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The issuer of bitcoin exchange traded notes was found to be in several violations of Nasdaq’s listing rules and subsequently fined, the exchange announced on Thursday. However, XBT Provider argues that most of the violations occurred prior to its acquisition by Global Advisors.
XBT Provider Fined by Nasdaq
The Disciplinary Committee of Nasdaq Stockholm announced on Thursday that it has imposed a fine of SEK 1,000,000 (approximately $121,698) on XBT Provider for breach of its “Rule Book for Issuers of warrants and certificates and other regulations in several respects.”
When the two ETNs were admitted to list and trade on the Nasdaq exchange, the company agreed to comply with the exchange’s Rule Book, explained Nasdaq.
However, the exchange has found that the company failed to comply with the internal routines and procedures provided in conjunction with its application. Specifically, it has failed:
- to ensure that the risk function reported to the Board of Directors,
- to carry out an audit of the company’s intranet and IT security,
- to handle a material change in the operations in accordance with the Internal Rules, and
- to ensure that the regulatory compliance with applicable legislation
Nasdaq has also found XBT Provider to be in breach of several sections of the Rule Book. The list of violations includes failing to publish information for the public as required and failing to have documents referenced in its base prospectus available to view on its website during the entire term of the prospectus.
In addition, the company has failed to publish its annual reports for 2015 and 2016 within the prescribed time, as well as failed to publish an interim report for the first half of 2015 on its website “before the exchange pointed this out.”
Fewer Violations After Global Advisors Took Over
The meeting before the Disciplinary Committee was held on July 17. Daniel Masters, Chairman of XBT Provider and Global Advisors, was present. While XBT Provider has largely admitted to the violations, it argued that most of them occurred when the company’s owner and guarantor was Knc Group. Global Advisors acquired XBT Provider in June 2016 when Knc Group filed bankruptcy. The company stated:
XBT affirms that the company is guilty of the violations argued by the exchange but argues that only 4 of the 24 violations occurred after the new owner, Global Advisors, took over ownership of XBT.
Following Nasdaq’s announcement, XBT Provider issued its own statement emphasizing that the majority of violations “occurred within 2015 and the first six months of 2016,” which was prior to its acquisition by the Global Advisors group. In addition, the company wrote, “the Board regrets that Nasdaq’s press release of 27th July, 2017 did not more prominently highlight the period in which the infractions occurred.”
The company also noted that “Global Advisors has made major efforts to ensure that XBT maintains the highest standards with respect to regulatory compliance in the future.” Since Global Advisors took over, XBT Provider’s ETNs have seen increasing demand from investors. In June, they crossed the $100 million threshold of assets under management. In addition, Britain’s largest broker, Hargreaves Lansdown, is now offering the pair to its customers.
What do you think of Nasdaq’s action against XBT Provider? Let us know in the comments section below.
Images courtesy of Shutterstock, XBT Provider, and Nasdaq
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