Festi has concluded new market making agreements on its shares listed on the Nasdaq Iceland stock exchange. The agreements take effect as of July 1, 2023, and are indefinite with a notice period of 14 days. The company's agreement with Íslandsbanki hf. on market making has been terminated as of the same date.
The purpose of the market making agreements is to promote trading in Festi's shares in order to create market prices and price formation to take place in an efficient and transparent manner.
Festi's agreement with Arion Banki replaces an earlier agreement between the same parties as stated in announcements on 11 March 2020 and 13 September 2021. According to the agreement, the Bank will submit bid and offer quotes for shares issued by Festi in the Nasdaq Iceland trading system each trading day. If submitted offers are accepted or cancelled, the Bank shall submit such new offers as soon as possible. If an offer is accepted, the Bank shall submit such new offer within 10 minutes until the maximum amount has been reached. The amount of each offer shall be a minimum of 100,000 shares in the Company at a price determined by the Bank; however, the offer shall not be subject to a deviation of more than 3% from the last transaction price. According to the agreement, the spread between bid and offer rates shall be determined by reference to the tick size table of the Stock Exchange as it stands at any given time, in such a way that the spread will be as close as possible to 1.5% but not lower than 1.45%. However, Arion Banki shall be permitted to submit bid and sell offers with a lower price range than above, e.g., due to circumstances arising from the Stock Exchange's tick size table. If Arion Banki's trades in Festi's shares exceed the Bank's trading book, amounting to a total market value of ISK 50,000,000, within the trading day, the above obligations regarding the maximum intraday bid and offer margin shall cease. If the price change of the company's shares within the trading day is exceeds 5%, the Bank is authorized to increase the maximum spread to 3% and if the price change within the trading day is in excess of 10%, the Bank is authorized to increase the maximum spread to 4.5%.
The agreement between Festi and Landsbankinn stipulates that the Bank will, as market maker, submit daily bid and sell offers for the company's shares, amounting to at least ISK 15,000,000 at market value. Tenders shall be renewed as soon as possible, however, always within 15 minutes of their full acceptance. The maximum amount that Landsbankinn is obliged to buy or sell each day is ISK 30,000,000 at net market value, which is calculated as the difference between the Bank's accepted bid and sell quotes. If the maximum volume of the day is reached, the Bank's obligation to submit bids on the filled side shall cease until the Bank's bid has been accepted on the opposite side and the net transaction volume is again below the daily maximum. The volume-weighted maximum price spread between the Bank's bid and sell orders is determined by the 10-day volatility of Festi's share price as measured at any given time and published in Bloomberg's information system. Where 10-day volatility is less than 30%, the volume-weighted range shall not exceed 1.5%; where 10-day volatility is equal to and/or greater than 30%, the volume-weighted spread shall be 3%.
According to the foregoing, Arion Banki and Landsbankinn will act alone as market makers with Festi's shares as of Monday 3 July 2023.
For further information please contact Magnús Kr. Ingason, Chief Finance and Operations Officer at Festi, mki@festi.is
