The supervision of securities markets is part of the Central Bank's financial supervision and supervises trading in the securities market, disclosure by issuers, and the activities of stock exchanges, multilateral trading facilities, central securities depositories, and other entities that fall under its supervision. The objective of monitoring trading in the securities market is to ensure normal price formation and that market participants comply with laws and regulations.
It monitors, for example, whether issuers of securities publicly disclose information that may affect the price of shares or bonds listed on a stock exchange. The Central Bank also monitors the securities market and analyses trading on the stock exchange. If major changes occur, such as an abnormal flow of bids or trading that leads to significant price changes in a short period of time, then bids and trading in individual securities are reviewed. In the above situations, consideration is given to, among other things, whether parties are engaging in market abuse or insider trading.
The Central Bank of Iceland also has the role of confirming securities prospectuses that must be published when a public offering is made or securities are admitted to trading on a regulated market. The purpose of a securities prospectus is to enable prospective purchasers of the securities to familiarise themselves with information about the activities and risk factors of the company or security that is to be offered in a public offering or admitted to trading on a stock exchange. This ensures investors all have access to the same information and can make informed decisions about investing in the securities.