Swedish regulator FI fines Nordnet Bank SEK 100 million
Nordnet Bank is being issued a remark and must pay an administrative fine of SEK 100 million, Sweden’s financial regulator FI announced today.
Nordnet Bank AB has authorisation to conduct banking business and investment services and activities. Pursuant to its authorisation to conduct investment services and activities under the Securities Market Act, Nordnet provides in part services for short selling in shares.
Finansinspektionen has investigated Nordnet’s service for intraday short selling and the bank’s internal procedures and processes related to this service. The investigation was initiated by the short-selling transactions of Nordnet’s customers in shares of Moment Group AB on 19 February 2021 that resulted in a large number of shares being sold short without coverage (so-called naked short selling).
The investigation shows that Nordnet has not met the requirements placed on a third party in the Short Selling Regulation. The bank also does not meet the requirements on internal guidelines and procedures and on risk management and risk assessment, and it has failed in its duty of care to its customers.
The violations have been of such a nature that there are grounds on which to intervene against Nordnet. The observed violations are not negligible or excusable but neither are they so serious that there is cause to consider withdrawing the bank’s authorisation or issuing the bank a warning. Finansinspektionen is therefore issuing the company a remark and an administrative fine of SEK 100 million.