Finland: Fund Regulation Reforms 2026, What Fund Managers Must Do

The most significant overhaul of fund regulation Finland has seen in a decade entered into force on 16 April 2026, transposing EU Directive 2024/927 (commonly known as AIFMD II) and related instruments into Finnish national law. The reforms impose immediate governance, documentation and liquidity-management obligations on managers of UCITS and alternative investment funds (AIFs), while a second wave of supervisory reporting requirements is phased in through 2027. This practical compliance guide sets out, section by section, exactly what fund managers, in-house counsel and compliance officers need to do now, which deadlines are approaching, and how to build the reporting infrastructure that the Finnish Financial Supervisory Authority (Finanssivalvonta, or FIN-FSA) will expect to see operational by next year.

What Changed in Fund Regulation Finland in 2026

Finland’s fund reforms 2026 package amends the Act on Alternative Investment Fund Managers (AFMA), the Act on Common Funds, and several FIN-FSA regulations and guidelines governing the organisation and procedures of investment-fund activities. At the EU level, the changes originate from Directive (EU) 2024/927, which updates both the AIFM Directive and the UCITS Directive, and from related ESMA guidelines on liquidity management tools and delegation arrangements. All EU Member States were required to transpose these amendments by 16 April 2026, and Finland met this deadline through government proposals adopted in early 2026.

The reforms introduce seven core compliance areas that fund managers must address:

• Regulatory gap analysis. Identify divergences between existing internal policies and the new statutory and FIN-FSA requirements.
• Prospectus and investor-disclosure updates. Amend fund prospectuses, key information documents and marketing materials to reflect new disclosure obligations.
• Re-papering of delegation agreements. Update delegation and outsourcing contracts with enhanced oversight, reporting and substance provisions.
• Selection of liquidity management tools. Open-ended AIF and UCITS managers must select and operationalise at least two liquidity management tools (LMTs) from a harmonised EU list.
• Valuation and collateral review. Revise valuation policies and collateral-eligibility assessments in line with updated Bank of Finland and FIN-FSA guidance.
• Internal reporting. Align board and risk-committee reporting templates with new regulatory data points.
• 2027 reporting infrastructure planning. Begin building the IT systems, data feeds and processes needed for enhanced supervisory reporting to FIN-FSA from 2027 onwards.

Scope and Applicability Under Finland Fund Regulation, Who Must Comply

The 2026 reforms apply to a broad range of entities operating within the Finnish fund ecosystem. Understanding precisely which organisations and fund types fall within scope is the essential first step in any compliance programme.

Entities in scope

• Authorised AIFMs. All alternative investment fund managers authorised in Finland under the AFMA are fully in scope, including managers of private equity, venture capital, real estate and infrastructure funds.
• UCITS management companies. Finnish-authorised UCITS management companies must comply with the updated liquidity-management, delegation and disclosure requirements.
• Registered (sub-threshold) AIFMs. While certain lighter-touch provisions apply, registered managers should review whether their activities, particularly loan origination, now trigger full authorisation thresholds.
• Loan origination funds. A new dedicated chapter of the Finnish fund regulation framework introduces comprehensive rules for funds that originate loans, including leverage limits of 175 % of NAV for open-ended loan origination funds and 300 % for closed-ended structures.
• Depositaries and fund administrators. Although the primary obligations fall on managers, service providers must update service-level agreements and reporting capabilities to support their fund-manager clients.

Quick scope decision tree

To determine your immediate compliance burden, answer these three questions in order: (1) Is your entity authorised or registered as an AIFM or UCITS management company in Finland? If yes, you are in scope. (2) Does any fund you manage originate loans? If yes, the new loan-origination chapter applies in full. (3) Do you manage open-ended AIFs or UCITS? If yes, the mandatory liquidity management tool requirements apply immediately.

Timeline of Key Dates and Phased Fund Regulation Finland Obligations

The reforms do not impose all obligations simultaneously. Finnish fund managers obligations are split between those that took effect on 16 April 2026 and a second phase of supervisory reporting infrastructure requirements expected to become operational in 2027. The following timeline table sets out the key dates, obligations and required actions.

Reporting obligations by entity type

Governance, Policies and Compliance Program Updates

The 2026 fund reforms demand a thorough review of internal governance frameworks. For most Finnish fund managers, the compliance checklist for fund managers begins with board-level policy updates and cascades into day-to-day operational controls.

Updating governance frameworks

• Board responsibilities. The board of the management company must formally approve the selection of liquidity management tools, updated valuation policies and revised delegation arrangements. Board minutes should record the rationale for each decision.
• Risk appetite statement. Update the risk appetite framework to reflect new loan-origination exposure limits and liquidity-risk parameters required by the amended legislation.
• Conflicts of interest policy. Revise the conflicts-of-interest register to address potential conflicts arising from loan origination activities and enhanced delegation arrangements.
• Remuneration policy. Ensure remuneration disclosures comply with the updated requirements, particularly for identified staff involved in risk-taking decisions at fund level.

Delegation and oversight

Delegation reporting requirements have been tightened under the 2026 reforms. Fund managers that delegate portfolio management or risk management to third parties must now demonstrate, through documented evidence, that they retain sufficient substance, expertise and oversight capability. FIN-FSA expects managers to maintain ongoing monitoring of delegates, including periodic on-site or remote due-diligence reviews, and to report material delegation arrangements in a standardised format.

Industry observers expect that FIN-FSA will pay particular attention to so-called “letter-box” arrangements during upcoming supervisory inspections, and early indications suggest that managers with thin local teams should bolster their in-house capability well before 2027 reporting cycles begin.

Internal controls and audits

• Compliance monitoring plan. Update the annual compliance monitoring plan to include specific testing of new fund regulation Finland requirements, particularly LMT operationalisation and delegation oversight.
• Internal audit scope. Expand the internal-audit scope to cover the adequacy of new policies, the accuracy of amended prospectus disclosures and the readiness of supervisory reporting systems.
• Record-keeping. FIN-FSA guidance emphasises that all compliance decisions, gap-analysis findings and remediation steps should be documented and retained for at least five years.

Fund Documentation Finland: Prospectuses, Fund Rules, Contracts and Delegation Agreements

One of the most operationally intensive workstreams arising from the 2026 reforms is the repapering of fund documentation. Every manager must review, and in most cases amend, prospectuses, fund rules, key information documents, management agreements and custody or depositary contracts.

Prospectus and investor disclosures

• Liquidity management tool disclosure. Prospectuses must now identify which LMTs have been activated or are available for activation, including a plain-language explanation of how each tool operates and its potential impact on investors.
• Loan origination disclosures. Funds engaged in loan origination must disclose their lending policies, leverage limits and borrower-concentration parameters.
• Delegation disclosures. Enhanced information about delegated functions, including the identity of delegates and the scope of delegated activities, must appear in the prospectus.
• Filing process. Amended prospectuses should be submitted to FIN-FSA in accordance with the supervisory release on the organisation and procedures of investment fund activities published in May 2026.

Delegation agreements

Existing delegation agreements should be updated to include, at minimum: enhanced reporting obligations from the delegate to the manager (including incident notification within defined timeframes); provisions granting the manager and FIN-FSA access to the delegate’s records; termination clauses that allow the manager to recall delegated functions at short notice; and explicit substance requirements demonstrating that the manager retains decision-making authority over delegated functions.

A sample oversight clause might read: “The Delegate shall provide the Manager with monthly performance and risk reports in a format agreed between the parties, and shall notify the Manager without delay of any material event, regulatory inquiry or operational disruption affecting the delegated functions.”

Service-level and reporting clauses

Management agreements with depositaries, fund administrators and other service providers should be reviewed to ensure that reporting clauses align with the manager’s enhanced supervisory reporting obligations Finland. The likely practical effect will be that service providers must deliver data in formats compatible with FIN-FSA standardised templates, and turnaround times for periodic data deliveries may need to be shortened to meet the 2027 filing calendar.

Liquidity Management and Operational Tools for Open-Ended Funds

The mandatory liquidity management framework is one of the headline changes in the 2026 fund regulation Finland package. Managers of open-ended AIFs and UCITS must select and operationalise at least two liquidity management tools from a harmonised list, ensuring they can be activated promptly in periods of market stress.

Selecting liquidity management tools

The harmonised list of LMTs from which managers must choose includes:

• Redemption gates. Caps on the proportion of units that can be redeemed in any single dealing period.
• Redemption notice periods. A required advance notice period before redemption orders are processed.
• Swing pricing. Adjustment of the NAV to allocate transaction costs to redeeming or subscribing investors.
• Anti-dilution levies. Charges applied to redeeming investors to protect remaining holders from dilution.
• Redemptions in kind. The option to satisfy large redemption requests through the transfer of fund assets rather than cash.
• Side pockets. Segregation of illiquid or hard-to-value assets into a separate compartment.

Managers must document why each selected tool is appropriate for the fund’s investment strategy, investor profile and asset-liquidity characteristics. The selection rationale should be approved by the board and recorded in the fund’s risk-management policy.

Operational testing and investor communication

• Dry-run testing. Before declaring a tool operational, managers should conduct at least one simulation exercise to test the activation workflow, NAV calculation impact, investor notification procedures and system readiness.
• Investor communication. Investors must be notified, via updated prospectuses and, where appropriate, direct communication, of the tools available and the circumstances under which they may be activated.
• Depositary coordination. The depositary must be informed of the selected LMTs and the operational procedures for activation, as the depositary’s cash and settlement functions are directly affected.

Valuation and NAV impact

Swing pricing and anti-dilution levies have direct NAV implications. Managers should update their valuation policies to define the methodology for calculating swing factors or levy amounts, specify the threshold triggers for activation, and ensure that the fund’s accounting systems can process adjusted NAV calculations accurately and on time.

Valuation, Collateral Eligibility and Bank of Finland Rules

Beyond liquidity management, the 2026 reforms sharpen the requirements around valuation practices and collateral eligibility Finland standards. The Bank of Finland (Suomen Pankki) has also issued operational guidance that affects how funds interact with central-bank counterparties and settlement systems.

Collateral eligibility checklist

• Review accepted collateral. Confirm that all collateral held by the fund, whether received under securities lending, OTC derivative or repo transactions, meets the updated eligibility criteria published by FIN-FSA.
• Haircut schedules. Update internal haircut tables to reflect any revised parameters, particularly for less liquid fixed-income instruments and structured products.
• Counterparty due diligence. Where funds post or receive collateral from central-bank eligible counterparties, verify compliance with Bank of Finland operational requirements for collateral quality and settlement finality.
• Concentration limits. Check that collateral pools do not breach issuer or sector concentration limits introduced by the amended legislation, and implement automated monitoring where feasible.

Custody and asset segregation implications

The tightened depositary and custody rules reinforce the principle that fund assets must be segregated from the assets of the manager, the depositary and other clients. Managers should verify with their depositaries that asset-segregation arrangements meet the enhanced standards, particularly for funds holding less liquid or non-standard assets such as loans, real estate or private-market instruments. Industry observers expect that FIN-FSA will increasingly scrutinise sub-custodial chains, and managers would be well advised to conduct a thorough review of their custody network as part of the 2026 compliance programme.

Supervisory Reporting Obligations Finland, Finanssivalvonta Filing Checklist

Enhanced supervisory reporting obligations Finland are the centrepiece of the 2027-phased reforms, but preparation must begin immediately. The FIN-FSA supervisory release issued in May 2026 outlines the amended regulations and guidelines on the organisation and procedures of investment fund activities and on alternative investment fund managers, including updated data-field requirements and filing frequencies.

What to file and when

• Delegation reporting. From 2027, authorised AIFMs must submit detailed delegation reports to FIN-FSA, specifying all delegated functions, the identity and jurisdiction of each delegate, and the manager’s ongoing oversight activities.
• Leverage reporting. Loan origination funds must file periodic leverage calculations demonstrating compliance with the applicable leverage limits (175 % for open-ended structures, 300 % for closed-ended).
• Liquidity-risk reporting. Enhanced data on fund-level liquidity profiles, including the results of stress tests and the availability of activated LMTs, will be required on a regular periodic basis.
• Investor-concentration data. Certain reports will require granular data on investor concentration, particularly for funds with significant exposures to single investors or investor groups.

Relevant FIN-FSA forms and guidance

Managers should monitor the Finanssivalvonta supervisory releases page for updated reporting templates and technical guidance as they are published. FIN-FSA has indicated that standardised electronic filing formats will be introduced, and managers should plan their IT builds accordingly.

Sample reporting calendar

Practical Implementation Plan and Project Checklist

A structured 90-day implementation plan will help managers convert the compliance checklist for fund managers into a controlled project with clear ownership and deliverables.

• Days 1–30: gap analysis and project launch. Appoint a project lead and working group. Complete the regulatory gap analysis against the amended AFMA and FIN-FSA guidance. Prioritise workstreams by risk and deadline. Communicate the project plan to the board.
• Days 31–60: documentation and governance. Draft updated prospectuses, fund rules and delegation agreements. Secure board approval for LMT selection and revised governance policies. Begin vendor engagement for reporting-system upgrades.
• Days 61–90: testing and filing. Conduct dry-run tests of liquidity management tools and supervisory reporting workflows. File amended prospectuses with FIN-FSA. Execute updated delegation agreements with counterparties. Communicate changes to investors and service providers.

Each workstream should have a named owner (using a RACI matrix approach: Responsible, Accountable, Consulted, Informed), a defined deliverable and a target completion date. For larger management companies, the compliance function typically leads, with legal, operations and IT as supporting workstreams. For smaller managers, external advisers may be engaged to provide capacity and specialist expertise.

Risk and Enforcement: Penalties and Supervisory Best Practices

FIN-FSA has broad enforcement powers under the amended legislation, including the ability to impose administrative fines, issue public warnings, and, in serious cases, withdraw a manager’s authorisation. The supervisory authority has signalled that it will focus initial enforcement attention on three areas: adequacy of liquidity management arrangements, substance of delegation structures, and completeness of investor disclosures.

Managers who identify compliance gaps should document their remediation plan and, where appropriate, notify FIN-FSA proactively. Early and transparent engagement with the supervisor is widely regarded as best practice in Finland’s regulatory environment. All compliance documentation, gap analyses, board minutes, amended contracts and filing confirmations, should be retained for a minimum of five years.

Sources

1. Finanssivalvonta, Amendments to regulations and guidelines on the organisation and procedures of investment fund activities and on alternative investment fund managers (2026)
2. Finlex, Finnish legislation translations and consolidated statutory texts
3. Bank of Finland (Suomen Pankki)
4. Borenius, Finland Implements Fund Regulation Reforms – Effective 16 April 2026
5. European Securities and Markets Authority (ESMA)
6. European Commission, Investment funds policy
7. Hannes Snellman
8. Castrén & Snellman