The Surveillance Department of Nasdaq Stockholm is responsible for monitoring issuers and members of the Exchange, 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 Rulebooks or other applicable regulations. If an investigation results in the conclusion that there has been no violation of the Rulebook or other applicable rules or that a violation is deemed insignificant, the matter can be finalized without further measures.
If there has been a violation of the Rulebooks or other applicable rules, but the violation is considered minor, a non-public reprimand can be issued by the Exchange.
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 Department at Nasdaq Stockholm comments on a couple of issues that may arise, read the Stock Exchange Notice English / Swedish.
A DISCIPLINARY PROCEEDING
In order for an investigation to be sufficiently documented, any communication will be conducted in writing. This 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 process, be available for the party that is subject to the disciplinary proceeding, should the party wish to call upon a meeting.
The first step of any disciplinary proceeding is that the Legal Department, based on the Surveillance Department's investigation, issues a Statement of Reprimand, which is sent to the issuer or member for comments. In the Statement of Reprimand, Nasdaq Stockholm outlines the relevant course of events, according to Exchange’s views, refers to the relevant set of items in the Rulebooks and states the Exchange’s preliminary assessment of the issuers or member’s violations of the Rulebooks.
The issuer or member will have to respond to the Statement of Reprimand within a deadline, but the involved party may 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 to the Disciplinary Committee. A limited number of senior representatives of the Legal Department and Surveillance Department are individually empowered to make such decisions.
If the matter is not brought forward to the Disciplinary Committee, it will be sent back to the responsible unit within Issuer Surveillance to be finalized, either by closing the case without criticism 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 that will follow. The Exchange will also provide any documentation the issuer or member has not already received.
The issuer or member can submit written comments on the ongoing case to the Disciplinary Committee. If either party submits additional documentation or other relevant testimony to the Disciplinary Committee, the other party will be given an opportunity to present its view on it.
There is also an opportunity for the issuer or member to verbally submit its views to the Disciplinary Committee. If such request is made, both the Exchange and the issuer or member will be summoned to a meeting with the Disciplinary Committee. The meeting will be held in Stockholm at a place that the Chairman of the Disciplinary Committee chooses. When the parties have presented their views, the members of the Disciplinary Committee may ask questions to both parties. Following this, the Disciplinary Committee will confer without any of the parties present.
If the issuer or member does not submit any further comments on the matter to the Disciplinary Committee, it will make its decision based on the information at hand.
The Disciplinary Committee can decide upon such sanctions that are set forth in the Rulebooks applicable to issuers and members. Such sanctions are warnings or reprimands, monetary fines, delisting, and termination of membership and to revoke trader authorization.
The issuer or member will be asked to select a contact person to whom 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.
Decisions taken by the Disciplinary Committee will always be made public, irrespective of whether the decision results in a sanction, 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 to appoint a Disciplinary Committee to handle matters relating to suspected violations of the Exchange’s regulations.
The Disciplinary Committee is an independent body from the Exchange. It shall always ensure that the issuer or member is heard before ruling on a disciplinary matter. Its decisions cannot be appealed.
The members of the Disciplinary Committee are appointed by the Board of Directors of the Exchange but the Swedish Financial Supervisory Authority has the right to give its opinions on the suitability of any new member. The Disciplinary Committee shall have at least five members and all members shall be independent from 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 Disciplinary 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
- Petter Asp (Deputy Chairman), Supreme Court Justice
- Johan Danelius, 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 Disciplinary Committee decides upon a fine, Nasdaq Stockholm will send an invoice to the issuer or 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.