Guidelines - violation charge related to periodic financial reporting

Pursuant to the Norwegian Securities Trading Act (STA) section 15-1 paragraph (3), Finanstilsynet oversees the periodic financial reporting of issuers of listed securities. The supervision also comprises overseeing the public disclosure of the financial reports within the deadlines.

Pursuant to the Norwegian Securities Trading Act section 5-5 paragraph (1), “the annual financial report shall be made public at the latest four months after the end of each financial year”. The requirement to publish the half-yearly financial report and the quarterly report by share issuers, is as soon as possible after the end of the relevant period, but at the latest two months after, cf STA section 5-6 paragraph (1) and the Securities Trading Regulation section 5-5 paragraph (5).

The deadline for publication is midnight on the last day of the actual month the time limit expires. As from the half-yearly report for 2009, the following guidelines for making the periodic financial information public apply:

Deadlines

• The deadline is the last day of the month in question at the latest, and expires at midnight that day.
• If the last day of the month in question is a Saturday, the deadline expires at midnight on that Saturday.
• If the last day of the month in question is a Sunday or a Norwegian public holiday, the deadline for publication will be extended until midnight on the following day. If for example 30 April is a Sunday, the deadline will expire 2 May at midnight, as 1 May is a public holiday in Norway.

Violation charges

Pursuant to STA 17-4 second paragraph, Finanstilsynet may impose a violation charge on a listed company “…whose financial reporting is not in conformity with law or regulation, where the violation was committed wilfully or through negligence”.

The deadlines for publication of periodic financial reports are absolute, and will normally be sanctioned from the first minute. However, Finanstilsynet will make an assessment on a case by case basis. Finanstilsynet has no power to allow exemptions from the deadlines.

Principles for measuring violation charges

• For issuers of shares and primary capital certificates, the violation charge will be linked to the market value of the company as of 1 January the year the financial report is to be publicly disclosed. The violation charge will normally be between NOK 100,000 and NOK 1,000,000.
• For issuers of interest-bearing-instruments, the violation charge will be linked to the outstanding amount of the loan issue as of 1 January the year the financial report is to be publicly disclosed. The violation charge will normally be between NOK 4,000 and NOK 40,000 per loan issue, and up to NOK 400,000 per issuer.
• In severe cases, Kredittilsynet will consider increasing the amount of the violation charges. Relevant elements may be the scale and the affects of the violation, repeated violations as well as the degree of guilt found.

Suspension

Pursuant to STA section 15-7 paragraph (7) and The Regulated Market Act section 25 paragraph (3), Finanstilsynet has the power to suspend financial instruments from trading.