The Surveillance department of Nasdaq Iceland 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 the Nasdaq Nordic 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 party to preceedings has not been able to provide an acceptable explanation for its actions and the violation is not considered minor, proceeding may be initiated in the Nasdaq Iceland Disciplinary Committee ("the Committee“). This document describes how such disciplinary proceedings are performed.
A Disciplinary Proceeding
If a decision is made to institute proceedings in the Disciplinary Committee the first step will be for the head of Legal, or a person authorized by him, to prepare and present the matters to be handled by the Committee as well as institute the proceedings. The party to preceedings will receive a copy of all relevant documents which have been sent to the Committee. Such documents include an outline of the course of events, as relevant for the matter and according to the understanding of the Exchange, with referrals to the relevant rules and a statement explaining why the preliminary assessment of the Exchange is that the party has violated the rules.
The party to preceedings shall be provided with the possibility to express its views regarding all material issues which come up in connection with the handling of the matter which the Party is related to. Such views shall be sent within a specific deadline. If such a deadline is perceived as unreasonable for some reason the party could contact Nasdaq Iceland to discuss alternatives.
Taking into account the written evidence available, the Disciplinary Committee can decide conclude a matter without taking action or to decide upon such sanctions that are set forth in the rules applicable for issuers, members and certified advisers. Such sanctions include non-public reprimands, public reprimands, monetary fines, removals from trading, termination of membership or trader authorization and termination of certified adviser status.
When the Disciplinary Committee has reached a decision, it will be sent to Nasdaq Iceland in written form. Nasdaq Iceland will without undue delay forward it to the party to preceedings and will also inform the party of the timing of an announcement, if relevant. This normally means that the issuer or member will be informed of the decision one day before its publication. Announcements of decisions taken by the Disciplinary Committee are handled by the Exchange and takes place by dissemination of a market notice.
The Disciplinary Committee
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. It‘s decisions cannot be appealed.
The Exchange’s Board of Directors shall appoint no less than three and no more than five individuals to be members of the Disciplinary Committee, at least two of whom must have a good command of the securities markets. The Chairman and the Vice-Chairman of the Disciplinary Committee shall be appointed by the Exchange’s Board of Directors and both shall preferably have a Master degree in Law.
Eyvindur G. Gunnarsson, professor in the Faculty of Law of the University of Iceland (chairman)
Katrín Ólafsdóttir, PhD in economics and assistant professor at Reykjavík University
Arnaldur Hjartarson, specialist of the Law Institute of the University of Iceland