Securities dealers and their employees carrying out transactions in securities are under a duty to notify the Danish Financial Supervisory Authority (DFSA) if a customer concludes a transaction which may reasonably be assumed to constitute insider trading or market manipulation under section 37(6) of the Danish Securities Trading etc. Act. The notification duty applies irrespective of any agreed or statutory professional secrecy.
If a private individual wishes to report suspicious circumstances, this may be done by email to firstname.lastname@example.org att. Capital Markets Division.
The notification of the securities dealer must be made without undue delay after the securities dealer has become aware of facts or information giving rise to assuming that a suspicious transaction is involved.
In order to harmonise the notifications, provisions have been laid down for the type of information to be included in the notifications made by the securities dealers. These requirements to content are found in section 11(2) of Executive Order No 386 of 18 April 2013 concerning notification, reporting and publication of senior employee transactions, insider lists, reporting of suspicious transactions, indications of price manipulation and accepted market practices (the Executive Order on Market Abuse).
To facilitate the reporting the DFSA has prepared a standard form to be used when giving notification of suspicious transactions.
The notification duty begins when a transaction is carried through in respect of which circumstances indicate possible insider trading or price manipulation. The securities dealer must not have actual proof or be certain of a violation having been made, reasonable suspicion suffices. The suspicion relating to a transaction triggers off the notification duty.
The DFSA has access to more information about transactions than the individual securities dealer. Therefore it is important that what is considered suspicious or peculiar by the individual securities dealer is notified to the DFSA which will then be able to make an overall assessment based on the information available. Subsequent events may also result in a duty to notify; for instance a customer being able to trade immediately prior to the publication of a surprising company announcement.
When notification is made, it will be processed by an employee in the Capital Markets Division of the DFSA. In connection with this assessment the Capital Markets Division will contact the securities dealer if the case officer requires additional information.
It is therefore important that the notification includes a description of any investigations made. As a public authority the DFSA must clarify all aspects of the matter. It is therefore very helpful if the securities dealers forward their assessments, both those pointing to and against a violation.
The notification should preferably include a copy of transaction notes and of the customer's order instruction, either as taped telephone conversations, e-mails, text messages, chats or similar. The DFSA will in general always ask for this information in connection with the processing of a notification.
Circumstances giving grounds for a notification duty may exist when the customer asks the securities dealer to carry through the transaction, for instance when the customer mentions access to knowledge which is not available to the market, or when the customer indicates a wish to change the price of the security.