Committee's decision on Danske Bank A/S

On 20 December 2022, the Listing and Surveillance Committee of Nasdaq Tallinn
decided to give a warning to Danske Bank A/S for non-compliance of Nasdaq
Tallinn rules and regulations chapter Member Rules clauses 3.1.2 and 5.8.1.,
chapter Rules for Clearing and Settlement of Stock Exchange Transactions
clauses 1.2 and 1.6. 

According to clause 3.1.2. of Member Rules, the Nasdaq rules and regulations
shall be binding on Members commencing on the date on which membership is
granted provided that the Member has entered into the Membership Agreement with
the Exchange. Clause 5.8.1. of Member Rules states 2-day settlement schedule
(T+2) for the delivery to exchange transactions. 

According to clause 1.2. of Rules for Clearing and Settlement of Stock Exchange
Transactions, the settlement of exchange transactions shall mean execution of
obligations arising from exchange transactions by transfers of securities and
money, according to the conditions of the exchange transactions executed by the
Members on the basis of the settlement details submitted by the Members to the
registrar the Estonian Register of Securities (Depository) and the execution of
operations by the Exchange necessary for clearing and settling the
transactions. Clause 1.6. states that the clearing and settlement of exchange
transactions shall be effected on the settlement date of the transaction (S).
The settlement date of an exchange transaction shall be determined according to
the rules for the use of the trading system. In case of automatic order
matching, the settlement date of the transaction shall be the second exchange
day (T+2) following the transaction date (T). 

In October 2022, a total of 65 transactions entered by Danske Bank A/S were
matched in the trading system with shares traded on the Exchange in the total
settlement amount of 21,009.01 euros, with settlement dates in the period from
October 6 to October 28, 2022. Of these transactions, 44 were settled on
November 4 and 21 were settled on November 7. According to Danske Bank A/S'
explanations, the transmission of the instructions necessary for the settlement
of transactions was delayed due to the assessment of the need for the possible
application of a financial sanction, but Danske Bank A/S did not inform the
settlement agent and the Exchange about the delay. 

The Committee found that Danske Bank A/S has not fulfilled the obligation
arising from the rules and regulations to settle exchange transactions within
the settlement cycle T+2, i.e. was not compliant with rules and regulations
chapter Member Rules clauses 3.1.2 and 5.8.1., chapter Rules for Clearing and
Settlement of Stock Exchange Transactions clauses 1.2 and 1.6. While the delay
on the part of Danske Bank A/S regarding the assessment of the possible
application of the financial sanction in the light of many new sanctions may be
understandable, the delay in notifying the settlement agent and the Exchange is
not acceptable. 

In the opinion of the Committee, the non-compliance with obligations has been
proven by the circumstances identified during the supervisory procedure carried
out by the Exchange, the non-compliance is not fully excusable, and there are
sufficient grounds for the application of legal remedies under the Exchange's
competence. Therefore, based on all the circumstances, including explanations
and confirmation from Danske Bank A/S to supplement its internal processes, the
Committee limited itself to issuing a warning to the Member. 



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