During spring 2003, Remium managed a share-buyback program on behalf of Optimail AB. On May 8, Remium repurchased a total of 283,500 Optimail shares from three different sellers in separate lots of 90,500, 40,000 and 153,000 shares. According to the Swedish Industry and Commerce Stock Exchange Committee's rules governing the purchase and sale of a company's own shares, repurchases during a single day may not exceed 25% of the average turnover of the shares concerned during the four calendar weeks immediately preceding the week when the repurchase was effected.
In this case, this would have corresponded to approximately 1,300 Optimail shares. Exceptions may be granted for what are termed as large block transactions. A block transaction would have involved at least 250,000 Optimail shares in a single transaction. It is not permissible, as Remium did in this case, to combine three different transactions to arrive at this limit. As a result, Stockholmsbörsen's Disciplinary Committee has ordered Remium to pay a fine of SEK 100,000.
Accordingly, Remium was in breach of the Swedish Industry and Commerce Stock Exchange Committee's rules. Prior to this case, the Disciplinary Committee had not tried the matter of whether the breach of these rules by an Exchange Member constituted a breach of generally accepted practices in the securities market. The membership rules state that sanctions will be imposed if a member breaches the stipulations of the membership agreement, Swedish law or other provisions governing the members' activities on the Stock Exchange, or disregards generally accepted practices in the securities market.
The Disciplinary Committee has concluded that the Swedish Industry and Commerce Stock Exchange Committee's rules have a very strong position in the securities market and noted that several of them have been included as appendices in Stockholmsbörsen's Listing Agreement. Accordingly, sanctions may be imposed on listed companies that breach these rules. In view of this, it is natural to conclude that a breach of these rules constitutes disregard for generally accepted practices in the market even if the breach is committed by Exchange Members and even in a case such as this where an Exchange Member has acted on behalf of a customer.
Disciplinary Committee
The role of Stockholmsbörsen's Disciplinary Committee is to consider suspicions regarding whether Exchange Members or listed companies have breached the rules and regulations applying on the Exchange. If Stockholmsbörsen suspects that a member or a listed company has acted in breach of Stockholmsbörsen's rules and regulations, the matter is reported to the Disciplinary Committee. Stockholmsbörsen investigates the suspicions and pursues the matter and the Disciplinary Committee issues a ruling regarding possible sanctions. The sanctions possible for Exchange Members are a warning, a fine or termination of membership, while the sanctions possible for a listed company are a warning, a fine or delisting. The fines that may be imposed on Members range from SEK 100,000 to SEK 10,000,000. The Disciplinary Committee's Chairman and Deputy Chairman must be lawyers with experience of serving as judges. At least two of the other members of the Committee must have in-depth insight into the workings of the securities market.
Members: Supreme Court Justice Johan Munck (Chairman), Supreme Court Justice Marianne Lundius (Deputy Chairman), Madeleine Leijonhufvud (professor), Stefan Erneholm (company director) and Hans Mertzig (company director). Deputy Members: Hans Edenhammar (MBA), Claes Beyer(lawyer), Jack Junel (company director), Lars Östman (professor) and Ragnar Boman (MBA).
