GXG Markets A/S has announced the surrender of its Danish Market Operator licence.
As a result, GXG’s operation of the GXG Official List, Regulated Market and GXG Main Quote and GXG First Quote multi-lateral trading facilities will cease at 1700 CET on 18 August 2015.
This announcement is the culmination of an on-going investigation into GXG by the Danish Supervisory Authority (the “FSA”) which commenced with the company’s annual inspection in November 2014.
The FSA’s enquiries identified a series of problems at GXG, including the identification of more than 70 cases where GXG had potentially breached its own rules on the admission of issuers. The FSA found that “GXG gravely disregarded risk information” and that GXG had been “grossly negligent” in allowing so many cases to proceed without correct supervision, noting that several of the cases may have led to investors or others suffering loses as a result of fraudulent behaviour.
The FSA’s inspection revealed that GXG had repeatedly and seriously neglected and violated its own rules and internal guidelines and, as a consequence, had exposed itself and the market to precisely those elements of risk which those same rules were intended to manage and reduce.
It is against this background that the FSA’s assessment was that GXG had not operated its regulated market and its multilateral trading facilities in a safe and appropriate manner and that such conduct was incompatible with GXG continuing to hold its operating licence.
The FSA notified GXG of this draft decision on 29 May 2015 and on 29 June 2015 GXG announced an immediate moratorium on the admission of new companies to trade on GXGs marketplaces, citing grounds that it had “initiated dialogue with the FSA on the company’s regulatory affairs, including GXG contemplating a voluntary surrender of the company’s operating permits”.
Finally, on 6 July 2015, GXG announced that it would be surrendering its operating licence with effect from 18 August 2015. The FSA has accepted the surrender of the operating licence.
GXG has announced that it is in discussions with a number of organisations regarding the continued trading in issuing companies’ securities with the intention that a timetable will be published no later than the 13 July 2015 on how this will be achieved.
If you would like any further information about this or related topics, please contact our Senior Associate Matthew Overton.