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Screenshot of a breaking news alert e-mail from Q2 2017
BGC Partners (Australia) Pty Limited (BGC) has paid a total penalty of $90,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel (MDP), ASIC announced earlier today.
The MDP had reasonable grounds to believe that BGC had contravened subsection 798H(1) of the Corporations Act 2001 (Cth) by failing to comply with Rule 3.3.1A(1) and 3.3.2 of the ASIC Market Integrity Rules (ASX 24 Market) 2010.
These particular Rules deal with pre-negotiated business orders in the ASX 24 futures market. In circumstances where a market participant has written authority from a client to engage in pre-negotiated business on behalf of the client, the participant is permitted to withhold the implementation of instructions from the client in order to solicit instructions from other clients. Where the participant seeks to execute pre-negotiated business on the market, the participant must make an enquiry through the message facility of the market, wait until 30 seconds has elapsed and then enter the matching orders that reflect the pre-negotiated business for execution on the market.
The purpose of these particular rules is to strike a balance between facilitating pre-negotiated business and ensuring a fair, open and transparent trading system by requiring market participants to give others notice of intention to trade.
The MDP found that BGC on three occasions (twice in March 2016 in relation to electricity futures contracts, and once in July 2016 in relation to put options over bonds futures) transacted pre-negotiated business orders on the ASX 24 Market but failed to make the required enquiry through the message facility of the trading platform of the market. The MDP also found that, in relation to those pre-negotiated business transactions, BGC did not have written authorisations to transact pre-negotiated business with some of the clients.