- Advertisement -
- Advertisement -

Related

Nordnet Fined for Short-Selling Breaches

Industry Report

- Advertisement -

Stockholm (HedgeNordic) – The Swedish Financial Supervisory Authority, Finansinspektionen, has fined bank and internet broker Nordnet Bank SEK 100 million for violations related to its intraday short-selling service.

Finansinspektionen (FI) found that Nordnet offered a small group of its customers a larger selection of shortable shares through an intraday short-selling service than what is offered in the bank’s other short-selling services. This intraday service has been offered to the most active customers or customers with larger amounts of capital to invest. The Swedish financial watchdog also found widespread naked short selling, the practice of short selling shares that have neither been borrowed nor located.

“The investigation shows that the bank, when offering the service, did not control that there were enough shares available before the bank’s customers were allowed to short the shares.”

“The investigation shows that the bank, when offering the service, did not control that there were enough shares available before the bank’s customers were allowed to short the shares,” writes Finansinspektionen in an press release. “There has therefore been a considerable risk that the customers were short selling shares without coverage, so-called naked short selling, which is banned.” According to Finansinspektionen, Nordnet Bank has had deficiencies in its internal guidelines, procedures, risk management and risk assessment, as well as in its duty of care to customers. Nordnet has been issued a remark and an administrative fine of SEK 100 million.

“Nordnet has offered an inaccurate service that risks introducing shortcomings and problems to the securities market.”

The Finansinspektionen investigation identified that Nordnet had raised the issue of deficient procedures in its intraday short-selling service back in 2018, but continued to provide the service without rectifying all of the deficiencies. “Nordnet has offered an inaccurate service that risks introducing shortcomings and problems to the securities market,” says Susanna Grufman, the Deputy Director General at FI. “It is particularly notable that the violations in the service were raised within the bank earlier without it taking all the necessary measures,” she adds. “Nordnet’s actions can have a negative impact on the confidence that the market is well functioning.”

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

Latest Articles

Rising Adoption of Quantitative Investment Strategies Among Nordic Investors

From a high-level perspective, there is a clear trend of increasing adoption of quantitative investment strategies (QIS) among Nordic institutional investors, either through the...

EU Plans Stress Test for Hedge Funds and Non-Bank Firms

European regulators are planning a stress test to identify vulnerabilities beyond the traditional banking sector, focusing on less regulated entities such as hedge funds,...

ALCUR Fonder Continues Hiring Spree

Following two earlier additions this year, ALCUR Fonder continues to expand its portfolio management team at a notable pace. The Stockholm-based hedge fund boutique...

Nordic Private Markets Modernize with Data-Centric Trade Lifecycle Automation

By Anders Stengaard Jensen at Indus Valley Partner: In recent years, asset managers in Nordic countries have accelerated efforts to modernize trade operations, particularly...

Norwegian Hedge Fund Industry Sees Major Boost with New Launch

The Swedish and Danish hedge fund industries remain closely matched in size, with Denmark recently edging ahead of Sweden. While still less than half...

Atlant Funds Hold Up in May Despite Mistimed Market Call

Macroeconomic and market forecasts are notoriously difficult, even for experienced hedge fund managers. What matters more than being right, however, is ensuring that incorrect...

Allocator Interviews

In-Depth: High Yield

Voices

Request for Proposal

- Advertisement -
HedgeNordic
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.