The Finanssivalvonta, the Financial Supervisory Authority of Finland’s financial and insurance sectors (FIN-FSA), has imposed its first penalties of 2024, which included an administrative fine on a pension provider for failures in reporting derivative contracts, and a penalty for a former board member for violating a transactions prohibition.

The first penalty, an administrative €90,000 ($97,500) fine, was imposed on Finland’s largest pension provider Keva for failures in reporting derivative contracts.

According to FIN-FSA, between 2019–2023, Keva neglected its obligation to report details of all derivatives to a trade repository – which is required by the EU Regulation on OTC derivatives, central counterparties and trade repositories (European Market Infrastructure Regulation, EMIR).

“It is important for market confidence that insiders exercise particular care and diligence in their securities trading.”

Tero Kurenma, Director General, FIN-FSA

Keva failed to report agreements on the transfer or delegation of its EMIR reporting with four counterparty banks. this resulted in the banks not reporting the derivatives contracts concluded with Keva to the trade repository. Nor did Keva undertake the EMIR reporting itself.

“Regulations are aimed at increasing transparency and reducing risks in derivatives markets. Data on derivatives markets must be of high quality, comprehensive and up to date, which calls for careful compliance with reporting rules,” FIN-FSA Director General Tero Kurenmaa said.

Kurenmaa also pointed out that other organizations had been sanctioned for shortcomings in reporting earlier, and that FIN-FSA will prioritize data quality as one of the authority’s supervisory priorities in 2024.

Violating prohibition on transactions

The second penalty payment of €60,000 ($65,015) was imposed on former Tecnotree Oyj board member Markku Wilenius over violating a prohibition on transactions.

According to FIN-FSA, Wilenius made a transaction in relations to the company’s shares during the closed period of 30 calendar days before the announcement of the company’s interim financial report went public on August 4, 2022.

Wilenius was found to be violating the prohibition by disposing of shares of the company on July 25, 2022.

“It is important for market confidence that insiders exercise particular care and diligence in their securities trading,” said Kurenmaa.

Both Keva and Wilenius have the right to appeal the decisions to the Helsinki Administrative Court within 30 days.