Corporate Governance Rules

The Icelandic Securities Depository is committed to sound and responsible corporate governance based on transparency, trust and a clear division of responsibilities. Good corporate governance is fundamental to the company’s operations, helping ensure a healthy working environment and trust in VBM.

Laws on public limited companies and central securities depositories, settlement and electronic registration of financial instruments are available at www.althingi.is.

The general rules governing VBM’s Board are set out in the company’s Articles of Association, which are published on the company’s website.       Comprehensive information on VBM’s corporate governance is submitted to the Financial Supervisory Authority of Iceland. Owners, customers and prospective customers may also request access to more detailed information.

Verðbréfamiðstöð Íslands hf. (VBM) is licensed under Act No. 7/2020 on Central Securities Depositories, Settlement and Electronic Registration of Financial Instruments, which applies throughout the European Economic Area. This significantly expands VBM’s operating area and marks a major milestone for the company. VBM will make use of these market opportunities by connecting with central securities depositories in Europe. Once these connections are in place, they will improve access to the Icelandic market and make it easier for Icelanders to trade in securities issued in the European Economic Area. VBM is a public limited company. The Companies Act provides that its governance structure consists of the general meeting of shareholders, the board of directors and the managing director. These bodies have defined responsibilities and a system of checks and balances. Shareholders’ liability is limited to the funds they contribute to the company as share capital, and they are therefore not personally liable for the company’s obligations beyond that amount. Under Article 80 of the Companies Act, the general meeting of shareholders is the company’s highest authority. Article 63(2) provides that the shareholders elect the board, while Article 65(1) provides that the board appoints the managing director. Article 68(1) states that the board and managing director are responsible for managing the company. At the company’s general meeting, shareholders exercise the highest authority in the company’s affairs, in accordance with Article 80(1) of the Companies Act. Shareholders participate in the company’s decision-making in accordance with Act No. 2/1995 on Public Limited Companies. Under Article 4.1 of VBM’s Articles of Association, the annual general meeting elects three directors and two alternate directors each year. Under Article 4.10, the newly elected board elects a chair and decides on the allocation of responsibilities at its first meeting. Article 4.15 states that the board is the company’s highest authority between general meetings and represents the company’s interests in dealings with third parties. It must ensure that the company’s organisation and operations are always in proper order. The role and duties of the managing director are also set out in the Companies Act. The managing director is responsible for the company’s day-to-day operations and must follow the board’s policies and instructions in this regard, pursuant to Article 68(2). Article 70(2), third sentence, provides that the managing director may attend board meetings and has the right to speak and make proposals, unless the board decides otherwise in a particular case. Article 70(5) provides that the board must adopt rules of procedure setting out in more detail how it conducts its work. Article 4.17 of the company’s Articles of Association likewise provides that the board must adopt rules of procedure. The VBM board’s rules of procedure are reviewed annually. They set out in more detail the relationship between the board and the managing director, among other things, and govern the board’s work, key responsibilities, division of duties, and communications between the board, chair and managing director. Performance reviews are intended to improve working practices, increase the board’s effectiveness and identify areas for improvement. Compliance with the policies, plans and procedures established by the board is ensured through regular reports from the managing director, the board’s review of operations, risk management processes, internal control reporting and other established monitoring measures. VBM will hold regular meetings with the Central Bank of Iceland’s Financial Supervisory Authority (FME). VBM is owned by Innviðir fjárfestinga slhf, Arion Bank, Íslandsbanki, Lífeyrissjóður verslunarmanna, Lífeyrissjóður verkfræðinga, Gildi lífeyrissjóður, Birta lífeyrissjóður, Almenni lífeyrissjóðurinn, Festa lífeyrissjóður, Tplús vörslu og uppgjörsþjónusta, and private investors.