Qualifications of Key Personnel
Rules of Arev Securities hf. on the Eligibility of Key Officials
General
These rules are issued on the basis of the Financial Services Act No. 161/2002 and the Markets in Financial Instruments Act No. 115/2021, the Financial Supervisory Authority's Guideline No. 3/2010 on the suitability of key personnel, and the Financial Supervisory Authority's Regulation No. 247/2017 on financial undertakings' dealings with related parties.
Goal
The objective of these rules is to manage specific risks related to the operations and reputation of Arev Securities hf. ("Arev") by specifying the minimum suitability requirements for employees who are defined as key personnel. However, the requirements placed upon them are the same as those for other employees, as Arev places great emphasis on ensuring that all personnel acting on behalf of Arev possess the adequate skills, knowledge, and expertise to carry out the tasks assigned to them. Particular emphasis is placed on ensuring that staff are familiar with the relevant rules and procedures.
Key personnel
According to item 7. Article 1(b) of Act No. 161/2002 on financial undertakings defines a key official as a person in a management position, other than a managing director, who has the authority to make decisions that may affect the company's future development and financial performance.
In the opinion of the board, it is not possible to define a specific group of employees at the company as key personnel; rather, this must be assessed on a case-by-case basis. The board shall decide in the event of any doubt when assessing whether an employee should be considered a key employee or not.
At present, Jón Sch. Thorsteinsson is the company's only key employee.
Position of key personnel
In addition to these rules and all of Arev's procedures, the following special rules apply to key personnel:
- Restrictions on facilities for key personnel and their close associates, pursuant to Regulation No. 247/2017.
- Restrictions on termination agreements, pursuant to Article 57b of the Act No. 161/2002 on financial undertakings.
- The annual report shall specify the number of key employees, as well as information on their total remuneration and benefits, in accordance with the 3rd paragraph of Article 87 of Act No. 161/2002 on financial undertakings.
Eligibility requirements
A key official shall at all times meet the following requirements:
- Possess adequate skills, knowledge and professional expertise to carry out the tasks assigned to them. In this regard, the individual's education and career history shall be reviewed, as well as their performance in previous roles. A key personnel member must have passed the securities trading examination. A key person must also have completed a basic course in accounting.
- Have an unblemished reputation and not have been convicted of a criminal offence in the last ten (10) years in connection with their business activities, or otherwise engaged in conduct that gives cause to question their business practices or integrity.
- Must be of legal age and financially independent, and must not have been declared bankrupt in the last five (5) years.
Should there be any changes to the circumstances or position of a key person which may affect their suitability, they are obliged to notify the Managing Director or the Compliance Officer immediately. If there is any doubt as to whether an employee fulfils the above-mentioned conditions, they shall not be considered fit as a key employee and shall therefore not have the authority to make decisions that could affect the future development and performance of Arev.
Assessment of suitability
The Managing Director appoints other employees and is responsible for their work and assesses the competence of key personnel. The Managing Director is authorised, with the approval of the Board, to entrust an external party with carrying out the competence assessment.
When assessing whether an individual meets the eligibility criteria of Article 5, both an objective and a subjective assessment must be carried out. The objective assessment involves checking the requirements for legal capacity, education, and a clean criminal record. Subjective assessment includes, for example, evaluating whether the individual's education and professional experience are suitable for the position in question, as well as assessing the employee's knowledge, financial independence and reputation.
An individual's professional career should be assessed with regard to whether they have been investigated by public regulators, whether legal proceedings have been brought against them, whether legitimate complaints have been made against them in relation to their regulated activities, and whether they have been dismissed from their employment for their actions or inaction. The above factors shall be assessed based on whether the individual can perform their role credibly and responsibly, as well as on reputational risk and whether past conduct is likely to call their competence into question or to suggest they might abuse their position or harm Arev.
An individual's knowledge and understanding of the laws and regulations of the financial market shall be assessed, and it shall be a condition that the prospective key person has completed the qualification for securities brokerage. The assessment of suitability under this provision may be conducted by means of an oral and/or written examination and/or a meeting with the relevant key person. Reasonable notice shall be given of any examination or meeting, as well as of the topics to be covered. Following such a test or meeting, an assessment shall be made as to whether the key person has sufficient knowledge and understanding of the laws and regulations that have been examined, and whether they are otherwise considered competent in light of the competence requirements of these laws and regulations.
An individual is obliged to provide, in connection with this assessment, all information that Arev deems necessary, e.g. a criminal record, a statement of liabilities, tax returns, a statement of securities transactions, etc.
Results of the suitability assessment
The Managing Director shall, as soon as is practicable, notify the relevant employee and the Compliance Officer in writing whether the employee has passed the suitability assessment and can be considered a key employee. The outcome shall be stored by the Compliance Officer along with the relevant documentation.
If an employee fails a competency assessment, the Managing Director may offer them the opportunity to retake the assessment within four weeks of the result being available. If the employee refuses to retake the assessment, or if they fail the retake, they will be deemed not competent for their position at Arev.
The participation of key personnel in management and business operations
The participation of Arev staff in management and business operations is addressed in the board's rules of procedure, and the relevant provisions of these procedures also apply to the involvement of key personnel.
When assessing whether participation in management or business activities is compatible with the role of a key employee, consideration shall be given to the individual's position within Arev, as well as to whether such participation compromises their integrity and work performance, as well as whether such participation could involve potential conflicts of interest or is likely to harm Arev's reputation.
Incompetence of key personnel in the handling of individual cases
Key personnel are prohibited from participating in any matter within Arev that concerns their own business interests, or those of companies in which they have a significant ownership stake, sit on the board, act as a director, or otherwise have substantial interests, unless these are subsidiaries of Arev. The same applies to the participation of key personnel in the handling of a matter concerning parties to whom they are personally or financially connected. When a key personnel member commences employment, they must inform the regulator of the parties with whom they are connected in the manner described above. A key employee shall also notify the regulator of any changes to the list of persons with whom they are connected.
Key official with the status of a suspect in a criminal case
A key official must notify the managing director or regulator if they are given the status of a suspect, e.g. under Act No. 88/2008 on criminal procedure by a special prosecutor, the Director of National Police, or another prosecuting authority. Being a suspect grants an individual the right not to answer questions about the alleged criminal conduct of which they are accused; at this point, the individual has neither been charged nor convicted.
The Managing Director and Compliance Officer shall assess the position of the relevant key employee within Arev with a view to whether they should be dismissed, placed on leave, or no action should be taken. Such an assessment shall take into account, among other things, the position of the relevant key employee within Arev and the seriousness of the alleged breach, as well as Arev's reputation.
Registration of key personnel
The Compliance Officer shall maintain a register of key personnel. The register shall specify the positions held by the individuals concerned and the reasons why they are considered key personnel. The Compliance Officer shall retain the data obtained for the assessment of key personnel's suitability, including Arev's internal assessment of their suitability.
Coming into force
The assessment of competence for those employees considered to be key personnel upon the entry into force of these rules shall be completed within three (3) months of their entry into force.
These rules shall be published on the Arev website, together with a list of key personnel.
These rules shall come into effect upon the signature of the Arev board. Furthermore, the policy on the same subject from 2025 is hereby repealed.
Approved at the board meeting on 27 March 2026.