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Govt scraps controversial securities bill, admits mistakes were made

Finance Minister Alexander Stubb announced Tuesday that the government had decided to ditch plans for reforms to the securities registry system. Stubb stressed that he had not considered stepping down as finance minister after providing incorrect information about the level of support for the measure.

Alexander Stubb
Image: Yle

Speaking during a press conference Tuesday afternoon, Finance Minister Alexander Stubb said that the governing coalition had jointly decided that it would not be feasible to move forward with planned reforms to the securities registry system under the current circumstances.

He said that the cabinet had discussed the matter during a meeting Tuesday morning.

"We estimated that it would not be possible to make the changes required to address the concerns raised by different officials during this government term," Stubb remarked.

Stubb: "I didn’t lie"

Stubb faced a firestorm of criticism when it was revealed that he had overstated the level of support for the controversial measure to open up the market for securities registries. Last week, he told MPs that the measure had the backing of 90 percent of experts.

However the daily Helsingin Sanomat reported that the number was actually 10 percent, forcing the minister to admit his mistake on Saturday during an interview with national broadcaster Yle. He also said, "Sorry about that."

Since then, political pundits and members of the opposition have called for Stubb to answer for what they see as providing misleading information.

"I have not considered resigning at any stage," Stubb said in response to a question about the possibility of stepping down.

He stressed that he had not lied to MPs, but had made a mistake. On Monday, he admitted to pulling the 90 percent figure off the top of his head. During Tuesday’s press conference he apologised for his mistake several times. He also lamented the fact that the entire process surrounding the securities registry reform did not inspire confidence.

A number of officials have sharply criticised the measure, with police, tax authorities and prosecutors expressing concern that the ability to transfer ownership to a nominee register that does not show the names of actual share owners would increase the possibility of tax evasion and facilitate insider trading.

The Finns Party was also critical of the planned reform, and had indicated that MPs might not support it. The parliamentary group said Tuesday that it was pleased with the decision to pull back the draft legislation.

"The Centre, National Coalition and Finns parties did not agree on securities registry reform in the government programme. We will continue to implement the government programme," Finns Party MP and head of the parliamentary finance committee Kaj Turunen said in a statement.

"Mistakes have been made"

The government has defended the planned legislation by pointing to an EU central securities depository regulation that entered into force last autumn. The finance ministry will now prepare to comply with the regulation without the contentious securities depository change.

During the press conference finance ministry permanent secretary Matti Hetemäki admitted that mistakes were made when work began on the legal changes in 1999.

"We under-estimated the importance of officials and the public. Another problem was that we misinterpreted the EU regulation, in that we thought the regulation would require the prohibition of nominee registration," Hetemäki said.

"If it is that the European Court of Justice rules that the Finnish system doesn’t comply with EU competition regulations, we will have to look at the matter again," Minister Stubb said.

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