Tallinn, Estonia, 2017-04-28 16:45 CEST (GLOBE NEWSWIRE) -- On April 27, 2017, the Listing and Surveillance Committee of Nasdaq Tallinn decided to impose a fine in the amount of 2 000 euros to AS Norvik Banka for violation of Nasdaq Tallinn rules and regulations chapter Member Rules clause 4.2.6, and Rules for Clearing And Settlement of Stock Exchange Transactions clauses 2.1 and 2.4.
Background:
According to Member Rules clause 4.2.6 a Member may participate in trading and act as a Member of the Exchange provided that it complies with all the following terms and conditions:
(i) The Member has at least two authorized Exchange Traders;
(ii) The Member has received approval for the Exchange of its technical equipment and such technical equipment has been connected to the trading system according to Clause 3.2.7;
(iii) A Member who at the same time is not a credit institution which is an account manager in the Estonian Central Depository of Securities has signed the Clearing agreement required under the section “Settlement Rules”;
(iv) The Member meets other pre-conditions for commencement of trading, trading and settlement of transactions provided in the section “Settlement Rules”.
According to Rules for Clearing And Settlement of Stock Exchange Transactions clause 2.1 a member firm, which is not a credit institution that is an ECSD account operator shall have a valid clearing agreement with a credit institution which is an ECSD account operator (hereinafter: the Clearing Agent) for clearing and settlement of exchange transactions. By agreement of the Exchange Management Board, a foreign member firm may arrange the clearing and settlement of exchange transactions through an ECSD account operator, which conforms to the requirements provided in subsection 32 (2) of the Estonian Central Register of Securities Act (hereinafter: the Foreign Clearing Agent). In such a case, the member firm need not conclude a clearing agreement with a credit institution, which is an ECSD account operator. The Exchange Management Board shall refuse to grant the above-mentioned consent if the settlement of exchange transactions by the foreign member firm has not been arranged according to the legislation of their country of seat or does not ensure the due execution of the obligations arising from exchange transactions according to the assessment of the Exchange Management Board.
According to Rules for Clearing And Settlement of Stock Exchange Transactions clause 2.4 a member firm shall be obliged to submit a data of the clearing agreement to the Exchange. Five banking days before the expiry of the clearing agreement at the latest, the member firm shall be obliged to submit a data of the new clearing agreement that shall enter into force on the day following the date of expiry of the previous clearing agreement at the latest.
AS Norvik Banka did not inform Stock Exchange about discontinuation of clearing and settlement agreement with Clearing Agent, and continued to act as Exchange Member without fulfilling necessary criterias.
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