The Disciplinary Committee of Nasdaq Iceland („the Exchange“)* has concluded that a public reprimand should be issued to the Municipality of Kópavogur due to events in which the issuer is deemed to have violated Articles of the Exchange‘s Rules for Issuers of Financial Instruments („the Rules“). The Disciplinary Committee concluded that the issuer violated Articles 4.1.2, 4.2.1, 4.1.4 og 4.1.3 of the rules in the following manner:
The Kópavogur Municipal Council’s resolution on housing matters was adopted on 14 January 2014. The resolution involved a potential increase in the Municipality’s debts by 7-9% from existing plans. In the opinion of the Disciplinary Committee the Municipality had a duty to disclose this information. The decision received media coverage in, among other things, an article published on the online newspaper site mbl.is at 22:54 hours on 14 January 2014. It was not until 13:39 hours on 15 January 2014 that the Municipality first made public an announcement on the Municipal Council meeting held on 14 January 2014, to call attention to the Municipal Council resolution on housing provision. When assessing whether information was published “without delay or as soon as possible” within the meaning of Article 4.1.4 of the Rules, the Disciplinary Committee was of the opinion that issuers should be granted certain scope to be able to assess whether the information is of a nature triggering the disclosure requirement. It was clear that the information regarding the Municipal Council’s resolution was not published until four hours after markets opened on the following day. The Disciplinary Committee found that the information was not disclosed “without delay or as soon as possible” within the meaning of the provision.
In the opinion of the Disciplinary Committee an issuer has certain scope to assess whether the information is of a nature triggering the disclosure requirement. Nonetheless, the Disciplinary Committee was of the opinion that the issuer should be required to ensure that proper procedures are in place to enable this assessment to be made within reasonable time limits.
In accordance with the foregoing, the Disciplinary Committee found that the issuer had violated Articles 4.1.2, 4.2.1 and 4.1.4 of the Rules. The Committee also found that equal treatment of investors was compromised because the Municipal Council’s housing resolution was made in an open meeting and information on the resolution was published that same day in the media, i.e. the day before the issuer made public its announcement to the same effect. Therefore, the Municipality of Kópavogur was found to have violated Article 4.1.3 of the Rules.
With reference to the above, the Disciplinary Committee found it proper to reprimand the Municipality of Kópavogur publicly for the aforesaid violations of the Exchange Rules. The decision to issue a public reprimand was made on the basis of an agreement between the issuer and the Exchange on the admission to trading of the issuer’s securities on the Exchange, cf. Article 8.3 of the Rules. Point 4 of the Article states, among other things, that in cases where an issuer is in breach of the Rules, the Exchange may make a public announcement on the case in question.
A more detailed description of the circumstances of the case and the decision by the Disciplinary Committee can be found attached.
About the Disciplinary Committee
The Disciplinary Committee of NASDAQ OMX Iceland hf. handles and decides on certain disciplinary matters as defined in the Rules for Issuers of Financial Instruments NASDAQ OMX Iceland hf., the First North Nordic Rulebook, the First North Iceland Fixed Income Rulebook and the NASDAQ OMX Nordic Member Rules.
The Disciplinary Committee, which is appointed by the Exchange‘s Board of Directors, comprises three independent experts; Eyvindur G. Gunnarsson, Professor of Law at the University of Iceland (chairman), Halldór Björnsson, Judge at the District Court of Reykjavík (deputy chairman) and Katrín Ólafsdóttir, PhD in Economics and Assistant Professor at the University of Reykjavík.
*Nasdaq Iceland is the brand name for NASDAQ OMX Iceland hf.
