Australia financial regulator ASIC just announced that OpenMarkets Australia Limited has paid a penalty of $200,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel (MDP).
The MDP had reasonable grounds to believe that OpenMarkets, throughout various periods in 2015 and 2016, breached the market integrity rules in relation to both the ASX Market and Chi-X Australia Market that require market participants to have appropriate filters in place for use of their automated order processing (AOP) system.
The MDP found that OpenMarkets did not have appropriate filters to:
- prevent trades that involved no change of beneficial ownership
- reject the placement of sell orders which exceeded maximum order value limits
- reject the placement of sell orders that were prohibited short sales
- identify orders that were priced far away from the prevailing price in other markets.
The MDP also had reasonable grounds to believe that OpenMarkets did not have appropriate organisational and technical resources in place to ensure that orders submitted to the trading platform did not interfere with the efficiency and integrity of the market.
The MDP would have applied a penalty of $560,000 for the conduct if not for OpenMarkets’ agreement to the imposition of conditions on their Australian financial services licence in December 2016. These conditions, which required OpenMarkets to engage an independent expert to review their systems, were imposed to address ASIC’s concerns with the financial services business carried on by OpenMarkets, including the use of its AOP system.
The compliance with the infringement notice is not an admission of guilt or liability, and OpenMarkets is not taken to have contravened subsection 798H(1) of the Corporations Act.