The Surveillance department of Nasdaq Helsinki 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 Nadaq Helsinki’s website.
An investigation will be initiated if the Surveillance department finds that an issuer or a member may have breached one or several provisions of the relevant rules. If the investigation leads to the conclusion that no breach of the rules has taken place or that a breach has been significant, the matter can be finalized without further measures.
If the conclusion is that a breach of the rules 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 breach is not considered minor, a disciplinary proceeding is initiated and the case is handed over to Nasdaq Helsinki’s disciplinary committee. This page describes how such disciplinary proceeding is performed.
Cases regarding suspected misuse of insider information are forwarded directly to the Finnish FSA for further investigations. The same applies to cases regarding suspected market manipulation, but if they at the same time involve a breach of the member rules, they will be handled by Surveillance as well.
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.
The first step is that the Surveillance department based on its investigation issues a request for statement, which is sent to the company or member for comments. In the document Nasdaq Helsinki outlines the course of events, as relevant for the matter and according to the understanding of the exchange, refers to the relevant rules and states why the Surveillance department suspects that the party may have breached the rules.
The request for statement will have a dead line for the response, but if such dead line is perceived as unreasonable for some reason the party could contact Nasdaq Helsinki to request postponement.
When the Surveillance department of Nasdaq Helsinki has received the response to the request for statement, it will evaluate and decide whether the matter should be closed, additional information requested or brought forward. The Head of Surveillance is empowered to make such decisions.
If the matter is not brought forward and additional information is not requested, the Surveillance department will 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 the Nasdaq Helsinki Disciplinary Committee. The issuer or member will in such event be informed as soon as possible by telephone and in writing of the decision and the procedural steps to follow. The exchange will also provide any documentation the issuer or member has not already received including a written invitation to and instructions for the Disciplinary Committee meeting.
The issuer or the member may submit further views on the matter prior the Disciplinary Committee meeting. As the company is invited to be present in the meeting there is also an opportunity for the company to orally submit its views to the Disciplinary Committee. The absence of the company does not prevent handling of the issue. When the parties have presented their views, the Committee members may ask questions from both parties.
The Disciplinary Committee can decide upon such sanctions that are set forth in the rules applicable for issuers and members. Such sanctions are warnings, non-public and public reprimands, monetary fines, de-listing, termination of membership and to revoke trader authorization.
When the Disciplinary Committee has reached a decision, it will be sent to Nasdaq Helsinki in written form. The secretary of the Disciplinary Committee will without undue delay forward it to the issuer or member and will also inform the party of the timing of announcement. This normally means that the issuer or member will be informed of the decision a couple of days before its publication. Decisions taken by the Disciplinary Committee will be made public when the decision is to issue a sanction.
Announcements or decisions taken by the Disciplinary Committee are handled by the exchange and takes place by dissemination of a press release in combination with publishing the decision on Nasdaq Helsinki's website.
The identity of the issuer of member will be included therein. The resolution of the statement and the main argumentations will be published. Unless special reasons exist the identity of individuals (for example exchange traders) subject to a disciplinary matter will not be included.
The Disciplinary Committee
The Disciplinary Committee is the supreme body deciding on the consequences of Surveillance actions. The Disciplinary Committee has operated as the supreme disciplinary body at the Nasdaq Helsinki since 1994.
The Disciplinary Committee is an independent body from the exchange. It shall always ensure that the issuer or member is heard before concluding a matter. Its decisions cannot be appealed.
The Board of Directors of Nasdaq Helsinki confirms the rules of the Disciplinary Committee and the rules are approved by the Finnish Ministry of Finance. The Board of Directors of Nasdaq Helsinki also appoints the Chairman and the Vice Chairman of the Disciplinary Committee, who must each have served as a judge. The Board of Directors also appoints a minimum of two and a maximum of four other members whereof at least two are required to have proper understanding of the securities market. The members have been appointed for a four-year term. The Board of directors can relieve a member of the Disciplinary Committee from his or her duties only for a particularly severe reason.
The Finnish FSA is reserved the right to state an opinion about the suitability of the members of the Disciplinary Committee before they are appointed. The rules of legal incompetence apply to the members of the Disciplinary Committee.
The current members of the Disciplinary Committee of Nasdaq Helsinki are:
Mikko Tulokas, former Supreme Court Justice (Chairman),
Risto Nuolimaa, former professor of Tampere University (Deputy Chairman),
Counselor of economics, Simo-Pekka Helander (member),
Tuula Pynnä, Supreme Court Justice (member),
Sami Torstila, Associate professor of Aalto University School of Business (member)
The Disciplinary Committee can, as governed by the applicable rules, issue fines as sanctions for certain breaches of rules. If the Committee decides upon a fine, Nasdaq Helsinki 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 Helsinki specifically to manage the funds collected as a result of sanctions and to allocate such funds.