Reporting Transactions In Which More Than One ICEX Member Participates

On 30 September of this year, a dispute arose between ICEX members as to the interpretation of provisions of the NOREX Member Rules concerning trade reporting in the ICEX trading system. Put briefly, the circumstances of the case were such that on the morning of 30 September, Landsbanki Íslands hf. reported a transaction involving 5,944,495,481 shares of Burðarás hf. Following this, Straumur-Burðarás Investment Bank informed ICEX that the Bank was of the opinion that it should have been responsible for reporting a transaction involving 3,004,095,332 of these shares. ICEX asked the parties to reach an agreement on the matter before the close of trading on 30 September, and also gave them an opportunity to settle the matter following the close of trading on the said day, but the parties failed to reach an agreement on a solution.

According to Section 5.6.1 of the NOREX Member Rules, an ICEX Member must report all manual trades in which it has participated. According to Section 5.6.2 of the same Rules, a Member shall be deemed to have participated in a manual trade where the Member, on its own account or on behalf of a third party, takes an active part in reaching the agreement containing the terms and conditions governing the trade. According to Section 5.6.6, if two ICEX Members are involved in a manual trade, both shall submit a trade report. According to Section 5.6.7, in the event of a lack of concurrence between two Members' trade reports, the Members must immediately investigate the cause of the error and replace the erroneous report with a new report.

ICEX is of the opinion that the above-mentioned provisions require members to consult on reporting of trades with other ICEX members if they are aware that the party concerned has also been involved in a manual trade. Failure to do so increases the probability of incorrect reporting of transaction amounts in listed securities. In the case in question, ICEX is of the opinion that both ICEX Members concerned were involved in a manual trade of 3,004,095,332 shares in Burðarás hf. In accordance with Section 5.6.6 both parties were obliged to report the trade and their participation in the trade should be equal.

ICEX has thus decided to alter its statistics on the turnover share of ICEX members, transferring a trade in 1,502,047,666 shares of Burðarás hf. from Landsbanki Íslands hf. to Straumur-Burðarás Investment Bank Ltd. Work is underway to change ICEX databases to reflect this change.