OMX Nordic Exchange Iceland (OMX ICE) has decided to reprimand FL Group hf. publicly in relation to two events where the company is found to have infringed provisions of the Rules for Issuers of Financial Instruments Listed on OMX ICE. The issuer, FL Group hf., is considered to have been in breach of provisions 2.1.2, 2.1.5 and 2.2.1 of the Rules by the following conduct. Notification by FL Group hf. on 30 November 2007 OMX ICE has decided to reprimand FL Group hf. publicly for the infringements outlined below of provisions 2.1.5 and 2.2.1 of the Rules for Issuers of Financial Instruments Listed on OMX ICE. Circumstances of the case: On 30 November 2007 at 09:45hrs FL Group hf. issued a notification through OMX ICE's news distribution service stating that the company had sold the largest part of its holding in AMR, the parent company of American Airlines. On the previous day, the company's share price had risen substantially, or by 3.8%. On 12 December 2007, OMX ICE requested explanations from the company regarding the time at which the sale of the AMR shares had been agreed, pointing out that this did not refer to the clearing and settlement of the transaction. The company's explanations were received on 21 December 2007. Provisions of the Rules for Issuers of Financial Instruments Listed on OMX ICE: Provision 2.2.1 of the Rules for Issuers of Financial Instruments Listed on OMX Nordic Exchange Iceland stipulates that a company must make every effort to make public without delay previously unpublished information on decisions or events which it knew or should have known would have a significant impact on the market price of its shares. In addition, provision 2.1.5 states that all information covered by the Rules shall be made public immediately or as quickly as possible. Conclusion: FL Group hf. entered into an agreement with OMX ICE on the admission to trading of its shares. The company thereby undertook to comply with OMX ICE rules on information disclosure. As stated above, an issuer is required to make public without delay all information that may have a significant impact on the market price of its shares. This duty of disclosure of FL Group hf. must be regarded to have been invoked when the company made the decision to sell the said shares in AMR, which thereby requires the company to communicate the notification on its decision immediately once the decision had been made. With reference to price movements in the company's shares in 29 November and their timing, the deduction can be made that the divestment in question had a significant impact on the market price of the company's shares, which rose by 3.8% on that day, cf. provision 2.2.1 of the Rules for Issuers of Financial Instruments Listed on OMX ICE. When assessing available investment options, investors clearly consider price movements in companies' underlying assets. Therefore, it should have been clear to the company that the said decision to sell the stake in AMR had a significant impact on the company's share price. Notification by FL Group hf. on 15 January 2007 OMX ICE has decided to reprimand FL Group hf. publicly for the infringements outlined below of provisions 2.1.2, 2.1.5 and 2.2.1 of the Rules for Issuers of Financial Instruments Listed on OMX ICE. Circumstances of the case: The circumstances of the case are that on 15 January 2008 FL Group hf. issued a notification to the effect that the company had sold a part of its holding in Commerzbank. The notification stated that the company had reduced its stake in Commerzbank and that, in light of a drop in the bank's share prices in the preceding days, the company had decided to disclose its holding in the bank, which stood at 2.1% on 15 January 2008. According to the notification, the stake had stood at approximately 2.9% at year-end, down from 4.3% at the end of the third quarter. On 16 January, OMX ICE requested information as to when the divestment of the company's stake in Commerzbank took place. A summary of transactions in Commerzbank shares was received on 30 January 2008, covering the period 20 November 2007 to 22 January 2008. According to the summary, the company began to divest its shares in Commerzbank on 20 November, having held a stake totalling 4.3% in Commerzbank up to that date. OMX ICE requested explanations from the company in a letter dated 8 May 2008. Explanations were sought as to why the company had not disclosed information on the sale of holdings in Commerzbank in accordance with provisions 2.2.1, 2.1.2 and 2.1.5 of the Rules for Issuers of Financial Instruments Listed on OMX ICE. These provisions place an obligation on an issuer of shares to make public without delay all previously unpublished information that may have a significant impact on the market price of the company's shares. FL Group hf. did not issue a notification until 15 January 2008, having during the period 20 November 2007 to 15 January 2008 sold a stake in excess of 20% of the company's market capitalisation. OMX requested, in particular, information as to why consistency was not maintained in the company's information disclosure, i.e. why the issuer made public the company's acquisition of an ISK 16.4 billion stake in Commerzbank on 26 September 2007 (increasing its holding from 3.24% to 4.25% of Commerzbank's total share capital) while omitting to disclose the sale of shares in Commerzbank until 15 January 2008, when 2.2% of the bank's total share capital had been sold. This divestment amounted to more than ISK 31 billion at market value and 21.7% of FL Group hf.'s total market capitalisation based on the share price on the date on which the sale was made public and 7.3% of the company's total assets at year-end. Provisions of the OMX ICE Rules: Provision 2.2.1 of the Rules for Issuers of Financial Instruments Listed on OMX ICE stipulates that a company must make every effort to make public without delay previously unpublished information on decisions or events which it knew or should have known would have a significant impact on the market price of its shares. In addition, provision 2.1.2 defines the objective of the Rules as ensuring that investors have, at all times, access to the latest information necessary to form an opinion of available investment options. The management of the issuer concerned must thus always make every effort to make public any information they feel could have a significant impact on the market price of its financial instruments. Furthermore, provision 2.1.5 states that all information covered by the Rules shall be made public immediately or as quickly as possible. Conclusion: FL Group hf. entered into an agreement with OMX ICE on the admission to trading of its shares. The company thereby undertook to comply with OMX ICE rules on information disclosure. As stated above, an issuer is required to make public without delay all information that may have a significant impact on the market price of its shares. The requirement must also be made that the issuer ensures consistency in its assessment of what information may have a significant impact on the market price of its shares. As previously stated, FL Group hf. started to divest its stake in Commerzbank on 20 November 2007, until which date the company held a stake totalling 4.3% in Commerzbank. On 15 January 2008, the company made public its sale of a stake of more than 2.2% in Commerzbank, retaining a holding of 2.1% after the sale. According to the summary of FL Group hf.'s transactions in Commerzbank shares during the period 20 November 2007 to 22 January 2008, the divestment of this 2.2% stake in Commerzbank took place in several transactions during the period. This stake was worth 21.7% of FL Group hf.'s total market capitalisation based on the date when the sale was made public and 7.3% of the company's total assets at year-end. While deciding when to make public information on a transaction carried out in several stages can be difficult, the divestment must be regarded as comprising such a large part of the company's total assets and market capitalisation that the company's management should have known that information pertaining thereto could have had a significant impact on the market price of shares in FL Group hf., cf. provisions 2.1.2 and 2.2.1 of the Rules for Issuers of Financial Instruments Listed on OMX ICE. Having due regard to the proportions in question, investor interests would clearly have been best served by publicly disclosing the company's divestment of its shares in Commerzbank. By failing to make public immediately information which could have had a significant impact on the market price of the company's shares the company has breached provisions 2.1.2, 2.1.5 and 2.2.1 of the Rules for Issuers of Financial Instruments Listed on OMX ICE. Decision to issue public reprimand The decision to issue a public reprimand for the infringements set out above is based on an agreement between FL Group hf. and OMX Nordic Exchange Iceland on the admission to trading of the company's shares on OMX ICE, cf. provision 8.3 of the Rules for Issuers of Financial Instruments Listed on OMX Nordic Exchange Iceland, point 3 of which states, inter alia, that, in the event of an issuer's non-compliance with the Rules, OMX ICE may make a public announcement concerning the case in question.