FILE PHOTO: A view of the exterior of the Nasdaq market site in the Manhattan borough of New York City, U.S., October 24, 2016. REUTERS/Shannon Stapleton
February 16, 2021
By Nora Buli
OSLO (Reuters) – Nasdaq Clearing has appealed a fine from Sweden’s financial supervisory authority over deficiencies uncovered in the wake of a trader’s default in 2018, the Nasdaq subsidiary said on Tuesday.
The financial watchdog on Jan. 27 issued a warning and a 300 million Swedish crowns ($36.19 million) administrative fine to Nasdaq Clearing for insufficient follow-up of memberships, miscalculations of trading margins and over its risk management.
Nasdaq Clearing said in a statement it had decided to appeal the decision as it disagreed with several of the fundamental assessments that underpinned the decision as well as its conclusions.
“Fundamentally, it is our belief that while the member default showed that improvements could be made, it also showed that our system worked and that the security walls and the default waterfall were sufficiently robust, even in such a stressful and highly unlikely event,” it said.
Nasdaq Clearing said the matter was now the subject of an appeals process at the Stockholm administrative court and that it would refrain from further comments at this stage.
Following the default, Nasdaq had launched a comprehensive programme to strengthen its resilience and robustness, it said last month.
The trader default followed big fluctuations in market spreads, when power prices in the Nordic region – which depends on hydroelectric power – fell amid heavy rain while German prices spiked along with the cost of carbon, Nasdaq said at the time.
(Reporting by Nora Buli, editing by Gwladys Fouche and Jane Merriman)