Majority Protection in the Nordic Capital Markets – a Matter of Concern?

The article introduces sophisticated legal frameworks-particularly those available in the UK and Ireland - for companies and stakeholders of their financial instruments, both shares and debt securities. Scheme of arrangement frameworks provide legal tools for a qualified majority of any class to counteract abuses of right by the same class minority. As current Nordic laws do not contain such regimes, the article discusses the potential benefits that scheme of arrangement frameworks could provide in the development of the Nordic capital markets. Trust has been viewed a key component for the development of capital markets. Any matter which may cause even minor mistrust about the level of protection available to investors on any capital market could undermine the development of such a market. As an example of the positive impacts that fair rules may have for a market, the author refers to the development of the US securities markets after the introduction of tight new regulations in 1930s. The theme of majority protection in the markets discussed in the article is also topical-all Nordic EU Member States have recently implemented the directive on preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedures (EU) 2019/1023 (Restructuring Directive). However, the implementation of the directive-driving 'minimum harmonisation of the restructuring regimes' - has resulted in notable variations in the Nordic Member States' laws. The directive emphasised the importance of preventive restructuring frameworks and it should be noted that a company law scheme of arrangement framework could be a flexible regime for 'preventive restructuring' as well.