Market surveillance

For a securities market to function well, it must have high standards of infrastructure and control of compliance. Oslo Børs commits sizeable resources to monitoring market activity and issuers’ compliance with the statutory requirements to which they are subject as a result of having a financial instrument admitted to trading on a trading venue. These requirements include issuers’ obligations in relation to reporting, the disclosure of information, and the prohibition against market abuse. These monitoring activities are the primary responsibility of the Market Surveillance Department.

It is essential for confidence in the integrity of the marketplace that the process of price formation for listed securities is carried out properly and correctly, and that everyone in the market has the same information. If circumstances occur that create uncertainty over the market's pricing of a particular security, it is the responsibility of Market Surveillance to investigate such incidents. In this kind of situation, there are a number of different tools that the Market Surveillance Department can implement, and it also reports any irregularities or breaches of the relevant legislation to the official authorities.

Investigation and reporting to the authorities

Oslo Børs has a legal duty to report suspicious matters to Finanstilsynet (the Financial Supervisory Authority of Norway). In addition, Oslo Børs and Finanstilsynet have established formal guidelines for their collaboration in this area. If Oslo Børs identifies a possible breach of the rules, it immediately initiates a more detailed investigation. Such investigations may result in Oslo Børs imposing sanctions on members or issuer companies, or it may refer cases to the authorities. In cases where Oslo Børs suspects a breach of legislation and regulations and its initial investigation does not resolve its suspicions, it will apply a low threshold of concern to report the matter to Finanstilsynet.

Market manipulation and insider dealing

dentifying market manipulation and insider dealing represent one of the most important duties of the Market Surveillance Department, and it commits considerable resources to this task. This involves the use of a number of advanced systems and well-established investigation techniques. In recent years cases relating to market manipulation and insider dealing have been routinely pursued through the courts, and most of these cases were first reported by Oslo Børs. Other rules of conduct with which Finanstilsynet monitors compliance are also subject to surveillance by Oslo Børs. For example, Oslo Børs reports to Finanstilsynet on a continual basis all breaches of the duty to disclose large shareholdings as well as all breaches by primary insiders of their duty to report their trades.

Monitoring issuers’ compliance with their obligations

Oslo Børs continuously carries out monitoring activities to ensure that issuers comply with the statutory requirements to which they are subject as a result of having a financial instrument admitted to trading on one of the Oslo Børs marketplaces. The key aspects of these requirements have been incorporated into the Continuing obligations issued by Oslo Børs for issuers admitted to Oslo Børs, Oslo Axess and Merkur Market. Complying with the relevant continuing obligations enables issuers to demonstrate that they comply with key official requirements in relation to reporting and the disclosure of information. (A complete overview of the rules that apply to issuers admitted to Oslo Børs’ various marketplaces is available here: The Issuer Rules)

Oslo Børs monitors issuers’ compliance with their obligations using established systems and methods developed specifically for the purpose. This work is conducted in a formalised manner through the use of procedures that include continually monitoring the market and price formation, close dialogue with issuer companies, and reviewing all stock exchange announcements published by issuers as well as other media coverage. Oslo Børs also monitors issuers’ compliance with their OAM reporting obligations, which require all information subject to the duty of disclosure to be stored in Newsweb no later than at the time the information is publicly disclosed. Oslo Børs additionally receives information from external sources that it assesses on a continual basis. All incidents involving a suspected breach of the issuer rules are logged, documented and reviewed by the Market Surveillance Department.

Oslo Børs has delegated authority to monitor the continuing duty of disclosure that applies to issuers with financial instruments listed on a trading facility as defined by MiFID (Directive 2014/65/EU). Significant breaches of this duty can lead to issuers having to pay violation charges. In such processes, issuers are always made aware that the imposition of a violation charge is being considered and what the basis for this is. Issuers are also given the opportunity to put forward their views before Oslo Børs takes its decision.

Where a violation charge is imposed, this decision and the basis for it are made public, and the issuer is able to appeal the decision to the Stock Exchange Appeals Committee. Less serious breaches normally result in issuers being given a warning. In many cases such warnings will be published in Oslo Børs’ Decisions and Statements documents as guidance for other market participants.

Courses and training

As part of its efforts to ensure issuers are familiar with and comply with all relevant regulations, Oslo Børs offers a range of courses targeted at issuers with financial instruments listed on one of its market places. These courses include courses on issuers’ continuing obligations, a stock exchange course for members of boards, and the option of customised courses adapted to the needs/requirements of the specific issuer. Some elements of these courses are mandatory

International collaboration with ISG

With 53 members, ISG – the Intermarket Surveillance Group – is an international network of exchanges from around the world, including Oslo Børs. The organisation exchanges information on matters such as trends and developments that its members experience in their markets, and subject to certain requirements members can also exchange confidential information and assist each other when investigating cases with cross-border involvement.

 

 

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Market surveillance