The Surveillance department of Nasdaq Stockholm is responsible for supervising issuers and members, with regards to compliance with exchange regulation. The relevant sets of rules that issuers and members are obliged to comply with are published on Nasdaq Stockholm's website.
An investigation will be initiated if the Surveillance department finds that an issuer or a member may have violated one or several provisions of the relevant rules. If the investigation leads to the conclusion that no violation of the rules has taken place or that a breach has been insignificant, the matter can be finalized without further measures.
If the conclusion is that a breach of rule has taken place but that it is of minor importance, a non-public reprimand can be issued.
If, however, the company has not been able to provide an acceptable explanation for its actions and the violation is not considered minor, a disciplinary proceeding is initiated and the case is handed over to Nasdaq Stockholm's Legal department.
Information from the Surveillance function at Nasdaq with regards to the Corona outbreak
The spread of the Coronavirus COVID-19 poses challenges in various respects for Issuers. The Surveillance function at Nasdaq Stockholm AB (the "Exchange") comments on a couple of issues that may arise, read the Exchange Notice English / Swedish.
A DISCIPLINARY PROCEEDING
In order for an investigation to be sufficiently documented, any correspondence will be conducted in writing. That does not prevent that meetings can be held with representatives of the issuer or the member. Nasdaq Stockholm may call upon such meetings, but will also, to the extent that it would not cause undue delay for the processing of the matter, be accessible for the party that is subject to the matter, should it wish to call upon a meeting.
The first step is that the Legal department, based on the Surveillance department's investigation, issues a Statement of reprimand, which is sent to the company for comments. In the document Nasdaq Stockholm outlines the course of events, as relevant for the matter and according to the understanding of the exchange, and refer to the relevant rules and states why the preliminary assessment of the exchange is that the party has violated the rules.
The Statement of reprimand will have a dead line for the response, but the party can contact Nasdaq Stockholm to discuss alternatives.
When Nasdaq Stockholm has received the response to the Statement of reprimand, it will evaluate and decide whether the matter should be closed or brought forward. A small number of senior representatives of the Legal and Surveillance departments are individually empowered to make such decisions.
If the matter is not brought forward, it will be sent back to Surveillance to finalize it by closing it without remarks or by issuing a non-public reprimand.
If it is decided that the matter shall be brought forward, it will be handed over to Nasdaq Stockholm’s Disciplinary Committee. The issuer or member will in such event be informed of the decision and the procedural steps to follow. The exchange will also provide any documentation the issuer or member has not already received.
The issuer or member has the opportunity to submit written comments on the matter to the Disciplinary Committee. To the extent that either party in the process submits further material to the Disciplinary Committee, the other party will be given an opportunity to present its view upon it.
There is also an opportunity for the issuer or member to orally submit its views to the Disciplinary Committee. If such request is made, both the exchange and the issuer or member will be called to a meeting with the Committee. The meeting will be held in Stockholm at a place that the Chairperson informs the parties of. When the parties have presented their views, the Committee members may ask questions to both parties. The Committee thereafter confers without any of the parties present.
If the issuer or member does not submit any further comments on the matter to the Disciplinary Committee, the Committee will make its decision based on the information at hand.
The Disciplinary Committee can decide upon such sanctions that are set forth in the rules applicable for issuers and members. Such sanctions are warnings or reprimands, monetary fines, de-listing, and termination of membership and to revoke trader authorization.
The issuer or member will be asked to communicate a contact person to which the Disciplinary Committee’s decision should be sent. The Disciplinary Committee will communicate the day and time when it will deliver its decision to the parties.
When the Disciplinary Committee has reached a decision, it will be sent by email to the parties. The publication of decisions taken by the Disciplinary Committee are handled by the exchange and takes place by dissemination of a press release in combination with the publication of the decision on Nasdaq Stockholm's website.
Decision taken by the Disciplinary Committee will always be made public, irrespective of whether the decision is to issue a sanction or not, the identity of the issuer or member will be included therein. Under normal circumstances the identity of individuals (for example exchange traders) subject to a disciplinary matter will not be included. The exchange will normally publish an English translation of the decision for information purposes.
THE DISCIPLINARY COMMITTEE
A Swedish Regulated Market is required by law and regulation to appoint a Disciplinary Committee to handle matters of suspected violations of exchange regulation.
The Disciplinary Committee is an independent body from the exchange. It shall always ensure that the issuer or member is heard before conducing a matter. Its decisions cannot be appealed.
The members of the Committee are appointed by the board of Directors of the exchange but the Swedish FSA has the right to comment on the suitability of any new member. The Committee shall have at least five members and all members shall be independent of the exchange, the exchange operator and the owner of the exchange operator. The Chairperson and the Deputy Chairperson of the Disciplinary Committee shall be lawyers with experience of serving as judges. Two of the other Committee members must have in-depth experience of the workings of the securities markets.
The Disciplinary Committee of Nasdaq Stockholm consists of more than five members in order for the Chairperson to be able to compose a committee for any given matter that will have the relevant set of competencies and that is free from any conflicts of interests.
The current members of the Disciplinary Committee of Nasdaq Stockholm are:
- Marianne Lundius (Chairman), Former Supreme Court Justice
- Ann-Christine Lindeblad (Deputy Chairman), Supreme Court Justice
- Petter Asp, Supreme Court Justice
- Anders Oscarsson, Company Director
- Jack Junel, Company Director
- Joakim Strid, Company Director
- Wilhelm Lüning, Lawyer
- Patrik Marcelius, Lawyer
- Erik Sjöman, Lawyer
- Ragnar Boman, MBA
- Carl Johan Högbom, MBA
- Magnus Svensson Henryson, Authorized Public Accountant
- Svante Forsberg, Former Authorized Public Accountant
The Disciplinary Committee can, as governed by the applicable rules, issue fines as sanctions for certain violations of rules. If the Committee decides upon a fine, Nasdaq Stockholm will send an invoice to the issuer of member to collect the funds on behalf of a foundation. The purpose of the foundation is to promote scientific research and other initiatives in the securities market. The foundation has been set up by Nasdaq Stockholm specifically to manage the funds collected as a result of sanctions and to allocate such funds.