Nasdaq Clearing Aktiebolag receives a warning and an administrative fine

2021-01-27 | Sanctions EMIR Markets

Nasdaq Clearing Aktiebolag is receiving a warning and must pay an administrative fine of SEK 300 million.

Following the declaration of default for one of Nasdaq Clearing's clearing members on 11 September 2018, Finansinspektionen investigated Nasdaq Clearing's handling of the default situation and how the firm complied with the organisational requirements, general conduct of business rules and prudence rules set out in Regulation (EU) No. 648/2012 on OTC derivatives, central counterparties and trade repositories (EMIR).

FI's investigation shows that Nasdaq Clearing has had serious deficiencies in its operations. Nasdaq Clearing has also been in violation of the investment prohibition in EMIR by investing its own funds in derivative contracts much too long after the default event. Nasdaq Clearing has also issued insufficient margin calls.

Together with other deficiencies that are presented in this decision, these breaches have created unacceptable risks in Nasdaq Clearing's operations, which could have had a very serious impact on the financial system.

Nasdaq Clearing has taken measures to rectify some of these deficiencies. FI has determined that there is no reason to assume anything other than that the breaches will not be repeated and it is sufficient to issue Nasdaq Clearing a warning and a significant administrative fine.

To reflect the serious nature of the deficiencies, Finansinspektionen considered in particular that the firm is systemically important and part of a large group.

Appeal to the Administrative Court

Nasdaq Clearing Aktiebolag has appealed FI's decision to the Administrative Court.

Ruling by the Administrative Court

The Administrative Court rejected the appeal.

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