient Finnish companies, and the Scandinavian business environment is relatively stable compared with many other regions.

“Finnish companies are in good shape and specialised. They have cut out all non-core assets. However, this is not a one-way street. Dynamic Finnish companies are actively looking for foreign targets to buy, and they are looking further than Sweden.

“Recent developments in Russia and China have had a surprisingly small impact on corporate transaction activity in Finland. Some mergers may be delayed, though, due to the increased volatility and general caution in the markets.”

Always do your homework

According to Carlberg, clients are facing increasing challenges especially in the fields of environmental law, intellectual property rights and labour law. Typically, the biggest realised risks are related to tax issues and environmental responsibilities.

When a company transfers its production to another country, it needs to know the consequences of lay-offs in different countries. In addition, many industries are becoming increasingly information-intensive, which emphasises the importance of privacy protection. “For example, if a company was to buy a Finnish gaming company, it would need to thoroughly investigate matters related to the management and hand-over of information collected by this company of its customers”, Carlberg explains.

The likelihood of success increases when both parties do their due diligence. Carlberg favours an open process in which risks and benefits are balanced so that both parties can happily sign the deal. However, this is a rarely achieved ideal. “It is more typical that some homework is overlooked and the situation leads to a dispute.” The causes of disputes are quite human. Those making decisions on behalf of a company usually try their best, but they can also make mistakes due to pressure, hurry, carelessness or lack of expertise. Utilising the other party’s weakness can also prove to be a mistake.

Learning five years in three years

Dittmar & Indrenius currently employs approximately 50 lawyers distributed across 13 practices. Carlberg sees the company growing to comprise approximately 60–65 lawyers in two to three years.

“We want to offer our clients consistent quality with the one-stop shop principle, when dealing with transactions, dispute resolution, demanding financing arrangements, or compliance.”

According to Carlberg, the firm nurtures a company culture that emphasises consistent high quality. In order to achieve its ambitious quality targets, the firm needs an open sparring culture, the right balance between responsibility and freedom, and clear goal-setting. The firm strives to offer its juniors opportunities to grow quickly.

“We like to say that at Dittmar & Indrenius it takes you three years to learn what you would learn in five years elsewhere”, Carlberg says and adds “but this does not mean that you’d have to put in more hours. We just believe that professional competence grows faster when the person is trusted with responsibility and inspiring tasks.”

Dittmar & Indrenius fosters a good working climate by maintaining open internal communications and flexibility, among other things. The firm pays particular attention to ensuring that it can offer the industry’s best prerequisites for young lawyers to develop and further their careers even in the most hectic phase of their lives.

Carlberg finds it important that every employee feels able to influence their own working environment and everyday work at the office. “This is why we always engage the entire staff in all internal development projects. We want this firm to be the best place for all of our employees to grow, both professionally and personally.”

“We believe that professional competence grows faster when the person is trusted with responsibility and inspiring tasks.”

Anders Carlberg, Managing Partner


Creditor-friendly on Corporate Benefit

In its ruling of 7 July 2015, the Helsinki Court of Appeal adopted a new interpretation of the requirement of corporate benefit when a subsidiary grants security for the debts of its parent company. This interpretation is wider than the prevailing market view and may imply enhanced possibilities for lenders to obtain collateral from the borrower's group companies.

In this recent case [HHO 7.7.2015 (S 14/2893)], a mutual real estate company (MREC), which was fully-owned by the company GT, had granted a real estate mortgage to the business partners of GT and GT's sole shareholder, a private person. The mortgage was granted as security for the payment obligations of GT and its owner pursuant to a settlement agreement which was unrelated to the activities of the MREC. When payment under the settlement agreement was not made, the mortgagees brought enforcement action against the MREC. In those proceedings, the MREC contended that the mortgage was invalid due to lack of corporate benefit on the part of the MREC to grant collateral for the debts of its owner.

Do subsidiaries still need to receive loan proceeds?

It is common ground that a subsidiary may grant security for the obligations of its parent only if the subsidiary derives from the transaction such direct or indirect benefit which justifies putting its assets at risk. According to precedent, security granted by a subsidiary for the obligations of its parent has been held invalid due to lack of corporate benefit in situations where the parent is in financial difficulties and it is evident already at the time of the granting of the security that the security will likely be lost (KKO 2006:96). In other circumstances, it has remained unclear what constitutes sufficient corporate benefit. In connection with loan arrangements, it has in practice often been considered that security granted by a subsidiary for the borrowing obligations of its parent is effective only up to the amount which corresponds to the loan proceeds actually channelled to the subsidiary (e.g. as intra-group loans).

“The Court of Appeal adopted an interpretation that was clearly more creditor-friendly than the prevailing market view.“

Need to secure maintenance charges

The Court of Appeal adopted an interpretation that was clearly more creditor-friendly than the prevailing market view. The mortgage was granted in a situation where GT's business partners had already filed for GT's bankruptcy due to GT's failure to make the payments set out in the settlement agreement. In assessing corporate benefit, the Court found that the MREC was dependent on maintenance charges from GT and that the mortgage was necessary to remove the threat of GT's bankruptcy and to secure the continued payment of maintenance charges to the MREC. The Court therefore held that the requirement of corporate benefit was met and the mortgage was valid.

The Court's findings concerning the MREC's interest to secure the inflow of maintenance charges could well have been different. Every MREC is dependent on maintenance charges from its shareholders. It is questionable whether financial difficulties of a shareholder can be regarded as a circumstance with which the MREC should be concerned and which would justify using other than distributable assets to support the shareholder. The Court's ruling would seem to lead to the problematic outcome that an MREC can always guarantee the debts of its shareholder if the shareholder is in serious financial difficulties.

“If this were to be the law, it would present a completely new landscape for corporate security arrangements.“

New collateral landscape

The real reason behind the creditor-friendly ruling was presumably that no other creditors of the MREC were harmed by the enforcement. The ruling therefore appears to say that very little or no corporate benefit is required for upstream security as long as at the time of the granting of the security there were no creditors who were likely to be harmed by such security. If this were to be the law, it would present a completely new landscape for corporate security arrangements. The ruling has, however, been appealed to the Supreme Court and it remains to be seen whether the creditor-friendly approach of the lower courts will prevail.

Juha-Pekka Mutanen

Partner, Head of Finance & Capital Markets


Energy Risks Are Rising for Taxpayers

The future prospects are increasingly bleak for the energy holdings of the municipal sector in Finland, says partner Mikko Eerola, Head of Energy, Infrastructure and Natural Resources.

Energy used to be good business and people were talking about money plants. How has the situation changed?

”It’s a tough business everywhere now, even in Finland. There are more than a hundred energy generation companies owned by municipalities in this country and their governance is mostly in the hands of amateurs. I think that their competence is with few exceptions too little compared to the big and far-reaching decisions they will face.”

What are the possible consequences?

”The risks are increasing for the citizens and taxpayers. These energy companies very seldom have a board made up of independent professionals for decent interaction with the CEO, for the analysis of strategic developments of business, and for the securing the best interests of owner. I think that municipal politicians should think seriously about what to do with their energy holdings. Should every poor municipality really have their own energy production facility or not?”

What kind of pressures do you see right now?

”Many energy companies have invested in new technology which typically uses local fuel resources. It’s basically a good idea and there will be local winners but it’s not necessarily a winning idea for all citizens. In many cases the prices of heat have risen dramatically and heat users have started to look for alternative energy sources, especially heat pumps.”

What about the global pressures?

”Progressive renewable energy policies have led to an increasing production of wind and solar power almost everywhere. The prospects of global climate change are challenging us to ask if the golden age of big traditional power plants is over for good. The situation is serious for the owners of local energy grids as well. They are often these same municipalities. They need to invest heavily in the grids, but to invest they need to raise prices, which increases customers’ incentives for energy efficiency and off-grid micro production.”

It seems a slightly complex situation for the municipalities. What options do you see for them?

”First, the strongest municipal enterprises can go on as they have done, for a while. Secondly, they can be merged with other municipal entities. The third option is to sell to a new private owner, local or foreign. The first option involves the most risks in the long term. A city may become prisoner to a business which is losing strength. The second and third options are difficult for the personnel, but again I would like to turn the attention of politicians to the increasing risks. They should ask how long they can continue in the energy business and, if they can, how will they find solutions that don’t burn up the money needed for schools and the care of senior citizens.”

What kind of energy policy will be needed in Finland to help with investment or divestment decisions?

”The state can help in structural change with the energy strategy which is a moderate in its adjustments and relatively predictable. Unfortunately, it has been almost the opposite during the last ten years. The new government should change this. They shouldn’t make things more difficult for this business in which the fundamentals are already exceptionally difficult.”

“The new government shouldn’t make things more difficult for the business in which fundamentals are already exceptionally difficult.”

The new government of Finland has decided to cut the subsidies for the wind power operators. What kind of signal is this?

”It’s surely an unpleasant signal. Those operators have probably made too big profits from the taxpayers’ point of view; however, fast turns do not increase the attractiveness of Finland as a safe target country for foreign investments. I see new business secured for lawyers but not much for others.”

How do you see the foreign ownership of energy assets?

”There’s a lot of money in the world. It’s not a bad thing if pensioners in Australia, Canada or Norway invest their dollars and krones in the development of Finland’s energy infrastructure. Global investment funds are mostly very professional, efficient and open in their decision-making. The regulation of electricity, gas and heat stays in local hands in the future. It works well and we don’t have any concerns over the positive regulation development seen here recently. The regulator has a very clear mission here: look after energy business players’ responsibilities and fair billing whatever their ownership is.”

Above is an excerpt of Mikko Eerola's blog published on 12 June 2015.

From left to right: Mikko Eerola, Kai Holkeri, Jukka Lång.

This year a trio of our partners has been writing blogs that cover topical phenomena and current themes relating to data protection, tax and energy.

Have a look at our trio's insights at


Catching Up With D&I Alumna Maija Vartiainen of If

Maija Vartiainen started her legal career at Dittmar & Indrenius in 1998. She joined If P&C Insurance Company Ltd. as their Senior Legal Counsel in 2010.

What is the best thing about working at If?

If is full of experts in different fields—from doctors to police officers and from mathematicians to construction engineers. This introduces a lawyer to a dizzying range of new perspectives. In addition, the heavily Nordic operational model of the company brings its own Swedish, Danish or other flavour to each project.

What is your favourite part of your day at the office?

The first hour of the morning! As I always start my day at 7 a.m., the only sounds at the office are the clicks of my heels and the hum of the air conditioner, which I find very calming. Before others arrive I have already accomplished many tasks and I am ready for whatever the day has to offer.

What legal issues or challenges have you got coming up over the next few months?

The insurance business, which has been seen as strongly conservative, is undergoing considerable change and, to the surprise of some people, is one of the pioneers of digital development. This is why the desk of a corporate lawyer is, and will be, increasingly full of legal questions related to digital service models and, for instance, the utilisation of big data. We are not short of challenges.

In your free time, what are you reading at the moment?

As reading is by far my favourite activity, there are always several books on the corners of my tables and in my bag, waiting to be read. My latest, perhaps somewhat surprising choice, was Emmi Itäranta's debut novel Memory of Water, which has won many awards in the spheres of science fiction and fantasy literature and was recommended to me by my mother. I am happy I took her advice. I am pretty sure I will be contemplating the book’s threatening but believable visions of the future for a long time. I am also about to finish Diary of a Wimpy Kid, which is a favourite of my sons. It is an evening ritual at our house. Lucky me, I get to experience it both as a reader and a listener.

“The insurance business is undergoing considerable change and, to the surprise of some people, is one of the pioneers of digital development.”

"The first hour of the morning is my favourite part of the day."


I Am Being Bullied!

A normal Monday morning at the office. Pekka is telling dirty jokes at the coffee table and his colleagues are laughing loudly. The only one not laughing is the new assistant Laura, who sits quietly to one side and does not seem to be enjoying Pekka's jokes.

Later on in the afternoon Laura knocks on her boss' door. She closes the door and wants to talk in private. Laura feels that Pekka's behaviour is inappropriate and his jokes offensive. What should the boss and the company do?

Harassment experiences are surprisingly common

According to the latest Working Life Barometer (Työolobarometri) published by the Finnish Ministry of Employment and the Economy, 37% of employees sometimes experience harassment or mental violence at their workplace. The phenomenon is surprisingly common, and even superiors experience their share of it.

“37% of employees sometimes experience harassment or mental violence at their workplace.”

The employer has an obligation to ensure a safe working environment and must therefore intervene in cases of bullying. According to the Occupational Safety and Health Act (738/2002), the employer, after becoming aware of the harassment or other inappropriate treatment of an employee causing hazards or risks to the employee's health, must by available means take measures for remedying this situation. Once the employer has received notification of the harassment or other inappropriate treatment, there must be action. From a practical point of view, it is important to have sufficient procedures in place to make sure all superiors know their obligations to take action.

Claims of inappropriate treatment are often presented in connection with litigation related to termination of employment. In Finland, it is also quite typical that the employer's passive approach leads to the employee presenting such allegations to the Regional State Administrative Agency which then initiates an investigation typically involving a number of questions and requests to the employer. Unsatisfactory answers and clarifications may lead to a criminal investigation, even regardless of whether the employee actually wants this.

What is harassment?

The Occupational Safety and Health Act (738/2002) does not define the terms "harassment" or "other inappropriate treatment". However, harassment is defined elsewhere in Finnish legislation. Harassment is defined by the new Non-discrimination Act (1325/2014), and the Act on Equality between Women and Men (609/1986) includes definitions on sexual harassment and gender-based harassment. However, it is not possible to create an exhaustive definition of harassment or other inappropriate treatment. The experience of harassment is always personal and it should not be disregarded even if it was not harassment or other inappropriate treatment.

“The experience of harassment is always personal and it should not be disregarded.”

Slight single actions are not normally considered as bullying. Neither are employer's measures and decisions which are based on the employer's right to supervise work. Elements of harassment or inappropriate treatment are, for example, underestimation, isolation, evasion, (non-verbal) inappropriate massages, discrimination, favouring, violation of reputation or status, criticism of personal characteristics and threatening behaviour. As outside counsels we have witnessed a broad spectrum of bullying allegations ranging from the superior giving non-ideal work tasks to claims of humiliating treatment by the superior.

Always look into the matter

In the event the employee has filed a request with the Regional State Administrative agency to investigate whether the employer has neglected its occupational safety obligations, it will be difficult to convince the investigating authorities if the employer can only say that there was no reason to investigate the matter since the employee had been overreacting.

In comparison, if the employer is able to provide the investigating authority with even a brief memorandum listing the employer's actions and the matters that led to the conclusion that the employee was not being harassed, the employer's position is significantly better. Most importantly, any further time-consuming investigations may be avoided altogether if the employer takes the concern seriously.

The initial investigation does not have to be in-depth. Even a simple form listing the actions performed as well as the conclusions, together with the reasons that led to those conclusions, will help in many cases.

Failure to comply with the employer's obligation to act

A failure to comply with the employer's obligations is a criminal offence and could lead to the representative of the employer being fined, or, in more extreme cases, even imprisonment. In addition, the employer could be sentenced to a corporate fine of EUR 850–850,000.

Once the representative of the employer becomes aware of harassment or other inappropriate treatment, he/she should:

  • begin to investigate immediately to discover what is going on
  • discuss with the parties separately and jointly
  • prohibit harassment and inappropriate treatment
  • follow up the fulfilment of the agreed solutions
  • remember to document the procedure in writing

Samuel Kääriäinen, Senior Associate and Nora Jaari-Hakola, Senior Attorney


Data Breach: Ready, Set … React

The Ashley Madison hacking has thrown data security right in the limelight. In the aftershock of events, companies are realizing that it could be them next.

A quick reaction can ultimately alter your company's ability to control the media's post data breach field day and resulting bad will. In practice, this requires prior planning and efficient execution.

In Finland, express data security provisions set a very loosely knit web of obligations for companies. As a result, too many companies have left data security completely to "the IT guys".

Every employee counts – data security is not just the "IT guy's" thing

However, data security goes beyond the IT department. Without the combination of both technical and administrational data security, the safety of your company's data is as good as your company's most careless employee.

So what is "administrational data security"? Administrational data security is all about preventing human and technical errors through planning, instructing and monitoring employees, and reacting to all occurring data security issues efficiently.

Data security can never be air tight so are you ready to react to a data breach?

However, at the end of the day, the reality is that data security can never be airtight. Therefore, it's good to remember that what is not there, cannot be taken. Solution: store only what you really need.

5 tips to get your company started:

  1. Audit. Periodically identify your company's main data security risks, legal obligations (e.g. obligations to inform regulatory authorities of data breaches) and your staff's ability to react to a data breach;
  2. Appoint. Put someone in charge of preventive data security planning, monitoring and reacting to suspected and confirmed data breaches;
  3. Bind others. Take a look at your contracts and ensure that all third party vendors acting on your behalf are (i) held to the same standards as your own employees, (ii) obliged to inform you of suspected and confirmed data security breaches, and (iii) are not allowed to inform others of such breaches without your express prior consent;
  4. Instruct. Put a Data Security Policy in place and bind your employees to it through each employee's employment contract; and
  5. Monitor. Plan and execute monitoring activities. When doing so, keep in mind that Finnish legislation sets out exceptionally severe restrictions regarding employee monitoring.

Iiris Keino



Recent Rulings from the Supreme Administrative Court

The Supreme Administrative Court Ruling confirms the interpretation of the equity ratio exemption under the Finnish interest limitation rules. Under the equity ratio exemption, the interest limitation rule does not apply if the equity ratio of the debtor is equal to or higher than the equity ratio of the consolidated group.

The Supreme Administrative Court confirmed the advance ruling (24.6.2015/1784) by the Central Tax Board according to which the equity ratio of the debtor was to be compared to the equity ratio in the consolidated financial statements of the foreign parent company as opposed to the Finnish subgroup parent company. This was the case even in a situation where the foreign parent company is not obligated to prepare consolidated financial statements pursuant to an exception under local law.

The comparison of equity ratios should primarily be made based on financial statements pursuant to IFRS. However, Finnish unlisted subsidiaries often prepare their financial statements pursuant to Finnish GAAP as opposed to IFRS. The financial statements of the foreign parent company may be drafted pursuant to IFRS or local GAAP. The differences in methods to determine the equity and the balance between Finnish and local GAAPs or IFRS may prove beneficial for equity ratio exemption purposes.

Two rulings from the Supreme Administrative Court clarify the right to deduct VAT for services related to the acquisition of shares

In the case KHO:2015:134 the holding company acquiring a new subsidiary was allowed to deduct VAT paid for e.g. due diligence services as general expences, due to the fact that the holding company itself carried out economic activities subject to VAT by providing management and IT-services to the group companies at the time of aqcuisition.

In the case KHO:2015:135 the holding company acquiring a new subsidiary was not allowed to deduct VAT paid for costs relating to the aqcuisition since the holding company did not carry out economic activities at the time of aqcuisition but rather acted merely as a passive owner. The fact that the holding company started to provide management services subject to VAT approximately one year after the aqcuisition was not deemed relevant.

The Supreme Administrative Court also stated, in accordance with CJEU legal praxis, that dividends and group contributions received by the holding company are not of relevance when calculating the amount of VAT deductible as general expences. CJEU has stated that VAT applies only to payments regarded as compensation for business transactions or economic activities and not to payments resulting from ownership, such as dividends and other proceeds from owned shares.

Certain proposed changes to tax rules

The government has proposed that the following amendments would be introduced as of 2016.

  • Capital losses would be deductible from all capital income, as now they are deductible only from capital gains on the year of sale and five following years.
  • Tax rates for capital income would be 30 % up to EUR 30.000 and 34 % on any exceeding amount.
  • The provisions regarding voluntary disclosure of evaded taxes will be adopted temporarily. Individuals and decedent's estates may avoid criminal sanctions for tax fraud under certain conditions by reporting evaded income on their own initiative during the year 2016.

Eeva-Lotta Kivelä



Implementing the Transparency Directive (2013/50/EU)

The amended Transparency Directive will soon be implemented and its most significant amendment relates to the removal of the obligation to publish quarterly financial reports and interim management statements.

Quarterly reporting has often been criticised for its high costs compared to its informative value. In the future, listed companies must publish financial reports only half-yearly and provisions concerning interim management statements will be abolished. Companies nevertheless remain free to continue to publish quarterly reports on a voluntary basis and many companies are expected to do so in order to cater for investors' information requirements.

In addition to the removal of quarterly reporting, the proposed amendments include, for example, the increase of the threshold value for prospectuses to 2.5 million euros instead of the current threshold of 1.5 million. The time limit for issuing annual financial statements and management reports will be lengthened to four months and the time limit for half-yearly financial reports will be lengthened to three months. Furthermore, the flagging obligation will be extended to cover also cash settled derivatives in order to increase the transparency of the securities markets in the EU.

Th amendments are intended to lighten the administrative burden of listed companies without notably weakening the level of investor protection. The two-year deadline for implementing the amended Transparency Directive is about to end and the related amendment of the Securities Market Act is almost at the finish line. A Government Bill was issued earlier this year and the proposed amendments will enter into force on 26 November 2015.

Having now worked with them I can say they are quite excellent.

IFLR1000 2015