SwedSec reprimands licensee working for asset manager

SwedSec Licensiering, the subsidiary of the Swedish Securities Dealers Association responsible for licensing securities dealers, has issued a reprimand against an un-named person working for an asset manager on a charge of breaking rules covering share dealing on the Nasdaq OMX First North pan-Nordic exchange.

The licensee broke internal rules prohibiting staff from trading in the parent company’s shares during certain periods of the year.

SwedSec does not name either the licensee or his employer. However, according to Nasdaq OMX, there are some 14 financial services companies that fit the description provided by SwedSec.

Fund companies on First North
 Aktiv Formue Forvaltning Stratego A/S
 Allokton AB
 Bore Tech AB
 Capilon AB
 Catella AB
 Danventures A/S
 EgnsINVEST Ejd. Tyskland A/S
 European Wind Investment A/S
 Insplanet AB
 Nischer AB
 Russian Real Estate Inv. Company AB
 SAV-Rahoitus Oyj
 Victoria Park AB
 Vinovo AB

Rules for listing on First North are relaxed compared to the main markets operated for the Nordic exchanges by Nasdaq OMX. It is also not defined as a regulated market under EU MiFID rules. The market chiefly targets young growth companies seeking capital. 

According to a published account of the ruling by SwedSec’s disciplinary board, the licensee claimed that he sold shares in his employer’s company by mistake, that he discovered the mistake himself and informed the company’s compliance officer about the error within 20 minutes of the activity taking place, and that the mistake was the result of a heavy work load at the time.

The licensee claimed to have checked a rule about owning shares for a minimum period of 30 days, but forgot to implement a relatively new rule prohibiting dealing in shares of his employer.

This information offered to SwedSec’s disciplinary board was not contradicted by any other party. The board found that the licensee clearly broke internal company rules, and as a result was deserving of an official sanction. However, because of the circumstances surrounding the event, including the fact that the licensee himself immediately made the company’s compliance officer aware of the problem, the board decided that the sanction should result in a reprimand rather than harsher punishment.

SwedSec’s licensing system means that there is no central database of disciplinary action taken against individual licensees. However, the disciplinary board keeps a record of decisions made, through which it can reference earlier actions in respect of future decisions.

When a licensee stops working for a company that requires SwedSec registration, then that company must fill in a form that states whether or not the licensee’s departure is linked in any way to rule breaches.

ABOUT THE AUTHOR
Jonathan Boyd
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