On 17 June 2026, the Supreme Administrative Court of Finland issued a precedent ruling in a case involving a Finnish placement agent. The case concerned the interpretation of authorisation requirements for the marketing of alternative investment funds. The question was whether units in alternative investment funds could be marketed without a license to provide investment services. Contrary to expectations, the Supreme Administrative Court held that the Finnish Financial Supervisory Authority (“FIN-FSA”) did not have sufficient grounds to consider the placement agent’s activities as the investment service of reception and transmission of orders as set out in the Finnish Act on Investment Services. Consequently, the FIN-FSA did not have the right to prohibit the company from continuing its business activities on the basis of its lack of license.
Background to the case and the issues at hand
On 6 June 2023, the FIN-FSA issued a decision prohibiting the placement agent from continuing its activities based on them constituting investment services. The FIN-FSA’s view was that the company provided investment services, specifically the investment service of reception and transmission of orders, as defined in the Act on Investment Services, without a proper license during 2022 and 2023.
According to the FIN-FSA, the placement agent marketed alternative investment funds, assisted with the provision of fund documentation and the subscription process, and bringing together investors with alternative investment fund managers. As part of the arrangement, the fund managers paid the company a commission when an investor made an investment. The company’s aim was to get investors to make investment commitments to the respective alternative investment funds.
The Administrative Court dismissed the placement agent’s appeal, finding that the company’s activities had included measures that had significantly contributed to the investors’ investment decisions being made, and that the company had provided investment services within the meaning of the Act on Investment Services. Consequently, the FIN-FSA was entitled to prohibit all activities carried out under that business model. According to the Administrative Court’s ruling, the activities were not limited to just general ‘soft circling’ activities and identifying potential investors but were specifically aimed at presenting particular funds and promoting investments to Finnish investors.
Precedent by the Supreme Administrative Court
As the company appealed the decision by the Administrative Court, the Supreme Administrative Court then had to decide whether the FIN-FSA had the right to prohibit the company from continuing its activities. In particular, the question was whether the marketing of units in alternative investment funds constituted the investment service of reception and transmission of orders. The Supreme Administrative Court’s key conclusion was that the marketing of alternative investment funds does not, in itself, automatically fulfil the criteria for reception and transmission of orders.
The Supreme Administrative Court stated that neither the Act on Investment Services nor the Act on Alternative Investment Fund Managers stipulates that the marketing of financial instruments would automatically constitute the investment service of reception and transmission of orders. The Supreme Administrative Court noted that the concept of “marketing” of alternative investment fund units is broader than the concept of the reception and transmission of orders under the Act on Investment Services, since “marketing” also covers such activities relating to the offering and allocation of fund units which do not involve the reception and transmission of buy or sell orders.
Therefore, the FIN-FSA had no grounds to conclude that the placement agent had provided investment services solely on the basis that the company had marketed alternative investment funds. Furthermore, the Supreme Administrative Court stated that while the FIN-FSA had considered that the company had brought together investors and alternative investment fund managers, the FIN-FSA’s decision did not sufficiently detail to what extent and on what grounds the company’s activities were in this respect deemed to constitute the provision of investment services. On these grounds, the Supreme Administrative Court decided to overturn the FIN-FSA’s decision and the Administrative Court’s ruling.
Assessment of the precedent and its practical implications
The Supreme Administrative Court’s precedent clarifies what had to some extent been expected, i.e. that the mere marketing of alternative investment funds does not automatically fulfil the definition of reception and transmission of orders nor does it constitute some other, unspecified investment service. In other words, the definition of “marketing” of alternative investment funds and definition of “investment services” are conceptually distinct.
In practice, this precedent is significant particularly for companies involved in raising capital in Finland for alternative investment funds. It supports the interpretation that the mere presentation of funds and the facilitation of investor contacts do not automatically require an authorisation to provide investment services, even where the marketing activities involve fee arrangements.
However, the reasoning by the Supreme Administrative Court was rather brief, leaving several key questions unanswered:
- Where should the line be drawn between the investment service of reception and transmission of orders and mere “introducing” activities (bringing together investors and fund managers), which are permitted without authorisation?
- On what specific grounds could (marketing) activities constitute reception and transmission of orders?
- To what extent were the FIN-FSA’s arguments and reasoning insufficient, and what impact did this ultimately have on the outcome?
In practice, the focus is now on how the FIN-FSA will respond to its established interpretation and supervisory practice being overruled. It remains to be seen whether the FIN-FSA will issue new perimeter guidance on the matter and what interpretation it will adopt regarding the scope of reception and transmission of orders. This will have a significant impact on how the fundraising and marketing activities of alternative investment funds can be arranged in Finland going forward.