Financial Supervisory Authority imposes a penalty

FINANCIAL SUPERVISORY AUTHORITY            PRESS RELEASE 8 March 2017

Financial Supervisory Authority imposes a penalty payment of EUR 1,000,000 on and issues a public warning to Nordea Bank AB (publ), Finnish Branch

An inspection of investment advice conducted by the Financial Supervisory Authority (FIN-FSA) identified cases of non-compliance with the company’s obligation to obtain adequate information on the customer and to ensure the suitability of transactions for the customer prior to offering relevant investment advice. In addition, the company had failed to record the fulfilment of the obligation to obtain information in documents in such a way that the information would have enabled ex post verification of the course of events. This has led to the company jeopardising the functioning and effectiveness of the FIN-FSA’s supervision.

Moreover, in its investment advice, the company had failed to take adequate action for identification and prevention of conflicts of interest.

The FIN-FSA has issued a decision on a penalty payment of EUR 1,000,000 and a public warning to the company. In connection with the same inspection, cases of non-compliance were identified at three other companies, to which decisions on penalty payments and public warnings have also been issued.

The FIN-FSA conducted an inspection at the companies in 2015–2016 regarding the obligation to obtain information in connection with investment advice provided by them. The inspection focused on examining how investment fund products and structured financial instruments had been sold to non-professional customers aged over 70. The inspection identified several cases of non-compliance with the provisions of the Investment Services Act and the regulations issued by the FIN-FSA.

The public warning was issued for non-compliance with the obligation to obtain information and non-compliance with the suitability assessments. The penalty payment, in turn, was imposed for failure to identify and prevent conflicts of interest and for omissions regarding documentation requirements.

Determination of the size of a penalty payment is based on a comprehensive assessment, taking into account, among other things, the nature, extent and duration of the act and the financial position of the actor. The FIN-FSA imposes a penalty payment not exceeding EUR 1 million. The penalty payment is payable to the State.

The decision of the FIN-FSA is not yet legally binding. The company has the right to appeal the decision of 6 March 2017 to the Market Court within 30 days of receipt of notice of said decision.

To request an interview with

Sonja Lohse, Head of Director General’s Staff, Chief Adviser, please contact FIN-FSA Communications, tel. +358 50 385 5154 (weekdays 9.00–16.00).

Appendix

Decision by the Financial Supervisory Authority (in Finnish)