DEFINITION of Iceland Stock Exchange – ICEX
The Iceland Stock Exchange (ICEX) is a stock exchange located in Reykjavik, Iceland, established in 1985. It was set up as a joint venture between some of Iceland's brokerage firms and banks, initiated by Iceland's central bank. The Iceland Stock Exchange’s regulatory agency is the Icelandic Financial Supervisory Authority.
BREAKING DOWN Iceland Stock Exchange – ICEX
The Iceland Stock Exchange began trading in Icelandic T-bonds (Treasury bonds) in 1986; in 1990, housing bonds, mortgage-backed securities with a State guaranty were added. Also in 1990, the exchange's first equities were listed, and by 1992, the exchange started gathering momentum, with an average of six new listings per year. In 1998, a new law required the Iceland Stock Exchange to alter its legal status from a self-owned institution to a limited company with shareholders.
The Iceland Stock Exchange joined the NOREX Alliance in June, 2000. The NOREX Alliance was established in 1998, to create a cooperative Nordic securities market using a joint trading system and common trading rules.
In 2002, a new holding company, Eignarhaldsfelagið Verðbrefaþing hf., was established to operate both the ICEX and the Icelandic Securities Depository (ISD). This holding company is owned by financial institutions, listed companies, pension funds, the central bank, the Investor Association and the Treasury.
The Iceland Stock Exchange merged with OMX in 2006, which was then acquired by Nasdaq in 2007. The Iceland Stock Exchange’s official name is now Nasdaq Iceland. The Iceland Stock Exchange has a small number of holdings in sectors such as industrials, health care, tourism, financials, consumer services and goods, telecommunications, and oil and gas. It trades in Icelandic Krona (ISK), the currency of Iceland. Though it is a small exchange, it has grown rapidly since inception.
Investing in the Iceland Stock Exchange
Because of the small market, those wishing to invest within the Iceland Stock Exchange have to open an account with a local member of the exchange. There are a small number of firms in Iceland authorized to trade on the exchange. Retail investors, both domestic and foreign, may open an account with one of the main banks.