The Sanction Commission of SIX Swiss Exchange has fined Liechtensteinische Landesbank AG CHF 200,000 for breaching the rules on disclosure of management transactions in a negligent manner.
The provisions in relation to the disclosure of management transactions require that issuers properly instruct persons who are subject to reporting requirements about their obligations. A member of the Board of Directors newly elected in 2013 was first made aware of the obligations in relation to the reporting of management transactions slightly more than three weeks after the election. The Sanction Commission concluded that the instruction had thus been provided too late.
Furthermore, the instruction provided was not comprehensive enough. In this regard, the company argued that the existing knowledge of the Board member in question from earlier roles and the use of its reporting system exempted it from providing a full instruction. The Sanction Commission generally rated the reporting system as appropriate, but nevertheless decided that the specific instruction provided was insufficient despite the reporting system and existing prior knowledge.
Issuers are required to disclose management transactions that are reported to them to SIX Exchange Regulation within three trading days. The Sanction Commission concluded that the management transaction was published with a delay of 42 trading days. However, the data published with a delay did not contain any information objectively analyzable by investors. Therefore, the present violation was judged as moderate overall.
In favor of the company, it was recognized that the issuer immediately contacted SIX Exchange Regulation as soon as the delay had been identified and that no sanctions had been issued against the issuer during the prior three years. It was also viewed as positive that the company has since implemented measures aimed at improving the instruction process.
In determining the sanction, the Sanction Commission took account of the fact that this case represents a moderate violation that was committed in a negligent manner.
Information regarding obligations to disclose management transactions
The disclosure of management transactions promotes the provision of information to investors and contributes to the prevention and prosecution of market abuse.
Issuers with a primary listing on SIX Swiss Exchange have a number of obligations in relation to the disclosure of management transactions which they are required to fulfill. Issuers must ensure, for example, that members of the Board of Directors and Executive Board notify the issuer of any transactions involving the issuer's equity securities, or related financial instruments, within two trading days. Issuers are also required to report any management transactions notified to them to SIX Exchange Regulation and to publish such information within three trading days.
Further information on the requirements for disclosing management transactions is available at: http://www.six-exchange-regulation.com/obligations/management_transactions_en.html
Published notifications of management transactions are available on the SIX Exchange Regulation website at:
http://www.six-exchange-regulation.com/obligations/management_transactions/notifications_en.html