Nordic Surveillance Quarterly Report

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Nordic Surveillance Quarterly Report NORDIC SURVEILLANCE QUARTERLY REPORT January‐March 2017 The exchange rules as well as the methodology of the surveillance are in substance harmonized between the Nasdaq exchanges in the Nordic countries. Due to national regulations however, there might be differences. For the reader to be able to distinguish the differences, some of the articles will be marked with flags to highlight this circumstance. The “Exchange” refers to Nasdaq as relevant in each local jurisdiction. IMPORTANT REMINDER – ISSUERS URGED TO ACQUIRE AND REPORT LEI CODES With reference to upcoming requirements under MiFID II, the Exchange once again urges all issuers to acquire a LEI code and submit the LEI code to the Exchange at the latest May 1, 2017 if not already associated with one. The LEI code is a 20‐character reference code that uniquely identifies legally distinct entities that engage in financial transactions associated reference data. The LEI code is issued by so called Local Operating Units (“LOU”) endorsed by the LEI Regulatory Oversight Committee (“LEI ROC”). To obtain a LEI code, issuers will need to carry out a self‐registration at a LOU. A list of LOUs with links to their websites can be found on LEI ROC’s website along with further information and a guide on how to obtain a LEI code: HTTP://WWW.LEIROC.ORG. Please submit the LEI code to the Exchange at the latest May 1, 2017 on the following email: [email protected] (Sweden), listing‐[email protected] (Denmark), [email protected] (Finland) and and [email protected] (Iceland). NORDIC SURVEILLANCE 1 NEW PROCEDURES REGARDING LISTING OF ADDITIONAL SHARES The Exchange has introduced a new, mandatory, process for admission to trading of new shares of an already listed series of shares. The admission to trading of such additional shares or depositary receipts must be applied for via the Nasdaq Listing Center. The new procedure entered into force in Sweden on April 1, 2017 and has since previously been in force in Finland. The admission to trading could be triggered by e.g. share issues or other increases of the number of outstanding shares or depositary receipts of an already listed series of shares or depositary receipts, such as exercise of warrants or conversion of shares into already listed depositary receipts. The new process is partly required due to the Exchange’s reporting obligation to the respective national Financial Supervisory Authority under MiFID II and the EU Regulation on market abuse1 (“MAR”). The Nasdaq Listing Center is available via HTTPS://LISTINGCENTER.NASDAQ.COM. Follow the below steps in order to apply for admission to trading of new shares of an already listed series of shares: Create an account in the Nasdaq Listing Center (can be done either by the company or by its advisors) Create and submit an application for admission to trading of additional shares 1) Log into the Nasdaq Listing Center 2) Go to “Create a new form” 3) Select “Applying to List Additional Shares on the Main (regulated) Market” or “Applying to List Additional Shares on First North” 4) Select “Listing of additional issue of shares” and include short name and ISIN code for the already listed shares 5) Include company and contact information as well as specific information about the share issue 6) Upload a prospectus valid for the purpose of admission to trading, if needed, or confirm that no prospectus is required 7) Submit the form The application must be submitted in the Nasdaq Listing Center no later than five days prior to registration of the new shares or as soon as possible in the case of conversion of shares into already listed depositary receipts. During 2017, the Exchange will implement similar procedures for all types of financial instruments, including admission to trading by increase of outstanding amount in fixed income instruments such as bond loans and structured products. 1 Regulation (EU) No. 596/2014 NORDIC SURVEILLANCE 2 STOCKHOLM Issuer Surveillance DISCIPLINARY CASE 2017:2 – HEXAGON AB On March 19, 2017, the Disciplinary Committee of Nasdaq Stockholm AB found that Hexagon AB, listed on Nasdaq Stockholm, had breached the Exchange’s Rule Book for Issuers (the “Rulebook”). The company was imposed a fine corresponding to two annual listing fees. The Disciplinary Committee concluded that Hexagon AB, in two respects, had breached item 3.1 of the Rulebook. The violations related to the company’s disclosure of information in conjunction with the arrest of the company’s CEO on the afternoon of October 26, 2016 for suspected insider trading regarding a private investment in a share listed on Oslo Børs and, later on, the Oslo Districts Court’s decision of detention of the CEO on October 29, 2016. Hexagon AB did not disclose information about the events until the morning of October 31, 2016. The Disciplinary Committee concluded that the information concerning the arrest of the CEO on suspicion of insider trading constituted inside information for Hexagon AB. The Rulebook, which refers to Article 17 of MAR regarding disclosure of inside information, states that the general rule is that inside information shall be disclosed to the public as soon as possible. In an exception to this general rule, MAR permits the issuer to delay the disclosure of inside information provided that all of the following three criteria are met: (a) Immediate disclosure is likely to prejudice the legitimate interest of the issuer. (b) Delay of disclosure is not likely to mislead the public. (c) The issuer is able to ensure the confidentiality of the information. Hexagon AB decided to delay disclosure of the arrest and the suspicions raised against the CEO on October 26, 2016 based upon the assessment that the information available at the time was sparse, contradictory and likely to change, why an immediate disclosure was likely to prejudice the legitimate interest of the company. However, on the morning of October 27, 2016, Hexagon AB received a Nordic arrest warrant regarding the CEO, and according to the Disciplinary Committee this information was sufficiently specific to determine that the company’s legitimate interest would not have been prejudiced had the company disclosed that the CEO had been arrested on suspicion of an insider offence. Accordingly, the conditions for delaying the disclosure of the inside information were not met at that point of time, why the information should have been disclosed as soon as possible. In addition to the above, the Disciplinary Committee also found that the press release published by Hexagon AB at 08:15 CET on October 31, 2016, which contained information about the detention of the CEO, did not provide any information about how the company intended to address the fact that the CEO was under suspicion of insider trading or a plan for the day‐to‐day administration of the company in the absence of the CEO, and could therefore not be considered relevant and clear enough. Given the surprising nature and severity of the situation in which Hexagon AB found itself and the challenge of applying the new Rulebook that entered into force on July 3, 2016, the Disciplinary Committee determined that the sanction should not exceed a fine of two annual listing fees. A detailed description of the matter and the Disciplinary Committee’s decision are available at: HTTP://WWW.NASDAQOMX.COM/LISTING/EUROPE/SURVEILLANCE/STOCKHOLM/DISCIPLINARYCOMMITTEE/ DECISIONS/ A complete description of disciplinary proceedings and market interventions conducted by the surveillance department in Stockholm is available in the Appendix. NORDIC SURVEILLANCE 3 Trading Surveillance REFERRALS ON SUSPECTED MARKET ABUSE During the first quarter, 27 matters have been reported to the Swedish FSA in accordance with the Exchange’s obligation to refer matters of suspected market abuse. 18 of these matters concerned suspected illegal insider trading and 9 matters concerned suspected market manipulation. HELSINKI Issuer Surveillance DISCIPLINARY CASE 2017:1 – DIGIA OYJ On March 31, 2017, the Disciplinary Committee of Nasdaq Helsinki Ltd found that Digia Oyj, listed on Nasdaq Helsinki, had breached the Exchange’s Rule Book for Issuers (the “Rulebook”) when announcing a significant business contract. The company was imposed a public warning and a fine of EUR 40,000. On October 14, 2016 at 16:10 EET, Digia Oyj disclosed a company announcement with information regarding that the Finnish Tax Administration had chosen Digia Finland Ltd as software supplier of national income register. The Finnish Tax Administration had earlier the same day at 13:17 EET published a press release stating that it had chosen Digia Finland Ltd as software supplier of national income register. The trading in the shares of Digia Oyj was afterwards suspended until the company was able to disclose a company announcement regarding the decision. Prior to the trading halt, the price of company’s share had risen by 7.8 per cent and the trading volume was approximately 30 times higher than the previous trading hour. In the company announcement on October 14, 2016, Digia Oyj stated that “the project is very important for Digia” and “the overall cost for a 15‐year contract period is approximately EUR 90 million, of which Digia Oyj accounts for approximately EUR 60 million.” The significance of the project was also highlighted in the company’s interim report on October 28, 2016. The Disciplinary Committee assessed if Digia Oyj had breached the procedures on inside information required by the Rulebook when participating in the public procurement process of the national income register and when it received information on the selection of the software supplier for the Finnish Tax Administration. On October 14, 2016 at 12:08 EET, Digia Oyj was informed that the Finnish Tax Administration had chosen the company as the contract partner in the public procurement process.
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