Securities market conduct

Supervision, analysis and monitoring

Monitoring and reporting

Most of the cases followed up by Finanstilsynet in 2024 on rules of conduct in the securities market were reported by investment firms, foreign authorities and investors. Many cases were also referred by Oslo Børs or initiated by Finanstilsynet itself in response to market events. Finanstilsynet’s own monitoring systems triggered a large number of alarms that led to further investigation.     

Finanstilsynet received 174 reports from investment firms and marketplaces under an obligation to report transactions giving rise to suspicion of insider dealing or market manipulation. In addition, Finanstilsynet received 62 reports from foreign supervisory authorities on insider dealing or market manipulation. 

Finanstilsynet has developed new monitoring processes to ensure that the rules on the mandatory disclosure obligation and notification obligation for primary insiders are observed. The transaction reporting system (TRS) covers all EEA states and includes reports on executed transactions in financial instruments from investment firms and trading venues. TRS is an important basis for the supervision of securities markets and is used to detect market abuse etc.     

After taking its newly developed monitoring systems and TRS data into use, Finanstilsynet imposed two administrative fines for violation of the disclosure requirement for large shareholdings and six fines for violation of the notification requirement for primary insiders etc. in 2024. 

Short sales

According to the Short Selling Regulation, investors holding short positions in shares or government debt that exceed set thresholds shall notify these to the supervisory authority. Short positions are reported and published in Finanstilsynet’s publicly available Short Sale Register, which has been established in accordance with EU short selling regulations. Net short positions above or equal to 0.5 per cent of share capital are publicly available information. Other notified positions are available only to Finanstilsynet and the European Securities and Markets Authority (ESMA). Finanstilsynet’s website on short sales contains information that is relevant to many and is frequently visited.   

Finanstilsynet imposed two administrative fines for violation of the Short Selling Regulation in 2024. In addition to the administrative fines, several undertakings were also warned of minor violations.

Insider dealing and market manipulation

Insider dealing

Finanstilsynet reported 14 cases of suspected insider dealing and/or breach of the ban on unlawful disclosure of inside information to the prosecuting authority in 2024.   

For the first time since the EU Market Abuse Regulation (MAR) was implemented in Norwegian law, Finanstilsynet decided in 2024 to confiscate the gain achieved by a firm after violating the prohibition on insider dealing (administrative confiscation). Finanstilsynet concluded that the firm had violated the prohibition on insider dealing by withdrawing a buy order immediately after receiving inside information about an imminent sale of a large stake (block sale) in the same share. Finanstilsynet did not consider the fact that it was the firm’s broker that initiated the withdrawal of the order to be of decisive importance. The confiscated gain was estimated at NOK 276 900.

Market manipulation

2024 was the first year Finanstilsynet imposed administrative fines for so-called small-volume trading. Eight private individuals were fined for violating the prohibition on market manipulation after completing small purchase and sale transactions. However, Finanstilsynet was not able to identify any real interest in buying or selling. In several of the transactions, the trading costs (brokerage commission) were higher than or accounted for a significant proportion of the trade amount. Many of the trades resulted in significant price changes. The small-volume trading also affected benchmarks for the shares in question, such as the opening price, the highest daily price and the closing price. Finanstilsynet concluded that this trading activity misled the market about the price, supply of or demand for the shares. The fines ranged from NOK 100 000 to NOK 250 000. Two of the decisions have been appealed to the Ministry of Finance.

In 2024, Finanstilsynet also imposed an administrative fine for market manipulation on a person who had published an article containing a buy recommendation for a share. It was Finanstilsynet’s assumption that the article, which was published on a website, resulted in a significant increase in the share price. Prior to publishing the article, the person had traded in the same share. After publishing the article, the person sold the shares, recording a significant gain. In Finanstilsynet’s opinion, parts of the recommendation were biased. When considering whether this could be characterised as market manipulation, Finanstilsynet emphasised that the article was published prior to the share purchase and the subsequent sale of the shares. It concluded that this was in violation of the prohibition on market manipulation and imposed an administrative fine of NOK 300 000 on the person.

Regulatory development

On commission from the Ministry of Finance, Finanstilsynet prepared a draft consultation document in 2024 on the introduction of the rules in the EU ‘Listing Act’ into Norwegian law. The rules aim to simplify and alleviate the MAR requirements concerning the ongoing disclosure obligation and delayed disclosure, insider lists and primary insiders’ notification obligation. 

In 2024, Finanstilsynet proposed to examine whether violation of the rules on insider dealing can be sanctioned with administrative fines in the same way as other rules on market abuse. The initiative was supported by Økokrim (the Norwegian National Authority for Investigation
and Prosecution of Economic and Environmental Crime). Based on the proposal, Finanstilsynet has been commissioned by the Ministry of Finance to examine the use of administrative sanctions in cases where the prohibition on insider dealing is violated.