Viiteosakkeet

Viiteosakkeet, often translated as reference shares or substitute shares, are a mechanism used in financial markets to facilitate the delivery of shares when a seller cannot deliver the actual underlying securities. This typically occurs in situations where the seller has sold shares they do not possess, perhaps due to a short sale without proper arrangements for borrowing, or a failure to receive the shares on time for settlement.

When a delivery obligation cannot be met with the actual shares, a financial institution, often a broker or custodian, may step in to provide "viiteosakkeet". These are essentially shares of the same company that are provided to the buyer as a substitute for the original shares. The intention is to ensure that the transaction settles as planned, preventing further disruptions in the market.

The use of viiteosakkeet is usually a temporary measure. The party that provided the substitute shares will then seek to obtain the actual underlying shares to replace them. This might involve buying the shares in the open market or borrowing them to fulfill the original obligation. While viiteosakkeet allow for settlement, they can sometimes lead to additional costs for the party that failed to deliver, such as borrowing fees or potential price differences if the market price of the shares fluctuates significantly. The practice is governed by market rules and regulations to maintain the integrity of trading.