Financial Services and Markets - Act No 34/1998 on activities of stock exchanges ad regulated OTC markets

[TRANSLATED FROM ICELANDIC]


 


CHAPTER I
General provisions
Article 1
This Act shall apply to the activities of stock exchanges and regulated over-the-counter (OTC) markets operating in Iceland.
Activities provided for in this Act may only be carried out by stock exchanges and regulated OTC markets which have been granted operating licences in accordance with this Act.

Article 2
For the purposes of this Act:
a regulated securities market: is a securities market as defined by the Act on Securities Transactions,
a stock exchange: is a market which is considered a regulated securities market, where public listing of securities and trading of them is carried out and which has been granted an operating licence, cf. Articles 3 and 10 of this Act,
a regulated OTC market: is a market which is considered a regulated securities market for securities which are not publicly listed on a stock exchange and which has been granted an operating licence, cf. Articles 3 and 31 of this Act,
securities: are securities as defined by the Act on Securities Transactions,
enterprises providing securities services: are enterprises providing securities services as defined by the Act on Securities Transactions,
public listing: is listing for public trading and price listing on a stock exchange on the basis of co-ordinated requirements for securities and their issuers which have been approved by the authorities,
a market member: is a party entitled to place orders and trade on the market concerned.

Operating licence
Article 3
The Minister of Commerce shall grant an operating licence pursuant to this Act upon receiving the opinion of the Bank Inspectorate of the Central Bank of Iceland. An application for an operating licence shall be made in writing.
The Minister's decision on an operating licence shall be notified to the applicant in writing as soon as possible and no later than six months after the Minister's receipt of a complete application. Grounds must be given for any refusal of an application by the Minister.
Operating licences may only be granted to limited-liability companies which fulfil the legal requirements for the issuing of a licence. No activities may be commenced until the share capital as referred to in Article 4 has been paid-up in full.

Article 4
An operating licence as provided for in this Act shall only be granted to parties who fulfil the following requirements:

I. Paid-up share capital shall amount to a minimum of ISK 65 million, and never less than the equivalent of ECU 730 000, based on the official reference exchange rate as currently listed. If an operating licence covers only the activities of an OTC market, however, such operating licence may be granted if paid-up share capital amounts to a minimum of one-half of this amount.
II. A satisfactory plan of operation must be available, as well as information on the proposed organisation and Rules on the trading and information system to be used for these activities, and information on the conditions for market membership and a plan listing prospective market members.
III. The Statutes for the company must include, under provisions on the purpose of the company, what may be accepted for trading and listing on the market.

In addition to the conditions provided for in the first paragraph, an operating licence for a stock exchange is conditional upon compliance with the requirements of this Act, including Article 30 on professional liability, and the submission of Rules satisfying the provisions of Article 17.
A stock exchange's operating licence must state whether it also carries out activities referred to in Chapter IX, on regulated OTC markets and their activities.

Board of Directors
Article 5
The Board of Directors of a stock exchange must consist of at least five members. The Board of an OTC market must have no less than three members.
Members of the Board of Directors must be of legal majority and of unblemished reputation, be competent to manage their own finances, and may not, during the last five years, have been convicted of an offence connected with a commercial activity which is punishable under the Criminal Code or Acts on limited-liability companies, private limited-liability companies, bookkeeping, annual accounts, bankruptcy or public levies.

Active holdings
Article 6
Individuals and legal entities must notify the Bank Inspectorate of direct or indirect holdings in a limited-liability company operating in accordance with this Act which amount to at least 10% of its share capital or voting rights, or less if such holding confers substantial influence on the management of the company, and the extent of such holdings.
Should a shareholder, who has a holding as large as that referred to in the first paragraph, exercise his rights in such a manner as is detrimental to the sound or reliable operation of the company the Minister may, upon receiving a proposal from the Bank Inspectorate, decide that such holding shall not confer voting rights or may order the company to take appropriate measures.
Should the Minister decide, pursuant to the second paragraph, that holdings shall not be entitled to voting rights, such holdings shall be excluded in calculations of the proportion of voting rights represented at shareholders' meetings.

Executive director and other personnel
Article 7
The executive director of a limited-liability company operating in accordance with this Act must, in addition, fulfil the qualifications set in the Act on Limited-liability Companies, have unblemished reputation, may not have been deprived at any time of competence to manage his own estate, and must possess extensive experience for the position, in the assessment of the Board.
The executive director and other personnel may not serve on the Board of Directors of institutions or business undertakings or take part in business operations in other respects except with the permission of its Board of Directors. Ownership of shares in an undertaking is considered to constitute participation in business operations except in the case of an insubstantial holding conferring no decisive influence on its management which may be considered primarily an investment of savings.
Rules adopted by the Board of Directors and approved by the Bank Inspectorate shall apply to securities trading of Board members and personnel of a limited-liability company which has been granted an operating licence in accordance with this Act.

Use of designations
Article 8
Only companies which have been granted an operating licence for stock exchange activities may, unless otherwise provided for by law, use for their firms the designation stock exchange (kauphöll), either standing alone or in compounds with other words, or as a further explanation of their activities.
Only companies which have been granted an operating licence for a regulated OTC market as provided for in this Act may use for their firms the designation regulated OTC market (skipulegur tilboðsmarkaður), either standing alone or in compounds with other words, or as a further explanation of their activities.

Article 9
A limited-liability company, which has been granted an operating licence pursuant to this Act, shall notify the Bank Inspectorate if it should become aware of violations against this Act and other Acts covering its operations, Regulations issued by virtue of it, or Rules which have been adopted and apply to stock exchanges or OTC markets.

CHAPTER II
The stock exchange and its purpose
Article 10
The activities of a stock exchange include operating a regulated securities market where the public listing of securities is carried out, as well as activities involving regulated trading between exchange members with securities publicly listed on:
I. a stock exchange established and registered in Iceland which has been granted an operating permit in accordance with the provisions of this Act,
II. a stock exchange or equivalent regulated securities market in the European Economic Area,
III. a stock exchange or equivalent regulated securities market with which Member States of the European Economic Area have concluded a co-operation agreement,
IV. any other comparable regulated securities market outside of the Member States of the European Economic Area which is accepted as valid by the Bank Inspectorate.

Role
Article 11
The role of a stock exchange shall be:
I. to handle the public listing of securities and set Rules on their eligibility for listing,
II. to contribute to making the listing, trading and price formation on the exchange clear and transparent and to make every effort to prevent discrimination in the trading carried out there, and to ensure the operation of a trading and information system, cf. Articles 21 to 23,
III. to set Rules on the activities of the stock exchange and on trading carried out there, as well as on other aspects which its Board considers necessary to ensure security in trading,
IV. to supervise that the issuers of listed securities and members of the stock exchange operate in accordance with the Acts, Rules and statutes which apply to it,
V. to adopt a code of conduct for the stock exchange.

Activities
Article 12
A stock exchange may carry out activities other than those described in Articles 10 and 11, provided such is in normal connection with exchange activities.
A stock exchange may also carry out parallel activities involving the provision of its services to non-members.
The Bank Inspectorate may decide that activities covered by this Article may only be carried out by a separate company.

Right of referral
Article 13
Written grounds must be given for any rejection by a stock exchange Board of an application for membership or of an application for listing of securities. The same shall apply if individual classes of securities are permanently deleted from the listings, cf. Article 18.
Any disputes concerning decisions of a stock exchange Board as referred to in the first paragraph may be referred to the Minister for review. The provisions of the Public Administration Act shall apply concerning case procedures and referrals.

CHAPTER II
Members of an exchange
Article 14
Members of a stock exchange refers to parties having the right to submit bids and accept offers for securities on a stock exchange. The following may be members of a stock exchange:

I. the Central Bank of Iceland,
II. undertakings providing securities services authorised to trade in securities for their own account,
III. legal entities authorised to be members of markets listed in Points 2 and 3 of Article 10 and authorised to provide services in this country,
IV. legal entities authorised to be members of markets listed in Point 4 of Article 10 and authorised to provide services in this country,

Application for membership and membership agreement
Article 15
The stock exchange Board shall set detailed Rules on exchange membership.
Written applications for membership must be sent to the stock exchange Board. It shall examine whether or not an applicant fulfils the requirements for membership in accordance with Article 14 and the provisions of Rules which it has adopted on membership.
A decision on an application for membership shall be notified to the applicant in writing as soon as possible and no later than three months after the receipt of a complete application by the stock exchange Board.
As soon as an application for membership to a stock exchange is accepted, this shall be announced to the Bank Inspectorate of the Central Bank of Iceland.

Article 16
Before a stock exchange member may begin trading on the exchange he must sign a written membership agreement with the stock exchange.
Should a stock exchange member repeatedly or grossly violate the conditions stipulated in the membership agreement, the stock exchange may nullify the agreement unilaterally or may apply less severe measures, such as temporary suspension of membership to the exchange. If a stock exchange takes measures pursuant to this Article it shall explain such measures to the Bank Inspectorate without delay.

CHAPTER IV,
Rules on public listing of securities on a stock exchange
Article 17
Members of a stock exchange shall apply for public listing of securities in the trading system of a stock exchange on behalf of the issuers unless the stock exchange Board has otherwise agreed. Listing is subject to the approval of the stock exchange Board, which shall set detailed Rules on securities accepted for public listing. Before the stock exchange board approves for its part Rules on public listing of securities it must refer them to the Bank Inspectorate of the Central Bank of Iceland for its opinion. Rules set by a stock exchange on public listing of securities must comply with rules deriving from international agreements to which Iceland has become a party. Rules on public listing of securities must include requirements for their acceptance for trade and listing, including:

I. the submission of the issuer's prospectus,
II. information on the size and distribution of each class, as well as other information which the Board regards as of importance for the marketability of the securities,
III. the publication, upon listing and thereafter, of information on each class of securities and its issuer which is of importance for assessment of the value of the securities in accordance with Rules set by the Board.

As a rule, an applicant shall be notified of the Board's decision on a listing no later than two months following the receipt of a complete application. The Board's decision must, however, always be announced within six months.
The Board shall ensure that the necessary information on publicly listed securities is available to the public.
Rules adopted by the stock exchange Board on public listing of securities, as well as any amendments to such Rules, must be approved by the Minister and published in Section B of the Official Journal of Iceland.

Deletion of listings and temporary suspension of trade
Article 18
A stock exchange Board must delete from its listings securities which, in its estimation, do not fulfil the requirements of this Act and Rules set by the Board or requirements for listing of securities. Furthermore, it may temporarily delete listings of individual classes of securities if it deems this advisable.
The issuer of publicly listed securities, or a stock exchange member on its behalf, may submit a written request for them to be deleted from the stock exchange listings. The stock exchange Board shall accord with this request upon receiving a written statement in support of such request. The Board may decide that the securities should not be deleted from the listings until up to one year has elapsed from the date upon which a complete statement is received by the stock exchange. The Board may also decide to publish the statement, wholly or in part.
Trading on a stock exchange may be temporarily suspended when special circumstances so require. Such temporary suspension must be notified to the Bank Inspectorate of the Central Bank of Iceland.

CHAPTER V
Take-over bids
Article 19
If a holding in a company which has publicly listed one or more classes of its shares on a stock exchange has been taken over, directly or indirectly, all the shareholders in the company shall be given the opportunity of relinquishing their holdings on comparable terms to a party who:

I. has acquired 50% of the voting rights in the company or a comparable portion of its share capital,
II. has acquired the right to appoint or remove a majority of members of the company's Board of Directors,
III. has received the right to direct the company on the basis of its Statutes or through other means by agreement with the company,
IV. has, on the basis of an agreement with other shareholders, the right to control 50 % of votes in the company.

The provisions of the first paragraph shall not apply to holdings in a company which has already been publicly listed on a stock exchange upon the entry into force of this Act, even if the circumstances listed in Points 1 to 4 of the first paragraph should apply to that holding. Should a holding in a company covered by the provisions of this paragraph decrease below the limits specified in the first paragraph after the entry into force of the Act, the Rules of the first paragraph shall, however, apply in all respects.
The stock exchange shall monitor the implementation of the provisions of the first paragraph.

Public supervision of bids
Article 20
When a take-over bid is made, a summary of the bid which includes all information on the bidder must be drawn up and made public. This must state what share issues are covered by the offer, its financial details, such as information on the basis of the price offered, terms of payment and whether payment is to be made with other securities, as well as the minimum and maximum number of shares to which the offer applies. In addition, it must state other conditions on which the offer is conditional, including the time limit given for its acceptance and the effect of the take-over on the future activities of the company, in addition to other information which may be deemed necessary to enable shareholders to acquire a satisfactory overview of the offer. The time limit for accepting a bid may not be shorter than four weeks nor longer than ten weeks.
If a bid which must be made in accordance with Article 19 does not apply to all the shares in a company, or shareholders offer to sell a bidder more of their shareholdings than his bid covers, shareholders must be treated on a non-discriminatory pro rata basis.
In other respects when a public take-over bid is made, which is not covered by the bidding obligation referred to in Article 19, for take-over of shares in a company which has one or more classes of shares listed on a stock exchange, an offer summary, as provided for in the first paragraph, may be drawn up.
A Regulation, issued by the Minister, may lay down detailed Rules on bidding obligations in accordance with Points 1 to 4 of the first paragraph of Article 19, as well as detailed Rules on the contents of an offer summary, its publication, how it concludes, by what means the offer may be rescinded and how bids intended to compete with the take-over bid may be advanced.

CHAPTER VI
The trading and information system
Article 21
A stock exchange Board shall adopt Rules on an organised trading and information system and on the settlement of trading which takes place there. Such Rules shall specify how orders are to be placed, as well as the collection and communication of information on trading in securities listed there, whether the trading takes place within the trading system or outside of it.

Article 22
Stock exchange members shall settle trading among themselves in accordance with Rules set by the Board and be responsible for their trading in listed securities.
Stock exchange members must inform the stock exchange Board of fees which they charge for handling the purchase or sale of securities listed there.

Article 23
A stock exchange member may trade in securities listed on an exchange without submitting his orders through its trading system, provided that he inform both buyers and sellers of such. Information on such trading must be forwarded to the stock exchange in the manner provided for in Rules adopted in accordance with Article 21.

CHAPTER VII
Disclosure requirements
Article 24
Issuers of securities which have been accepted for public listing on a stock exchange must make public immediately any information on any aspects of importance which could be regarded as having an effect on the price of the securities or which must be made public in accordance with the Rules set by a stock exchange Board, cf. Article 17 of this Act.
A notice, which has been received by a stock exchange which has accepted the securities for public listing and has been communicated to members of the exchange in the manner prescribed by Rules adopted by the Board, is regarded as having been made public. A stock exchange may set detailed Rules on the format of notices.

Article 25
A limited-liability company which has had its shares publicly listed on a stock exchange, should notify the exchange immediately of the total ownership by the company of its own shares, including shares in its subsidiaries, when this reaches, exceeds or drops below 5% and 10% of the total share capital in the company ??.
Notifications to a stock exchange as referred to in the first paragraph, shall state the actual share holding, how it is divided between share classes and what it was according to the most recent previous notification on a shareholding.

Flagging rules
Article 26
A shareholder in a limited-liability company, which has listed its shares on a stock exchange, should, under the conditions specified in the second paragraph, notify the stock exchange and the company immediately of voting rights or holdings in the company.
Notification as referred to in the first paragraph must be given when voting rights or the nominal price of shares reaches, exceeds, or drops below the following limits: 5%, 10%, 20%, 33, 50% and 66%.

Article 27
A Regulation issued by the Minister may provide in detail for obligations on share issuers and shareholders to provide a stock exchange with information, as well as on when exemptions from such disclosure requirements may be granted.
Detailed Rules on disclosure requirements when an issuer has had its shares accepted for listing on more than one stock exchange may also be set in a Regulation.

Compilation of statistics and provision of information
Article 28
A stock exchange Board may, on its own initiative or at the request of an outside party and in accordance with the provisions of other Acts, prepare and publish statistics and other information for the benefit of the market on the basis of data which it possesses or collects by other means on trading recorded by the stock exchange.

Trading and reporting
Article 29
Members of a market or exchange must report on agreements for taking over ownership of securities listed or traded on a stock exchange or a regulated OTC market or an equivalent regulated securities market in a state of the European Union, or in a state with which the European Union has concluded a co-operation agreement, provided their market members participated in carrying out the trading.
In a Regulation issued by the Minister provision may be made to apply reporting obligations to other parties as well, in addition to which provision may be made, under exceptional circumstances, for such reporting obligation to apply also to other unlisted securities which are bought or sold on an OTC market.
Those parties subject to reporting obligations must preserve documents concerning trading which must be accounted for and the report itself for at least five years after the submission of the report.
The Minister shall, in a Regulation, set detailed Rules on reporting obligations, including how extensive they should be, other details of the contents and where the report should be sent.
A stock exchange shall set detailed Rules on fees charged for reporting and expenses for publication.

CHAPTER VIII
Professional liability of a stock exchange
Article 30
A stock exchange must have valid professional liability insurance covering financial losses by a customer attributable to negligent activities of the exchange or its employees.
The insurance must cover damages of up to ISK 32.5 million for individual damage claims and up to ISK 65 million each insured year. These amounts shall change each month in proportion with changes to the consumer price index as inflation indexing from the date of entry into force of the Act. Detailed provisions on the scope of this insurance may be laid down in a Regulation.

CHAPTER IX
Regulated OTC markets and their activities
Article 31
The activities of a regulated OTC market include a regulated securities market where securities which are not publicly listed on a stock exchange are traded.
Securities which have not been accepted for public listing on a stock exchange may be, at the request of the issuer, bought and sold on a regulated OTC market, provided other conditions set by law are complied with and trading in the securities is in accordance with the purpose as specified in the Statutes applicable to the market and the Board of the market deems it advantageous that they be traded there.
The Statutes for a regulated OTC market shall state what types of securities are to be bought and sold there.

Purpose and activities
Article 32
The Board of Directors of a regulated OTC market is responsible for ensuring that its activities are carried out in a sound and efficient manner.
Each regulated OTC market is responsible for:

I. ensuring the necessary access to information and trading systems for securities which are purchased and sold there,
II. promoting the conduct of its activities in such fashion as to ensure that trading on the market will be carried out in a clear and transparent manner, in accordance with provisions of current Acts, Regulations and Rules adopted pursuant to them, and ensure non-discriminatory treatment of all parties trading on the market,
III. supervising that the issuers of listed securities and members of the OTC market operate in accordance with the Acts, Rules and statutes which apply to it.

The Board of a regulated OTC market must set Rules on:

I. conditions for commencing trade in securities on the market, as well as on disclosure requirement for issuers of securities and shareholders,
II. conditions which must be fulfilled in order to become market members,
III. reporting on trading for information purposes.

Rules adopted in accordance with this Article must be available at the place of business of a regulated OTC market.
Before a market member may begin trading on a regulated OTC market he must sign a written membership agreement. Should a market member repeatedly or grossly violate the conditions set for market membership his membership may be revoked.

Suspension of trade
Article 33
The Board of a regulated OTC market may decide to cease trading in securities on the market, if it deems that continuing trading is neither to the advantage of securities issuers nor to the market.
If the estate of a securities issuer has been accepted for insolvency proceedings trading in the securities shall be prohibited.
If the issuer of a security submits a request that trading in the securities be halted, such request should be accorded with unless the Board of the regulated OTC market deems this to be contrary to the interests of investors, borrowers or the market. The Board of a regulated OTC market may request a written statement from the issuer. The Board may decide that the securities should not be deleted from the listings until up to six months have elapsed from the date upon which a complete report was delivered. The Board may also decide to publish the statement, wholly or in part.
Trading in securities on a regulated OTC market must cease no later than the date upon which they are publicly listed on a stock exchange.
The Board of a regulated OTC market shall set detailed Rules on when trading in securities must cease.

CHAPTER X
Trading outside a regulated securities market
Article 34
No indication may be given that a securities market is regulated with respect to trading or placing orders for securities which are not listed on a stock exchange or regulated OTC market, for instance, by publishing regular infor-ma-tion on trading in the same manner as a stock exchange or regulated OTC market would do, or by any means which could create confusion with such activities. This shall also apply even though such trading takes place through the trading system of a stock exchange or regulated OTC market.
If parties operate a securities market where substantial trading takes place, the Bank Inspectorate of the Central Bank of Iceland may demand, as a condition for its continuing operation, that it fulfil the provisions of this Act concerning a stock exchange or regulated OTC market, as appropriate.

CHAPTER XI
Supervision
Article 35
The Bank Inspectorate of the Central Bank of Iceland shall supervise that activities of stock exchanges and regulated OTC markets comply with the provisions of this Act, Regulations and Rules issued in accordance with it, other instructions or the Statutes applying to the activities. For such purpose the Bank Inspectorate shall have access to all data and information on the activities carried out in accordance with this Act which it deems necessary. Should the Bank Inspectorate be of the opinion that activities covered by this Act are carried out without the required authorisation, it shall have comparable access to data and information from the party concerned. The Central Bank Act and the Act on Securities Transactions, as well as provisions of other Acts as appropriate, shall apply to such supervision.

Article 36
If the Bank Inspectorate considers that a stock exchange or regulated OTC market, operating pursuant to this Act, has violated the provisions of this Act, of the Act on Securities Transactions, or Regulations or Rules issued in accordance with them, or that the behaviour of companies or institutions is otherwise irregular, unsound, or unreliable, it shall grant a suitable time limit for rectification, except in the case of a serious violation.
In cases of violations against this Act the Bank Inspectorate may, in addition, demand that the situation be rectified immediately, and may place a temporary prohibition on further activities if exceptional circumstances so demand.
If a stock exchange or regulated OTC market fails to respond to repeated instructions from the Bank Inspectorate for improvements as referred to in this Article, the latter may propose that its operating licence be revoked, cf. Article 37 of this Act.

CHAPTER XII
Revocation of Operating Licences
Article 37
The Minister shall revoke the operating licence of a stock exchange or regulated OTC market acting upon a proposal from the Bank Inspectorate of the Central Bank of Iceland:

I. if the granting of an operating licence was based on incorrect reports or information from the licensee or if it was procured by other illegitimate means,
II. if a company commits serious or repeated violations against the Statutes coverning its activities or against this Act or Rules or Regulations adopted in accordance with it,
III. if the members of the Board do not satisfy the conditions of Article 5 or the operations of a licensee are no longer viable due to the provisions of the second paragraph of Article 6,
IV. if the Bank Inspectorate deems that close links between a licensee and natural or legal persons could hinder it in its regular supervision activities, or that law and regulations applicable to such parties hinder normal supervision,
V. if the estate of a licensee has been accepted for insolvency proceedings or the undertaking dissolved for other reasons.

Operating licences shall, however, only be revoked in accordance with Points 1 to 4 of the first paragraph after the Bank Inspectorate has raised objections with the licensee concerned and given him the opportunity to clear up the matter.

Article 38
Revocation of the operating licence shall be notified to the board of directors of the licensee and supported by arguments in writing. A notice of the revocation shall be published in the Legal Gazette and advertised in the mass media.
If a Minister revokes the operating licence of a stock exchange or regulated OTC market to operate in this country, the company shall be dissolved.

Financial sanctions
Article 39
Stock exchanges and regulated OTC markets may provide in a membership contract, as well as in Rules adopted by the board of the company, for penalties for violations of the membership contract or Rules applicable to their activities in the form of fines. Fines may amount to up to ten times the annual fees for market membership of the market concerned if the violation is serious.

CHAPTER XIII
On confidentiality and
submission of annual accounts
Confidentiality
Article 40
The Board of Directors and all employees of a company operating pursuant to this Act shall be bound by obligations of confidentiality concerning any information on the situation of its clients and affairs of the company, as well as other information which they may acquire through their employment and which is subject to secrecy in accordance with law or the nature of the case, unless a judge Rules expressly that they are obliged to provide such information in court or to the police, or there is a legal obligation to provide the information. The obligation of confidentiality shall remain even after their employment ceases.
Notwithstanding the provisions of the first paragraph, a stock exchange may cooperate with stock exchanges or competent authorities abroad and provide them with information, provided that the foreign parties involved fulfil the requirements for equivalent confidentiality in their own country. Information provided by a stock exchange to?? the above-mentioned foreign parties described as confidential or which are confidential in nature, must be treated as referred to in the first paragraph.

On submission of annual accounts
Article 41
The annual accounts of a limited-liability company, which operates pursuant to this Act, must be audited by a certified public accountant or audit bureau.
An auditor must be allowed access to all assets, books and accompanying documents and other company materials and in addition the Board and staff must provide him with any information requested which it is in their power to provide.
Audited annual accounts shall be forwarded, together with an annual report, to the Bank Inspectorate of the Central Bank of Iceland within three months of the end of each accounting year.

CHAPTER XIV
Entry into force, etc.
Article 42
This Act shall enter into force at once. Furthermore, Act No. 11/1993, on the Icelandic Stock Exchange, shall become invalid as of that date, cf. however Temporary Provisions I.

Temporary provisions
I.
The Icelandic Stock Exchange, which operates pursuant to Act No. 11/1993, shall be granted until 1 July 1999 to adapt its activities to comply with this Act. Until that time the provisions of that Act on its activities shall continue to be valid in all respects with the exception of provisions concerning its exclusive right to pursue stock exchange activities, cf. Article 1 of the Act. Furthermore, the provisions of Chapters V, VI and VII of this Act shall apply as appropriate to issuers of securities which have been accepted for listing on the Icelandic Stock Exchange. It may at the same time carry out activities in accordance with the provisions of Chapters IX and X of this Act.

II.
The Minister shall, within two months of the entry into force of this Act, appoint a committee to prepare the establishment of a limited-liability company for the purpose of operating a stock exchange and assuming all the rights, assets, liabilities and obligations of ISE, cf. Act No. 11/1993, as subsequently amended. In establishing a limited-liability company efforts shall be made to reach an agreement on the division of holdings between the present Exchange members, issuers of listed securities and investors.
The Minister shall entrust an independent certified public account with assessment of the equity capital of the Icelandic Stock Exchange as of the date a new limited-liability company, which has been granted an operating licence on the basis of this Act, takes over its operations.

Adopted by the Alþingi on 6 April 1998